HomeMy WebLinkAboutAgenda_GGAF_01.28.2015Notice of Meeting for the
General Government and Finance Advisory Board
of the City of Georgetown
January 28, 2015 at 3:30 PM
at Georgetown Public Library Friends of the Library Room, located at 402 West 8th
Street, Georgetown, TX
The City of Georgetown is committed to compliance with the Americans with Disabilities Act (ADA).
If you require assistance in participating at a public meeting due to a disability, as defined under the
ADA, reasonable assistance, adaptations, or accommodations will be provided upon request. Please
contact the City at least four (4) days prior to the scheduled meeting date, at (512) 930-3652 or City
Hall at 113 East 8th Street for additional information; TTY users route through Relay Texas at 711.
Legislative Regular Agenda
A Review minutes from the January 7, 2015 GGAF Meeting - Danella Elliott, Executive Assistant
B Discussion and recommended selection of Valley View Consulting, LLC for Investment Advisory
Services - Susan Morgan, CPA, Finance Director
C Consideration and recommendation to implement an expansion of the City’s Infor Enterprise
Asset Management software to enable its use for vehicle fleet management at the City of
Georgetown’s Fleet Service Center - Chris Bryce, Assistant Director – IT; Stan Hohman, Fleet
Maintenance Supervisor; Paul Diaz, Utilities Financial Analyst
D Overview of the City’s Debt Program, including current outstanding and proposed debt
obligations - Micki Rundell, Chief Financial Officer
CERTIFICATE OF POSTING
I, Jessica Brettle, City Secretary for the City of Georgetown, Texas, do hereby certify that this Notice
of Meeting was posted at City Hall, 113 E. 8th Street, a place readily accessible to the general public
at all times, on the ______ day of __________________, 2015, at __________, and remained so
posted for at least 72 continuous hours preceding the scheduled time of said meeting.
____________________________________
Jessica Brettle, City Secretary
City of Georgetown, Texas
Government and Finance Advisory Board
January 28, 2015
SUBJECT:
Review minutes from the January 7, 2015 GGAF Meeting - Danella Elliott, Executive Assistant
ITEM SUMMARY:
FINANCIAL IMPACT:
N/A
SUBMITTED BY:
Danella Elliott, Executive Assistant
ATTACHMENTS:
Description Type
Draft Minutes from 01.07.15 GGAF Meeting Cover Memo
Minutes of the Meeting of the
GENERAL GOVERNMENT AND FINANCE ADVISORY BOARD (GGAF)
City of Georgetown, Texas
January 7, 2015
The General Government and Finance Advisory Board met at 3:30 p.m. on Wednesday, January 7, 2015 in the
Georgetown Public Library Friends of the Library Room, located at 402 West 8thth Street, Georgetown, Texas.
MEMBERS PRESENT: Keith Brainard, Chair, Tommy Gonzalez, Jerry Hammerlun, Joe Pondrom, Ralph Mason
MEMBERS ABSENT: None
STAFF/OTHERS
PRESENT: Jim Briggs, Laurie Brewer, Micki Rundell, Mike Peters, Stan Hohman, Trina Bickford,
James Davis, Chris Bryce, Chris Foster, Jennifer Bills, Skye Masson, Michelle Villarreal,
Mark Thomas, Dennis Hoover (Owner, Northwest Apartments); Doug Duffie, CPA and
Shawn Seaberg, PulteGroup; Matt Loeschman (Williamson County Sun)
A copy of these minutes, containing detailed information on the items listed below will be available in the Finance
and Administration Office, located at 113 East 8th Street, Georgetown, TX and can be found online at
http://agendas.georgetown.org/
Executive Session
In compliance with the Open Meetings Act, Chapter 551, Government Code, Vernon’s Texas Codes, Annotated, the
items listed below will be discussed in closed session and are subject to action in the regular session that follows.
Regular Session – Called to order at 3:30 p.m.
The GGAF Board may, at any time, recess the Regular Session to convene an Executive Session at the request of the
Chair of the GGAF Committee for any purpose authorized by the Open Meetings Act, Texas Government Code
Chapter 551.)
Public Wishing to Address Council
On a subject that is posted on this agenda: Please fill out a speaker registration form. Clearly print your name and
the letter of the item on which you wish to speak and present it to the Chair or Board Liaison, preferably prior to the
start of the meeting. You will be called forward to speak when the Board considers that item.
On a subject not posted on the agenda: Persons may add an item to a future Board agenda by contacting the Liaison
prior to the creation of the agenda for the following meeting, with the subject matter of the topic they would like to
address and their name. The Board Liaison can be reached at 512-930-3676 or by email at
danella.elliott@georgetown.org
Statutory Consent Agenda
The Statutory Consent Agenda includes non-controversial and routine items that Board may act on with one single
vote. A board member may pull any item from the Consent Agenda in order that the Board discuss and act upon it
individually as part of the Regular Agenda.
Council advised on August 26th to not have a Consent Agenda at Boards and Commission meetings; previously
posted items were moved and discussed on the Legislative Regular Agenda.
Legislative Regular Agenda
The Board will individually consider and possibly take action on any or all of the following items:
Keith Brainard, Chair, called to meeting to order at 3:30 p.m.
A. Review minutes from the December 3, 2014 GGAF meeting - Danella Elliott, Executive
Assistant
Tommy moved approval, Jerry seconded. All board members present approved (5-0)
B. Consideration and recommendation to implement an expansion of the City’s Infor Enterprise
Asset Management software to enable its use for vehicle fleet management at the City of
Georgetown’s Fleet Service Center - Stan Hohman, Fleet Maintenance Supervisor and Chris
Bryce, Assistant Director of IT Technology Director
Chris Bryce and Stan Hohman presented. Staff explained that this item is an expansion of the 2014
Infor Enterprise Asset Management project to include fleet. This module will replace the current
software, called RTA, which was purchased in 1998. Stan explained that mechanics currently use a
lot of time on their computers, as opposed to make repairs. RTA is also not designed for a diverse
fleet like Georgetown’s. The new program will have increase ability to track vehicles and schedule
predictive maintenance. The eventual goal will be for less downtown and more scheduled repairs.
The Infor product uses an existing product that the City already owns and limits new systems for IT
to manage. It allows for improved preventative maintenance, maximized warranty recovery, improve
time tracking, and better forecasts for replacement schedules. The software costs $52,000, the
consulting $83,000, hardware $3,000 for a total of $142,000.
Tommy asked about fleet’s operating budget of $1.2 million. Staff clarified that this did not include
sold assets. Staff also clarified that it would take one to two years to develop predictive data.
Jerry asked about the length of time that the consultant will work. Staff clarified that it would be four
to six months, and the entirety of the $83,000 was an outsourced cost.
The board then began a discussion regarding cost savings, return on investment (ROI), and the need
for new products in the future. Micki clarified that the current product has been used for 15 years, the
current IT platform no longer supports it, and the City will realize a savings by not using it anymore.
Stan will better be able to make repair decisions and updating RTA is no longer practicable.
Jerry asked why software costs only $52,000, but the consulting work is $83,000. Mike Peters
explained that data conversion and developing the module to work for Georgetown is expensive.
Micki reiterated that implementation is the major cost factor when purchasing new software (e.g.
training). The board then discussed not doing any data conversion, and simply collecting data starting
today.
Tommy asked what the costs savings would be if the City purchased this module. He would like all
items to have this type of justification so he can clearly justify expenses, time savings, FTE savings,
etc.
Jerry asked for testimonials from other cities.
Joe asked for data conversion costs and, more specifically, an itemization of the $83,000 consulting
cost.
Micki said she would bring back an ROI and testimonials at the January meeting.
C. Purchase of replacement Cisco Network Switches from Presidio Networked Solutions for
$77,052.60 - James Davis, IT Operations Manager and Mike Peters, Information Technology
Director
James Davis presented. This is a request to replace network switches in the City. The vendor is on a
Texas Department of Information Resources (DIR) contract.
Tommy asked which systems were being replaced. James explained that these are the boxes in
buildings that connect the computers to the network.
Tommy moved approval, Joe seconded. All board members present approved (5-0)
D. Consideration and possible action to approve a loan agreement with Steele Georgetown
LIHTC, LLC. to assist in securing Housing Tax Credits for the renovation of 55 existing
affordable units at Georgetown Square Apartments located at 206 Royal Drive.—Jennifer C.
Bills, Housing Coordinator and Laurie Brewer, Assistant City Manager
Jennifer Bills introduced both item D and item E. They are similar items. The federal government
issues tax credits to the state. The state then allows people to apply for these credits. The Qualified
Action Plan that the state provides has requirements that give preference to applicants who have local
support. The support in both these cases, if approved, will be show in the form of a collateralized
loan from the City. Both of these apartment complexes already exist.
Jennifer then introduced item D, the Georgetown Square Apartments. These were built in 1973, are
section 8 housing, and have not had significant renovations since they were built. To secure the
maximum number of points on the Qualified Action Plan, they will need the City to provide the loan
and a tax credit resolution. The loan is totally collateralized. The developer provides the money to
the City to hold in escrow. The City then calls the money a loan and gives it back to the developer.
The minimum loan for this project would be $30,000 and the maximum would be $450,000.
The board asked what impact the new Northwest Bridge will have on the property. Jennifer clarified
that it will “clip” the property and takes about 10 feet. Tommy clarified that the points give them
credits; this is not a financial issue. Jerry asked that Jennifer show where the bridge will be when this
item goes to Council. Keith reiterated that staff needs to show that the bridge and 971 will not
interfere with this project. Joe suggested using exhibit B with the new 971 alignment. Staff once
again stated that the loan is fully collateralized.
Jerry moved to approve the $450,000 loan, Ralph seconded. Passed (4-1), with Tommy opposed.
E. Consideration and possible action to approve a loan agreement with HVM 2015 Georgetown,
Ltd. To assist in securing Housing Tax Credits for the renovation of 24 existing affordable units
at Northwest Apartments, located at 1623 Northwest Boulevard.—Jennifer C. Bills, Housing
Coordinator and Laurie Brewer, Assistant City Manager
Jennifer Bills presented this item. The Northwest Apartment were rejected during the last application
cycle due to a technicality. The minimum loan for this project is $12,000 and the maximum is
$197,633.
The owner of the project, Dennis Hoover, spoke. He wanted to clarify that this was not a direct cash
payment to the City. Micki clarified that this is done through a trustee custodial agreement. Tommy
went on to say that the money is secured by the bank and released at the end of the project. It is a tool
for subsidizing for-profit ventures.
Keith asked Tommy about his dissenting vote on the previous item. Tommy clarified that it was due
to the fact that federal tax money was going to a for-profit company. Staff clarified that it was a $1
million renovation and the properties are taxed.
Staff clarified that the resolution will go to Council on January 27th.
Jerry moved to approve the $197,633 loan, Joe seconded. Passed (4-1), with Tommy opposed.
F. Discussion regarding the use of Direct Payment Sales Tax Permits as Economic Development
Tools - Christopher Foster, Manager of Resource Planning and Integration and Mark Thomas,
Economic Development Director
Chris Foster presented. Direct pay permits allow vendors to pay sales tax in the area where they use
their materials, as opposed to where they purchase their materials. It is a form of tax shifting. There
are special requirements that require special accounting. Usually large institutions, like oil and gas
companies or power companies, use these permits. Typically the tax is shifted to an area that does
not have the 2% local sales tax. The direct pay permits can be used in conjunction with 380
agreements to allow the vendor to rebate a portion of the shifted tax.
This type of economic development tool yields rather low dollar amounts compared to other tools.
The City also cannot control other communities who implement this tool. Staff requested a general
discussion regarding developing 380 agreements and permitting direct pay permits in Georgetown.
Keith asked the representatives from Pulte to introduce themselves. Shawn Seaberg with PulteGroup
and Doug Duffie, CPA, both spoke. They explained that 95% of sales tax goes to other cities. Direct
payment permits redirect tax. It is better to pay sales tax in the city where they build. The cost to
track is substantial, but it makes them a better community member. They clarified that only one-third
of their Pro-Build receipts are from the Pro-Build located in Georgetown.
Tommy stated that Georgetown gets a portion of sales tax and rebates a portion to Pulte. There is a
potential loss from the Pro-Build rebate. Staff clarified that the Georgetown Pro-Build would be
excluded. The Pulte representatives said will request reimbursement twice per year; 80% of 1% of
their sales tax and protect the Pro-Build sales. Tommy said all other homebuilders will want the same
deal.
This action would set a precedent. The board asked that all local major lumber suppliers be exempts.
The board said this item will not return to GGAF, but will go straight to Council. Staff will compare
other 380 agreements, develop standard terms, and include Pulte’s deal points.
Tommy moved approval, Joe seconded. All board members present approved (5-0).
G. Consideration and possible action to approve the board bylaws in accordance with the revised
Code of Ordinances – Micki Rundell, CFO and Danella Elliott, Staff Liaison
Skye Masson presented. These are the new bylaws approved by Council. A vice-chair will be
elected in March with the new board appointments.
Tommy moved approval, Joe seconded. All board members present approved (5-0).
Adjournment
The meeting was adjourned at 4:36 pm.
_____________________________________
Board Chair
City of Georgetown, Texas
Government and Finance Advisory Board
January 28, 2015
SUBJECT:
Discussion and recommended selection of Valley View Consulting, LLC for Investment Advisory
Services - Susan Morgan, CPA, Finance Director
ITEM SUMMARY:
Background.
The City contracts for outside expertise to assist with its investment portfolio management. The
current contract for limited investment advisory services with Valley View Consulting, L.L.P. will
expire February 28, 2015 with no additional renewal options. Valley View was selected through a
competitive proposal process conducted in 2009/2010.
RFP Process.
The economy and City’s needs have changed substantially since the last process was undertaken
almost 6 years ago. The City has higher balances and more detailed requirements with no more
staff resources available. To meet these growing needs, this RFP included a more standard full
service request for investment advisory services. The RFP was prepared using best practices as
outlined by the Government Finance Officers Association, and as professional services, was
focused on best qualifications and best match for the City’s needs. Internal policies require at least
an informal proposal process for this dollar amount of services; however, in an abundance of
caution, staff traditionally conducts a formal solicitation process for these services. The RFP was
issued November 17, 2014 with 4 proposals received on the December 16, 2014 due date.
The staff review committee consisted of the three authorized investment officers for the City –
Micki Rundell, Chief Financial Officer; Susan Morgan, Finance Director and Lisa Haines,
Controller. The criteria are outlined in the attached summary. The proposals were reviewed and
scored independently by staff, then reviewed collectively for the best value and service match.
Recommendations.
Based on the responses and staff evaluations, Valley View Consulting, LLC, was selected as the
top firm. Staff met with Susan Anderson and Richard Long on Wednesday, January 21, 2015 to
discuss services and options. The original proposed price was negotiated to $26,000 per year with
the City still receiving the services requested in the proposal. The recommendation is for a two-
year term and 2, two-year extensions. The RFP also allows for 2 additional two-year terms, at the
City’s discretion.
A summary of the proposals, committee scoring and evaluations are attached.
Susan Anderson from Valley View Consulting, LLC will be present at the meeting for questions.
Comments:
The annual dollar amount is below City policies requiring Council approval, but the Local
Government Code Section 2256, the Public Funds Investment Act (PFIA), requires all such
contracts be approved by the governing body. The PFIA requires that investment advisory
contracts be renewed every two years.
FINANCIAL IMPACT:
Funds for this service are included in the Finance Administration department budget under Special
Services, account number 540-5-0302-51-330.
SUBMITTED BY:
Susan Morgan, CPA, Finance Director
ATTACHMENTS:
Description Type
Investment Advisor Selection Summary Cover Memo
Investment Advisor RFP Cover Memo
Investment Advisor Agreement Cover Memo
Valley View ADV Part 1 Cover Memo
Valley View ADV Part 2 Cover Memo
Valley View IA RFP Response Cover Memo
Valley View Sample Report BRA Cover Memo
Valley View W9 Cover Memo
Investment Advisory Services
2014/15 RFP – Summary for GGAF
Staff recommends the City continue its relationship with Valley View Consulting, Inc. and expand
the services provided as outlined in the RFP. This firm has consistently provided high quality and
responsive services. A summary of the proposals, criteria and considerations are included in this
memorandum.
Criteria and Services Requested
The proposals were evaluated on a combination of qualifications and experience with cost being a
lower ranking consideration. These services are fairly standard across Texas cities and staff
research indicated that pricing was competitive among most possible proposers; therefore, best
value was the focus of the RFP, not lowest price.
The evaluation criteria from the RFP are shown below:
6.1.1 Proposal Responsiveness
15 points The City will evaluate each Proposer’s overall proposal, how
effectively the services required are addressed.
6.1.2 Demonstrated Ability in
Providing Similar Services to
Municipalities and/or Other Public
Entities
25 points The City will evaluate based on Proposer’s previous
experience with public entities as well as the quality of
reference provided.
6.1.3 Professional Qualifications and
Experience
25 points The City will evaluate based on the qualifications and
experience of the staff proposed for assignment to the City’s
account.
6.1.4 Recommended Approach to
Management of City’s Portfolio
20 points The City will evaluate based on Proposer’s detailed
investment approach.
6.1.5 Proposed Fee
15 points The City will evaluate price as an important, but not
overriding, factor, considering the cost of base services and
the optional services.
The City’s RFP requested standard investment advisory services including, but not limited to, (1)
assisting in the proper investment and management of city cash resources including soliciting and
executing security and related transactions, (2) advising on compliance and policy needs, (3)
assessing market conditions and cash flows needs, and (4) tracking and reporting of the portfolio
to meet the Public Funds Investment Act requirements and management needs.
In addition, the City also requested the services outlined below. These services were determined
to be critical needs to properly support the City’s treasury management functions. (Please note:
All of the service noted below would require additional fees under the current arrangement.)
o Preparation of RFP, review and selection of new depository banking services. The
City’s current depository agreement will expire August 31, 2015 with no renewal
options.
o Ongoing review and assistance in implementing best practices in managing its
banking, cash management and cash handling programs.
o Evaluation and selection of separate contract for securities clearing and
safekeeping, if needed.
Proposers and Evaluation
The City received proposals from four well-known and qualified firms. The services and pricing
were within general offerings to local governments in Texas and in compliance with the City’s RFP.
Staff’s independent ranking is shown below.
