HomeMy WebLinkAboutMinutes_GGAF_01.03.2012
The General Government and Finance (GGAF) Advisory Subcommittee established by the Georgetown City Council
met at 1:0 0 p.m. on Tuesday, January 3, 2012, in the City of Georgetown Council Chambers, located at 101 East
7th Street, Georgetown, Texas.
MINUTES
These minutes were approved at the February 8, 2012 GGAF Meeting.
The meeting was called to order at 1:00 p.m.
1. Review minutes from the November 1, 2011 GGAF Meeting – Danella Elliott, Administrative Manager
Unanimously approved, with one change noted: Item #2, capitalize “Pondrom”.
2. Review of proposed changes to the City’s Investment Policy - Susan Morgan, CPA, Finance Director
Susan noted that the changes proposed were “clean-up” items. The proposed changes to the policy include
minor adjustments to update the policy for changes adopted by 82nd Texas Legislature during the 2011 and
continue to modify terminology to conform to industry standards: Below is the memo presented to City Council
on January 24th outlining the changes proposed by staff and recommendations by the General Government
and Finance Advisory Subcommittee after presentation/review at the January 3rd meeting:
The City’s investments are guided by the City’s investment policy, which was created pursuant to Chapter 2256 of the
Texas Government Code, known as the Public Funds Investment Act (PFIA). The law requires the governing body of local
governments to review the policy annually. City staff and its investment advisory firm, Valley View Consulting, L.L.C., have
reviewed the current policy and made recommended changes to comply with recent updates in the law and make minor
language clarifications. During the 82nd Texas legislature, HB 2226 made several changes to the PFIA and the needed
policy updates have been included. HB 2346 and SB 1543 also modified the PFIA, but those changes were not applicable
to municipal governments.
These proposed changes were reviewed with the General Government and Finance Subcommittee (GGAF) on January 3,
2012 and modifications suggested by the committee are included in the policy presented for the January 24, 2012
Georgetown City Council Meeting.
A summary of the changes proposed is outlined below.
Section 1.3 Objectives
The current policy defines yield in terms of the “highest possible rate of return.” Staff recommends that the language be
clarified to better state the City’s yield objective. In the current low interest rate market, better cash management tools and
processes continue to be the most effective method for improving earnings. For example, beginning in November 2011,
the City began taking advantage of a fee credit option with its depository bank, JP Morgan Chase. By maintaining higher
overnight balances with the bank, the City can reduce banking fees up to the equivalent of 50 basis points. This is in
contrast to the average return of less than 10 basis points from local government investment pools such as TexPool.
Members Present: Patty Eason, Danny Meigs, Joe Pondrom, Steve Fought
Members Absent: Rachael Jonrowe
Staff Present: Susan Morgan, Lorie Lankford, Terry Jones
GGAF recommended some wording clarifications that have been incorporated into the proposed changes.
Section 2.1 Prudence
Additional language is added to clarify what the Investment Officer is and is not responsible for in complying with the PFIA
and the City’s investment policy. The first section is taken directly from the PFIA and the second section is to clarify that
while the Investment Officer is not responsible for adverse changes in an investment made in compliance with the policy,
the Investment Officer must report those conditions immediately and take appropriate actions. At GGAF’s suggestion, this
section was reviewed and affirmed with the Acting City Attorney.
Section 2.3 Delegation of Authority
This section is updated for changes in position titles. Section 2.3 (4) is updated to reflect clarifications made by the 82nd
legislature defining the start and end dates of the two year Investment Officer training cycle requirements as the entity’s
fiscal year. The two year requirement of 10 hours of training remains unchanged.
Section 3: Investment Strategies
The term “Certificates of Deposit” is updated throughout this section to the more accurate and consistent term “financial
institution deposits.”
Section 4.1.1 Financial Institution Deposits
The language is updated to reflect changes in the PFIA allowing purchase of financial institution deposits from approved
brokers and deletes the unnecessary language for the CDARS program. This program is already covered by existing
financial institution deposit language.
