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HomeMy WebLinkAboutAgenda 06-18-04 Names Tabs AGENDA #2415 CITY COUNCIL MEETING/WORK SESSION CITY OF UNIVERSITY PARK, TEXAS CITY HALL CONFERENCE ROOM FRIDAY, JUNE 18, 2004 AT 7.'30AM i. ITEMS FROM THE FLOOR Anyone wishing to address an item not on the Agenda or having questions about items on the Consent Agenda should do so at this time. Questions and comments regarding Main Agenda items may be made when that item is addressed by the City Council. ii. PRESENTATION: By Alex Del Carmen, Ph.D. on Independent Commission on Racial Profiling iii. CONSENT AGENDA A. CONSIDER: Resolutions amending City Investment Policy and approving participation in TexasTERM local government investment pool - Austin Tab I B. CONSIDER: Bid on annual contract for fuels - Green Tab II C. CONSIDER: Approval of City Council Meeting Minutes for June 1, 2004 - Wilson Tab III IV. MAIN AGENDA A. CONSIDER: Property, Casualty, Liability & Workers Compensation Insurance Renewal - Livingston Tab IV B. DISCUSS & ACTION: On whether to modify or change prior city council's action and design of the restoration of City Hall C. DISCUSS: Schedule for construction of water and sanitary sewer improvements in the area east of Caruth Park - Smallwood Tab V D. DISCUSS: Prospects for a paperless agenda - Criswell Tab VI As authorized by Section 551.071(2) of the Texas Government Code, this meeting may be convened into Closed Executive Session for the purpose of seeking confidential legal advice from the City Attorney on any agenda items listed herein. 9:00-9:15AM: EXECUTIVE SESSION REGARDING PERSONNEL ITEMS WITH RESPECT TO TMRS AND FRRF AND FOR CONSULTATION WITH CITY ATTORNEY REGARDING POTENTIAL LITIGATION UNDER SECTIONS 551.071 AND 551.074 OF THE TEXAS GOVERNMENT CODE - Tab VII AGENDA MEMO (06/011t/04 AGENDA) DATE: TO: FROM: SUBJECT: June 9, 2004 Honorable Mayor and City Council Kent R. Austin, Director of Finance Resolutions amending City Investment Policy and approving participation in TexasTERM local government investment pool ITEM: The Texas Public Funds Investment Act (PFIA) requires that a city's governing body "review its investment policy and investment strategies not less than annually" and that the policy be adopted by rule, order, ordinance, or resolution. The City Council last approved University Park's Investment Policy via resolution in August 2003. Staff proposes to modify the investment policy by adding TexasTERM as an authorized investment for the City. TexasTERM is a professionally managed pool consisting of high quality fixed-term investments (U. S. government agency and Treasury securities, collateralized repurchase agreements, collateralized certificates of deposit, and SEC-regulated money market mutual funds). Unlike the City's current investment pools, TexPool and TexSTAR, which offer daily liquidity and floating daily rates, TexasTERM offers participants a fixed-term, fixed rate investment for up to one year. The result is a product with the benefits of a CD and the safety of a large pool. City staff and the Finance Advisory Committee met with Susan Anderson, Senior Managing Consultant for TexasTERM, in February 2004 to learn more about the pool. At their May 18 meeting, the Committee recommended that the City modify its investment policy to authorize participation in TexasTERM. Other highlights of the City's investment policy include: · Emphasis on safety of principal first, liquidity second, and yield third; · Listing of eligible investments, including U.S. Treasury and agency securities and specific local government investment pools but excluding commercial paper and collateralized mortgage obligations; · Requirements for quarterly investment reporting and 'marking to market' to reflect fair market value of securities held by the City; · Use of delivery versus payment for settlement of investment transactions; · Establishment of asset allocation limits (for example, maximum 60% for U.S. agencies and 50% for local government investment pools); 3800 UNIVERSITY BOULEVARD UNIVERSITY PARK, TEXAS 75205 TELEPHONE (214) 363-1644 C:\Documents and Settings\nwilson. UNIVPARK\Local Settings~Temporary Internet Files\OLK3~AGENDA MEMO Invest Poi Adopt 062004.doc 9:25 AM 06/11/04 · Limitation of maximum portfolio weighted average maturity to 548 days (1.5 years) and no final stated maturities longer than five years for individual securities; and · Designation of the Finance Advisory Committee as the City's investment committee. In the interest of brevity, I have omitted the appendices from the attached 18-page investment policy. These appendices consist of boilerplate language regarding State investment legislation, master repurchase agreement, broker/dealer certification, and broker/dealer questionnaire. They remain unchanged from last year. RECOMMENDATION: City staff and the Finance Advisory Committee recommend approval of the attached resolutions amending the Investment Policy and authorizing participation in TexasTERM. The resolution names the Finance Director, City Manager, and Controller as investment officers. ATTACHMENTS: · Finance Advisory Committee draft meeting minutes, May 18, 2004 · Resolution adopting City investment policy · Proposed City investment policy sans appendices · Resolution approving participation in TexasTERM 3800 UNIVERSITY BOULEVARD UNIVERSITY PARK, TEXAS 75205 TELEPHONE (214) 363-1644 C:\Documents and Settings\nwils°n'UNIVPARK\L°cal Settings\Temporary Internet Files\OLK3~AGENDA MEMO Invest Poi Adopt 062004.doc 9:25 AM 06/11/04 CITY OF UNIVERSITY PARK, TEXAS FINANCE ADVISORY COMMITTEE TUESDAY, MAY 18, 2004 at 7:30 A.M. MINUTES Committee members attending: Atwood, John Edwards, Richard Harralson, Howell Kelley, Terry Mahon, Ed Others present: Austin, Kent Absent: Davis, Dick - Council member Olmsted, Bob Stuart, John Call to order. Chairman Bob Olmsted was unable to attend. Kent Austin called the meeting to order at 7:40 a.m. with members Atwood, Harralson, Kelley, and Mahon present Review/approve minutes of February 11, 2004 meeting. John Atwood moved approval of the February 11, 2004 meeting minutes. Ed Mahon seconded, and the motion was approved 4-0. Discuss/consider recommendation for City Hall and major projects funding. Committee member Richard Edwards arrived. Austin briefed the Committee on staff' s recommended funding plan for the City Hall renovation, Lovers Lane II reconstruction, and Northwest Parkway screening wall projects. The plan, provided in the Committee's agenda packet, recommends assembling funds for the projects from a combination of budgeted monies and fund balance drawdowns in the General Fund and Utility Fund. Austin noted that for FY2004 the plan includes a transfer of $3.45 million to the Capital Projects Fund for the City Hall Renovation project (no. 43700). Of this total, $2.2 million is from the General Fund and $1.25 million is from the Utility Fund. After discussion, Terry Kelly moved approval of the funding plan and fund balance drawdowns. John Atwood seconded, and the motion was approved 5-0. Review January-March 2004 City investment report. The Committee reviewed the quarterly investment report for the period ended March 31, 2004. The City's portfolio market value totaled $50,181,909 and earned a weighted average return of 1.618%, down from the prior quarter's 1.757%. The 3/31/04 portfolio composition consisted of 50.6% U.S. agencies, 29.4% investment pools, 14.1% certificates of deposit, and 6.0% U.S. Treasuries. No action was taken. Terry Kelley departed the meeting. C: ~)ocuments and Settingslnwilson. UNIVPARK(Local SettingslTernporary ]nternet ~'ileslOLK3(FACminutes 051804. doc 06/11/04 Consider amendment of City investment poficy to approve TexasTERM as an authorized investment pool for the City of University Park. The Committee discussed modifying the City's investment policy to add the TexasTERM investment pool as an authorized investment. This subject had been discussed at the February 11, 2004 Committee meeting, when members met with senior portfolio manager Susan Anderson. John Atwood moved approval of TexasTERM for inclusion in the City investment policy. Howell Harralson seconded, and the motion was approved 4-0. Follow-up items. a. FY2003 audit - Kent Austin informed the Committee that the FY2003 audit was concluding and that Controller Tom Tvardzik and staff were finalizing the Comprehensive Annual Financial Report (CAFR) document. The CAFR will be issued by May 31, the City's deadline to submit the document to the Government Finance Officers Association for its annual CAFR award program. b. Depository bank contract - Austin informed the Committee that the bank depository RFP process had not progressed since the Committee's last meeting but would be underway soon. New business. There was no new business. Set next Committee meeting date. The next meeting will be in August. Adjourn. The meeting adjourned at 8:20 a.m. Submitted by Kent Austin, Director of Finance Bob Olmsted, Chair C: (Documents and Settingslnwilson. UNJVPARKkLocal SettingslTernporary [nternet FileslOLK3~F'ACminutes 051804. doc 06/11/04 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNIVERSITY PARK, TEXAS, ADOPTING THE INVESTMENT POLICY OF THE CITY OF UNIVERSITY PARK HERETOFORE ADOPTED BY RESOLUTION NO. 03-11; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Public Funds Investment Act, as amended, requires the City to adopt an investment policy by rule, order, ordinance or resolution, and to review such policy not less than annually; and WHEREAS, the Public Funds Investment Act, as amended, requires the Treasurer, the Chief Financial Officer, and the Investment Officers of the City to attend investment training; and WHEREAS, the City of University Park approves of the investment training courses sponsored by the Texas Municipal League and other independent sources; and WHEREAS, the Treasurer, the Chief Financial Officer, and the Investment Officers of the City have attended investment training courses as required by the Public Funds Investment Act; and WHEREAS, the attached investment policy complies with the Public Funds Investment Act, as amended, and authorizes the investment of City funds in safe and prudent investments; Now, Therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF UNIVERSITY PARK, TEXAS: SECTION 1. That the City of University Park has complied with the requirements of the Public Funds Investment Act, and the Investment Policy, as amended, attached hereto as Exhibit "A" is hereby adopted as the Investment Policy of the City of University Park, effective June 18, 2004. SECTION 2. That the following individuals are hereby designated as Investment Officers for the City of University Park: Kent Austin, Director of Finance; Bob Livingston, City Manager; and, Thomas Tvardzik, Controller. SECTION 3. This resolution shall take effect from and after its passage, and it is accordingly so resolved. C: ~)ocuments and Settin~sln~ilson. UN~-PAP~ocal Settin~slTernporary ~nternet FileslC)L~3~esolution ~n~est Policy 0~012004. doc DULY PASSED AND APPROVED by the City Council of the City of University Park, Texas, on the 18th day of June, 2004. APPROVED: APPROVED AS TO FORM: JAMES H. HOLMES, iii, MAYOR ATTEST: CITY ATTORNEY NiNA WILSON, CITY SECRETARY C: ~Documents and Settingslnwilson. UNII/PAR~Local SettingslTemporary ]nternet FileslOLZ~3~Resolution ]nvest Policy 06012004. doc Investment Policy Effective June 18, 2004 City of University Park, Texas City of University Park, Texas - Investment Policy CONTENTS Preface ......................................................................................................................... iv 1. PURPOSE o o o 2. 