City of Georgetown, Texas
Overall Averages for Each Company
Criteria:
*Proposal Responsiveness - 15 pts
15.0 15.0 11.7 13.3
*Demonstrated ability in providing similar service to municipalities and/or other public entities including the quality
of references - 25 pts 24.0 22.7 21.7 21.7
*Professional qualifications and experience of staf f to be assigned to project - 25 pts
24.3 23.0 22.0 22.0
*Recommended approach to management of City's portf olio - 20 pts
20.0 18.3 13.3 17.7
Proposed fee - 15 pts
11.0 15.0 9.7 13.0
Qualifications Average Sub-Totals:94.3 94.0 78.3 87.7
Notes:
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Request for Proposals: 201515 Investment Advisory
Services
The original pricing proposals received are summarized below. Pricing was not a controlling factor
in the evaluation, but is always a consideration. Using proper procurement practices, the City
approached the top vendor and negotiated more favorable pricing.
Valley View Consulting, LLC $36,000 annually
proposed
$26,000 annually –
negotiated after
selection
All inclusive – all standard and additional
services included in price
Patterson & Associates $28,000 annually All inclusive – all standard and additional
services included in price
First Southwest $24,000 annually No banking RFP or evaluation assistance
available, separate services would have to
be acquired from another vender
PFM $6,000 All added services would require
additional fees, amounts were not
provided in the proposal. Also services
were limited to a TexasTERM/ TexasDAILY
products offering. PFM earns additional
fees on those products.
Cost of Services
The recommended proposer will cost the City $26,000 per year. This is higher than previous
years’ costs, but was anticipated. In 2013/14, the City paid $8,800 to Valley View, but it was for a
much more limited level of service and with pricing from several years ago. The level of services
and costs were expected to change with this proposal. The previous proposal was done in 2009, a
time when resources were very tight. Only the bare minimum level of assistance was requested at
that time. City and industry conditions have changed substantially since then and the higher level
of service was budgeted and expected to meet the City’s needs and help defer adding additional
staffing. The price includes these additional services:
• Reporting and tracking using Valley View’s web-based investment management software,
(currently being done manually by city staff using Excel); thus further improving internal
controls within this area;
• More assistance in day-to-day operations;
• Staff training and education, as well as
• All of the services requested above on banking, RFP, safekeeping and cash handling
reviews.
CITY OF GEORGETOWN, TEXAS
REQUEST FOR PROPOSALS
FOR
INVESTMENT ADVISORY SERVICES
RFP # 201515
Dated November 17, 2014
DUE DATE FOR RESPONSES
December 16, 2014
2:00 PM
Central Standard Time
City of Georgetown
INVESTMENT ADVISORY SERVICES
2
Table of Contents
1.0 Notice to Proposers 3
2.0 Background and Current Circumstances 3
3.0 Project Purpose and Objectives 4
4.0 Key Event Schedule 5
5.0 Proposal Submission Requirements 5
6.0 Proposal Evaluation/Selection Process 8
7.0 Instructions to Proposers 9
8.0 Terms and Conditions 12
9.0 Scope of Work 12
Exhibit A – Terms and Conditions 15
Exhibit B – City of Georgetown, TX Adopted Investment Policy 25
Exhibit C – City of Georgetown, TX Most Recent Quarterly Financial and Investment Report 35
City of Georgetown
INVESTMENT ADVISORY SERVICES
Page 3
1.0 Notice to Proposers
The City of Georgetown (the “City”) is soliciting sealed proposals for Request for Proposal (RFP) No.
201515 for Investment Advisory Services.
All addenda, notices, additional information, etc. will be posted to the City of Georgetown Purchasing
Department’s web site, http://purchasing.georgetown.org/bid-information/. Four printed copies (one
original plus 3 copies) plus one digital copy on CD/DVD of Proposals must be sealed and returned to the
City of Georgetown, Attention: Purchasing Manager, P. O. Box 409, Georgetown, Texas 78627 (mailing
address) or 300-1 Industrial Avenue, Georgetown, Texas 78626 (physical address) by 2:00p.m. Central
Standard Time, on December 11, 2014. All proposals must be plainly marked with the proposal name
and RFP number: Investment Advisory Services, RFP # 201515“.
Proposer is responsible for delivery of response by the date and time set for the closing of the proposal
acceptance. Responses received after the date and time set for the closing will not be considered.
The information contained in these specifications is confidential and is to be used only in connection
with preparing this proposal.
The City of Georgetown reserves the right to reject any and all proposals and waive informalities in
proposals received.
All questions concerning this RFP must be addressed to the following point of contact:
Trina Bickford
Purchasing Manager
300-1 Industrial Ave.
Georgetown, Texas 78627
Phone: (512) 930-3647
Fax: (512) 930-9027
Email: purchasing@georgetown.org
2.0 Background and Current Circumstances
2.1 Introduction
The City of Georgetown, Texas is seeking proposals from investment advisors who are registered with
the Securities and Exchange Commission and the Texas State Securities Board to provide
nondiscretionary portfolio management services for the City’s $110 million investment portfolio.
This RFP is designed to present interested firms with the description of the City’s current investment
program, the services required by the City, and the format for submitting a response.
City of Georgetown
INVESTMENT ADVISORY SERVICES
Page 4
2.2 City of Georgetown
The City of Georgetown is a rapidly growing community with a current population of 55,000. It is
located on Interstate 35, and is the northern most “gateway” to the gently rolling hills of Central Texas.
While Georgetown offers the amenities and charm of a small community, it is strategically and centrally
located in the middle of the four major metropolitan areas of Texas. Austin is 26 miles south of
Georgetown, Dallas is two hours north, Houston is three hours southeast and San Antonio is just one-
and a-half hours south, placing Georgetown in a very advantageous position for cultural and economic
development. Additional information is available at the City’s website at www.georgetown.org.
2.3 Overview
The investment of City’s funds is governed by Texas Government Code, Chapter 2256 – “Public Funds
Investment Act”, the City’s Charter and its Investment Policy. The City’s primary investment objectives in
order of importance are the preservation of principal, maintenance of sufficient liquidity, preservation
of the public trust and a reasonable and competitive return.
The City seeks advisors who demonstrate extensive experience, especially with fixed income securities,
to provide certain services related to the investment of City funds, including the execution of securities
purchases/sales for the City’s operating and bond funds, investment advice, investment reporting, and
review of the City’s Investment Policy and procedures.
Day to day management responsibility for the investment program is delegated by the City Council to
the Chief Financial Officer, Finance Director and Controller, as investment officer(s) for the City. The
advisor will receive instructions regarding securities purchases/sales from one or more of these
authorized staff.
The majority of City funds are pooled for investment purposes and managed according to the City’s
approved Investment Policy (Exhibit B). Also attached is the most recent quarterly financial and
investment report (Exhibit C).
The City has an internal investment committee composed of 3 to 4 staff members that meets at monthly
to review banking, treasury and investment items, as well as investment performance and strategy. The
advisor is expected to attend these meetings on a quarterly basis.
The City also presents an annual report and investment policy review and update to its General
Government and Finance Advisory Board. The advisor is expected to assist with and attend this
meeting, generally held in early December each year.
3.0 Project Purpose and Objectives
3.1 Scope of Procurement
The City desires to acquire nondiscretionary portfolio management services for the City’s investment
portfolio, currently valued at $110 million. The initial term will be for a two year period, commencing
with the signing of the initial agreement with the option for two additional two-year renewals with
satisfactory services provided. It is the City’s general practice to require new proposals every 6 years;
City of Georgetown
INVESTMENT ADVISORY SERVICES
Page 5
however, it retains the right to negotiate up to two additional two-year renewals.
The desired services must be provided by an investment advisor registered with the Securities and
Exchange Commission and the Texas State Securities Board, and must demonstrate extensive
experience, especially with fixed income securities, to provide services related to the investment of the
City’s funds.
3.2 Anticipated Approach
City expects this procurement to deliver a complete solution for the requirements contained in this RFP.
Investment of the City’s funds is governed by the Texas Government Code, Chapter 2256, “Public Funds
Investment Act” as well as the City’s Charter and its adopted Investment Policy. The City’s primary
investment objectives, in order of importance, are the preservation of principal, maintenance of
sufficient liquidity, preservation of public trust and a reasonable and competitive return.
3.2.1 Included Core Elements
The procurement of the services under this RFP must meet all requirements of this RFP and must
include:
Execution of securities purchases/sales for the City’s operating and bond funds, investment advice,
investment reporting and review of the City’s Investment Policy and its procedures.
3.2.2 Ability to combine vendors/products
The City will consider combinations of vendors/products to achieve the entire list of requirements
stated in this RFP. As a result, it is possible for a vendor to propose portions of the solution and specify
compatible products/partners for the remaining parts of the solution. If this approach is taken, the City
will evaluate the number, strength and relationship of the vendors/products proposed to determine if
that approach provides the best value and easiest ongoing operation for the City.
4.0 RFP Key Events Schedule
Issue RFP Monday, November 17, 2014
Deadline for questions on RFP Wednesday, December 3, 2014, 5PM CST
Proposals Due Tuesday, December 16, 2014, 2PM CST
City evaluation of proposals completed (approx.) December 17, 2014 – January 16, 2015
Selection of contractor (approx.) Week of January 26, 2015
Council Approval of Contract Award (approx.) February 11, 2015
It is the expectation of the City that the successful proposer will commence services effective March 1,
2015.
5.0 Proposal Submission Requirements
5.1 Proposal Submission Format
The Purchasing Department will not accept oral proposals, or proposals received by telephone, FAX
machine, or telegraph.
City of Georgetown
INVESTMENT ADVISORY SERVICES
Page 6
The proposal must be submitted in hard copy. The Proposer shall submit one (1) original and three (3)
copies of the proposal submission, plus one (1) digital copy on CD/DVD, to consist of the following
tabbed sections designated by letter as follows:
A. Cover Letter - Signed cover letter
B. Company Description - A complete description of Proposer’s organization, including at a
minimum:
o Date founded and details of ownership as well as any subsidiaries and affiliates relevant
to the City;
o Description of the experience of the firm in serving as an investment advisor for
municipalities and other public entities in Texas;
o The types of accounts primarily sought;
o Any SEC or regulatory censure or litigation involving institutional business Proposer
conducts with governmental investors currently or over the past three years;
o Description of any accounts which have discontinued services from the firm, including
the reason for the termination; and
o Copies of ADV Parts I and II, as on file with the SEC, and proof of registration with the
Texas State Securities Board.
C. Personnel - Details of Proposer’s personnel including at a minimum:
o Size of staff committed to public sector clients and the credentials of key staff members;
o List of investment professionals proposed to directly provide services to the City,
including their relationship with firm, number of years with the firm, their
responsibilities, their investment business experience and experience in public sector
investment management;
o Descriptions of investigations for improper, fraudulent or unfair activities related to the
sales of securities involving personnel above, if any; and
o Details of methods to inform investment professionals of developments relevant to
governmental investment managers.
D. Investment Approach - Detailed description of Proposer’s investment management approach,
including at a minimum:
o Process to ensure the City’s objectives of safety, liquidity and yield;
o Experience in developing investment policies and portfolio strategies for governmental
operating funds;
o Types of investment research utilized and the methods for making investment decisions
including maturity and selection;
o Primary strategies for adding value to portfolios;
o Suggested performance benchmarks for the City’s portfolio; and
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o Daily procedures for portfolio review and client contact.
E. Descriptions & Sample Reports - Detailed descriptions and samples of reports available to the
City and their frequency, including methods and formulas used to calculate yield and
performance
F. Compensation - Proposed compensation for services, either as a flat annual fee or as a per trade
fee with an annual cap
G. Additional Services - Provide description of services and approach for assisting the City with the
following optional services. If these services are not included in the proposed price above,
additional compensation must be clearly noted.
o Preparation of RFP, review and selection of new depository banking services. The City’s
current depository agreement will expire August 31, 2015 with no renewal options.
o Ongoing review and assistance in implementing best practices in managing its banking,
cash management and cash handling programs.
o Evaluation and selection of separate contract for securities clearing and safekeeping, if
needed.
o Others as might be suggested by the proposer.
H. References - Reference information for Proposer’s five comparable public sector clients,
including at a minimum a description of services provided to client, length of relationship with
client, the point of contact, phone number and email
The Proposer may also provide supplemental marketing or technical materials, to be packaged
separately from the Proposal. No materials provided by the Proposer will be returned at any time
during or following this procurement.
5.2 Proposal Time Stamp
The time proposals are received shall be determined by the time clock stamp in the Purchasing
Department. Purchasing Department personnel will promptly timestamp submissions as they are
received. Proposers are responsible for insuring that their proposals are received and stamped by
Purchasing Department personnel by the deadline indicated.
5.3 Proposer Representations and Responsibilities
By submitting a proposal in response to this RFP, the Proposer represents that it has read and
understands all elements of this RFP and has familiarized itself with all federal, state, and local laws,
ordinances, and rules and regulations that in any manner may affect the cost, progress, or performance
of the work described.
By submitting a proposal in response to this RFP, the Proposer represents that is has not relied
exclusively upon any technical details in place or under consideration for implementation by the City,
but has supplemented this information through due diligence research and that the Proposer sufficiently
understands the issues relative to the indicated requirements.
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The failure or omission of any Proposer to receive or examine any form, instrument, addendum, or
other documents or to acquaint itself with conditions existing at the site or other details shall in no way
relieve any Proposer from any obligations with respect to its proposal or to the contract.
5.4 Proposal Withdrawal
A proposal may be modified or withdrawn by the Proposer any time prior to the time and date set for
the receipt of proposals. The Proposer shall notify the Purchasing Department in writing of its
intentions.
1. If a change in the proposal is requested, the modification must be so worded by the Proposer as
to not reveal the original amount of the proposal.
2. Modified and withdrawn proposals may be resubmitted to the Purchasing Department up to the
time and date set for the receipt of proposals.
3. No proposal can be withdrawn after the time set for the receipt of proposals and for sixty (60)
days thereafter.
5.5 Late Proposals
All proposals received in the Purchasing Department on time shall be accepted. All late proposals
received by the Purchasing Department shall be returned upon request to the Proposer unopened.
Proposals shall be open to public inspection only after award of the contract.
5.6 Proposer Questions
Proposers may contact the individual listed in Section 1 with any questions regarding this RFP. Proposers
should not attempt to contact City Council members, the City staff or management directly during the
pre-proposal or post proposal period.
6.0 Proposal Evaluation/Selection Process
The City has attempted to provide Proposers with a comprehensive statement of requirements through
this RFP for the services required. Proposers are requested to make written proposals which present
the Proposer's qualifications and understanding of the work to be performed. Proposers are asked to
address each evaluation criteria and to be specific in presenting their qualifications. Proposals should be
as thorough and detailed as possible so that the City may properly evaluate Proposer’s capabilities to
provide the required services.
Selection may be made of one or more Proposers that are deemed to provide the best value for City
from those submitting proposals. Demonstrations and possible site visits will be conducted for the
Proposers so selected. The City reserves the right to award based on the responses received or to
negotiate with any or all of the Proposers so selected. Price shall be considered, but will not be the sole
determining factor. The City may also award to other than the highest ranked proposer in the event the
best and final price submitted by the proposer is more than the budget available for the project. The
City shall select the Proposer which, in its opinion, has made the proposal that is most beneficial to the
City, and shall award the contract to that Proposer. Should the City determine in writing and in its sole
discretion that only one Proposer is fully qualified or that one Proposer is clearly more highly qualified
than the others under consideration, a contract may be negotiated and awarded to that Proposer. The
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award document will be a contract incorporating by reference all the requirements, terms and
conditions of the solicitation and the Proposer's proposal as negotiated.
6.1 Evaluation Criteria
The City has established specific, weighted criteria for selection. This section presents the evaluation
criteria, description, and relative weight assigned to each (100 points maximum).
6.1.1 Proposal Responsiveness – 15 points
The City will evaluate each Proposer’s overall proposal, how effectively the services required are
addressed.
6.1.2 Demonstrated Ability in Providing Similar Services to Municipalities and/or Other Public
Entities – 25 points
The City will evaluate based on Proposer’s previous experience with public entities as well as the quality
of reference provided.
6.1.3 Professional Qualifications and Experience – 25 points
The City will evaluate based on the qualifications and experience of the staff proposed for assignment to
the City’s account.
6.1.4 Recommended Approach to Management of City’s Portfolio – 20 points
The City will evaluate based on Proposer’s detailed investment approach.
6.1.5 Proposed Fee – 15 points
The City will evaluate price as an important, but not overriding, factor, considering the cost of base
services and the optional services outlined in section 5.1 G. Optional Services and the best value for the
City’s needs.
6.2 Proposal Evaluation Process
Each proposal will be reviewed, evaluated, and scored as part of the formal selection process. Each
proposal will be reviewed independently based solely on the merits of the proposal. The proposals will
then be scored and, if necessary, a short list of Proposers will be selected for additional evaluation,
Proposer presentations, demonstrations, and reference checks.
7.0 Instructions to Proposers
7.1 General Conditions
A. Proposers must include the following information as a part of proposal. Failure to provide in the
proposal any information requested in this RFP may result in the disqualification of the proposal.
1. Each Proposer shall furnish a complete name, mailing address and telephone number.
2. Each proposal must designate the individual(s), along with respective telephone numbers, who
will be responsible for answering technical and contractual questions with respect to their
proposal.
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3. The City, in its sole discretion, expressly reserves the right to request and/or require any
additional information from the Proposer(s) that it deems relevant with respect to this RFP.
4. Cost for developing proposals is entirely the responsibility of the Proposer and shall not be
chargeable to the City.
5. Samples of additional reports may be requested by the City for evaluation purposes. Any sample
that fails evaluation process for any reason may be considered sufficient reason to reject a
proposal. The City reserves the right to determine if a sample fails to meet specifications.
6. Proposals should not contain promotional or display materials, except as they may directly
answer, in whole or in part, questions contained in the RFP. Such exhibits shall be clearly
marked with the applicable reference number of the questions in the RFP.
7. The contents of the proposal and any clarification or counter proposal thereto submitted by the
successful Proposer shall become part of the contractual obligation and incorporated by
reference into the ensuing contract.
8. Products and services not specifically mentioned in this RFP, but which are necessary to provide
the functional capabilities described by the Proposer shall be included in the proposal.
9. This RFP is intended to describe the requirements and response format in sufficient detail to
secure comparable proposals.
10. A Proposer may withdraw his/her proposal by submitting a written request for its withdrawal
over the signature of an authorized individual as described in Paragraph 2 above, to the
Purchasing Manager any time prior to the submission deadline. The Proposer may thereafter
submit a new proposal prior to the deadline. Modifications offered in any manner will not be
considered if submitted after the deadline.
11. The successful Proposer may be required to provide an affidavit that he/she has not conspired
with other potential suppliers in any manner to attempt to control competitive pricing. This
paragraph does not, however, preclude two or more suppliers of certain parts of the
requirements from presenting a combined or joint proposal for the purpose of providing a
complete proposal.