Section 4.1.4 Money Market Mutual Funds
Section d is deleted to reflect changes in SEC rule 2a (7) language that changes weighted average maturity (wam)
calculations to 2 separate calculations. The remaining sections a through d provide more stringent requirements than the
wam limitations; therefore this section is no longer necessary.
Section 4.1.5 Repurchase Agreement
This language is updated to reflect changes in the PFIA.
Section 4.2 Credit Rating Review and Effect of Loss of Required Rating
This is a new section added to reflect the new PFIA requirement to monitor the credit rating of investments and
recommends this review be conducted quarterly. The section has also been clarified to state that an instrument that drops
below the minimum rating at any time during the quarter is considered to have NOT met the minimum rating for
investment.
Section 5.1 Authorized Broker/Dealers
Authorized investments could include a financial institution deposit; therefore, this language is deleted.
The original language defining Qualified Representative was originally proposed to be deleted by staff because it is also
referenced in the previous paragraph. GGAF recommended leaving this terminology in the document to provide easier
and clearer reference for policy makers.
Section 5.3 Internal Controls
Qualifying language for quotes is added because competitive quotes for Money Market Accounts or financial institution
deposits may not be available.
Section 5.5 Collateralization
This section is enhanced to include the specific language as required by the Financial Institutions Reform, Recovery and
Enforcement Act (FIRREA). These requirements are already practiced by the City and its depository, but included here for
additional clarity.
Section 6.1 Quarterly Reporting
This section is updated to reflect changes in the PFIA. Local governments are no longer required to recognize fair market
gains or losses on a quarterly basis.
Attachment “A” Approved Broker/Dealer List
Great Pacific Securities is not active in the Texas municipal finance market. The City’s existing list is more than adequate
for its investing needs. A more thorough broker/dealer evaluation will be undertaken in the future when needed.
3. Consideration and possible action for the approval of the annual payment for the operation of the
county wide radio communications system to Williamson County in the amount of $99,750.00 – Terry
Jones, Construction Manager
In February 2008 the City Council approved entering into an interlocal agreement with Williamson County for
the establishment, operation and maintenance of the WILCO Radio Communication System. This agreement
dissolved the old CWICS group, that consisted of combined radio systems of Williamson County, Georgetown,
Round Rock, Cedar Park and Hutto, and established a Williamson County Radio Communication System. The
agreement created an organizational and management structure for on-going administration, operation and
maintenance of the system; and creates a budget process, strategic planning/budget forecasting process, as
well as allocation of costs associated with operating, maintaining and upgrading the system. In accordance
with the agreement, Williamson County bills the City quarterly for operations and maintenance at a cost of
$17.50 per radio per month. The City currently has 475 radios on the system.
Total amount of the City’s portion of the Williamson County RCS for fiscal year 2011/12 is $99,750.00 based
upon the approved rate of $17.50 per radio, per month for 475 radios.
Unanimously approved.
4. Consideration and possible action for approval of the selection of a design build team to provide
services for the design and construction of Fire Station 2 – Terry Jones, Construction Manager
Last summer Council directed staff to move forward on the construction of a new Fire Station 2 by the use of
the design/build method of construction. In August Council approved a contract with Broaddus & Associates to
act as our representative for design/build and to help us navigate through the DB process.
For the past three months staff has worked with Broaddus to develop a “request for qualifications” for the
purpose of soliciting for design/build team services. As a result of that solicitation we received qualification
statements from eleven design/build teams interested in the project. The Council appointed a selection
committee of Councilmember Jonrowe, Councilmember Sattler, Bob Young, Chief Fite, Terry Jones and
Broaddus that reviewed the qualifications and developed a short list of the most qualified to interview.
Additional scoring was performed on the short list group and interviews were conducted with the five short
listed teams of ZapalacReed/1113, SpawGlass/Atkins, J.Jacobs/Hickman, Chasco/Hickman and
BraunButler/Spencer Group. Final scoring was reviewed and the selection committee discussed pros and cons
of each of the five short listed firms.
The selection committee unanimously agreed to recommend to the City Council the team of Chasco
Contracting and KA Hickman Architects to design and construct Fire Station 2.
The GGAF Committee unanimously approved the recommendation and noted that City Council will have the
final approval.
5. The meeting adjourned at 1:40.