3. 4. Authorization .................................................................................................... 1 Goal .................................................................................................................. 1 Scope ................................................................................................................ 1 Review and Amendment .................................................................................... 1 INVESTMENT OBJECTIVES 2. 3. 4. Preservation and Safety of Principal ................................................................... 2 Maintenance of Adequate Liquidity .................................................................... 2 Return on Investments ....................................................................................... 2 Prudence and Ethical Standards ......................................................................... 3 INVESTMENT STRATEGY STATEMENT 2. 3. 4. Operating Funds ................................................................................................ 4 Bond Debt Service Funds .................................................................................. 4 Bond Reserve Funds .......................................................................................... 4 Capital Projects Funds ....................................................................................... 5 SPECIFIC INVESTMENT POLICIES Eligible Investments ........................................................................................... 6 2. 3. 4. 5. 6. 7. 8. 9. Obligations of the United States ................................................................ 6 Obligations of the State of Texas ............................................................... 6 Agencies of the United States and State of Texas ...................................... 6 Obligations of other States, Counties, Cities .............................................. 6 Direct Repurchase Agreements ................................................................. 6 Certificates of Deposit .............................................................................. 6 Share Certificates of state and federal Credit Unions ................................. 7 Money Market Mutual Funds .................................................................... 7 Local Government Investment Pools ......................................................... 7 Ensuring Safety of Principal ................................................................................ 8 1. Protection of Principal .............................................................................. 8 1. Approved Broker/Dealers/Financial Institutions/Depositories .............. 8 2. Master Repurchase Agreement ............................................................ 9 3. Collateralization .................................................................................. 9 City of University Park, Texas - Investment Policy 1. Allowable Collateral ................................................................... 10 1. Certificates of Deposit ........................................................ 10 2. Repurchase Agreements ...................................................... 10 2. Collateral Levels ........................................................................ 10 1. Certificates of Deposit ........................................................ 10 2. Repurchase Agreements ...................................................... 11 3. Monitoring Collateral Adequacy ................................................. 11 1. Certificates of Deposit ........................................................ 11 2. Repurchase Agreements ...................................................... 11 4. Margin Calls .............................................................................. 11 1. Certificates of Deposit ........................................................ 11 2. Repurchase Agreements ...................................................... 11 5. Collateral Substitution .............................................................. 12 6. Collateral Reductions .............................................................. 12 4. Portfolio Diversification .................................................................... 12 1. Bond Proceeds ........................................................................... 13 5. Limiting Maturity .............................................................................. 13 1. Operating Funds ......................................................................... 13 2. Bond Proceeds, Bond Reserves, Debt Service Funds .................. 13 2. Safekeeping .............................................................................................. 14 1. Safekeeping Agreement ..................................................................... 14 2. Safekeeping of Certificate of Deposit Collateral ................................. 14 3. Safekeeping of Repurchase Agreement Collateral .............................. 14 Ensuring Liquidity ........................................................................................... 14 Achieving Investment Return Objectives .......................................................... 15 1. Securities Swaps ...................................................................................... 15 2. Competitive Bidding ................................................................................. 15 3. Methods of Monitoring Market Price ........................................................ 15 4. Benchmark Rate of Return ....................................................................... 16 Responsibility and Controls .............................................................................. 16 1. Authority to Invest ................................................................................... 16 2. Bonding requirements/Standard of care .................................................... 16 3. Establishment of Internal Controls ............................................................ 17 4. Standard of Ethics .................................................................................... 17 5. Training and Education ............................................................................. 17 6. Investment Committee .............................................................................. 18 Reporting ........................................................................................................ 18 Compliance Audit ............................................................................................ 19 Certification ..................................................................................................... 19 5. ADOPTING CLAUSE ............................................................................................. 20 City of University Park, Texas - Investment Policy APPENDICES ao INVESTMENT LEGISLATION ................................................................. 21 MASTER REPURCHASE AGREEMENT ................................................ BROKER/DEALER CERTIFICATION ..................................................... 56 ATTACHMENTS BROKER/DEALER QUESTIONNAIRE .................................................... 5 $ iii City of University Park, Texas - Investment Policy PREFACE The purpose of this document is to establish specific investment policy and strategy guidelines for the City of University Park, Texas ("City") in order to achieve the goals of safety, liquidity and yield for all investment activity. The City shall review its investment strategies and policy not less than annually. This policy serves to satisfy the statutory requirement, specifically the Public Funds Investment Act, Chapter 2256 of the Texas Government Code (the "Act"), to define, adopt and review a formal investment strategy and policy. It is the policy of the City that all available funds shall be invested in conformance with these legal and administrative guidelines. 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. The City's portfolio shall be designed and managed in a manner responsive to the public trust and consistent with state and federal law. Investments shall be made with the primary considerations of: · Preservation of capital and protection of principal · Maintenance of sufficient liquidity to meet operating needs · Security of City funds and investments · Diversification of investments to avoid unreasonable or foreseeable risks · Maximization of return on the portfolio iv SECTION 1 PURPOSE City of University Park, Texas - Investment Policy 1. Purpose 1. Authorization This Policy is to be authorized by the City Council in accordance with Section 5 of the Public Funds Investment Act (Chapter 2256, Texas Government Code), which requires the adoption of a formal written Investment Policy. 2. Goal The primary goal of the City of University Park's Investment Policy shall be to ensure the safety of all funds entrusted to the City; to maintain the availability of those funds for the payment of all necessary obligations of the City; and to provide for the investment of all funds, not immediately required, in interest-bearing securities or pooled investment products. The safety of the principal invested shall always be the primary concern. 