12. Pursuant to Texas Local Government Code Section 262.030 of VTCA, proposals shall be opened
so as to avoid disclosure of the contents to competing offers. Details will not be released until all
ensuing negotiations have been completed and contractual agreements have been executed. All
information submitted on this RFP will be public record.
13. All proposals become the property of the City and will not be returned to the Proposer.
14. By submitting a response, Proposer certifies that it is a duly qualified, capable and otherwise
bondable business entity not in Receivership or contemplating same, and has not filed for
bankruptcy.
15. Submission of a proposal in response to this RFP shall affirm that the Proposer shall not
discriminate against any employee or applicant for employment because of race, religion, sex,
sexual preference, color or national origin and that the firm shall make efforts to ensure that
employment is offered to applicants without regard to their race, religion, sexual preference,
color and national origin.
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16. Proposer, its employees, subcontractors, and agents shall comply with all applicable federal and
state laws, the charter and ordinances of the City of Georgetown, Texas, and all applicable rules
and regulations promulgated by all local, state, and national boards, bureaus, and agencies.
Successful Proposer shall further obtain and maintain all permits and licenses required, if any,
for the performance of any services required hereunder.
B. Award of Contract
1. The award of the contract shall be made to the responsible Proposer, whose proposal is
determined to be the best evaluated offer from negotiation, taking into consideration the
relative importance of price and other evaluation factors set forth in Section 9.0. All proposals
must be valid for a minimum of 180 days from the date of submission.
2. All proposals submitted in accordance with the requirements of this RFP shall be considered
offers to contract on the terms contained in the proposals and in this RFP and at the price
offered by the successful Proposer. When the City awards a contract to the successful Proposer,
it will constitute an acceptance of that offer and a contract between the City and the successful
Proposer embodying the terms of this RFP and the proposal will become effective on the date of
such award.
C. Reservations
1. The City expressly reserves the right to:
i. Waive any defect, irregularity or informality in any proposal;
ii. Reject or cancel any or all proposals, or part(s) of any proposal;
iii. Accept proposals from one or more Proposers; and/or;
iv. Procure services by other means.
2. In considering the proposal(s), the City reserves the right to select the acceptable Proposer(s)
who will offer contractual terms and conditions most favorable to the City.
3. Requirements stated in the RFP shall become part of any contract with the Proposer(s) resulting
from this RFP, and any deviations from these requirements must be specifically defined by the
Proposer in the resulting proposal, request for clarification and/or counter proposal which, if
accepted, shall also become part of any contract resulting from this RFP. The City, however,
reserves the right to modify the specifications of this RFP contract for segments of this RFP,
and/or negotiate the price and any other terms with prospective Proposers, as needed.
D. Other Conditions
1. Venue:
Any contract awarded based on this RFP shall be governed by and construed in accordance with
the laws of the State of Texas, is fully performable in Georgetown, Texas, and venue for any
action related to this contract will be Georgetown, Texas.
2. Warranties and Service:
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The implied warranties of merchantability and fitness for a particular purpose shall not be
waived under this RFP or any contract awarded from this RFP except as expressly authorized in
writing by the City granting the waiver.
3. Assignment:
The work to be provided under this RFP, or any part of the work to be provided under this RFP,
shall not be assignable by the Proposer without the express written permission of the City.
E. Safety – successful Proposer shall perform the work in accordance with applicable laws, codes,
ordinances, and regulations of the state of Texas and the United States and in compliance with
OSHA and other laws as they apply to its employees. Successful Proposer assumes responsibility and
liability and hereby agrees to indemnify the City from any liability caused by successful Proposer’s
failure to comply with applicable federal, state, or local regulations, touching upon the maintenance
of a safe and protected working environment.
F. Insurance Requirements
Successful Proposer shall maintain insurance coverage appropriate for the fulfillment of any
agreement resulting from this RFP. In the event the successful Proposer, its employees, agents or
subcontractors enter premises occupied by or under the control of the City, the successful Proposer
agrees to maintain public liability and property damage insurance in reasonable limits covering the
obligations described in this RFP, and shall maintain Workers’ Compensation coverage (either by
insurance or if qualified pursuant to law, through a self-insurance program) covering all employees
performing on premises occupied by or under control of the City. Upon request, successful Proposer
shall provide a copy of its insurance policies to the City.
G. Authorized Signature
1. Persons who have the legal authority must sign all proposal forms.
G. Successful Proposer’s Understanding and Duty
1. The successful Proposer, its employees, subcontractors, and agents shall comply with all
applicable federal and state laws, the charter and ordinances of the City of Georgetown, Texas,
and all applicable rules and regulations promulgated by all local, state, and national boards,
bureaus, and agencies. Successful Proposer shall further obtain and maintain all permits and
licenses required, if any, for the performance of any services required hereunder.
2. Successful Proposer will be responsible for conducting criminal background checks and verifying
employment eligibility on all custodial employees that will have access to City property in
accordance with the state and federal laws.
8.0 Terms and Conditions
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The City expects the successful Proposer to agree to the standard terms and conditions that would be
extended by the City for the purchase of comparable services. The City’s standard terms and conditions
are attached for referenced. These terms and conditions or, in the sole discretion of City, terms and
conditions substantially similar, will constitute and govern any agreement resulting from this RFP. If
Proposer takes exception to any terms or conditions, Proposer will submit a list of the exceptions as part
of its proposal. Proposer’s exceptions will be reviewed by City and may result in disqualification of
Proposer’s proposal as non-responsive to this RFP. If Proposer’s exceptions do not result in
disqualification of Proposer’s proposal, then City may consider Proposer’s exceptions when City
evaluates the proposal.
9.0 Scope of Work
This Scope of Work specifies the services that the City expects to acquire from the successful Proposer as a
result of this solicitation.
9.1 Minimum Mandatory Requirements
Proposer must:
A. Be a registered Investment Advisor as defined and regulated by the Securities and
Exchange Commission and must be registered with the Texas State Securities
Board;
B. Be either completely independent of any financial institution or securities
brokerage firm or must fully and continuously disclose any and all relationships
with such financial institution(s) and/or securities firm(s), and must further
disclose any commissions, bonuses and/or other soft dollar payments resulting
from a relationship with the City;
C. Take no possessions of City monies or investment securities, and have no access
to or control over such monies and/or securities; and
D. Comply with all laws of the State of Texas as well as the Charter and Ordinances of
the City of Georgetown, Texas
9.2 Required Services
At a minimum, proposals must include the following services:
• Review of the City’s Investment Policy and make recommendations for changes/updates;
• Review present investment management procedures and documentations, and make
recommendations for improvements;
• Assist in development and implementation of investment strategies designed to enhance
performance of the City’s portfolio under current and anticipated changes in market conditions
within the parameters of the established investment policies and cash flow requirements, and
make presentations to the City’s staff investment committee and/or Council or its advisory boards
as needed in support of such strategies;
• Assist staff with maintaining and monitoring cash flow projections;
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• Provide non-discretionary management of the City’s investment portfolio acting solely in an
advisory and administrative capacity within the guidelines of the City’s Investment Policy;
• Provide timely assessment of the market including market reaction to economic events;
• Execute securities (including CD’s) purchases/sales upon verbal instructions from authorized City
staff, confirming details of such transactions (details of trade, dealers contacted, and price
received at a minimum) to the City electronically or fax after trade is executed. An official trade
confirmation must be provided by mail to the City within five business days of the transaction.
The City is responsible for instructing the Custodian to either accept or deliver securities
transacted through successful Proposer;
• Obtain a minimum of two offers/bids for each trade, and provide monthly reports documenting
total trades offered and awarded to each dealer;
• Assist staff with preparing detailed monthly and quarterly reports in a format acceptable to the
City, including at a minimum the following information on each investment:
o Par Value
o Cost Value
o Book Value
o Market Value
o Any other details pertinent to the City’s portfolio
• Attend all investment committee meetings as requested and present quarterly performance
reports as agreed upon with the City including current information regarding the City’s portfolio
such as creditworthiness of investments, total return comparisons to an established index for the
quarter and since inception and market commentary and future outlook;
• Assist the City with selecting a primary depository services financial institution;
• Assist and advise the City on selecting and/or maintaining appropriate securities clearing and
safekeeping arrangements;
• Assist the City in maintaining and selecting an authorized broker/dealer list and creating a
competitive environment for each trade; and
• Other duties and assistance as agreed to upon negotiating the final agreement.
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EXHIBIT A
CITY OF GEORGETOWN
Standard Terms and Conditions
By acceptance of a purchase order or agreement, or response to a solicitation, Vendor agrees the following terms and conditions, without
modification, will govern:
I. DEFINITIONS
The following definitions shall be used to identify terms throughout procurement documents:
A. AGREEMENT/CONTRACT – A mutually binding legal document obligating the Vendor to furnish the goods, equipment or
services specified within the solicitation and obligating the City to pay for the goods, equipment, or services specified. .
B. BID/PROPOSAL /RESPONSE/OFFER/QUOTATION– A complete, properly signed response to a solicitation that, if
accepted, would bind the Respondent to perform the resulting contract.
C. BIDDER/PROPOSER/RESPONDENT/OFFERER – The Respondent identified throughout the solicitation that they consider
themselves qualified to provide the goods, equipment or services specified herein, and are interested in making an offer
to provide the goods, equipment or services to the City.
D. CITY – The City of Georgetown, located in Williamson County, Texas.
E. GOODS –Materials, supplies, commodities and/or equipment.
F. PIGGYBACK CONTRACT – A contract or agreement that has been competitively bid in accordance with State of Texas
statutes, rules, policies and procedures and has been extended for the use of state and local agencies and active State of
Texas CO-OP entities.
G. PURCHASE ORDER – An order placed by the City for the purchase of goods or services issued on the City’s standard
purchase order form and which, when accepted by the Vendor, becomes a contract. The purchase order is the Vendor’s
authority to deliver and invoice the City for goods or services specified, and the City’s commitment to accept the goods or
services for an agreed upon price.
H. SERVICES – Work performed to meet the requirements and demand of the purchase order. The furnishing of labor, time,
or effort by the Vendor and their ability to comply with promised delivery dates, specification and technical assistance
specified.
I. SOLICITATION/INVITATION TO BID/REQUEST FOR PROPOSALS/REQUEST FOR QUOTES – The solicitation document
issued by the City containing terms, conditions and specifications for the service or commodity to be procured.
J. SUBCONTRACTOR – Any person or business enterprise providing goods, labor, and/or services to a Vendor if such goods,
equipment, labor, and/or services are procured or used in fulfillment of the Vendor’s obligations arising from a contract
with the City.
K. VENDOR/CONTRACTOR – Person or business enterprise providing goods, equipment, labor and/or services to the City as
fulfillment of obligations arising from an agreement or purchase order.
II. SOLICITATIONS
A. CONFLICT OF INTEREST:
Effective January 1, 2006, Chapter 176 of the Texas Local Government Code (HB 914) requires an entity contracting or
seeking to contract for the sale or purchase of property, goods, or services with a local governmental entity to disclose
any affiliation or business relationship which might create a conflict of interest with a local government entity. The
Conflict of Interest Questionnaire is available from the Texas Ethics Commission at www.ethics.state.tx.us, and completed
forms must be submitted to the appropriate records administrator of the City not later than the seventh business day
after the date the entity begins contract discussions or negotiations with the local governmental entity, or submits to the
local governmental entity an application, response to a Request for Proposals or Bids, correspondence, or another writing
related to a potential Agreement with the local governmental entity. If responding to a Solicitation, the Conflict of
Interest Form may be submitted with the Response. The completed forms may be mailed or hand delivered to the City
Secretary at the following address: The City of Georgetown, Office of the City Secretary, City Hall, 113 East 8th Street,
Georgetown, TX 78626. This legislation is subject to change and each entity should consult its own attorney regarding
the current law. Any attempt to intentionally or unintentionally conceal a conflict of interest may result in
disqualification of any response to a solicitation. The validity of the Contract is not affected solely because of failure to
comply with the conflict of interest disclosure requirements.
B. COMMUNICATIONS WITH THE CITY:
To insure the proper and fair evaluation of a Solicitation, the City prohibits ex parte communication (e.g., unsolicited)
initiated by the Offeror to the City Official or Employee evaluating or considering the Responses prior to the time an
award has been made. Communication between Offeror and the City will be initiated by the appropriate City Official or
Employee in order to obtain information or clarification needed to develop a proper and accurate evaluation of the
Solicitation. Ex parte communication may be grounds for disqualifying the offending Offeror from consideration or award
of the Solicitation then in evaluation, or any future Solicitation.
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Unless otherwise specified, all requests for clarification or questions regarding a Solicitation must be directed to the City
of Georgetown Purchasing Department, Attn.: Purchasing Manager, PO Box 409, 300-1 Industrial Avenue, Georgetown,
TX 78627, 512-930-3647, FAX: 512-930-9027, purchasing@georgetown.org.
C. DISCLOSURE OF PENDING LITIGATION:
Each Respondent shall include in its proposal a complete disclosure of any material civil or criminal litigation or pending
investigation which involves the Respondent or in which the Respondent has been judged guilty.
D. CONFIDENTIALITY OF RESPONSES, PUBLIC INFORMATION ACT:
All Responses are subject to release as public information unless the Response or specific parts of the Response can be
shown to be exempt from the Texas Public Information Act. Respondents are advised to consult with their legal counsel
regarding disclosure issues and take the appropriate precautions to safeguard trade secrets or any other proprietary
information. The City assumes no obligation or responsibility for asserting legal arguments on behalf of potential
Respondents.
If a Respondent believes that a Response or parts of a Response are confidential, then the Respondent shall so specify.
The Respondent shall stamp in bold red letters the term "CONFIDENTIAL" on that part of the Response, which the
Respondent believes to be confidential. Vague and general claims as to confidentiality shall not be accepted. All
Responses and parts of Responses that are not marked as confidential will be automatically considered public
information. Notwithstanding, responses to Requests for Proposals shall be opened in a manner that avoids disclosure of
the contents to competing offeror and keeps the proposals secret during negotiations as provided for in Section 252.049
of the Local Government Code.
E. CLARIFICATIONS, WAIVER OF MINOR TECHNICALITIES OR DISCREPANCIES:
The City reserves the right to request clarification or additional information specific to any response after all Responses
have been received and the Solicitation due date has passed. Additionally, the City reserves the right to accept or reject
all or part of any Response, waive any formalities or technical inconsistencies, delete any requirement or specification
from the Solicitation, or terminate the Solicitation when deemed to be in City’s best interest.
F. COST OF PREPARATION OF RESPONSE:
All costs directly or indirectly related to preparation of a Response to this Solicitation or any oral presentation required to
supplement and/or clarify a Response which may be required by the City shall be the sole responsibility of the
Respondent.
G. RESPONSES BECOME PROPERTY OF THE CITY:
Submissions received in response to a Solicitation become the sole property of the City.
H. WITHDRAWAL OF A RESPONSE:
A Response may be withdrawn prior to the submission deadline by submitting a written request for its withdrawal to the
Purchasing Manager. A new Response may be submitted and must be received prior to the submission deadline to be
considered. Modifications offered in any manner will not be considered if submitted after the submission deadline.
I. DETERMINATION OF AWARD, RESULTING AGREEMENT:
In determining award, the City reserves the right to select the acceptable Respondent who will offer contractual terms
and conditions most favorable to the City. All requirements stated in the Solicitation shall become a part of any Contract,
Agreement or Purchase Order awarded as a result of the Solicitation, and any deviations from these requirements must
be specifically stated and defined by the Respondent in their Response. Requests for clarification and the responses(s)
shall also become a part of any Contract, Agreement or Purchase Order resulting from the Solicitation.
J. AFFIRMATIONS AND CERTIFICATIONS:
By signature on and submission of a Response, Respondent certifies they have not conspired with any other potential
supplier in any manner to attempt to control competitive pricing. By signature on and submission of a Response,
Respondent certifies they are duly qualified, capable and a bondable business entity not in receivership or contemplating
same, and has not filed for bankruptcy. By signature on and submission of a Response, Respondent affirms that they will
not discriminate against any employee or applicant as prohibited by law.
K. REQUIREMENTS FOR SUBMISSION OF RESPONSE:
1. All Responses must be submitted on the form provided by the City, and accompanied by all required attachments.
Each Response shall be placed in a separate envelope and properly identified with Solicitation Number and Opening
Date. Responses must be time-stamped at the Purchasing Department, 300-1 Industrial Avenue, PO Box 409,
Georgetown, TX 78626, on or before due date and time shown on the Solicitation form. Late Responses will not be
considered.
2. If applicable, Respondent will show exact cost to deliver. Responses must specify unit price on the quantity
specified, extend and show total. Unit prices shall govern, including in case of errors. Pricing will be considered firm
for acceptance for a minimum of 60 days after the due date unless otherwise specified in the Solicitation. The
validity period may be extended beyond that date on agreement of parties. Cash discounts will not be considered in
determining award; all cash discounts offered will be taken if earned. Respondent will list and deduct all discounts
not based on early payment from prices quoted.
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3. The City is exempt from all federal excise, state and local taxes unless otherwise stated. The City claims exemption
from under Texas Tax Code §151.309, as amended. Texas Limited Sales Tax Exemption Certificates will be furnished
upon request. Do not include taxes in Response to any Solicitation.
4. Unless stated otherwise, any catalog, brand name or manufacturer's reference used in the Solicitation is descriptive
(not restrictive), and is used to indicate type and quality desired. Responses on brands of like nature and quality will
be considered. If quoting on other than referenced specifications, the Response MUST show manufacturer brand or
trade name and description of product offered. Illustrations and complete descriptions of product offered should be
made part of the Response. If Respondent does not identify exceptions to the specifications shown in this
Invitation, Respondent will be required to furnish brand names, numbers, etc., as shown in the Solicitation.
5. Response must show the number of days required to deliver items or provide services to the City’s
designated location under normal conditions. Unrealistically short or long delivery promises may cause
Response to be disregarded. Failure to state delivery time obligates Respondent to complete delivery in 14
calendar days.
III. PURCHASE ORDERS
A. GENERAL TERMS AND CONDITIONS
1. ACCEPTANCE:
A Purchase Order is the City’s commitment to make procurement and is subject to Vendor’s acceptance of the City’s
terms and conditions
2. ABSENCES OF PURCHASE ORDER OR AGREEMENT:
The City is not responsible for delivery of any materials or services without a proper Purchase Order
3. VENDOR’S OBLIGATIONS:
The Vendor shall fully and timely provide all deliverables described in the Solicitation and in the Vendor’s Offer in
strict accordance with the terms, covenants, and conditions of the Agreement and all applicable Federal, State, and
local laws, rules, and regulations.
