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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.