3. Scope This Investment Policy of the City of University Park shall include all investment activities of any fund of the City, except for the Firemen's Relief and Retirement Fund, which is covered by a separate policy. In addition to this Policy, bond funds, including debt service and reserve funds, shall be managed by their governing resolution and federal law, including the Tax Reform Act of 1986 and subsequent legislation. City funds will be pooled for investment purposes. 4. Review and Amendment This Policy may be amended from time to time as the City Council may so desire, or as State Law may require. This Policy, which includes strategies for each fund or pooled fund group, shall be adopted by resolution, rule, or ordinance by the City Council and shall be reviewed annually by the City Council. The fact that the Investment Policy has been reviewed and that any amendments have been made must be recorded by resolution, rule or ordinance. SECTION 2 INVESTMENT OBJECTIVES City of University Park, Texas - Investment Policy 2. INVESTMENT OBJECTIVES The City shall manage and invest its cash with four objectives, listed in order of priority: Preservation and Safety of Principal; Liquidity; Yield; and Prudence. All investments shall be designed and managed in a manner responsive to the public trust and consistent with State and Local Law. The City shall maintain a comprehensive cash management program that includes the prudent investment of available cash. Cash management is defined as the process of managing monies in order to increase cash availability and interest earnings on short- term investment of idle cash. 1. Preservation and Safety of Principal The primary objective of City investment activity is the preservation of principal in the overall portfolio. Each investment transaction shall be conducted in a manner designed to avoid principal losses, whether they are from securities defaults or erosion of market value. The manner in which the City ensures safety of principal is presented in Section 4.2, "Ensuring Safety of Principal." 2. Maintenance of Adequate Liquidity The City investment portfolio shall be structured such that the City is able to meet all obligations in a timely manner. Maintenance of adequate liquidity is described in Section 4.3, "Ensuring Liquidity." 3. Return on Investments Consistent with State law, the City shall seek to optimize return on investments within the constraints of safety and liquidity. Investments (excluding assets managed under separate investment programs, such as in arbitrage restrictive programs) shall be made in permitted obligations at yields equal to or greater than the bond equivalent yield on United States Treasury obligations of comparable maturity. Other appropriate performance measures will be established by the Investment Committee. Specific policies regarding investment rate of return are presented in Section 4.4, "Achieving Investment Return Objectives." For bond issues to which Federal yield or arbitrage restrictions apply, the primary objectives shall be to obtain satisfactory market yields and to minimize the costs associated with investment of such funds. City of University Park, Texas - Investment Policy 4. Prudence and Ethical Standards The standard of prudence used by the City shall be the "prudent person rule" and shall be applied in the context of managing the overall portfolio within the applicable legal constraints. The prudent person rule is restated below: "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence would exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived." In determining whether the Investment Officer(s) or Investment Advisor under contract has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration the investment of all funds over which the Officer/Advisor 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. The Investment Officers, 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 immediately. Specific policies describing the City's prudence and ethical standards are found in Section 4.5, "Responsibility and Controls." SECTION 3 INVESTMENT STRATEGY STATEMENT City of University Park, Texas - Investment Policy 3. INVESTMENT STRATEGY STATEMENT The City maintains portfolios that utilize four specific investment strategy considerations designed to address the unique characteristics of the fund groups represented in the portfolios. 1. The Operating Funds The investment strategy for operating funds has as its primary objective the assurance that anticipated cash flows are matched with adequate investment liquidity. The secondary objective is to create a portfolio structure which will experience minimal volatility during economic cycles. This may be accomplished by purchasing quality, short- to medium-term securities. The dollar weighted average maturity shall be calculated in accordance with GASB requirements. The weighted average maturity of operating funds shall not exceed 548 days. Securities may not be purchased that have a final stated maturity date that exceeds five (5) years. 2. The Bond Debt Service Funds The investment strategy for bond debt service fund(s) has as its primary objective the assurance of investment liquidity adequate to cover the debt service obligation on the required payment date. Securities purchased shall not have a stated final maturity date that exceeds the next unfunded bond debt service payment date. 3. Bond Reserve Funds The investment strategy for bond reserve fund(s) has as its primary objective the ability to generate a dependable revenue stream to the appropriate debt service fund from securities with a low degree of volatility. Securities should be of high quality and, except as may be required by the Bond Ordinance specific to an individual issue, of short-to- intermediate-term maturities. The stated final maturity dates of securities held shall not exceed five (5) years. City of University Park, Texas - Investment Policy 4. Capital Projects Funds The investment strategy for capital projects funds portfolios has as its primary objective the assurance that anticipated cash flows are matched with adequate investment liquidity. These portfolios should include at least 10% in highly liquid securities to allow for flexibility and unanticipated project outlays. The stated final maturity dates of securities held should not exceed the estimated project completion date. To maximize the effective investment of assets, all funds needed for general obligations may be pooled into one account for investment purposes. The income derived from this account will be distributed to the various funds based on their average balances on a periodic basis. Proceeds of bond issues shall not be pooled with other assets of the City, but shall be maintained in the fund issuing the bonds with interest earnings on these invested proceeds recorded directly to that fund. SECTION 4 SPECIFIC INVESTMENT POLICIES City of University Park, Texas - Investment Policy 4. SPECIFIC INVESTMENT POLICIES 1. Eligible Investments Investments described below are those authorized by the Public Funds Investment Act (Chapter 2256, Texas Government Code), as amended, which is included and made a part of this Policy as Appendix A. The following list may not contain all of those securities that are authorized by state statutes, but only those that the City Council wishes to include in their portfolios. The purchase of specific issues may at times be further restricted or prohibited because of current market conditions. City funds governed by this Policy may be invested in: 1. obligations of the United States or its agencies and instrumentalities; 2. direct obligations of the State of Texas or its agencies; other obligations, the principal and interest on which are unconditionally guaranteed or insured by the State of Texas or the United States or its agencies and instrumentalities. obligations of states, agencies, counties, cities and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than A or its equivalent. fully collateralized direct repurchase agreements having a defined termination date, secured by obligations described by subdivision 1 of this subsection, pledged to the City, held in the City's name and deposited at the time the investment is made with the City with a third party selected and approved by the City, and placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in Texas, and having a market value (including accrued interest) of no less than the principal amount of the funds disbursed; 6. certificates of deposit issued by state and national banks domiciled in Texas that are: 1. guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor; or, 2. secured by obligations that are described by 1 - 4 above, which are intended to include all direct federal agency or instrumentality issues that have a market value of not less than the principal amount City of University Park, Texas - Investment Policy of the certificates or in any other manner and amount provided by law for deposits of the City. 7. share certificates issued by state and federal credit unions domiciled in Texas that are: guaranteed or insured by the National Credit Union Share Insurance Fund, or its successor; or, secured by obligations that are described by 1 - 4 above, which are intended to include all direct federal agency or instrumentality issues that have a market value of not less than the principal amount of the certificates or in any other manner and amount provided by law for deposits of the City. SEC-regulated, no-load money market mutual funds with a dollar- weighted average stated portfolio maturity of 90 days or less and whose investment objectives include seeking to maintain a stable net asset value of $1 per share. No more than 15% of the City's average fund balance may be invested in money market mutual funds, and the City may not invest funds under its control in an amount that exceeds 10% of the total assets of any individual money market mutual fund. Local government investment pools organized in accordance with the Interlocal Cooperation Act (Chapter 791, Texas Government Act) as amended, whose assets consist exclusively of the obligations that are allowed as a direct investment for funds subject to the Public Funds Investment Act (Chapter 2256, Texas Government Code). A public funds investment pool must be continuously rated no lower than AAA, AAA-m or at an equivalent rating by at least one nationally recognized rating service. Eligible investment pools must be authorized by the City Council, by rule, order, ordinance, or resolution, as appropriate. The City Council has approved the Texas Local Government Investment Pool ("TexPool"), administered by the Texas State Comptroller,,,ll,~,~' the Texas Short Term Asset Reserve ("TexSTAR");; administered by JPMorgan Chase and First Southwest Asset Management~ ITexasTERM, administered by PFM Asset Management LLC.I Investments in collateralized mortgage obligations are strictly prohibited. These securities are also disallowed for collateral positions. The City will not be required to liquidate investments that were authorized investments at the time of purchase. City of University Park, Texas - Investment Policy 2. Ensuring Safety of Principal Ensuring safety is accomplished through protection of principal and safekeeping. 