4. EFFECTIVE DATE/TERM:
Unless otherwise specified in the Solicitation, this Agreement shall be effective as of the date the City issues and
signs the Purchase Order, and shall continue in effect until all obligations are performed in accordance with the
Agreement.
5. SUBCONTRACTORS:
If the Vendor utilizes Subcontractors in providing the goods and/or services under this Purchase Order, the Vendor
shall be fully responsible to the City for all acts and omissions of the Subcontractors just as the Vendor is
responsible for the Vendor’s own acts and omissions. The Vendor shall:
a. Require that all deliverables to be provided by the Subcontractor be provided in strict accordance with the
provisions, specifications and terms of the Agreement;
b. Prohibit the Subcontractor from further subcontracting any portion of the Agreement without the prior
written consent of the City and the Vendor. The City may require, as a condition to such further
subcontracting, that the Subcontractor post a payment bond in form, substance and amount acceptable to the
City;
c. Require Subcontractors to submit all invoices and applications for payments, including any claims for
additional payments, damages or otherwise, to the Vendor in sufficient time to enable the Vendor to include
same with its invoice or application for payment to the City in accordance with the terms of the Agreement;
d. Require that all Subcontractors obtain and maintain, throughout the term of their contract, insurance in the
type and amounts specified for the Vendor, with the City being a named insured as its interest shall appear;
e. Require that the Subcontractor indemnify and hold the City harmless to the same extent as the Contractor is
required to indemnify the City; and
f. Shall pay each Subcontractor its appropriate share of payments made to the Vendor not later than ten (10)
calendar days after receipt of payment from the City.
6. DELAYS:
The City may delay scheduled delivery or other due dates by written notice to the Vendor if the City deems it is in its
best interest. If such delay causes an increase in the cost of the work under the Agreement, the City and the Vendor
shall negotiate an equitable adjustment for costs incurred by the Vendor in the Agreement price and execute an
amendment to the Agreement. The Vendor must assert its right to an adjustment within ten (10) calendar days
from the date of receipt of the notice of delay. Failure to agree on any adjusted price shall be handled under the
Dispute Resolution Process specified in Section Z. However, nothing in this provision shall excuse the Vendor from
delaying the delivery as notified.
7. FORCE MAJEURE:
Neither party shall be liable for any default or delay in the performance of its obligations under this Agreement if,
while and to the extent such default or delay is caused by acts of God, fire, riots, civil commotion, labor disruptions,
sabotage, sovereign conduct, or any other cause beyond reasonable control. In the event of default or delay in
performance due to any of the foregoing causes, then the time for completion of the services will be extended;
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provided, however, in such an event, a conference will be held within three (3) business days to establish a mutually
agreeable period of time reasonably necessary to overcome the effect of such failure to perform.
8. INSURANCE REQUIREMENTS:
Unless specific insurance requirements are noted, Vendor shall maintain insurance coverage appropriate for the
fulfillment of the Purchase Order. In the event the Vendor, its employees, agents or subcontractors enter premises
occupied by or under the control of the City, the Vendor agrees to maintain public liability and property damage
insurance in reasonable limits covering the obligations set forth in this Purchase Order, and will maintain Workers’
Compensation coverage (either by insurance or if qualified pursuant to law, through a self-insurance program)
covering all employees performing on premises occupied by or under control of the City. Upon request, Vendor
shall provide a copy of its insurance policies to the City.
9. EXCEPTIONS TO SPECIFICATIONS:
Any deviation from the specifications must be clearly indicated in the Response to the Solicitation or promptly
documented in writing at or before the time of the award. Any deviations or exceptions are subject to review by
the City and may be grounds for rejection.
10. TRAVEL EXPENSES:
All travel, lodging and/or per diem expenses associated with providing the materials, equipment or services
specified must be included in the original Quotation and/or the resulting Purchase Order or Agreement. All travel
expenses are subject to review by the City and documentation of actual itemized expenses may be requested. No
reimbursement will be made without prior authorization, or for expenses not actually incurred. Airline fares in
excess of coach or economy will not be reimbursed.
11. HUB REQUIREMENTS:
The City complies with the requirements of the State of Texas Local Government Code, Chapter 252, Section
252.0215.
12. SPECIAL TOOLS AND EQUIPMENT:
If the price stated in the Offer includes the cost of any special tooling or special test equipment fabricated or
required by the Vendor to fulfill the Agreement, such special tooling and/or equipment and all process sheets
associated thereto shall become the property of the City and shall be identified by the Vendor as such.
B. SERVICES
1. PLACE AND CONDITIONS OF WORK, ACCESS TO SITE:
If Services are to be performed principally on the City’s premises or in public rights of way, the City shall provide the
Vendor access to the sites where the Vendor is to perform the Services as required in order for the Vendor to
perform in a timely and efficient manner, in accordance with and subject to applicable security laws, rules and
regulations. The Vendor acknowledges that it has satisfied itself as to the nature of the City’s service requirements
and specifications, the location and essential characteristics of the work sites, the quality and quantity of the
materials, equipment, labor and facilities necessary to perform the Services and any other conditions or states of
fact which could, in any way, affect performance of the Vendor’s obligations under the Agreement. The Vendor
shall promptly notify the City if the actual site or service conditions differ from the expected conditions and failing
to do so, hereby releases and holds the City harmless from and against any liability or claim for damages of any kind
or nature.
2. VENDOR TO PROVIDE ALL MATERIAL, EQUIPMENT, LABOR:
Vendor shall provide all goods and labor necessary to perform Services. All material must be new and all equipment
utilized must be in good safe working condition and suitable for Services. Vendor shall employ all personnel for
Services in accordance with the requirements of applicable local, state, and federal law.
3. WORKFORCE:
If Services are to be performed principally on the City’s premises or on public right-of-ways:
a. Vendor shall employee only orderly and competent workers, skilled in the performance of the Services which
they will perform under the Agreement.
b. Vendor, its employees, subcontractors and subcontractor’s employees while engaged in participating in a
Solicitation or while in the course and scope of delivering goods and services under City Purchase Order or
Agreement may not:
i. use or possess a firearm, including a concealed handgun that is licensed under state law, except as
required by the terms of the Agreement; or
ii. use or posses alcoholic or other intoxicating beverages, illegal drugs or controlled substances, nor may
such workers be intoxicated or under the influence of alcohol or drugs while on the job.
c. If the City or the City’s representative notifies the Vendor that any work is incompetent, disorderly or
disobedient, has knowingly or repeatedly violated safety regulations, has possessed firearms, or has
possessed or was under the influence of alcohol or drugs on the job, the Vendor shall immediately remove
such worker from Agreement Services and may not employ such worker again on Agreement Services without
the City’s prior consent.
4. COMPLIANCE WITH ALL SAFETY AND ENVIRONMENTAL REQUIREMENTS:
If Services are to be performed principally on the City’s premises or on public rights of way, the Vendor, its
subcontractors and their respective employees, shall comply fully with all applicable federal, state and local health,
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safety and environmental laws, ordinances, rules and regulations in the performance of the Services, including but
not limited to those promulgated with the City and the Occupational Safety and Health Administration (OSHA). In
the case of conflict, the most stringent safety requirement shall govern. The Vendor shall defend, indemnify and
hold the City harmless from and against all claims, demands, suits, actions, judgments, fines, penalties and liabilities
of any kind or nature arising from the breach of the Vendor’s obligations under this paragraph.
5. STOP WORK NOTICE:
The City may issue an immediate Stop Work Notice in the event the Vendor is observed performing in a manner
that is in violation of Federal, State or local guidelines, or in a manner that is determined by the City to be unsafe to
either life or property. Upon notification, the Vendor shall cease all work until notified by the City that the violation
or unsafe condition has been corrected. The Vendor shall be liable for all costs incurred by the City as a result of the
issuance of such Stop Work Notice.
6. WARRANTY OF SERVICES:
Vendor warrants and represents that all Services to be provided to the City under the Agreement will be fully and
timely performed in good and workmanlike manner in accordance with generally accepted industry standards and
practices, the terms, conditions and covenants of the Agreement and all applicable Federal, State and local laws,
rules or regulations. This warranty may not be limited, excluded or disclaimed and any attempt to do so will be
without force or effect. Unless otherwise specified, the warranty period shall be a minimum of one year from
acceptance by the City of Services. In the event any applicable warranty is breached, the Vendor shall promptly
upon receipt of demand of performance, perform the Services again in accordance with the above standard at no
additional costs to the City. All costs incidental to such additional performance shall be borne solely by the Vendor.
The City shall endeavor to give the Vendor written notice of the breach of warranty within thirty (30) calendar days
of discovery of the breach of warranty, but failure to give timely notice shall not impair the City’s rights under this
section.
In the event the Vendor is unable or unwilling to perform the Services in accordance with the above standards as
required by the City, then in addition to any other available remedy, the City may reduce the amount of Services
originally required to purchase from the Vendor under the Agreement and procure conforming Services from other
sources. In such event, the Vendor shall pay the City upon demand the increased cost, if any, incurred by the city to
procure such services from an alternative source.
C. COMMODITIES/EQUIPMENT
1. MATERIAL SAFETY DATA SHEETS:
Under the “Hazardous Communication Act,” commonly known as the “Texas Right to Know Act,” a Vendor must
provide to the City WITH EACH DELIVERY Material Safety Data Sheets, which are applicable to hazardous substances
as defined in the Act.
2. GOODS:
Goods furnished shall be the latest improved model in current production, as offered to commercial trade, and shall
be of quality workmanship and material. The Vendor represents that all goods and equipment offered shall be new.
Unless otherwise specified, used, shopworn, demonstrator, prototype or discontinued models are not acceptable.
3. PACKAGING OF DELIVERABLES:
Vendor must package deliverables in accordance with good commercial practice and shall include a packing list
showing the description of each item, the quantity and the unit price. Unless otherwise provided in writing by the
City, each shipping container shall be clearly and permanently marked with the Vendor’s name and address, and the
City’s name, address and Purchase Order number. Vendor shall bear all costs of packaging. Deliverables must be
suitably packed to secure lowest transportation cost, conform with requirements of common carriers and ensure
safe delivery. The City’s count or weight shall be final and conclusive on shipments not accompanied by packing
lists.
4. WARRANTY:
The goods or equipment specified shall be warranted against defects in material or workmanship for a period of not
less than twelve (12) months from date of acceptance by the City. If the manufacturer’s warranty exceeds twelve
(12) months, then the manufacturer’s warranty shall be in effect. Vendor shall furnish a copy of the manufacturer’s
warranty at the time of delivery.
5. NO LIMITATION OF MANUFACTURERS’ WARRANTIES:
Vendor may no limit, exclude or disclaim any warranty provided by manufacturer.
D. DELIVERY
1. DELIVERY TERMS, TRANSPORTATION CHARGES, FOB:
Deliverables shall be shipped FOB point of delivery unless otherwise specified on the Purchase Order or in the
Solicitation. The Vendor’s price shall be deemed to include all delivery and transportation charges. The City shall
have the right to designate what method of transportation shall be used to ship deliverables. The place of delivery
shall be specified in the Purchase Order.
2. NO SUBSTITUTIONS OR CANCELLATIONS:
Unless specifically permitted in writing by the City, no substitutions or cancellations shall be acceptable.
3. NOTICE OF DELAY IN DELIVERY:
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If a delay in delivery is anticipated, Vendor shall give written notice to the City. The City has the right to extend the
delivery time/service date, or to cancel the Purchase Order or Agreement. Vendor shall keep the City advised at all
times of the status of the order. Default in promised delivery, service or failure to meet specifications authorizes
the City to procure the goods or services from an alternate source and charge the full increase, if any, in cost and
handling to defaulting Vendor. Default on delivery may result in legal action and recourse.
4. DELIVERY LOCATION, HOURS, DAYS, HOLIDAYS:
Unless otherwise specified, all deliveries must be made to City of Georgetown, Central Receiving, 300-1 Industrial
Avenue, Georgetown, TX, between the hours of 8AM and 4PM (CST), Monday through Friday except regularly
observed state and federal holidays (see http://georgetown.org/contact-us/holiday-schedule/ for schedule).
Receipt of goods or materials does not signify acceptance.
5. NO SHIPMENT UNDER RESERVATION:
Vendor is not authorized to ship deliverables under reservation and no tender of bill of lading will operate as a
tender of deliverables.
6. TITLE/RISK OF LOSS:
Title to and risk of loss of the deliverables shall pass to the City only when the City actually receives and accepts the
deliverables (no delivery, no sale).
7. RIGHT OF INSPECTION AND REJECTION:
The City expressly reserves all rights under law, including but not limited to, the Uniform Commercial Code, to
inspect the deliverables at delivery or at a reasonable time subsequent to delivery, and to reject defective or non-
conforming deliverables. If the City has the right to inspect the Vendor’s or the Vendor’s subcontractors facilities,
or the deliverables at the Vendor’s or the Vendor’s subcontractors premises, the Vendor shall furnish or shall cause
to be furnished without additional charge all reasonable facilities and assistance to the City to facilitate such
inspection.
8. ACCEPTANCE OF INCOMPLETE OR NON-CONFORMING GOODS:
If, instead of requiring immediate correction or removal and replacement of defective or non-conforming
deliverables, the City prefers to accept such deliverables, the City may do so. The Vendor shall pay all claims, losses
and damages attributable to the City’s evaluation of and determination to accept such defective or non-conforming
deliverables. If any such acceptance occurs prior to final payment, the City may deduct such amounts as are
necessary to compensate the City for the diminished value of the defective or non-conforming deliverables. If
discovery that the deliverables are defective or non-conforming occurs after final payment, Vendor may be required
to refund such amounts to the City.
E. PAYMENT
1. TAX EXEMPT STATUS:
The City is exempt from all federal excise, state and local taxes unless otherwise stated in this document. The City
claims exemption from all sales and/or use taxes under Texas Tax Code §151.309, as amended. Texas Limited Sales
Tax Exemption Certificates are furnished upon request. Vendor will not charge for such taxes. If billed, the City will
not remit payment until a corrected invoice is received.
2. INVOICING REQUIREMENTS:
Unless otherwise specified, all invoices shall be submitted to City of Georgetown, Accounts Payable, PO Box 409,
Georgetown, TX 78627, and issued as required by the Purchase Order or Agreement. Each invoice must reference
the unique Purchase Order number, and include the Vendor’s complete name and remit to address. If applicable,
transportation and delivery charges must be itemized on the each invoice. A copy of the bill of lading and the
freight waybill must be submitted with the invoice if applicable. Invoices for labor must include a copy of all time
sheets with labor rate and Purchase Order or Agreement number clearly identified. Invoices for labor shall also
include a tabulation of hours worked at the appropriate rates and grouped by work order number, if applicable.
Time billed for labor shall be limited to hours actually worked at the work site.
3. PAYMENT TERMS:
All payments will be processed in accordance with Texas Prompt Payment Act, Texas Government Code, Subtitle F,
Chapter 2251. The City will pay Vendor within thirty days after acceptance of goods, supplies, materials, equipment
or the day of performance of services was completed, or the day of receipt of a correct invoice for goods, supplies,
materials, equipment or services, whichever is later. The Vendor may charge a late fee (fee shall not be greater
than that permitted under the Texas Prompt Payment Act) for payments not made in accordance with this prompt
payment policy; however, the policy does not apply to payments made by the City in the event: (a) there is a bona
fide dispute between the City and Vendor concerning the goods, supplies, materials, equipment delivered, or the
services performed, that causes the payment to be late; (b) the terms of a federal agreement, grant, regulation or
statute prevents the City from making a timely payment with Federal funds; (c) there is a bona fide dispute between
the Vendor and a subcontractor and its suppliers concerning goods, supplies, material or equipment delivered, or
the services performed, which caused the payment to be late; or (d) the invoice is not mailed to the City in strict
accordance with instructions on the Purchase Order or Agreement, or other such contractual agreement.
4. RIGHT TO AUDIT:
The Vendor agrees that the representatives of the City shall have access to, and the rights to audit, examine, or
reproduce, any and all records of the Vendor related to the performance under this Agreement. The Vendor shall
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retain all such records for a period of four (4) years after final payment on this Agreement or until all audit and
litigation matters that the City has brought to the attention of the Vendor are resolved, whichever is longer. The
Vendor agrees to refund to the City any overpayments disclosed by any such audit.
5. FIRM PRICING:
The price shall remain firm for the duration of the Purchase Order or Contract, or extension periods. No separate
line item charges shall be permitted for either bidding or invoice purposes, which shall include equipment rental,
demurrage, fuel surcharges, delivery charges, and cost associated with obtaining permits or any other extraneous
charges. Vendor further certifies that the prices in the Offer have been arrived at independently without
consultation, communication, or agreement for the purpose of restricting competition, as to any matter relating to
such fees with any other firm or with any competitor.
6. PRICE WARRANTY:
The Vendor warrants the prices quoted are not materially higher than the Vendors current prices on orders by
others for like deliverables under similar terms of purchase. In addition to any other remedy available, the City may
deduct from any amounts owed to the Vendor, or otherwise recover, any amounts paid for items materially in
excess of the Vendor’s current prices on orders by others for like deliverables under similar terms of purchase.
7. VENDOR OWING TAXES OR FEES TO THE CITY:
Payment will not be made to any person, firm or in arrears in taxes or fees to the City.
IV. TERMS, CONDITIONS AND ADDITIONAL REQUIREMENTS
A. VENDOR’S OBLIGATION:
Vendor shall fully and timely provide all deliverables described in Solicitation, Vendor’s Offer in strict accordance with the
terms, covenants and conditions of the Agreement and all applicable federal, state and local laws, rules and regulations.
B. DEFAULT:
Vendor shall be in default under the Agreement if the Vendor (a) fails to fully, timely and faithfully perform any of its
material obligations under the Agreement, (b) becomes insolvent or seeks relief under the bankruptcy laws of the United
States or (c) makes a material misrepresentation in Vendor’s Offer, or in any report or deliverable required to be
submitted by Vendor to the City.
C. ABANDONMENT OR DEFAULT:
A Vendor who abandons or defaults the work on the Agreement and causes the City to purchase the services elsewhere
may be charged the difference in service if any and may not be considered in the re-advertisement of the service and may
be rejected as an irresponsible bidder and not considered in future Solicitations for the same type of service unless the
scope of work is significantly modified.