1. Protection of Principal The City shall seek to control the risk of loss due to the failure of a security issuer or guarantor. Such risk shall be controlled by: 1. investing only in the safest types of securities as defined in the Policy, 2. qualifying the broker/dealer and financial institution with whom the City will transact, 3. collateralization as required by law, 4. portfolio diversification, and 5. limiting maturity. Settlement of all investment transactions, except those transactions involving investments in mutual funds or local government investment pools, must be made on a delivery versus payment basis. The purchase of individual securities shall be executed "delivery versus payment" (DVP) through the Federal Reserve System delivered to an authorized safekeeping agent or "Trustee." By so doing, City funds are not released until the City has received, through the Federal Reserve wire, the securities purchased. The security shall be held in the name of the City by the Trustee. The Trustee's records shall assure the notation of the City ownership of or explicit claim on the securities. The original copy of the safekeeping receipts shall be delivered to the City within twenty-four (24) hours of the security's receipt by the Trustee. 1. Approved Broker/Dealers/Financial Institutions and Depositories Investments shall only be made with those firms and institutions who have acknowledged receipt and understanding of the City's Investment Policy. The "qualified representative" of the business as defined in Chapter 2256 of the Texas Government Code shall execute a written certification to acknowledge receipt of the City's Investment Policy and to acknowledge that the organization has implemented reasonable procedures and controls to preclude imprudent investment activities arising out of the investment transactions conducted between the entity and the City. Should the City contract with an external investment advisor to execute the investment strategy, including the negotiation and execution of investment transactions, a managing officer of the investment advisory firm may sign the written certification in lieu of the City of University Park, Texas - Investment Policy broker/dealer firms. This certification must be included as part of the investment advisory contract. Securities and certificates of deposit shall only be purchased from those institutions included on the City's list of broker/dealers and financial institutions as approved by the Investment Committee. All securities dealers shall provide the City with references from other public entities that they are currently serving. This list of approved investment providers must be reviewed at least annually by the City's Investment Committee and shall be recorded in the Committee's meeting minutes. The City's Finance Advisory Committee shall comprise the Investment Committee. All state and national banks located in the State of Texas, which are insured by the Federal Deposit Insurance Corporation (FDIC) are to be considered as eligible depositories. The financial condition of the bank shall be considered prior to establishing any accounts with that bank. The Finance Advisory Committee shall review the bids submitted by depository candidates and make a recommendation to the City Council for final approval. 2. Master Repurchase Agreement It is the policy of the City to require each issuer of repurchase agreements to sign a copy of the City's Master Repurchase Agreement. An executed copy of this agreement must be on file before the City will enter into any repurchase agreement with an issuer. (See Appendix B, "Master Repurchase Agreement".) 3. Collateralization Consistent with the requirements of State law, the City requires all bank deposits (including time deposits) to be federally insured or collateralized with eligible securities. Financial institutions serving as City Depositories will be required to sign an Agreement with the City and its safekeeping agent for the collateral, perfecting the City's rights to the collateral in case of default, bankruptcy or closure. The City shall not accept, as depository collateral, any security that is not specifically allowed to be held as a direct investment by the City portfolio (see 4.1). Repurchase agreements must also be collateralized in accordance with State law. Each issuer of repurchase agreements is required to sign a copy of the City's Master Repurchase Agreement. An executed copy of this agreement must be on file before the City will enter into any repurchase agreements with an issuer. (See Appendix B, City of University Park, Texas - Investment Policy "Master Repurchase Agreement".) The City considers repurchase agreements to be simultaneous purchases and sales of securities as outlined in the Master Repurchase Agreement and not as collateralized loans. However, the underlying securities may be referred to as "collateral." Evidence of the pledged collateral shall be maintained by the Finance Director or a third party financial institution. All collateral shall be subject to inspection and audit by the Finance Director or the City independent auditors. (1) Allowable Collateral 1. Certificates of Deposit Eligible securities for collateralization of certificates of deposit are U.S. Treasury obligations and government agency securities. The eligibility of specific issues may at times be restricted or prohibited because of current market conditions. 2. Repurchase Agreements Collateral underlying repurchase agreements is limited to U.S. government and agency obligations, which are eligible for wire transfer (i.e. book entry) to the City's designated safekeeping agent through the Federal Reserve System. (2) Collateral Levels Collateral is valued at current market plus interest accrued through the date of valuation. 1. Certificates of Deposit The market value of collateral pledged for certificates of deposit must at all times be equal to or greater than 102% of the par value of the certificate of deposit plus accrued interest, less the amount insured by the FDIC or its successors. Investment in eligible pooled Certificate of Deposit programs is authorized under this section. 2. Repurchase Agreements q0 City of University Park, Texas - Investment Policy The market value of collateral required to be pledged for repurchase agreements shall be a percentage of the par value of the agreement plus accrued interest and shall be maintained at the following levels: Collateral U.S. Treasury U.S. Government Maturity Securities Agency 1 year or less 102 % 102 % 1 year to 5 years 102 % 103 % Over 5 years 103 % 104 % (3) Monitoring Collateral Adequacy 1. Certificates of Deposit The City requires monthly reports with market values of pledged securities from all financial institutions with which the City has certificates of deposit. The City's Investment Officer will at least weekly monitor the adequacy of collateral. 2. Repurchase Agreements Weekly monitoring by the City's Investment Officer of all collateral underlying repurchase agreements is required. More frequent monitoring may be necessary during periods of market volatility. (4) Margin Calls 1. Certificates of Deposit If the collateral pledged for a certificate of deposit falls below the 102% of the deposit, plus accrued interest less FDIC insurance, the institution will be notified by the City and will be required to pledge additional securities no later than the end of the next succeeding business day. 2. Repurchase Agreements If the value of the collateral underlying a repurchase agreement falls below the margin maintenance levels specified above, the City will make a margin call unless the repurchase agreement is City of University Park, Texas - Investment Policy scheduled to mature within five business days and the amount is deemed to be immaterial. (5) Collateral Substitution Collateralized investments and certificates of deposit often require substitution of collateral. Any broker or financial institution requesting substitution must contact the Investment Officer(s) for approval and settlement. The substituted collateral's value will be calculated and substitution approved if its value is equal to or greater than the required value (See 4.2.1.3.2.2). The Investment Officer or must give immediate notification of the decision to the bank or the safekeeping agent holding the collateral. Substitution is allowable for all transactions, but should be limited, if possible, to minimize potential administrative problems and transfer expense. The Investment Officer may limit substitution and assess appropriate fees if substitution becomes excessive or abusive. Collateral may be substituted only with the oral authorization of the Investment Officer, followed by written confirmations within 24 hours. (6) Collateral Reductions Should the collateral's market value exceed the required amount, any broker or financial institution may request approval from the Investment Officer to reduce collateral. Collateral reductions may be permitted only if the City's records indicate that the collateral's market value exceeds the required amount. Written confirmations of the collateral reduction should be received within 24 hours of the Investment Officer's approval. 4. Portfolio Diversification Risk of principal loss in the portfolio as a whole shall be minimized by diversifying investment types according to the following limitations. q2 City of University Park, Texas - Investment Policy As discussed below, these limitations do not apply to bond proceeds. Investment Type: % of Portfolio · U.S. Treasury Notes/Bonds/Bills 100% · U.S. Agencies 60% · Local Government Investment Pools 50% · Repurchase Agreements 30% · Certificates of Deposit 30% · Money Market Mutual Funds 15% 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. Generally, the City should limit its repurchase agreement exposure with a single firm to no more than 15% of the value of the City's overall portfolio. To allow efficient and effective placement of proceeds from any bond sales, these limits may be exceeded for a maximum of five business days following the receipt of bond proceeds. (1) Bond Proceeds Proceeds of a single bond issue may be invested in a single security or investment if the Investment Committee determines that such an investment is necessary to comply with Federal arbitrage restrictions or to facilitate arbitrage record keeping and calculation. 5. Limiting Maturity In order to minimize risk of loss due to interest rate fluctuations, investment maturities will not exceed the anticipated cash flow requirements of the funds. Maturity guidelines by funds are as follows: (1) Operating Funds The dollar weighted average days to final stated maturity shall be 548 days or less. The Investment Officer will monitor the maturity level and make changes as appropriate. (2) Bond Proceeds, Bond Reserves, Debt Service Funds The investment maturity of bond proceeds (including reserves and debt service funds) shall be determined considering: 1. the anticipated cash flow requirements of the funds, and; q3 City of University Park, Texas - Investment Policy the "temporary period" as defined by Federal tax law during which time bond proceeds may be invested at an unrestricted yield. After the expiration of the temporary period, bond proceeds subject to yield restriction shall be invested considering the anticipated cash flow requirements of the funds. 3. Safekeeping 1. Safekeeping Agreement The City shall contract with a bank or banks for the safekeeping of securities either owned by the City as a part of its investment portfolio or held as collateral to secure certificates of deposits or repurchase agreements. The Safekeeping Agreement shall clearly define the procedural steps for gaining access to the collateral should the City determine that the City funds are in jeopardy. The safekeeping institution, or Trustee, shall hold all aforementioned securities in an account at the Federal Reserve Bank that specifies City ownership of the account. The Safekeeping Agreement shall include the signatures of authorized representatives of the City, the firm pledging the collateral and the Trustee. 2. Safekeeping of Certificate of Deposit Collateral All collateral securing certificates of deposit must be held by a third party banking institution approved by the City, or collateral may be held at the Federal Reserve Bank. The City's ownership in collateral positions must be fully perfected. 3. Safekeeping of Repurchase Agreement Collateral The securities that serve as collateral for repurchase agreements with dealers must be delivered to a third-party custodian with which the City has established a third-party safekeeping agreement. The City's ownership of all securities that serve as collateral for repurchase agreements must be fully perfected. 3. Ensuring Liquidity Liquidity shall be achieved by matching investment maturities with forecasted cash flow requirements, by investing in securities with active secondary markets, and by investing in eligible money market mutual funds (MMMF's) and local government investment pools (LGIP' s). q4 City of University Park, Texas - Investment Policy A security may be liquidated to meet unanticipated cash requirements, to re- deploy cash into other investments expected to outperform current holdings, or to otherwise adjust the portfolio. 4. Achieving Investment Return Objectives Investment selection for all funds shall be based on legality, appropriateness, liquidity, and risk/return considerations. The portfolios may be actively managed to enhance overall interest income. Active management will take place within the context of the "Prudent Person Rule." (see Section 2.4). 1. Securities Swaps The City may take advantage of security swap opportunities to improve portfolio yield. A swap which improves portfolio yield may be selected even if the transaction results in an accounting loss. 2. Competitive Bidding It is the policy of the City to require competitive bidding for all individual security purchases except for those transactions with money market mutual funds (MMMFs) and local government investment pools (LGIP's) which are deemed to be made at prevailing market rates, and for government securities purchased at issue through a primary dealer at auction price. Rather than relying solely on yield, investment in MMMFs and LGIP's shall be based on criteria determined by the Investment Committee, including adherence to Securities and Exchange Commission (SEC) guidelines for MMMFs when appropriate. At least three bidders must be contacted in all transactions involving individual securities. Competitive bidding for security swaps is also required. Bids may be solicited in any manner provided by law. For those situations where it may be impractical or unreasonable to receive three bids for a transaction due to a rapidly changing market environment or to secondary market availability, documentation of a competitive market survey of comparable securities or an explanation of the specific circumstance must be included with the transaction bid sheet. All bids received must be documented and filed for auditing purposes. 3. Methods of Monitoring Market Price The methods/sources to be used to monitor the price of investments that have been acquired with public funds shall be from sources deemed reliable by the Investment Officer, including primary or regional broker/dealers, established financial institutions providing portfolio management/accounting services, financial publications, such as the l/Vail q5 City of University Park, Texas - Investment Policy Street Journal, market information vendors such as Bloomberg or Telerate and market pricing services. 4. Benchmark Rate of Return As a general guideline, the City's cash management portfolio shall be designed with the objective of regularly meeting the average return on three-month U.S. Treasury Bills, or the average rate of 90-day Certificates of Deposit. These indices are considered benchmarks for risk-free investment transactions and therefore comprise a standard for the portfolio's rate of return. Additional benchmarks may be developed and recommended by the Investment Committee and used as a comparative performance measures for the portfolio. Additional benchmarks that may be considered for targeting by the Investment Committee include the Constant Maturity Treasury Bill with the maturity that most closely matches the weighted average maturity of the portfolio or a more customized index made up of blended Merrill Lynch Treasury/Agency indices. The investment program shall seek to augment rates of return above this threshold, consistent with legal restrictions and prudent investment principles. In a diversified portfolio, measured losses are inevitable and must be considered within the context of the overall portfolio. 5. Responsibility and Control 1. Authority to Invest Authority to manage the City investment program is derived from a resolution of the City. Those authorized by said resolution are designated as Investment Officers of the City, and, in conjunction with the Investment Committee, are responsible for investment decisions and activities. The City reserves the right to contract with an external investment advisory firm to manage the investment assets, and the resulting resolution will grant investment authorization to the contracted firm. The Finance Director shall establish written procedures for the operation of the investment program consistent with this Investment Policy. 2. Bonding requirements/Standard of care Each of the authorized investment officers shall be a bonded employee. All participants in the investment process shall act responsibly as custodians of the public trust and shall exercise the judgment and care, under prevailing circumstances, that a prudent person would exercise in the management of the person's own affairs. City of University Park, Texas - Investment Policy $. Establishment of Internal Controls The Finance Director is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that the 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. 4. Standard of Ethics 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 shall disclose to the City any material interests 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 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 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 by affinity or consanguinity to an individual seeking to sell an investment to the City 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 City. $. Training and Education In accordance with the Public Funds Investment Act (Chapter 2256, Texas Government Code), the designated Investment Officers, or those personnel authorized to execute investment transactions, must attend periodic investment training. State law requires that training relating to investment responsibilities must be provided by an independent source as approved by the Investment Committee. Personnel authorized to execute or approve investment transactions must receive at least 10 hours of investment training within each two-year period. Newly appointed investment officers must attain at least 10 hours of instruction relating to the officer's q7 City of University Park, Texas - Investment Policy o responsibility under the Act within 12 months after assuming investment duties. 