D. TERMINATION/CANCELLATION:
1. TERMINATION FOR CAUSE:
In the event of default by the Vendor, the City shall have the right to terminate the Agreement for cause, by written
notice effective ten (10) calendar days, unless otherwise specified, after the date of such notice, unless the Vendor,
within such ten (10) day period cures such default, or provides evidence sufficient to prove to the City’s satisfaction
that such default does not, in fact, exist. In addition to any other remedies available under law or in equity, the City
shall be entitled to recover all actual damages, costs, losses and expenses incurred by the City as a result of the
Vendor’s default, including without limitation, cost of cover, reasonable attorneys’ fees, court costs and
prejudgment and post-judgment interest at the maximum lawful rate. Additionally, in the event of default by the
Vendor, the City may remove the Vendor from the City’s Vendor List and any Offer submitted by the Vendor may be
disqualified for up to three (3) years. All rights and remedies under the Agreement are cumulative and not exclusive
of any other right or remedy provided by law.
2. TERMINATION WITHOUT CAUSE:
The City shall have the right to terminate the Agreement, in whole or in part, without cause any time upon thirty
(30) calendar days’ prior written notice. Upon receipt of a notice of termination, the Vendor shall promptly cease
all further work pursuant to the Agreement, with such exceptions, if any, specified in the notice of termination. The
City shall pay the Vendor, to the extent of funds appropriated or otherwise legally available for such purposes, for
all goods delivered and services performed and obligations incurred prior to the date of termination in accordance
with the terms hereof.
3. NON-APPROPRIATION:
The resulting Agreement is a commitment of the City’s current revenues only. It is understood and agreed that the
City shall have the right to terminate the Agreement at the end of any City fiscal year (September 30th) if the
governing body of the City does not appropriate funds sufficient to purchase the estimated yearly quantities, as
determined by the City’s budget for the fiscal year in question. The City may effect such termination by giving the
Vendor a written notice of termination at the end of its then current fiscal year.
4. CANCELLATION:
The City reserves the right to cancel the Agreement for default all or any part of the delivered portion of the
deliverables if the Vendor breaches any term hereof including warranties, or becomes insolvent or commits acts of
bankruptcy. Such right of cancellation is in addition to and not in lieu of any remedies which the City may have in
law or in equity.
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E. FRAUD:
Fraudulent statements by the Vendor on any Offer or in any report or deliverable required to be submitted by the Vendor
to the city shall be grounds for termination of the Agreement for cause by the City and may result in legal action.
F. INDEMNITY:
VENDOR SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES
FROM AND AGAINST ANY AND ALL SUITS, ACTIONS, LEGAL PROCEEDINGS, CAUSES OF ACTION, CLAIMS, DEMANDS,
DAMAGES, JUDGMENTS, LOSSES, LIENS, COSTS, EXPENSES, ATTORNEYS’ FEES AND ANY AND ALL OTHER COSTS, FEES
AND/OR CLAIMS OF ANY KIND OR DESCRIPTION ARISING OUT OF, IN CONNECTION WITH OR RESULTING FROM THE
AGREEMENT OR THE GOODS OR SERVICES PROVIDED UNDER THE AGREEMENT.
IF THE VENDOR AND THE CITY ARE CONCURRENTLY NEGLIGENT, EACH PARTY’S LIABILITY SHALL BE LIMITED TO THAT
PORTION OF NEGLIGENCE ATTRIBUTABLE TO IT AS DETERMINED UNDER THE APPLICABLE PROPORTIONATE
RESPONSIBILITY RULES OF THE STATE OF TEXAS.
G. LIABILITY:
Any person, firm or corporation performing services pursuant to this Agreement or Purchase Order shall be liable for all
damages incurred while in the performance of such services. Vendor assumes full responsibility for the work to be
performed hereunder and hereby releases, relinquishes, and discharges the City, its officers, agents and employees from
all claims, demands and causes of action of any nature including the cost of defense thereof, for any injury to, including
death of, any person whether that person be a third party, supplier or an employee of either of the parties hereto, and
any loss of or damage to property, whether the same be that of either of the parties, caused by or alleged to have been
caused by, arising out of or in connection with the issuance of the Agreement or Purchase Order to the Vendor and the
negligence of the Vendor, whether or not said claims, demands and causes of action in whole or in part are covered by
insurance. Certificates of insurance may be required for, but not limited to, Commercial General Liability, Business Auto
Liability, Workers Compensation and Professional Liability Insurance.
H. INFRINGEMENT:
Vendor represents and warrants to the City that: (a) Vendor shall provide the City good and indefeasible title to the
deliverables and (b) the deliverables supplied by the Vendor in accordance with the specifications of the Agreement shall
not infringe, directly or contributory, any patent, trademark, copyright, trade secret or any other intellectual property
right of any kind of any third party; that no claims have been made by an person or entity with respect to the ownership
or operation of the deliverables and the Vendor does not know of any basis for any such claims. Vendor shall, at its sole
expense, defend, indemnify and hold the City harmless from and against all liability, damages and costs (including court
costs and reasonable fees of attorneys and other professionals) arising out of or resulting from: (a) any claim that the
City’s exercise anywhere in the world of the rights associated with the City’s ownership, and if applicable, license rights,
and its use of the deliverable infringes the intellectual property rights of any third party; or (b) Vendor’s breach of any of
the Vendor’s representations or warranties stated in this Agreement. In the event of any such claim, the City shall have
the right to monitor such claim or, at its option, engage its own separate counsel to act as co-counsel on the City’s behalf.
Further, Vendor agrees that the City’s specifications regarding the deliverables shall in no way diminish Vendor’s
warranties or obligations under the Section, and the City makes no warranty that the products, development or delivery
of such deliverables will not impact such warranties of Vendor.
I. DAMAGE TO CITY PROPERTY:
Vendor shall be responsible for any and all damage to the City’s equipment and/or property, the workplace and its
contents, by its work, negligence in work, its personnel and equipment. Vendor shall be responsible and liable for the
safety, injury and health of its working personnel while its employees are performing service work.
J. OVERCHARGES:
Vendor hereby assigns to the City any and all claims for overcharges associated with this Agreement which arise under
the antitrust laws of the United States, 15 USCA Section 1 et seq., and/or which arise under the antitrust laws of the State
of Texas, Business and Commerce Code Ann., Section 15.01, et seq.
K. CONFIDENTIALITY:
In order to provide the deliverables to the City, Vendor may require access to certain of the City’s and/or its licensors’
confidential information (including, but not limited to, inventions, employee information, trade secrets, confidential
know-how, confidential business information and other information which the City or its licensors consider
confidential)(collectively, “Confidential Information”). Vendor acknowledges and agrees that the Confidential
Information is the valuable property of the City and/or its licensors, and any unauthorized use, disclosure, dissemination
or other release of the Confidential Information will substantially injure the City and/or its licensors. The Vendor
(including its employees, subcontractors, agents or representatives) agrees that it will maintain the Confidential
Information in strict confident and shall not disclose, disseminate, copy, divulge, recreate or otherwise use the
Confidential Information without the prior written consent of the City, or in a manner not expressly permitted under this
Agreement, unless the Confidential Information is required to be disclosed by law or as a result of an order of any court
or other governmental authority with proper jurisdiction, provided the Vendor promptly notifies the City prior to
disclosing such information so as to permit the City reasonable time to seek an appropriate protective order. The Vendor
agrees to use protective measures no less stringent than the Vendor uses within its own business to protect its own most
valuable information, which protective measures shall under all circumstances be at least reasonable measures to ensure
the continued confidentiality of the Confidential Information.
L. CODES, PERMITS, LICENSES:
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Vendor shall comply with all federal, state and local standards, codes and ordinances and the terms and conditions of the
services of the electric utility, as well as other authorities that have jurisdiction pertaining to equipment and materials
used and their application. None of the terms or provisions of the specification shall be construed as waiving any rules,
regulations or requirements of these authorities. Vendor shall be responsible for obtaining all necessary permits,
certificates and/or licenses to fulfill contractual obligations to the City.
M. ADVERTISING/PUBLICITY:
Vendor shall not advertise or otherwise publicize, without the City’s prior written consent, the fact that the City has
entered into the Agreement, except to the extent required by applicable law.
N. INDEPENDENT CONTRACTOR:
The Agreement shall not be construed as creating an employer/employee relationship, a partnership or joint venture.
The Vendor’s services shall be those of an independent contractor. The Vendor agrees and understands that the
Agreement does not grant any rights or privileges established for employees of the City. Vendor shall not be within
protection or coverage of the City’s Worker Compensation insurance, Health Insurance, Liability Insurance or any other
insurance that the City, from time to time, may have in force.
O. LIENS:
Vendor shall defend, indemnify and hold the City harmless from and against any and all liens and encumbrances for all
labor, goods and services provided under this Agreement. At the City’s request, the Vendor or its subcontractors shall
provide a proper release of all liens or satisfactory evidence of freedom from liens shall be delivered to the City.
P. ASSIGNMENT/DELEGATION:
The Agreement shall be binding upon and endure to the benefit of the City and the Vendor, and their respective
successors and assignees, provided however, that no right or interest in the Agreement shall be assigned and no
obligation shall be delegated by the Vendor without the prior written consent of the City. Any attempted assignment or
delegation by the Vendor shall be void unless made in conformity with this Section. The Agreement is not intended to
confer any rights or benefits on any person, firm or entity not a party hereto; it being the intention of the parties that
there be no third party beneficiaries to the Agreement.
Q. INTERPRETATION:
The Agreement is intended by both parties as the final, complete and exclusive statement of the terms of their
agreement. No course of prior dealing between the parties or course of performance or usage of the trade shall be
relevant to supplement or explain any term used in the Agreement. Although the Agreement may have been
substantially drafted by one party, it is the intent of the parties that all provisions be construed in a manner fair to both
parties, reading no provision more strictly against one party of the other. Whenever a term defined by the Uniform
Commercial Code (the “UCC”), as enacted by the State of Texas, is used in the Agreement, the UCC definition shall control
unless otherwise defined in the Agreement.
R. GOVERNING LAW AND VENUE:
This Agreement is made under and shall be governed by the laws of the State of Texas, including when applicable, the
UCC as adopted in Texas, VTCA, Business & Commerce Code, Chapter 1, excluding any rule or principle that would refer to
and apply the substantive law of another state or jurisdiction. This Agreement is fully performable in Georgetown, TX,
and the venue for any action related to this Agreement shall be Georgetown, TX. All issues arising from this Agreement
shall be resolved in the courts of Williamson County, Texas and the parties agree to submit to the exclusive personal
jurisdiction of such courts. The foregoing, however, shall not be construed or interpreted to limit or restrict the right or
the ability of the City to seek and secure injunctive relief from any competent authority as contemplated herein and does
not waive the city’s defense of sovereign immunity.
S. INTERLOCAL COOPERATIVE PURCHASING/PIGGYBACK CONTRACTS:
Other governmental entities may be extended the opportunity to purchase from Solicitations of the City, with the
consent and agreement of the awarded Vendor(s) and the City. Such consent and agreement shall be conclusively
inferred from lack of exception to this clause in Vendor’s Response. However, all parties indicate their understanding and
all parties hereby expressly agree that the City is not an agent of, partner to or representative of those outside agencies
or entities and that the City is not obligated or liable for any action or debts that arise out of such independently
negotiated piggyback procurements.
T. SURVIVABILITY OF OBLIGATIONS:
All provisions of the Agreement that impose continuing obligations on the parties, including but not limited to the
warranty, indemnity and confidentiality obligations of the parties, shall survive the expiration or termination of the
Agreement.
U. CLAIMS:
If a claim, demand, suit or other action is asserted against the Vendor which arises under or concerns the Agreement, or
which could have a material adverse effect on the Vendor’s ability to perform thereunder, the Vendor shall give written
notice to the City within ten (10) calendar days after receipt of notice by the Vendor. Such notice to the City shall state
the date of notification of any such claim, demand, suit or other action; the names and address of the claimant(s); the
basis thereof; and the name of each person against whom such claim is asserted. Such notice shall be delivered to the
Purchasing Department as set forth below and to the City Attorney at PO Box 409, Georgetown, TX 78627.
V. NOTICES:
Unless otherwise specified, all notices, requests or other communications required or appropriate to be given under the
Agreement shall be in writing and deemed delivered three (3) business days after postmarked if sent by US Postal Service
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Certified or Registered Mail, Return Receipt Requested. Notices delivered by other means shall be deemed delivered
upon receipt by the addressee. Routine communications may be made by first class mail, fax, or other commercially
accepted means. Notices to the Vendor shall be sent to the address specified in the Vendor’s Offer or at such other
address as a party may notify the other in writing. Notices to the City shall be addressed to: City of Georgetown,
Purchasing Department, PO Box 409, Georgetown, TX 78627 and marked to the attention of the Purchasing Manager.
W. GRATUITIES:
The City may, by written notice to the Vendor, cancel the Agreement without liability if it is determined by the City that
gratuities were offered or give by the Vendor or any agent or representative of the Vendor to any officer or employee of
the City with the intent of securing the Agreement or securing favorable treatment with respect to awarding or amending
or the making of any determinations with respect to performing of the Agreement. In the event the Agreement is
cancelled by the City pursuant to this Section, the City shall be entitled, in addition to any other rights and remedies, to
recover the benefits or payments to the Vendor, as a result of the gratuities.
X. PERSONAL INTEREST PROHIBITED:
No officer, employee, independent consultant or elected official of the City who is involved in the development,
evaluation or decision-making process of the performance of the any Solicitation shall have a financial interest, direct or
indirect, in the resulting Agreement. Any willful violation of this Section shall constitute impropriety in office, and any
officer or employee guilty thereof shall be subject to disciplinary action up to and including dismissal. In the event a
member of the governing body or an appointed board or commission of the City belongs to a cooperative association, the
City may purchase equipment or supplies for the association only if no member of the governing body, board or
commission will receive pecuniary benefit from the purchase, other than as reflected as in increase in dividends
distributed generally to members of the association. Any violation of this provision with the knowledge, expressed or
implied, by the Vendor shall render the Agreement voidable by the City. Nevertheless, the City may obtain the
equipment or service if a conflict of interest affidavit is filed and the Council member recuses his/herself.
Y. WAIVER:
No claim or right arising out of a breach of the Agreement can be discharged in whole or in part by a waiver or
renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed
by the aggrieved party. No waiver by either the Vendor or the City of any one or more events of default by the other
party shall operate as, or be construed to be, a permanent waiver of any rights or obligations under the Agreement, or an
express or implied acceptance of any other existing or future default(s), whether of similar or different character.
Z. DISPUTE RESOLUTION:
If either the Vendor or the City has a claim, dispute or other matter in question for breach of duty, obligations, services
rendered or any warranty that arises under this Agreement, the parties shall first attempt to resolve the matter through
this dispute resolution process. The disputing party shall notify the other party in writing as soon as practicable after
discovering the claim, dispute or breach. The notice shall state the nature of the dispute and list the party’s specific
reasons for such dispute. Within ten (10) business days of receipt of the notice, both parties shall make a good faith
effort, in person or through generally accepted means, to resolve any claim, dispute, breach or other matter in question
that may arise out of, or in connection with, this Agreement. If the parties fail to resolve the dispute within sixty (60)
days of the date of receipt of the notice of the dispute, then the parties may submit the matter to non-binding mediation
upon written consent of authorized representatives of both parties in accordance with the Arbitration Rules of the
American Arbitration Association or other applicable rules governing mediation than in effect. If the parties cannot
resolve the dispute through mediation, then either party shall have the right to exercise any and all remedies available
under law regarding the dispute.
AA. INVALIDITY:
The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity or
enforceability of any other portion or provision of the Agreement. Any void provision shall be deemed severed from the
Agreement and the balance of the Agreement shall be construed and enforced as if the Agreement did not contain the
particular portion or provision held to be void. The parties further agree to reform the Agreement to replace the stricken
provision with a valid provision that comes as close as possible to the intent of the stricken provision. The provisions of
this section shall not prevent the entire Agreement from being void should a provision which is the essence of the
Agreement be determined to be void.
BB. RIGHT TO ASSURANCES:
In the event the City, in good faith, has reason to question the intent of the Vendor to perform, the City may demand
written assurances of the intent to perform. In the event no written assurance is given within the time specified, the City
may treat this failure as an anticipatory repudiation of the Agreement.
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EXHIBIT B
CITY OF GEORGETOWN, TEXAS
INVESTMENT POLICY
As amended December 10, 2013
SECTION 1: SCOPE & OBJECTIVES
1.1 SCOPE
This Investment Policy applies to all financial assets of the City of Georgetown, Texas, which
includes the City of Georgetown Economic Development Corporation and the Georgetown
Transportation Enhancement Corporation, held in all funds.
1.2 STATEMENT OF CASH MANAGEMENT PHILOSOPHY
The City will maintain a comprehensive cash management program to include the effective
collection of all accounts receivable, the prompt deposit of receipts to the City's bank accounts,
the payment of obligations to comply with State law and in accord with vendor invoices, and the
prudent investment of idle funds in accord with this Policy.
1.3 OBJECTIVES
The City's investment program will be conducted to accomplish the following objectives, listed in
priority order:
1. Safety. The City will give priority to the preservation and safety of the principal
invested. Investments will be made in a manner that will mitigate credit risk and
interest rate risk.
2. Liquidity. The City will maintain the availability of sufficient cash to pay
obligations of the City when they are due.
3. Public Trust. Investment Officers shall seek to act responsibly as custodians of
the public trust. Investment Officers shall avoid transactions that might impair
public confidence in the City’s ability to govern effectively.
4 Yield. The City will invest idle cash in a manner that will maximize earnings to the
greatest extent possible, consistent with State and local laws and the objectives
of safety and liquidity listed above.
It is also the objective of the City to diversify its investments to eliminate the risk of loss resulting
from over concentration of assets in a specific maturity, a specific issuer or a specific class of
investments, when appropriate. It is the intent of the City to hold investments to maturity.
SECTION 2: STANDARD OF CARE
2.1 PRUDENCE
Investments will be made with judgment and care, under circumstances then prevailing, that
persons of prudence, discretion, and intelligence exercise in the management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital
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and the probable income to be derived. The City Council recognizes that in maintaining a
diversified portfolio occasional measured losses due to market volatility are inevitable and must
be considered within the context of the overall portfolio's investment return, provided that
adequate diversification has been implemented.
In determining whether an Investment Officer has exercised prudence with respect to an
investment decision, the determination shall be made taking into consideration:
A. The investment of all funds, or funds under the City’s control, over which the Officer had
responsibility rather than a consideration as to the prudence of a single investment.
B. Whether the investment decision was consistent with the written Investment Policy of the
City.
The Investment Officer, acting in accordance with written procedures and exercising due
diligence, shall not be held personally responsible for a specific investment's adverse credit risk
or market price changes, provided that these deviations are reported immediately to the City
Manager and/or the Council and that appropriate action is taken to control adverse
developments.