6. Investment Committee An Investment Committee that is comprised of the membership of the Finance Advisory Committee shall be established to determine investment guidelines, general strategies, and monitor performance. The Committee shall meet quarterly to review performance, strategy and procedures. The Investment Committee shall include in its deliberation such topics as: performance reports, economic outlook, portfolio diversification, maturity structure, potential risk to the City funds, authorized brokers and dealers, and the target rate of return on the investment portfolio. Reporting Investment performance is continually monitored and evaluated by the Finance Director. The Investment Officer(s) will provide detailed reports, as required by the Public Funds Investment Act (Chapter 2256, Texas Government Code, Section 2256.023) for the City on a quarterly basis. The Finance Director shall submit a quarterly investment report signed by the investment officers that summarizes current market conditions, economic developments and anticipated investment conditions. The report shall summarize investment strategies employed in the most recent quarter, and describe the portfolio in terms of investment securities, maturities, risk characteristics and shall explain the total investment return for the quarter. The report will outline conformance to the restrictions of the Policy in the area of diversification and term of maturity. The report will also compare the performance of City's portfolio to appropriate benchmarks as determined by the Investment Committee. The report shall summarize current market conditions, economic developments and anticipated investment conditions. The report shall also summarize investment strategies employed in the most recent quarter, and describe the portfolio in terms of investment securities, maturities and risk characteristics. Within 60 days of the end of the fiscal year, the Finance Director or the Investment Advisory firm shall present an annual report on the investment program and investment activity. The report may be presented as a component of the fourth quarter report to the City. The quarterly investment report shall include a succinct management summary that provides a clear picture of the status of the current investment portfolio and transactions made over the last quarter. This management summary will be City of University Park, Texas - Investment Policy prepared in a manner which will allow the City to ascertain whether investment activities during the reporting period have conformed to the Investment Policy. The report will include the following: 1. A listing of individual securities held at the end of the reporting period. Unrealized gains or losses resulting from appreciation or depreciation by listing the beginning and ending book and market value of securities for the period. 3. Additions and changes to the market value during the period. 4. Average weighted yield to maturity or total return performance of the portfolio on entity investments as compared to applicable benchmarks. 5. Listing of investments by maturity date. 6. The percentage of the total portfolio which each type of investment represents. 7. Statement of compliance of the City investment portfolio with State Law and the investment strategy and policy approved by the City. 7. Compliance Audit In conjunction with its annual financial audit, the City shall perform a compliance audit of management controls on investments and adherence to the City's established Investment Policies. The results of the audit shall be reported to the Investment Committee and the governing body of the City. 8. Certification A copy of this Investment Policy will be provided to the senior management of any bank, dealer, broker or investment advisor wishing to transact investment business directly with the City in order that it is apprised of the investment goals of the City. Before business is transacted with the firm, a certification (Appendix C) must be signed by a senior member of a firm. Should the City contract with an external investment advisor to execute the entity's investment strategy, including the negotiation and execution of investment transactions, a managing officer of the investment advisory firm may sign the written certification in lieu of the broker/dealer firms. This certification must be included as part of the investment advisory contract. SECTION 5 ADOPTING CLAUSE City of University Park, Texas - Investment Policy ADOPTING CLAUSE This Investment Policy for the City of University Park, Texas is hereby adopted as of the 18th day of June, 2004. Mayor Director of Finance ATTEST: City Secretary 48 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNIVERSITY PARK, TEXAS, ENTERING INTO A PARTICIPATION AGREEMENT WITH THE TEXASTERM LOCAL GOVERNMENT INVESTMENT PORTFOLIO; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of University Park, Texas, ("Participant") is a local government of the State of Texas 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 to invest local funds in investments that provide for the preservation and safety of principal, liquidity, and yield consistent with the Public Funds Investment Act; and WHEREAS, the TexasTERM Local Government Investment Portfolio, a public funds investment pool (a "Pool"), was created on behalf of entities whose investment objectives in order of priority are preservation and safety of principal, liquidity, and yield consistent with the Public Funds Investment Act. NOW THEREFORE, be it resolved as follows: A. That Participant shall enter into a Participation Agreement to establish an account in its name in the Pool, for the purpose of transmitting local funds for investment in either the TexasTERM series or the TexasDAILY series within the Pool. B. That the individuals, whose signatures appear in this Resolution, are Authorized Representatives of the Participant and are each hereby authorized to transmit funds for investment in the Pool and are each further authorized to withdraw funds from time to time, to issue letters of instruction, and to take all other actions deemed necessary or appropriate for the investment of local funds. List of the Authorized Representatives of the Participant. These individuals may be issued P.I.N. numbers. 1. Name: Kent R. Austin Title: Director of Finance Signature: 2. Name: Tom Tvardzik Signature: Title: Controller 3. Name: __Bob Livingston Signature: Title: City Manager List the name of the Authorized Representative provided above that will have primary responsibility for performing transactions and receiving confirmations and monthly statements under the Participation Agreement. TexasTERM Tnformation Statement · 21 Name: In addition and at the option of the Participant, one additional Authorized Representative can be designated to perform only inquiry of selected information. This limited representative cannot make deposits or withdrawals. If the Participant desires to designate a representative with inquiry rights only, complete the following information. 4. Name: Title: Signature: C. That this Resolution and its authorization shall continue in full force and effect until amended or revoked by the Participant, and until the Pool receives a copy of any such amendment or revocation. This Resolution is hereby introduced and adopted by the Participant at its meeting held on the 18th day of June, 2004.. NAME OF PARTICIPANT: BY: Signature Printed Name Title ATTEST: Signature Printed Name Title SEAL: TexasTERM Tnformation Statement · 21 AGENDA MEMO (6/18/04 AGENDA) DATE: TO: FROM: SUBJECT: June 9, 2004 Honorable Mayor and City Council Christine Green, Purchasing Agent Bid #04-09, Annual Contract for Fuels Bid #04-09 for the purchase of fuels on an annual contract basis was opened on May 27th. This bid was posted on RFP Depot: 228 vendors received fax or e-mail notice of the bid; 20 vendors viewed the bid; three vendors submitted bids. The City buys fuel based on a mark-up or mark-down from the daily average wholesale fuel prices for the Dallas/Ft. Worth area as published by the Oil Price Information Service (OPIS). Petroleum Traders, Inc. submitted the low bid with an OPIS mark-up of $0.0143 for unleaded, $0.0163 for diesel #2, and $0.0463 for diesel #1. The City will purchase approximately $179,299.50 in fuel through this contract. Petroleum Traders has been the City's fuel vendor since April of 1999 and has provided good service. RECOMMENDATION: Staff recommends accepting the low bid of Petroleum Traders, Inc. Attached is a bid tabulation including a price history. 3800 UNIVERSITY BOULEVARD UNIVERSITY PARK, TEXAS 75205 TELEPHONE (214) 363-1644 C:\Documents and Settings\nwils°n'UNIVPARK\L°cal Settings~Temporary Internet Files\OLK3\0409memo (2).doc 9:07 AM 06/1 BID #04-09, ANNUAL FUEL CONTRACT BID TABULATION OPENED MAY 27, 2004, 3:00 P.M. DESCRIPTION ANN. QTY. UNIT DFW OPIS PRICE 5-24-04 1. Mansfield Oil Co. 2. Petroleum Traders Corp. 3. Susser Petroleum MARK-UP/ I APPROX. MARK-UP/ APPROX. MARK-UP/ I APPROX. DOWNI TOTAL DOWN TOTAL DOWNI TOTAL 1. Unleaded 65,000 GAL $1.4140 0.0197 $ 93,190.50 $0.0143 $ 92,839.50 $0.0380 $ 94,380.00 2. Diesel #2 75,000 GAL 3. Diesel #1 Infrequent use $1.1365 0.0224 $ 86,917.50 $0.0163 $ 86,460.00 $0.0380 $ 88,087.50 $1.2275 0.0313 $0.0463 *** NO BID *** APPROX. ANNUALTOTAL $ 180,108.00 $ 182,467.50 1. Mansfield Oil Co. 2. Petroleum Traders 3. Susser Petroleum NO, but $35 if above ground tanks NO, but Texas delivery fee NO NO NO NO NO NO NO NO NO NO Unbranded Motiva, Exxon, Citgo, Conoco Phillips Unbranded OTHER FEES (not taxes): 1. Split load charge? 2. Tank Wagon Delivery charge? 3. Charge for deliveries <8000 gals? 4. Pump off charge? 5. Brand of fuel * NOTE: The City of University Park usually orders full transport loads defivered to one location. These extra fees usually will not apply. Price History 2001-2004 Fuel Vendor was Petroleum Traders $0.0003 markup on Unleaded $0.0048 markup on Diesel #2 $0.0350 markup on Diesel #1 1999 Fuel Vendor was Petroleum Traders $0.0019 markup on Unleaded $0.0064 markup on Diesel #2 $0.0195 markup on Diesel #1 2000 Fuel Vendor was Petroleum Traders $0.0009 markup on Unleaded $0.0054 markup on Diesel #2 $0.0185 markup on Diesel #1 1998 Fuel Vendor was TAC (Truman Arnold) $0.0066 markup on Unleaded $0.0071 markup on Diesel #2 $0.0141 markup on Diesel #1 MINUTES #2414 CITY COUNCIL MEETING CITY OF UNIVERSITY PARK, TEXAS CITY HALL COUNCIL CHAMBERS TUESDAY, JUNE 1, 2004, 5:00 P.M. Mayor Holmes convened the council into a pre-meeting at 4:02 p.m. to discuss the upcoming City Council Agenda. No action was voted on or taken. Mayor Holmes then opened the regular meeting of the City Council. Present were Mayor Pro Tempore Jim Roberts, Councilmembers Harry Shawver, Kelly Walker and Sydney Carter. Also in attendance were City Attorney Rob Dillard, City Manager Bob Livingston, Public Works Director Bud Smallwood, Finance Director Kent Austin, Police Chief Gary Adams, Fire Chief David Ledbetter, Human Resources Director Luanne Hanford and Deputy City Secretary Robert Corder. City Secretary Nina Wilson was absent and excused. AWARDS & RECOGNITION: COMMENDATION: Police Chief Gary Adams presented a commendation on behalf of the City Of University Park to Ms. Kim Duncan. Ms. Duncan observed two individuals running from a garage in the 3000 block of Hanover. Ms. Duncan quickly called the University Park Police and the individuals were stopped. Officers discovered that the vehicle the suspects were driving was stolen from Dallas, and contained stolen property from the residence. RECOGNITION: Finance Director Kent Austin recognized the members of the Texas Higher Education Authority. Members present included Eiband Wilshusen, Wayne Tenney, O. Paul Corley, and Trevor Rees-Jones. Don Houseman and Richard Quisenberry were not present. Mr. Austin presented each member in attendance with certificates of appreciation and noted the accomplishments of the authority. DEPARTMENT PINS: City Manager Bob Livingston presented department service pins to Robert Rogers for 15 years of service with the City and to Jacob Speer for 5 years of service with the City. BOY SCOUTS: Mayor Holmes asked any Boy Scouts in attendance to approach the podium and give their name, troop number, and merit badge working towards while attending the meeting. Mr. Stephen Turney from Troop 125 was working on his Communications badge; Mr. Wen McCaory from Troop 72 was working on his Communications badge; and Mr. Michael Demdicki from Troop 125 was working on his Citizenship in the Community badge. Councilmember Shawver moved acceptance of the Consent Agenda. Councilmember Carter seconded, and the vote was unanimous to approve the following: CONSENT AGENDA CONFIRMATION OF JIM ROBERTS AS MAYOR PRO TEMPORE: Approval of this item would confirm Jim Roberts as the Mayor Pro Tempore through 2006. CONSIDER RESOLUTION: Approval of the resolution will authorize participation in the Corporate Travel Charge Card Program of BankOne, and authorize the Purchasing Agent to execute the agreement. RESOLUTION NO. 04-05 A RESOLUTION OF THE CITY COUNCIL OF UNIVERSITY PARK, TEXAS, AUTHORIZING PARTICIPATION IN THE CORPORATE TRAVEL CHARGE CARD PROGRAM OF BANK ONE; AUTHORIZING EXECUTION OF AN AGREEMENT AND OTHER NECESSARY PAPERS BY THE PURCHASING AGENT; AND PROVIDING AN EFFECTIVE DATE. CONSIDER APPROVAL OF CITY COUNCIL MEETING MINUTES: For May 19 & 24, 2004. MAIN AGENDA CONSIDER ORDINANCE ABANDONING DYER RIGHT-OF-WAY FROM AIRL1NE TO DULBIN TO SOUTHERN METHODIST UNIVERSITY: Director of Public Works Bud Smallwood introduced the proposed ROW abandonment and indicated that this item was a cleanup issue from a previously authorized rezoning, street realignment, and screening wall. The City will receive fair market value for the proposed ROW abandonment. Mayor Pro Tempore Jim Roberts moved for approval of the proposed ROW abandonment. Councilmember Sydney Carter seconded, and the vote was unanimous to approve the ROW abandonment. ORDINANCE NO 04/17 AN ORDINANCE OF THE CITY OF UNIVERSITY PARK, TEXAS, ABANDONING ALLEY RIGHT-OF-WAY AS MORE PARTICULARLY DESCRIBED IN EXHIBIT "A", AND ABANDONING STREET RIGHTS-OF-WAY AS MORE PARTICULARY DESCRIBED IN EXHIBIT "B" AND "C", TO THE ABUTTING OWNER, SOUTHERN METHODIST UNIVERSITY, IN CONSIDERATION OF THE PAYMENT OF THE MARKET VALUE AND CONVEYANCE TO THE CITY OF AN ALLEY EASEMENT FOR THE PROPERTY MORE PARTICULARLY DESCRIBED IN EXHIBIT "D"; PROVIDING FOR THE FURNISHING OF A CERTIFIED COPY OF THIS DOCUMENT FOR RECORDING IN THE REAL PROPERTY RECORDS OF DALLAS COUNTY, TEXAS AS A DEED; AND PROVIDING AN EFFECTIVE DATE. CONSIDER REQUEST FROM CINDY WILLIAMS OF THE UNIVERSITY PARK ELEMENTARY SCHOOL PTA FOR FEE WAIVER FOR USE OF CURTIS PARK: Ms. Cindy Williams has requested the City consider waiving a fee waiver for use of Curtis Park. Previous use of the park by this organization required a $300 fee plus a $250 security deposit. City Manager Bob Livingston, citing previous recommendations to deny fee waivers for use of park, indicated he was recommending against the proposed fee waiver. However, he did indicate that he would like the new Parks Director to work with the Parks Advisory Committee to develop a fee analysis and policy regarding fee waiver requests. Councilmember Shawver moved to deny the fee waiver by Ms. Williams. Mayor Pro Tempore seconded, and the vote was unanimous to deny the fee waiver request. CONSIDER ORDINANCE ABANDONING RIGHT-OF-WAY AT THE CORNER OF CARUTH AND TURTLE CREEK BLVD: Director of Public Works Bud Smallwood introduced the item that would abandon a triangular ROW at the northwest corner of Caruth and Turtle Creek. The City will receive fair market value for the proposed ROW abandonment. Councilmember Shawver moved for approval of the proposed ROW abandonment. Councilmember Walker seconded, and the vote was unanimous to approve the ROW abandonment. ORDINANCE NO 04/18 AN ORDINANCE OF THE CITY OF UNIVERSITY PARK, TEXAS, ABANDONING A PORTION OF THE STREET RIGHT-OF-WAY OF CARUTH BOULEVARD AND TURTLE CREEK BOULEVARD, AS MORE PARTICULARLY DESCRIBED AND DEPICTED IN EXHIBIT "A", TO THE ABUTTING OWNER IN CONSIDERATION OF THE PAYMENT OF THE APPRAISED MARKET VALUE OF $45,850, BY THE OWNER TO THE CITY; PROVIDING FOR THE FURNISHING OF A CERTIFIED COPY OF THIS ORDINANCE FOR RECORDING IN THE REAL PROPERTY RECORDS OF DALLAS COUNTY, TEXAS, AS A QUIT CLAIM DEED; AND PROVIDING AN EFFECTIVE DATE. RETIREMENT PLAQUE: Mayor Pro Tempore Jim Roberts presented Agustin B. Carbajal with a plaque for his 18 years of service with the City. Mayor Pro Tempore Roberts also presented Mr. Carbajal with two checks and thanked him for his years of service with the Parks Department. CONDISER REQUEST TO REZONE PD-2-R - 4520 LOVERS LANE: In November, 2003 the Park Cities Animal Hospital received approval from the Planning and Zoning Commission for a sixteen foot addition to the rear of their space in Planned Development District 2-Retail. After further review of their space needs, the applicant made a request at the April 19, 2004 Planning and Zoning meeting for an additional two feet to the building, for a total addition of 537 square feet. The Planning and Zoning Commission approved the request. Mayor Pro Tempore Jim Roberts moved for approval of the request to amend PD-2-4. Councilmember Walker seconded the motion and the vote was unanimous to approve the amended PD-2-R. At that time the applicant questioned whether that included the additional two feet requested. Mayor Pro Tempore Roberts amended his motion to specify the additional two feet. Councilmember Walker seconded the amended motion, and the vote was unanimous to approve the amended PD-2-R for an additional two feet, for a total of 18 feet. ORDINANCE NO 04/19 AN ORDINANCE OF THE CITY OF UNIVERSITY PARK, TEXAS, AMENDING THE COMPREHENSIVE ZONING ORDINANCE AND MAP OF THE CITY OF UNIVERSITY PARK, AS HERETOFORE AMENDED, SO AS TO AMEND PLANNED DEVELOPMENT DISTRICT NO. 2 (PD-2-R) FOR THE PROPERTY DESCRIBED AS LOT 2 OF BLOCK C, IDLEWILD NO. 2, AN ADDITION TO THE CITY OF UNIVERSITY PARK, DALLAS COUNTY, TEXAS, AND MORE COMMONLY KNOWN AS 4520 LOVERS LANE, UNIVERSITY PARK, TEXAS; APPROVING A SITE PLAN; PROVIDING SPECIAL CONDITIONS; PROVIDING FOR THE REPEAL OF ALL ORDINANCES IN CONFLICT; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR A PENALTY OF FiNE NOT TO EXCEED THE SUM OF TWO THOUSAND DOLLARS ($2,000.00) FOR EACH OFFENSE; AND PROVIDING AN EFFECTIVE DATE. CONSIDER REQUEST TO REZONE 5801 HILLCREST FROM MF-2-MF-3: A rezoning request at 5801 Hillcrest by Highland Park United Methodist Church has been reviewed and approved by the Planning & Zoning Commission. The proposed change would rezone the property from Multi Family District 2 to Multi Family District 3. The MF-3 zoning classification would allow a total of thirteen multi-family units on the property. Councilmember Walker moved to approve the zoning request from MF-2 to MF-3. Councilmember Shawver seconded the motion, and the vote was unanimous to approve the rezoning request. ORDINANCE NO. 04/20 AN ORDINANCE OF THE CITY OF UNIVERSITY PARK, TEXAS, AMENDING THE COMPREHENSIVE ZONING ORDINANCE AND MAP OF THE CITY OF UNIVERSITY PARK, AS HERETOFORE AMENDED, BY CHANGING THE ZONING ON THE PROPERTY AT 5801 HILLCREST FROM MULTI FAMILY DISTRICT 2 (MF-2) TO MULTI FAMILY DISTRICT 3 (MF-3), SAID PROPERTY BEING MORE PARTICULARLY DESCRIBED AS LOTS 9 AND 10, BLOCK 6, WALKER'S ADDITION, AN ADDITION TO THE CITY OF UNIVERSITY PARK, DALLAS COUNTY, TEXAS; PROVIDING FOR THE REPEAL OF ALL ORDINANCES IN CONFLICT; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR A PENALTY OF FiNE NOT TO EXCEED THE SUM OF TWO THOUSAND DOLLARS ($2,000.00) FOR EACH OFFENSE; AND PROVIDING AN EFFECTIVE DATE. CONSIDER ORDINANCE AMENDING THE FY2004 BUDGET: Staff is requesting Council approval to transfer monies to the Capital Projects Fund for the City Hall Renovation project in the amount of $3,450,000. The transfer would come from two sources: 1) unreserved fun balance in the General Fund, $2,200,000; and 2) unreserved fund balance in the Utility Fund, $1,250,000. Councilmember Shawver moved to approve the budget transfer. Councilmember Walker seconded the motion, and the vote was unanimous to approve the transfer. ORDINANCE NO. 04/21 AN ORDINANCE OF THE CITY OF UNIVERSITY PARK, TEXAS, AMENDING THE 2003-2004 FISCAL YEAR BUDGET, ORDINANCE NO. 03/22, TO TRANSFER FUNDS FROM THE FISCAL YEAR 2004 GENERAL FUND AND UTILITY FUND INTO THE CAPITAL PROJECTS FUND; AND PROVIDING AN EFFECTIVE DATE. DISCUSSION REGARDING PROPOSAL FOR CABLE TV FRANCHISE RENEWAL ADVISORY GROUP: The City's cable TV franchise agreement with Charter Communications expires in 2005. During previous franchise negotiations a staff member and Council representative have held discussions with Charter Communications. Staff is proposing to form a temporary advisory committee formed of citizens from University Park and Highland Park to negotiate the agreement on behalf of the communities. The committee would be a five to seven member committee with approximately 2-3 members from Highland Park and the remaining members from University Park. CONSIDER COMMITTEE APPOINTMENTS: Mayor Holmes has been working with staff members to consider new appointments to the City's various statutory and advisory committees. A list was provided to Council of the proposed committee members. Mayor Pro-Tempore Jim Roberts moved to approve the committee appointments. Councilmember Carter seconded the motion, and the vote was unanimous to approve the appointments. Mayor Holmes then announced the formation of a City Hall Renovation Oversight Committee. The temporary committee would be comprised of former mayor Harold Peek, Olin Lane, John Walsh, Bob Livingston, and