2.2 ETHICS & CONFLICT OF INTEREST
Investment Officers and employees involved in the investment process will refrain from personal
business activity that could conflict with the proper execution of the investment program, or
which could impair their ability to make impartial investment decisions. Investment Officers and
employees will comply with all disclosure and reporting requirements of Section 2256.005 (I) of
the Texas Government Code.
2.3 DELEGATION OF AUTHORITY
The Chief Financial Officer, Finance Director and Controller are the City's Investment Officers.
The Chief Financial Officer is responsible for overall management of the City's investment
program and may direct the other Investment Officers in their duties. Accordingly, the
Investment Officers are responsible for day-to-day administration of the investment program and
for the duties listed below:
1. Maintain current information as to available cash balances in City accounts, and
as to the amount of idle cash available for investment;
2. Make investments and maintain written procedures for the operation and internal
control of the investment program consistent with this Policy;
3. Ensure that all investments are adequately secured; and
4. Attend training as required by Section 2256.008 (a) of the Texas Government
Code and ensure that any staff executing transactions covered by this Policy
attend the required training. The investment training shall be attended not less
than once in a two-year period that begins on the first day of the City’s fiscal year
and consists of the two consecutive fiscal years after that date and receive not
less than 10 hours of instruction relating to investment responsibilities under this
Policy. The training must be sponsored by:
Texas Municipal League
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Government Finance Officers Association of Texas (GFOAT)
Government Finance Officers Association of US and Canada
Government Treasurers Organization of Texas (GTOT)
University of North Texas
Texas Tech University Center for Professional Development
Unless authorized by State or local laws as provided above, no person may deposit, withdraw,
transfer or manage in any other manner the funds of the City.
SECTION 3: INVESTMENT STRATEGIES
3.1 OPERATING FUNDS
Operating Funds are defined as cash and investments used for day to day operations that do
not fall into one of the other categories. Operating funds will be invested in a manner suitable
for funds requiring a high degree of liquidity. Investments of Operating Funds shall be limited to
a weighted average maturity no greater than one year, and all investment instruments must
meet credit and safety criteria as required by the Public Funds Investment Act and this Policy.
Involuntary liquidation of Operating Fund investments is unlikely due to their short term nature.
However, should a liquidation of investments prior to maturity be necessary, their short term
nature will make material losses unlikely. Operating Fund investments will be diverse and may
include financial institution deposits, U.S. treasuries and agencies, investment pools, and
money market mutual funds. Investment of Operating Funds will be structured to attain the
highest possible yield given the liquidity and safety requirements.
3.2 CONTINGENCY RESERVES (or operating reserves)
Contingency Reserves are the minimum fund balance/working capital requirements as defined
by Council in the Annual Operating Plan. Contingency Reserve balances may be used to cover
any cash operating shortfalls due to the timing of bond issues, revenue receipts, etc.
Investments of these funds may exceed 24 months with prior approval of the City Manager if
short term cash flow needs are not evident. Any one investment may not exceed 36 months in
maturity length. The weighted average maturity for these funds may not exceed 24 months.
Involuntary liquidation of Contingency Reserve investments is unlikely due to their nature.
However, should a liquidation of investments prior to maturity be necessary, the comparatively
longer term nature of some of the investments could result in material losses depending on
financial and economic conditions. Contingency Reserve investments will be diverse and may
include financial institution deposits, U.S. treasuries and agencies, investment pools, and
money market mutual funds. Investment of Contingency Reserves will be structured to attain
the highest possible yield given the liquidity and safety requirements.
3.3 DEBT
3.3.1 Reserves. Debt reserves are defined as bond reserve funds required to be set
aside in accordance with bond covenants. The City’s bond covenants do not require the
City to maintain any reserve funds. Therefore, the City’s investments are not adversely
affected by any reserve requirement conditions.
3.3.2 Interest & Sinking (or debt service funds). Interest and sinking funds are
defined as those funds accumulated to meet periodic payments required by bond and
note maturity schedules. The investment maturities are limited by pertinent debt service
requirements and tax laws limiting accumulation and earnings for such funds.
Involuntary liquidation of investments is highly unlikely due to the nature of these funds.
Interest and sinking fund investments will be diverse and may include financial institution
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deposits, U.S. treasuries and agencies, investment pools, and money market mutual
funds.
3.4 BOND PROCEEDS (capital improvement funds)
Bond proceed funds are defined as those funds received from the sales of City bonds or notes
and not otherwise set aside for debt service or reserve purposes. These funds typically include
money to fund infrastructure construction or other large projects. The investment maturities are
limited by pertinent project draw requirements and tax laws governing earnings for such funds,
but may not have a weighted average maturity in excess of one year, with no single security
greater than 24 months, unless a flexible repurchase agreement is used in accordance with
Section 4.1.5 of this Policy. Involuntary liquidation of investment is highly unlikely. Bond
proceed investments will be diverse and may include financial institution deposits, U.S.
treasuries and agencies, investment pools, and money market mutual funds.
SECTION 4: AUTHORIZED INVESTMENTS
4.1 ALLOWABLE INVESTMENTS
City funds may be invested in the following instruments:
4.1.1 Financial Institution Deposits. Certificates of Deposit and other evidences of deposit at
a financial institution that, a) has its main office or a branch office in Texas and is guaranteed or
insured by the Federal Deposit Insurance Corporation or its successor, b) is secured by
obligations in a manner and amount provided by law for deposits of the City, or c) is executed
through a depository institution or approved broker that has its main office or a branch office in
Texas that meets the requirements of the Public Funds Investment Act. All financial institution
deposits in excess of the FDIC insured amount must be collateralized as described by Section
5.5 COLLATERALIZATION.
4.1.2 U.S. Treasuries and Agencies. Obligations of the United States of America, its agencies
and instrumentalities.
4.1.3 Investment Pools. Investment pools that meet the following criteria:
a. An investment pool must provide an offering circular or other similar disclosure
instruments and provide monthly and transaction reporting as required by
Section 2256.016 of the Texas Government Code.
b. Investment in a new pool will require the approval of the City Council.
c. A public funds investment pool created to function as a money market mutual
fund must (1) mark its portfolio to market daily, (2) include in its investment
objectives the maintenance of a stable net asset value of $1 for each share and
(3) be continuously rated no lower than AAAm or at an equivalent rating by at
least one nationally recognized rating service.
4.1.4. Money Market Mutual Funds. No-load money market mutual funds if the fund:
a. Is regulated by the Securities and Exchange Commission;
b. Marks its portfolio to market daily;
c. Includes in its investment objectives the maintenance of a stable net asset value of $1
for each share;
d. Is continuously rated no lower than AAA or at an equivalent rating by at least one
nationally recognized rating service.
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4.1.5. Repurchase Agreements. Fully collateralized repurchase agreements that:
a. Have a defined termination date;
b. Are secured by cash or obligations as allowed by the Public Funds Investment
Act and this Policy;
c. Require independent third party safekeeping of all securities prior to the release
of any funds;
d. Are placed through a primary dealer or financial institution doing business in this
State; and
e. Do not create a reverse repurchase agreement by the City.
f. Construction, capital improvement and bond proceed funds may utilize a flexible
repurchase agreement, or similar agreement, that allows expenditure-related
withdrawal of funds, without penalty, with an average life and termination date
limitation based on the anticipated draw schedule.
4.1.6. Municipal Issuers. Obligations of:
a. This State and its agencies or instrumentalities; and
b. Counties, cities, and other political subdivisions of the State of Texas rated as to
investment quality by a nationally recognized investment rating firm not less than
A or its equivalent.
4.1.7. Other Investments. Other investments as approved by the City Council and not
prohibited by law.
Investment securities purchased prior to this Policy’s revision, that do not meet the revised
requirements of this Policy, are not required to be liquidated. The City shall monitor each
security’s status to determine whether it is in the best interest of the City to hold or liquidate the
security.
4.2 CREDIT RATING REVIEW AND EFFECT OF LOSS OF REQUIRED RATING
Not less than quarterly, the Investment Officers will obtain from a reliable source the current
credit rating for each held investment that has a PFIA-required minimum rating. Any Authorized
Investment that requires a minimum rating and does not qualify at any time during the period, is
considered to not have the minimum rating. The City shall take all prudent measures that are
consistent with this Policy to liquidate an investment that does not have the minimum rating.
4.3 COMPLIANCE WITH STATE LAW
All authorized investments outlined above must meet the requirements of the Public Funds
Investment Act, Section 2256 of the Texas Government Code. No investment may be made in
any instrument except as provided above.
4.4 CASH ON HAND
Cash resources required for the immediate needs of the City and not otherwise available for
longer term investment will be placed in account(s) at the City's Depository/ Depositories. Such
account(s) will earn interest at the highest rate(s) provided in the respective depository
contract(s).
4.5 LENGTH OF INVESTMENTS
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The following general constraints will apply. Maturities exceeding 36 months will require
authorization by the City Manager, with no single maturity greater than 60 months. Maturities
will be staggered to avoid undue concentration of assets in a specific maturity sector and
maturities selected will provide for stability of income and reasonable liquidity.
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SECTION 5: SAFEKEEPING AND CUSTODY
5.1 AUTHORIZED BROKER/DEALERS and INVESTMENT POLICY CERTIFICATION
Authorized investment securities may be purchased only through brokers/dealers who are
licensed and in good standing with the Texas Department of Securities, the Securities
Exchange Commission, the Financial Industry Regulatory Authority, or other applicable self-
regulatory organization. The Investment Officers will maintain a list of broker/dealers who are
authorized to provide investment services. The list is approved and included in Attachment “A”
of this Policy.
Before engaging in investment transactions with a financial institution, broker/dealer, Investment
Pool, or Money Market Mutual Fund, the Investment Officers will have received from said firm a
signed Certification Form. This form will attest that the individual responsible for the City’s
account with that firm has received and reviewed the City’s Investment Policy and that the firm
has implemented reasonable procedures and controls in an effort to preclude imprudent
activities arising out of investment transactions conducted between the City and the firm. The
letter must be signed by a qualified representative as defined by Section 2256.002, of the Texas
Government Code.
“Qualified Representative” means a person who holds a position with a business organization
who is authorized to act on behalf of the business organization and who is one of the following:
(1) a business organization doing business that is regulated by or registered with a securities
commission, a person who is registered under the rules of the Financial Industry Regulatory
Authority;
(2) for a state or federal bank, a savings bank or state or federal credit union, a member of the
loan committee for the bank or branch of the bank or a person authorized by corporate
resolution to act on behalf of and bind the banking institution;
(3) for an investment pool, the person authorized by the elected official or board with authority to
administer the activities of the investment pool to sign the written instrument on behalf of the
investment pool, or
(4) for an investment management firm registered under the Investment Advisers Act of 1940 or,
if not subject of registration under the Act, registered with the State Securities Board, a person
who is an officer or principal of the investment management firm.
5.2 AUTHORIZED FINANCIAL INSTITUTIONS
Financial institution deposits and other evidences of deposit may be purchased at qualified City
Depositories and other financial institutions. Qualifications will be determined by the Investment
Officers. The City must have a written agreement with the Depository and other financial
institutions, and that depository and other financial institutions must meet all State Laws for
deposit of public funds. The City's main operating Depository/Depositories will be selected as
provided by law and the City’s purchasing procedure.
5.3 INTERNAL CONTROLS
All investment transactions will be documented by the Investment Officers. The Investment
Officers may make investments orally, but will follow promptly with a written confirmation to the
financial institution or broker/ dealer, with a copy of such confirmation retained in the City's files.
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On investments, the Investment Officers will solicit competitive quotes. Where appropriate, at
least two (2) quotations will be solicited for each such investment made.
Market value of the portfolio and each investment will be monitored at least quarterly through
industry standard publications/sources for market data such as, but not limited to, The Wall
Street Journal. Market value may also be determined through the City’s investment software
application, which uses industry standard publications/sources for its market data.
5.4 SAFEKEEPING
All securities purchased by the City under this Policy must be designated as assets of the City,
must be conducted on a delivery-versus-payment (DVP) basis, and must be protected through
the use of a third-party custody/safekeeping agent. The City will enter into a formal agreement
with an institution of such size and expertise as is necessary to provide the services needed to
protect and secure the investment assets of the City.
5.5 COLLATERALIZATION
To the extent not insured by federal agencies that secure deposits, City funds (including
financial institution deposits and C.D.’s) must be collateralized or enhanced in compliance with
the Texas Public Funds Collateral Act and pertinent federal banking regulations. With the
exception of deposits secured with irrevocable letters of credit at 100% of deposit plus accrued
interest, the aggregate market value of pledged securities shall be equal to at least one hundred
two percent (102%) of the of the deposit (including accrued interest) less an amount insured by
the Federal Deposit Insurance Corporation. Should the depository fail to adequately maintain
the required collateral level, the City may increase the minimum to 110%. The City reserves the
right, in its sole discretion, to accept or reject any form of insurance or collateralization pledged
towards depository deposits. Institutions serving as a depository will be required to sign a
Depository/Collateral Agreement with the City. The collateralized deposit portion of the
Agreement shall define the City’s rights to the collateral in case of default, bankruptcy, or closing
and shall establish a perfected security interest in compliance with Federal and State
regulations, including:
• The agreement must be in writing;
• The agreement has to be executed by the Depository and the City contemporaneously
with the acquisition of the asset;
• The agreement must be approved by the Board of Directors or designated committee of
the Depository and a copy of the meeting minutes must be delivered to the City; and
• The agreement must be part of the Depository’s “official record” continuously since its
execution.
Securities pledged as collateral must be retained in an independent third party bank and marked
as pledged to the City. The City will be provided the original safekeeping receipt on each
pledged security. With the exception of the Federal Reserve Bank, the City, financial institution,
and the safekeeping bank(s) will operate in accordance with a master safekeeping agreement.
The City's Investment Officers must approve in writing the release of collateral prior to its
removal from the safekeeping account in accordance with the terms of the depository
agreement.
The financial institution(s) with which the City invests and/or maintains deposits will require the
custodian to provide monthly a listing of the collateral pledged to the City marked to current
market prices. The listing will include total pledged securities itemized by name, CUSIP, type
and description of the security; safekeeping receipt number; par value; current market value;
maturity date; and Moody's or Standard & Poor's rating, if available.
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SECTION 6: REPORTING
6.1 QUARTERLY REPORTING
The Investment Officers shall prepare and submit to the Council a quarterly report on
investment transactions for all funds covered by this Policy. The report will be prepared in
compliance with the Public Funds Investment Act. The report will cover the investment position
of the City at the end of the each fiscal quarter. The contents will include at a minimum:
1. Beginning and ending market value of the portfolio;
2. Beginning and ending market value and book value, maturity date, type of
funds, interest coupon, accrued interest and yield for each separate
security; and
3. A statement as to the compliance with this Policy and State law.
6.2 ANNUAL REPORTING
Within 90 days following the end of the fiscal year, the Investment Officers will present to the
City Council a comprehensive annual report on the investment program and investment activity.
In addition to the information required for quarterly reporting, the annual report will include a
review of the activities and return for the twelve months, suggest Policy revisions and
improvements that might enhance the investment program, and include an investment plan for
the ensuing fiscal year.
6.3 PERFORMANCE STANDARDS
In order to evaluate portfolio performance of funds subject to this Policy, the City establishes
“weighted average yield to maturity” as the standard portfolio performance measurement. The
portfolio’s performance will be compared against appropriately competitive and reasonable
benchmarks, including money market mutual funds or investment pools of similar make-up and
maturities.
6.4 COMPLIANCE
The quarterly reports shall be formally reviewed and a compliance audit of management
controls and adherence to this Policy as it relates to the City’s investments and investing activity
will be performed on an annual basis in conjunction with the City’s annual financial audit. The
results shall be reported to the City Council.
SECTION 7: POLICY REVIEW AND AMENDMENTS
This Investment Policy will be reviewed by the City Council on at least an annual basis as
required by the Public Funds Investment Act and make amendments as necessary. The
Council will review the Policy as part of the annual investment report presented by staff.
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CITY OF GEORGETOWN INVESTMENT POLICY
Attachment “A”
Approved Broker/Dealer List
Bank of America/Merrill Lynch
UBS Paine Webber, Inc.
Duncan Williams
Rice Financial
Raymond James
JPMorgan Chase Securities
Coastal Securities
These broker/dealers meet the City’s Investment Policy requirements.
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EXHIBIT C
CITY OF GEORGETOWN QUARTERLY REPORT –
FOURTH QUARTER
1
AGREEMENT
BY AND BETWEEN
THE CITY OF GEORGETOWN, TEXAS
AND
VALLEY VIEW CONSULTING, L.L.C.
It is understood and agreed that the City of Georgetown (the Investor) will have, from time to
time, money available for investment (Investable Funds) and Valley View Consulting, L.L.C.
(Advisor) has been requested to provide professional services to the Investor with respect to the
Investable Funds. This agreement (the Agreement) constitutes the understanding of the parties
with regard to the subject matter hereof.
1. This Agreement shall apply to any and all Investable Funds of the Investor from time to
time during the period in which this Agreement shall be effective.
2. The Advisor agrees to provide its professional services to direct and coordinate all
programs of investing as may be considered and authorized by the Investor.
3. The Advisor agrees to perform the following duties:
a) Assist the Investor in developing cash flow projections;
b) Suggest appropriate investment strategies to achieve the Investor’s objectives;
c) Advise the Investor on market conditions, general information and economic data;
d) Analyze risk/return relationships between various investment alternatives;
e) Attend occasional meetings as requested by the Investor;
f) Assist in the selection, purchase and sale of investments. The Advisor shall not have
discretionary investment authority over the Investable Funds and the Investor shall
make all decisions regarding purchase and sale of investments. All funds shall be
invested consistent with the Texas Public Funds Investment Act, Chapter 2256
Government Code and the Investor’s Investment Policy;
g) Advise on the investment of bond funds as to provide the best possible rate of return
to the Investor in a manner which is consistent with the proceedings of the Investor
authorizing the investment of the bond funds or applicable federal rules and
regulations;
h) Assist the Investor in creating investment reports in compliance with State
legislation and the Investor’s Investment Policy; and
i) Assist the Investor with primary depository bank selection.
2
4. The Investor agrees to:
a) Compensate the Advisor for any and all services rendered and expenses incurred as
set forth in Appendix A attached hereto;
b) Provide the Advisor with the schedule of estimated cash flow requirements related to
the Investable Funds, and will promptly notify the Advisor as to any changes in such
estimated cash flow projections;
c) Allow the Advisor to rely upon all information regarding schedules, investment
policies and strategies, restrictions, or other information regarding the Investable
Funds as provided to it by the Investor and that the Advisor shall have no
responsibility to verify, through audit or investigation, the accuracy or completeness
of such information;
d) Recognize that there is no assurance that recommended investments will be
available or that such will be able to be purchased or sold at the price recommended
by the Advisor; and
e) Not require the Advisor to place any order on behalf of the Investor that is
inconsistent with any recommendation given by the Advisor or the policies and
regulations pertaining to the Investor.