Blackie Holmes. DISCUSS DATE FOR JUNE WORK SESSION AND MEETING DATES FOR THE REMAINDER OF 2004: Brief discussion regarding a need to move the June 16th work session to June 18th. Members of Council agreed that this new date would work, and an upcoming item would be added to discuss the remaining meeting dates. CONSIDER CHANGE ORDER NO. 1 WITH SYB CONSTRUCTION FOR UTILITY IMPROVEMENTS ALONG LOVERS LANE: Council awarded SYB Construction a contract in the amount of $1,489,258 for utility improvements along Lovers Lane in December, 2003. Staff discovered that the Lovers Lane reconstruction project could be expedited if the remaining utility work along Lovers Lane from Thackeray to Hillcrest could be added to SYB's contract. The proposed change order would be in the amount of $148,033.50. Councilmember Shawver moved to approve change order No. 1 with SYB construction. Councilmember Walker seconded the motion, and the vote was unanimous to approve change order No. 1 with SYB Construction. PASSED AND APPROVED this 18th day of June 2004. ATTEST: James H. Holmes III, Mayor Nina Wilson, City Secretary AGENDA MEMO (06/18/04AGENDA) DATE: June 14, 2004 TO: Honorable Mayor & Councilmembers FROM: Bob Livingston City Manager SUBJECT: INSURANCE RENEWAL FOR PROPERTY, CASUALTY, LIABILITY & WORKERS COMPENSATION The committee is in the process of reviewing renewal options and will be meeting on Tuesday morning to formulate recommendations for the city council. Frank Swingle, chairman of the committee, will be in attendance at the city council meeting on Friday morning. RECOMMENDATION: ATTACHMENTS: 3800 UNIVERSITY BOULEVARD UNIVERSITY PARK, TEXAS 75205 TELEPHONE (214) 363-1644 U:\Docs\City Council~Agenda Memo for Insurance Committee.doc 10:05 AM 06/1, AGENDA MEMO (06-18-04 AGENDA) DATE: TO: FROM: SUBJECT: June 11, 2004 Bob Livingston City Manager Gene R. Smallwood, P.E. Director of Public Works Information and discussion of schedule for construction of water and sanitary sewer improvements in the area east of Caruth Park. Background. Plans and specifications are complete, and staff is prepared to solicit bids for the reconstruction of water, sanitary sewer, storm sewer, and pavement improvements in the following locations: · Alley in the 32-3300 block of Centenary - Marquette; · Alley in the 32-3400 block of Colgate - Caruth; · 32-3300 block of Caruth; · Alley in the 32-3300 block of Greenbrier-Southwestern; · Hillcrest, alley north of Southwestern to Caruth, and the parking area at east end of Caruth Park; Unless otherwise directed, staff will advertise for bids, present Council with a recommendation for award in August, and start construction in September. We expect the construction to be completed by mid-to-late 2005. Coincidently, that completion estimated date is very similar to that of the Lovers Lane project. Information / Discussion. Staff would entertain any questions or comments from Council. AGENDA MEMO (06/18/04 AGENDA) DATE: TO: FROM: June 8, 2004 Honorable Mayor and Members of the City Council Jim Criswell, Director of Information Services SUBJECT: Prospects for a "Paperless" Agenda As we move into the 21st century, the City Manager and Staff are constantly considering additional ways to use automation to generate a more efficient operation. With the implementation of the LaserFiche Document Management software in the Executive, Engineering, Building, Fire, and Sanitation Departments, great strides have been made in moving toward a more paperless environment. To continue that trend, City Staff is proposing a discussion to help give direction to automating the delivery of agenda packets, Friday reports, email, and other crucial information to the City Council. The advantages of a move toward a paperless agenda process are many. The City Secretary and Administrative Assistant spend several hours twice each month preparing the agenda books that then must be delivered to the homes of the Mayor and Council. This process could be replaced by electronically transmitting the documents instead. Additionally, the advantage of the Mayor and each Council member having access to a City email account would facilitate constant communication among people who are at times difficult to reach, and information delivery in a consistent manner. Today, Staff is seeking information related to the Council's comfort zone with personal computing, current capabilities at home or at the office, and a general discussion as to the direction Staff should take as we move toward a paperless world. 3800 UNIVERSITY BOULEVARD UNIVERSITY PARK, TEXAS 75205 TELEPHONE (214) 363-1644 C:\Documents and Settings\nwils°n'UNIVPARK\L°cal Settings~Temporary Internet Files\OLK3~Agenda Memo - Council Prospects for Paperless Agenda.doc 9:50 AM 06/11/04 City of University Park City Council Computer Use Survey June 8, 2004 This survey is intended to help identify the Mayor and Council's comfort level with the use of personal computers and discover the current computing capabilities available at home or work. 1. Do you currently use a personal computer at? Work Home (If yes to either, please continue.) 2. Which of the following applications do you use? Work Home Internet Explorer Email Adobe Acrobat Reader Microsoft Word Microsoft Excel Microsoft Powerpoint 3. Which Microsoft Windows version do you have installed? Work Home Windows 98 Windows 2000 Windows XP Other 4. If you know the computer brand and specifications, indicate below. Work Home Brand Processor Memory Disk Capacity Approx. Purchase Date Brand Processor Memory Disk Capacity Approx. Purchase Date If you know what type of connection you use to access the Internet/Email, indicate below. Dial-up(regular telephone line) High Speed Digital Subscriber Line (DSL) High Speed Cable Modem T-1 Line Work Home City of University Park City Council Computer Use Survey June 8, 2004 General: 6. How would you assess your personal computer skills? Beginner Intermediate Power User 7. Would you prefer to access City-related email and documents from your work or home computer, or by paper? Work Home Paper 2 AGENDA MEMO (06/18/04 AGENDA) DATE; June 10, 2004 TO: Honorable Mayor and City Council City Manager FROM: Kent R. Austin, Director of Finance SUBJECT: TMRS/FRRF conversion study summary ITEM: Included on the June 18 work session agenda is a discussion item regarding the ongoing study of a merger between the City Fire Fighters' Relief and Retirement Fund (FRRF or "the Fund") and the Texas Municipal Retirement System (TMRS). Below is a summary of key points in the TMRS/FRRF conversion effort: · The 1/1/03 FRRF actuarial study concluded that the Fund would not be actuarially sound without an additional 2.4% in contributions. Currently the firefighters contribute 10% of their pay, and the City contributes 14.01%. In 2002 the Fund's investments returned negative 10.5%, the third consecutive year of negative returns. On a cash basis, Fund payouts have exceeded Fund inputs for the past three years. · In December 2002 the FRRF Board began discussing the possibility of merger with TMRS. · The FRRF Board and CUP City Council requested that TMRS conduct a merger study on April 28, 2003. The City agreed to pay the $10,000 study cost upon completion. · In September 2003 TMRS informed the Board that it would only consider accepting the active FRRF participants, not the non-actives and retirees. The reason is that FRRF does not have sufficient funds to cover the liability associated with the retirees if merged with TMRS. · An asset transfer of $1.445 million to TMRS would be required to account for active employee contributions previously made. As of 05/28/04, the FRRF portfolio balance was $6.6 million. The remaining balance ($5.155 million) would be used to pay future benefits to existing retirees. · In addition to the asset transfer, the City'sTMRS contribution rate would need to rise from 14.01% to 14.46%. This change would pay for the increase in unfunded liability created by the addition of the active Fire Department personnel. · The TMRS Board will not consider a merger without a 100% unanimous vote of approval by the existing FRRF membership. · To realize an equal or improved TMRS benefit comparable to 20 years in FRRF, FRRF actives would need 25 years of service credits in TMRS. Currently FRRF members are eligible for full retirement benefits after 20 years of service and 50 years of age. · The question of how much the non-actives and retirees will cost is key. Currently the Fund pays out $58,172 in monthly retiree benefits. A brief study by actuary Chuck Dean 3800 UNIVERSITY BOULEVARD UNIVERSITY PARK, TEXAS 75205 TELEPHONE (214) 363-1644 C:\Documents and Settings\nwils°n'UNIVPARK\L°cal Settings~Temporary Internet Files\OLK3~AGENDA MEMO FRRF 061804.doc 9:12 AM 06/11/04 entitled ;;Analyses of Retired Lives Liability" (4/20/04) identified the present value of retiree benefits at $11,094,970. This would be the cost today of purchasing annuities for all non-actives and retirees. · Instead of buying annuities, a likely less expensive funding method would be pay-as-you- go, using the remaining FRRF assets as a ;;wasting trust" until they are consumed. At over $600,000/year in benefit payouts, the Fund's assets would last about eight years. · As a means of reaching 100% favorable vote and ensuring that all merged members do not receive a lesser benefit, staff asked TMRS if some active could be retained with FRRF. TMRS responded that all actives would have to be merged, all or nothing. · The Fund's portfolio earned a 19.25% return for 2003 but has earned less than 1% year to date for 2004. UPDATE: Simply put, the challenge is two-fold: first, how to achieve unanimous approval from a large and independent-minded group of employees, and second, how to finance the $6 million gap in funding retiree benefits should a merger occur. FRRF Board of Trustees and City management have discussed, at length, advantages and disadvantages of different responses to the challenge. At this time City management would like to discuss alternatives, informally, with the City Council. The alternatives range from doing nothing (and awaiting the results of the next actuarial valuation, scheduled for 12/31/04) to funding the $6 million needed to cover all future benefits of current retirees. 3800 UNIVERSITY BOULEVARD UNIVERSITY PARK, TEXAS 75205 TELEPHONE (214) 363-1644 C:\Documents and Settings\nwils°n'UNIVPARK\L°cal Settings\Temporary Internet Files\OLK3~AGENDA MEMO FRRF 061804.doc 9:12 AM 06/11/04