5. In providing the investment services in this Agreement, it is agreed that the Advisor shall
have no liability or responsibility for any loss or penalty resulting from any investment made
or not made in accordance with the provisions of this Agreement, except that the Advisor
shall be liable for its own gross negligence or willful misconduct; nor shall the Advisor be
responsible for any loss incurred by reason of any act or omission of any broker, selected
with reasonable care by the Advisor and approved by the Investor, or of the Investor’s
custodian. Furthermore, the Advisor shall not be liable for any investment made which
causes the interest on the Investor’s obligations to become included in the gross income of
the owners thereof.
6. The fee due to the Advisor in providing services pursuant to this Agreement shall be
calculated in accordance with Appendix A attached hereto, and shall become due and
payable as specified. Any and all expenses for which the Advisor is entitled to
reimbursement in accordance with Appendix A, attached hereto, shall become due and
payable at the end of each calendar quarter in which such expenses are incurred.
7. This agreement incorporates the services as stated in the Advisor’s response to RFP
#201515 dated December 16, 2014 and is subject to the Investor’s terms and conditions
included therein.
8. This Agreement shall be in effect until February 28, 2017, with the option of the
Investor to extend this Agreement in additional one and two year increments. Provided,
however, the Investor or Advisor may terminate this Agreement upon thirty (30) days
3
written notice to the other party. In the event of such termination, it is understood and
agreed that only the amounts due to the Advisor for services provided and expenses incurred
to and including the date of termination will be due and payable. No penalty will be
assessed for termination of this Agreement. In the event this Agreement is terminated, all
investments and/or funds held by the Advisor shall be returned to the Investor as soon as
practicable. In addition, the parties hereto agree that upon termination of this Agreement the
Advisor shall have no continuing obligation to the Investor regarding the investment of
funds or performing any other services contemplated herein.
9. The Advisor reserves the right to offer and perform these and other services for various
other clients. The Investor agrees that the Advisor may give advice and take action with
respect to any of its other clients, which may differ from advice given to the Investor. The
Investor agrees to coordinate with and avoid undue demands upon the Advisor to prevent
conflicts with the performance of the Advisor towards its other clients.
10. The Advisor shall not assign this Agreement without the express written consent of the
Investor.
11. The Investor acknowledges that:
1) _____ Investor was provided a written copy of Form ADV Part 2 not less than
48 hours prior to entering into this written contract, or
2) _____ Investor received a written copy of Form ADV Part 2 at the time of
entering into this contract and has the right to terminate this contract without
penalty within five business days after entering into this contract.
3) __X__ Investor is renewing an expiring contract and has received in the past,
and offered annually, a written copy of Form ADV Part 2.
When accepted by the Investor, it, together with Appendix A attached hereto, will constitute the
entire Agreement between the Investor and Advisor for the purposes and the consideration herein
specified.
Respectfully submitted,
Richard G. Long, Jr.
Manager, Valley View Consulting, L.L.C.
This agreement is hereby agreed to and executed on behalf of the City of Georgetown, Texas.
By _______________________________
City of Georgetown
4
Date: ______________________________
APPENDIX A
FEE SCHEDULE AND EXPENSE ITEMS
In consideration for the services rendered by Advisor in connection with the investment of the
Investable Funds for the Investor, it is understood and agreed that its fee will be an annual fee
equal to $26,000.
Should the selected tax-exempt bond proceeds investment strategy incorporate a flexible
repurchase agreement or other structured investment, fees will be determined by any applicable
I.R.S. guidelines and industry standards and may be in addition to the annual fee.
Said fee includes all costs of services related to this Agreement, and all travel and business
expenses related to attending regularly scheduled meetings. With pre-trip Investor approval, the
Advisor may also request reimbursement for special meeting or event travel and business
expenses. The obligation of the Advisor to pay expenses shall not include any costs incident to
litigation, mandamus action, test case or other similar legal actions.
Although none are anticipated, any other fees retained by Advisor in the performance of its
duties shall be disclosed to the Investor.
FORM ADV Part 2 – The Brochure
Valley View Consulting, L.L.C.
2428 Carters Mill Road
Huddleston, VA 24104-4003
SEC File Number 801-56181
540.297.3419 phone
540.297.3758 fax
www.valleyviewconsulting.net
March 15, 2014
This brochure provides information about the qualifications and business practices of Valley View Consulting, L.L.C.
If you have any questions about the contents of this brochure, please contact us at 540.297.3419. The information in
this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any
state securities authority.
This filing of Form ADV Part 2 is in conjunction with the Annual Updating Amendments requirement. Only minor wording
edits have been performed. The last update to this brochure was March 3, 2013.
Page 1.
Table of Contents
Advisory Business
Fees and Compensation
Performance-Based Fees and Side-By-Side Management
Types of Clients
Methods of Analysis, Investment Strategies and Risk of Loss
Disciplinary Information
Other Financial Industry Activities and Affiliations
Code of Ethics, Privacy Policy, Participation or Interest in Client Transactions, and Personal Trading
Brokerage Practices
Review of Accounts
Client Referrals and Other Compensation
Custody
Investment Discretion
Voting Client Securities
Financial Information
Page 2.
Advisory Business
Valley View Consulting, L.L.C. (“Valley View”), established in 1998 and registered in 1999.
Valley View provides investment supervisory services primarily to public entities and their related
organizations. Services are provided on a non-discretionary, non-custodial basis. State legislation and
individual client investment policies determine authorized investments and appropriate strategies. Fixed
income/fixed maturity securities, mutual funds, local government investment pools, and financial
institution deposits provide the main investment options. Strategies are generally focused on safety of
principal and maintenance of adequate liquidity to fund operational needs.
Each client’s investment policy and cash flow requirements tailor the investment advice offered by
Valley View. Clients have complete control and discretion over allowed investments and implemented
strategies.
As of December 31, 2013, Valley View provided advisory services to thirty-three entities with
approximately $2.5 billion in total assets. Additionally, Valley View provides cash and investment
consulting services to non-advisory clients.
Valley View is solely owned by Richard G. Long, Jr.
Fees and Compensation
Investment supervisory fees can be a percentage of assets under management, hourly rates, fixed fees, or
a combination of these. All fees are negotiable, and direct-billed and payable in arrears. Fees structures
generally range from 0.01% to 0.30%, annually, based on the book value of assets under management;
$150.00 to $750.00 per hour; $500 to $25,000 per project; $800 to $3,000 per day; $150.00 to $500.00
per month; $400.00 to $1,000.00 per transaction; or other fees as negotiated at the time of contract. In
some cases, a minimum annual fee may apply. Contracts are cancelable without cause with 30 day
notice. Clients maintain their own safekeeping agent/custodian relationships and are responsible for any
related fees. Local government investment pools and mutual funds are subject to their own fee
schedules. Recommended mutual funds have been, and are anticipated to be, no-load. Valley View
assists each client in minimizing transactional expenses or any other normal business expenses that
might be incurred in the management of its funds.
In the event that a flexible repurchase agreement or other structured investment option is utilized for
bond proceeds, Valley View may receive a normal and customary fee (usually paid by the counterparty)
within the guidelines of the Internal Revenue Service, in lieu of the fee prescribed in advisor agreement.
Although no other forms of compensation are anticipated, if any additional compensation is received,
the amount and source will be disclosed to the client.
Performance-Based Fees and Side-By-Side Management
Valley View does not charge any performance-based fees nor participate in side-by-side management.
Page 3.
Types of Clients
Valley View generally provides investment advice to “government entity” investors, including, but not
limited to: state agencies, cities, counties, school districts, special districts, colleges and universities, and
special authorities. Additionally, Valley View provides advice to clients on matters not directly
involving investing.
Valley View does not impose a minimum dollar value of assets for starting or maintaining a
relationship.
Methods of Analysis, Investment Strategies and Risk of Loss
Each client’s investment policy governs investment strategy selection and implementation, with most
client investment objectives focused on preservation of principal and maintenance of adequate liquidity
to fund ongoing operations. Selecting investments with limited credit risk and matching short and long-
term maturity purchases to client-based cash needs primarily manage the risk of realized loss. Most
investments are cash equivalent or fixed income/fixed maturity that are held to maturity.
Depending upon investment and strategy selection, each client may risk loss of principal or anticipated
earnings due to issuer default or adverse market movement.
Valley View most often offers advice on: money market instruments, certificates of deposit and other
financial institution deposits, municipal securities, mutual fund shares, United States government
securities, repurchase agreements, and local government investment pools. Valley View’s analysis
includes fundamental, cyclical, and client-based cash flow requirements. Information sources include
financial newspapers and magazines, research material prepared by others, corporate rating services,
annual reports, prospectuses, regulatory filings, and other financial information sources.
Credit Risk – Most government entities specifically manage and restrict the exposure to credit risk.
Assuming large amounts of credit risk is inconsistent with the main objectives to “primarily emphasize
safety of principal and liquidity.” All issuers contain incremental credit risk, although the markets
believe certain ones have little to no real credit risk (e.g. U.S. government securities). Generally,
legislation does allow specific issuer-types with true credit risk, but restricts that risk based on
measurements of nationally recognized credit rating agencies.
Credit risk considerations extend beyond the investments that are selected to be included in the
organization’s portfolio. Properly collateralized deposits or repurchase agreements, secured in
accordance with the investment policy and federal banking regulations, essentially reduce the inherent
credit risk of the financial institution or counterparty. Periodic review of collateral values and financial
institution strength ensures that any exposure remains minimal.
Prior to investment, accurate identification of the individual issuer’s risk profile or the local government
investment pool/mutual fund’s investment criteria, and analysis of the historical risk/return relationship
determines if the client will potentially receive adequate return for any increased risk. Although
minimum credit rating requirements may apply, the investment policies and strategies of available
pools/funds are reviewed to ensure that their policies are congruent with those of the client.
Page 4.
Market/Opportunity Risk – The restriction of most credit risks focuses portfolio management on
controlling market risk and opportunity risk. Working with the yield curve, issuer yield spreads, and
cash flow requirements addresses these two risks.
Appropriate yield curve positioning, with limited interest rate cycle timing, provides most yield
enhancement. Our services include the research and analysis necessary to assist the client in formulating
strategy recommendations. Cash flow predictability creates the baseline for investment strategy
development. Keeping current-use funds in expenditure-related maturities or cash-equivalent
alternatives, while positioning stable and longer range funds further out the yield curve, provides overall
portfolio enhancement.
For government entities, the higher yield-advantage of extended maturities most safely manifests itself
in increased interest earnings (not speculative gains). Therefore, a hold-to-maturity strategy is primarily
utilized.
Disciplinary Information
Valley View attempts to comply with all registration requirements and has not experienced any legal or
disciplinary event that is material to a client’s evaluation of its advisory business or to the integrity of its
management personnel.
Other Financial Industry Activities and Affiliations
Valley View is not affiliated with any other financial institution and no related person is a general
partner in any partnership in which clients are solicited to invest. There are no registrations current or
pending for either the firm or its management personnel to register as a broker-dealer, futures
commission merchant, commodity pool operator, commodity trading advisor, or an associated person to
the forgoing entities.
Valley View provides investment advisory services on a consulting–basis through Estrada Hinojosa &
Company, Inc. Estrada Hinojosa (a registered broker-dealer and adviser firm) provides similar
investment advisory services to its financial advisory clients. No client transactions are conducted with
Estrada Hinojosa.
Two Valley View team members individually hold positions that provide continuing education services
through the University of North Texas (see attached resumes).
Any and all investment advice and security transactions are separately handled and are not subject to any
commingling or front loading. Except as described above, Valley View is not compensated by any
investment provider or investment manager.
Valley View is actively engaged in business other than giving investment advice, and anticipates
spending less than 50% of its resources pursuing and providing non-investment services. Other
activities include, but are not limited to: bank service analysis and provider selection, cash and
investment management policies and procedures creation and revision, government entity investment
continuing education, and other finance-related services.
Page 5.
Code of Ethics, Privacy Policy, Participation or Interest in Client Transactions, and Personal
Trading
Valley View maintains a Code of Ethics that is available upon request to its clients. The Code is
designed to prevent client-based conflicts of interest and attempts to comply with applicable laws and
regulations.
Valley View advises governmental entities subject to various open records requirements. Therefore
most, if not all, client information is considered public. If Valley View and its advisory personnel do
have access to non-public information (e.g. bank account numbers), said information shall not be
disclosed without the prior written approval of the client and any discarded files shall be destroyed (e.g.
shredded).
As a firm, Valley View does not participate in, nor have an interest in, investments that may be
recommended to clients or resulting client transactions. However, the team members are allowed to
purchase similar investments for his or her personal account and related accounts. The team member is
not allowed to commingle or execute in front of client transactions.
To further reduce any conflict of interest, individual Valley View team members primarily invest in
“non-reportable securities” or securities not eligible for client portfolios.
Brokerage Practices
Specific client consent is required to determine the investments to be bought or sold, the amount of the
investments to be bought or sold, the broker-dealer or financial institution to be used, or the commission
rates to be paid (where applicable). In most cases, the client authorizes and annually re-approves a
broker-dealer list. Valley View may assist clients in selecting broker-dealers based on the firm and
representative’s public funds experience, compliance with client investment policies, competitive
pricing, and responsiveness to client needs. Valley View does receive “general” market research from
investment providers, however no products, services, or soft dollar benefits are provided to Valley View.
Eligible securities are usually sold by each broker-dealer “as principal” without additional commissions.
Multiple client transactions are not aggregated as each client has specific needs and settlement
requirements. Given the commonality of most investment options, not aggregating generally does not
result in higher commissions or costs.
Review of Accounts
At relationship initiation, Valley View reviews each client’s investment policy, eligible investment
products, current investment practices, cash flow requirements, recent investment reports, authorized
broker-dealer and investment provider lists, and other pertinent documentation. Investment maturities,
significant cash inflows and/or outflows, bond issuance, quarter end, fiscal year end, major market
movements, and other factors trigger periodic reviews. Ongoing reviews include current portfolio,
projected cash flows, investment policy requirements, investment strategy targets, market conditions,
and other considerations.
As Chief Investment Officer, Mr. Long performs the investment supervisory function and reviews all
accounts. Ms. Anderson, Mr. Day, Mr. Koch, and Mr. Ross assist in all aspects of client service as
registered investment adviser representatives.
Page 6.
Client reports include, but are not limited to:
• Individual transaction information (at time of transaction).
• Broker-dealer trade and financial institution deposit confirmations and activity reports sent
directly to the client by the respective firm.
• Safekeeping agent/custodian clearance receipts and holdings reports sent directly to the client.
• Written portfolio reports, prepared as per each client’s investment policy and contract terms
(usually quarterly).
Fixed income security “Fair Value” is provided by client-specific safekeeping agents/custodians, by
generally available market prices, or determined by reviewing generally available offering prices and
decreasing the price by an appropriate bid/offer spread.
Client Referrals and Other Compensation
Valley View does not have any arrangements where it receives cash or other economic benefit from a
non-client in connection with giving advice to clients. Valley View has an agreement with Estrada
Hinojosa & Company, Inc. to provide cash or other economic benefit for client referrals. The
arrangement and potential compensation are disclosed to each potential client prior to contract initiation,
and on an ongoing basis thereafter.
Custody
Valley View does not have custody of client funds.
Investment Discretion
Valley View does not have investment discretion over client funds. Any and all investment advice and
investment transactions are separately handled and are not subject to any commingling or front loading.
Voting Client Securities
Valley View does not vote client proxies. Each client’s safekeeping agent/custodian is responsible for
communicating any and all proxy events.
Financial Information
Valley View does not have discretion over investment transactions, custody of client funds, or require
payment of more than $1,200 in fees per client, six or more months in advance. Audited financial
statements are not available.
Page A-1.
Résumés
Richard G. Long, Jr.
Manager, Valley View Consulting, L.L.C.
Center for Public Management Staff, University of North Texas
Investment industry since 1981
Founded Valley View Consulting, L.L.C and registered with the SEC as an
investment advisory firm
Mr. Long’s background includes extensive public entity investment management. He has
been actively involved in government entity investment legislation; investment policies
and strategies; cash flow-based investment portfolios; eligible investment options;
appropriate asset allocations; investment transaction settlement and safekeeping
procedures; bank service agreements; and arbitrage rebate regulation.
Mr. Long founded Valley View Consulting, L.L.C., in the fall of 1998 and became
registered with the Securities and Exchange Commission as an investment adviser firm
effective January 1999. Since 1988, Mr. Long has primarily provided cash and
investment-related services to government entities. In earlier capacities, Mr. Long
originated corporate, asset backed and tax-exempt securities, managed a government
trading operation, and distributed both public and private securities.
On a consulting-basis, Mr. Long coordinates the team’s efforts to assist Estrada Hinojosa
& Company, Inc. (a registered broker-dealer and investment adviser firm) in providing
cash and investment services.
Mr. Long earned a Bachelor of Science, Business Administration degree in Finance from
Colorado State University and a Masters of Business Administration degree from the
University of Dallas. Mr. Long provides continuing education classes through the
University of North Texas and has presented information to multiple investment
management organizations.
Susan K. Anderson
Registered Investment Adviser Representative, Valley View Consulting, L.L.C.
Chief Executive Officer, Anderson Financial Management, L.L.C.
Investing Public Funds since 1981
Former City of Austin, TX Treasurer & Investment Officer
Served as Chief Investment Officer for State of Texas
Investment Manager, The PFM Group for 9 years
Center for Public Management Staff, University of North Texas
Page A-2.
Ms. Anderson has extensive public fund experience, beginning in 1971 with her first
government position at the City of Austin. Ms. Anderson served the City in the Financial
Services Division for over twenty-five years. The last twenty years were specifically
dedicated to the management of the investment, debt and cash resources of the City. As
Treasurer of the City of Austin, she was responsible for the $1.5 billion investment
portfolio, the $3.3 billion debt portfolio and all cash management programs, including
collections and bank relations. Additional relevant responsibilities included serving as
liaison to all three of the City’s pension programs and as Trustee on the City of Austin
Firemen’s Relief and Retirement Fund, and Board Member of the City of Austin
Deferred Compensation Fund. Investment strategies developed for City funds, pension
funds and deferred compensation funds spanned the entire spectrum of public-eligible
investment products, including fixed income, equity and international funds.
Following her retirement from the City of Austin, she served as Chief Investment Officer
for the State of Texas where she was responsible for the management of $35 billion of
combined operating, endowment and trust funds. After her public service, she joined the
national financial and investment advisory firm, The PFM Group. PFM allowed Ms.
Anderson to be exposed to a myriad of government clients with unique needs and
requirements and to hone her skills to identify problems and find the appropriate
solutions for her clients.
Ms. Anderson earned a Bachelor of Science, Business Administration degree in Finance
from St. Edward’s University. She is a Certified Cash Manager and a registered
investment advisor representative.
Ms. Anderson founded Anderson Financial Management, L.L.C. in 2008 and has
partnered with Valley View to bring her expertise to the Valley View team. Ms.
Anderson provides continuing education classes through the University of North Texas
and has presented information to multiple investment management organizations.
William J. Koch
Registered Investment Adviser Representative, Valley View Consulting, L.L.C.
President, Avalon Financial Services
Public-sector consulting since 1990
Over forty years financial management experience
Founded Avalon Financial Services in 1996
Mr. Koch is a capable and versatile financial professional with extensive management
and operational credentials that include a strong background in accounting, cash
management, treasury, and information systems. He has broad industry experience with
both publicly traded and privately held firms, including international market activities,
and public sector organizations. His career has included management positions with
Page A-3.
Fortune magazine ranked firms in which he was responsible for accounting and financial
reporting, treasury, and information services.
Since 1990, Mr. Koch has been a management consultant providing specialized financial
services primarily to public sector organizations, including municipalities, school
districts, colleges, hospital districts, and regional transportation authorities. With proven
financial expertise, solidly versed in statutes and legal requirements, and extensive
knowledge of banking systems and services, he has a unique blend of capabilities to offer
his clients.
Mr. Koch is a registered investment adviser representative.
Formerly a partner with a regional consulting group, Mr. Koch founded Avalon Financial
Services in 1996 and serves as its president. Mr. Koch is a graduate of Texas A&M
University.
Thomas H. Ross
Registered Investment Adviser Representative, Valley View Consulting, L.L.C.
Retired City of Bedford, Texas Director of Administrative Services
Over seventeen years public-sector experience
Lengthy corporate finance and accounting career
Mr. Ross has a background in financial operations and information technology
management, including seventeen years in the public sector, and most recently completed
fourteen years of service with the City of Bedford, Texas, retiring as Director of
Administrative Services. Joining the team in February 2010, Mr. Ross brings a broad and
unique client operations perspective to the areas of cash management, governmental
accounting, banking relations, management reporting, portfolio management, and general
financial analysis, all of which impact the successful execution of a client’s investment
program.
Mr. Ross is a member of the Government Finance Officers Association of Texas
(GFOAT), where he earned the designation of Certified Government Finance Officer
(CGFO), and the Government Treasurer’s Organization of Texas (GTOT).
Mr. Ross is a registered investment adviser representative.
Mr. Ross is a graduate of Texas A&M University with a Bachelor of Business
Administration degree in Management.
Page A-4.
Benjamin F. Day
Registered Investment Adviser Representative, Valley View Consulting, L.L.C.
Investment industry since 1984
Diversified background in sales and trading
Extensive client-based risk/return analysis experience
Mr. Day is the most recent addition to the Valley View team. He first entered the
securities industry in 1984 and has sales and trading desk experience in equity, matched
book and fixed income investments. His various positions with large and regional
investment-related firms developed a knowledgeable assessment of the major market
rallies and melt downs of the last thirty years. This background enhances his outlook
regarding portfolio risk/reward and client expectation. He has over fifteen years’
experience in developing and delivering investment portfolio management seminars.
Mr. Day is a registered investment adviser representative.
Mr. Day is a graduate of Northwood University with a Bachelor of Business
Administration degree.
REQUEST FOR PROPOSALS
FOR
INVESTMENT ADVISORY SERVICES
RFP # 201515
DUE DATE FOR RESPONSES
December 16, 2014
By 2:00 PM CST
Proposal By
Page 2
2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
Investment Advisor Services
Request For Proposals (“RFP”)
RFP #201515
Table of Contents
A. Cover Letter Page 3
B. Company Description Page 5
C. Personnel Page 7
D. Investment Approach Page 12
E. Descriptions and Sample Reports Page 19
F. Compensation Page 20
G. Additional Services Page 21
H. References Page 23
Certification of Non-Collusion Page 24
Conflict of Interest Questionnaire Page 25
W-9 Page 26
ATTACHMENTS:
Form ADV Part 1
Form ADV Part 2
Sample Report
Page 3
2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
December 16, 2014
Ms. Trina Bickford
Purchasing Manager
City of Georgetown
300-1 Industrial Ave.
Georgetown, TX 78627
Dear Ms. Bickford:
Thank you for this opportunity to present Valley View’s credentials for continuing investment
advisory services for the City of Georgetown (the “City”). Attached is our response to the RFP
addressing Valley View’s experiences, philosophies, and capabilities related to the objectives
and work to be performed under this contract.
As we have demonstrated with our current servicing of the City, we believe an investment
advisor should function as an extension of the City’s finance staff. The City has other pressing
issues and additional time constraints to deal with in the overall administration of the City and
we can assist to effectively manage and monitor this vital function.
Our team monitors the markets on the City’s behalf, and develops and executes investment
strategies to safely optimize the returns of the City’s portfolio. Our strategy and selection
considerations are fully communicated prior to execution so that the City can be comfortable that
appropriate decisions are made and confident that, should the need arise, the City could quickly
re-integrate the delegated functions.
The proposal reinforces our team’s overall approach when determining the City’s optimal
allocation of financial assets, especially considering the recent unique economic environment.
During our service period, the City effectively maintained a targeted yield curve position and
actively evolved to an optimum investment structure. Even with the substantial variability in
portfolio balances, the portfolio achieved the required liquidity and augmented interest income.
If the City chose to re-contract with Valley View, the investment services you would continue to
receive include:
• Strategic portfolio advice to achieve the City’s investment objectives,
• Investment policy and bond covenant review,
• Development of historical cash flow model for all non-bond funds,
• Project management assistance to develop a cash flow model for bond proceeds,
• Complete analysis of investment types, pools, and money market funds,
• Thorough communication, reporting, and training,
• Effective broker/dealer management,
• Integration of bond proceeds investment, and
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2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
• Long range portfolio strategy development.
These services would be performed as non-discretionary functions, working to assist the City
through:
Personal Commitment – Our business objectives create dedicated focus and we believe the City
has positively experienced that commitment.
Education – All portfolio decisions thoroughly discussed, beneficial investment provider
relationships developed, and education opportunities pursued will continue to increase the City’s
abilities.
Independence – We independently analyze each investment option. There is no promotional
advantage to any choice, nor hidden agendas or back door marketing efforts to jeopardize
recommendations.
Providing value added services for a reasonable and appropriate fee is the objective. With that in
mind, and based upon the current portfolio balances, we propose $36,000 annual fixed fee. We
certainly appreciate our many years servicing the City and are willing to negotiate a mutually
beneficial fee and fee structure.
The attached information provides an extensive outline of the team’s history and approach to
public funds investment. Valley View is a public-funds focused investment advisory firm with
relatively few clients that have been carefully developed due to their compatibility with our
business plan. This discretion is the cornerstone of our commitment to customer service, to
ensure that each client feels as if they are our only client.
This response attempts to fulfill the requirements of the RFP. Please call me at (888) 853-3778
if any information is missing, or if there are questions.
Sincerely,
Richard G. Long, Jr.
Manager, Valley View Consulting, L.L.C.
Page 5
2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
B. Company Description - A complete description of Proposer’s organization,
including at a minimum:
• Date founded and details of ownership as well as any subsidiaries and affiliates relevant
to the City;
Valley View was founded in the fall of 1998 and registered with the SEC as an investment
advisor firm effective January 1999. Richard G. Long, Jr. wholly owns the firm. To more fully
address the complete spectrum of client needs, Mr. Long has teamed with Susan K. Anderson,
Benjamin F. Day, Julie S. Gerhardt, William J. Koch, and Thomas H. Ross. These affiliations
assure that our clients will receive more comprehensive and individually designed services
related to the financial programs of government investors.
Valley View Consulting, L.L.C. is a Securities and Exchange Commission (“SEC”) registered
investment advisory firm serving public entities in a variety of cash and investment management
and consulting roles. Valley View provides completely independent advice and consultation and
is not affiliated with any investment pool, mutual fund, broker/dealer, financial institution, or
investment provider.
Valley View and its professionals perform substantial other consulting activities that include
cash and investment-related projects, but do not meet the definition of investment advisory
service. These activities have direct beneficial application to the City’s service requirements.
Although Valley View’s office of registration is in Virginia, it is fully registered with the State of
Texas and has personnel located in Austin, Fort Worth, and Dallas areas. All services provided
to the City will be seamless from any physical address.
• Description of the experience of the firm in serving as an investment advisor for
municipalities and other public entities in Texas;
Valley View specializes in serving public fund investors and recognizes that the challenges
facing these clients are significantly different from non-governmental investors. Public fund
investors face cash flow constraints, fewer staff resources and more limited investment options.
Likewise, investment strategies and preferred investment products for the governmental investor
can be significantly different. Valley View has successfully navigated through these challenges
to develop effective investment programs.
Valley View’s business plan offers a variety of advisory and consulting services exclusively to
public entities similar to the City. Managing extremely large client portfolios or investment
pools are not part of that business plan. Providing client-specific service will not be jeopardized
by the whims of the “800 pound gorilla” that demands attention.
The PFIA, and subsequently the City and all other local governments’ investment policies,
requires local environment-cash flow based investment management decisions. With that
requirement, each government has a unique and distinct “optimum” investment strategy.
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2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
Consequently client-to-client yield comparisons are not appropriate. That stated, the City’s own
portfolio experienced a wide variety of local and market conditions since 2001, and was
appropriately adjusted and positioned by effective coordination between City staff and the
investment advisory team.
• The types of accounts primarily sought;
Almost all of our clients are Texas public entities subject to the Public Funds Investment Act (the
“PFIA”); therefore most of our client portfolios will be similar to that of the City. Valley View’s
business plan will provide service to a limited number of entities with portfolios roughly sized
from $10,000,000 to over $400,000,000. True value-added advice and consultation requires a
consistent and dedicated focus. The City is a prime candidate to receive value from such a
relationship.
• Any SEC or regulatory censure or litigation involving institutional business Proposer
conducts with governmental investors currently or over the past three years;
Ms. Anderson, Mr. Day, Ms. Gerhardt, Mr. Koch, Mr. Long, Mr. Ross, nor Valley View has ever
been subject to any SEC or FINRA (the Financial Industry Regulatory Authority replaced the
NASD) regulatory censure litigation, arbitration, enforcement actions or complaints.
• Description of any accounts which have discontinued services from the firm, including
the reason for the termination; and
Since 1999 only two investment advisory clients have discontinued utilizing Valley View as
ongoing investment advisor. Both experienced general revenue challenges and terminated all, or
a majority of, outside consulting agreements. Services were not terminated for cause or lack of
performance. Both have volunteered as references:
City of Beaumont Laura Clark 409.880.3115
City of Hurst Clay Caruthers 817.788.7059
There have been local governments that retained Valley View for specific bond issue investment.
When those funds were expended the contracts expired.
Valley View provides various consulting services to public entities on a project-by-project basis.
Most engagements result in additional service contracts.
• Copies of ADV Parts I and II, as on file with the SEC, and proof of registration with the
Texas State Securities Board.
Valley View qualifies for national registration – SEC registration file number 801-56181. The
SEC registration includes a Notice Filing to the State of Texas. Please see attached Forms ADV
Parts 1 and 2.
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C. Personnel - Details of Proposer’s personnel including at a minimum:
a. Size of staff committed to public sector clients and the credentials of key staff members;
Valley View is pleased to offer a team whose members have extensive experience with the City
and will each play an integral role in providing their expertise to fulfill the contract objectives of
the City. Mr. Long will oversee the relationship. Ms. Anderson will coordinate most the
portfolio activities and investment transactions. Mr. Ross will facilitate monthly and quarterly
investment portfolio reporting. Mr. Day, Ms. Gerhardt, and Mr. Koch will provide client support
and back-up as well as provide specialized investment and consulting services.
Team members will be available to attend most meetings within a reasonable amount of notice
time. Because Valley View practices a team approach to client coverage, each member of the
firm is aware of client initiatives and portfolio status. Each week, the firm reviews every client
with updates on all portfolio activities and strategies. It is therefore our policy that our clients
will be able to have their needs met by any team member.
The following lists the credentials of key personnel:
Richard G. Long, Jr.
• Manager, Valley View Consulting, L.L.C.
• Investment industry since 1981
• Public funds cash and investment management focus since 1988
• Registered Valley View Consulting, L.L.C. with the Securities and Exchange Commission
in 1999
Susan K. Anderson
• Chief Executive Officer, Anderson Financial Management, L.L.C.
• Investing Public Funds since 1981
• Former City of Austin Treasurer & Investment Officer
• Served as Chief Investment Officer for State of Texas
• Founded Anderson Financial Management, L.L.C. in 2008
• Associated with Valley View since 2008
William J. Koch
• President, Avalon Financial Services
• Public-sector consulting since 1990
• Over forty years financial management experience
• Founded Avalon Financial Services in 1996
• Associated with Valley View since 1999
Thomas H. Ross
• Retired City of Bedford, Texas Director of Administrative Services
• Twenty+ years public-sector experience
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• Lengthy corporate finance and accounting career
• Associated with Valley View since 2010
Benjamin F. Day
• Investment industry since 1984
• Diversified background in sales and trading
• Extensive client-based risk/return analysis experience
• Associated with Valley View since 2012
Julie S. Gerhardt
• Investment industry since 1993
• Responsible for administration and organizational issues
• Experienced in customer support and reporting
b. List of investment professionals proposed to directly provide services to the City,
including their relationship with firm, number of years with the firm, their
responsibilities, their investment business experience and experience in public sector
investment management;
The following resumes highlight each team member’s experience:
Richard G. Long, Jr.
Manager
Mr. Long’s background includes extensive public entity investment management (he is
responsible for in excess of $2 billion of public funds). He has been actively involved in the
public funds investment legislation; investment policies and strategies; cash flow-based
investment portfolios; eligible investment options; appropriate asset allocations; investment
transaction settlement and safekeeping procedures; bank service agreements; and arbitrage rebate
regulation.
Mr. Long founded Valley View Consulting, L.L.C., in the fall of 1998 and became registered
with the SEC as an investment advisor firm effective January 1999. At his previous employers
(First Southwest Company and Ambac Investment Management, Inc.) he established and/or
managed their investment management efforts. In other previous capacities, Mr. Long originated
corporate, asset backed and tax-exempt securities, managed a government trading operation, and
distributed both public and private securities.
Mr. Long began his fixed income market career in 1981 and has focused on public funds since
1988.
Mr. Long earned a Bachelor of Science, Business Administration degree in Finance from
Colorado State University and a Masters of Business Administration degree from the University
of Dallas. Mr. Long has presented information to multiple public funds investment management
organizations.
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Mr. Long is a registered investment adviser representative.
Susan K. Anderson
Investment Advisor Representative
Ms. Anderson has extensive public fund experience, beginning in 1971 with her first government
position at the City of Austin, Texas. Ms. Anderson served the City in the Financial Services
Division for over twenty-five years. The vast majority of time was specifically dedicated to the
management of the investment, debt and cash resources of the City. As Treasurer, she was
responsible for the $1.5 billion investment portfolio, the $3.3 billion debt portfolio and all cash
management programs, including collections and bank relations. Additional relevant
responsibilities included: serving as liaison to all three of the City’s pension programs, as Trustee
on the Firemen’s Relief and Retirement Fund, and as Board Member of the Deferred
Compensation Fund. Investment strategies developed for City funds, pension funds and deferred
compensation funds spanned the entire spectrum of eligible investment products, including fixed
income, equity and international funds.
Following her retirement from the City of Austin, she served as Chief Investment Officer for the
State of Texas where she was responsible for the management of $35 billion of combined
operating, endowment and trust funds. After her public service, she joined the national financial
and investment advisory firm, The PFM Group, where she continued to develop her knowledge
of public fund investment. The stint at PFM allowed Ms. Anderson to be exposed to a myriad of
government clients with unique needs and requirements and to hone her skills to identify
problems and find the appropriate solutions for her clients.
Throughout her career, Ms. Anderson has been involved in professional organizations for public
sector officials. She has been a member of the Government Finance Officers’ Association
(Texas and national), and the Texas Association of School Business Officials, and held officer
positions in the Government Treasurers’ Organization of Texas (also chaired their Legislative
Committee).
Ms. Anderson earned a Bachelor of Science, Business Administration degree in Finance from St.
Edward’s University. She is a Certified Cash Manager and a registered investment adviser
representative.
Ms. Anderson founded Anderson Financial Management, L.L.C. in 2008 and has partnered with
Valley View since then to bring her expertise to the investment advisory team.
William J. Koch
Investment Advisor Representative
Mr. Koch is a capable and versatile financial professional with extensive management and
operational credentials that include a strong background in accounting, cash management,
treasury, and information systems. He has broad industry experience with both publicly traded
and privately held firms, including international market activities, and public sector
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organizations. His career has included management positions with Fortune magazine ranked
firms in which he was responsible for accounting and financial reporting, treasury, and
information services.
Since 1990, Mr. Koch has been a management consultant providing specialized financial
services primarily to public sector organizations, including municipalities, school districts,
colleges, hospital districts, and regional transportation authorities. With proven financial
expertise, solidly versed in statutes and legal requirements, and extensive knowledge of banking
systems and services, he has a unique blend of capabilities to offer his clients.
Mr. Koch is a registered investment adviser representative.
Formerly a partner with a regional consulting group, Mr. Koch founded Avalon Financial
Services in 1996, serves as its president, and has been a Valley View team member since 1999.
Mr. Koch is a graduate of Texas A&M University.
Thomas H. Ross
Investment Advisor Representative
Mr. Ross has an outstanding background in financial operations and information technology
management, including almost twenty years in the public sector, and most recently completed
fourteen years of service with the City of Bedford, Texas, retiring as Director of Administrative
Services. Joining the team in February 2010, Mr. Ross brings a broad and unique client
operations perspective to the Valley View practice in the areas of cash management,
governmental accounting, banking relations, management reporting, portfolio management, and
general financial analysis, all of which impact the successful execution of a client’s investment
program.
Mr. Ross is a member of the Government Finance Officers Association of Texas (GFOAT),
where he earned the designation of Certified Government Finance Officer (CGFO), and the
Government Treasurer’s Organization of Texas (GTOT).
Mr. Ross is a registered investment adviser representative.
Mr. Ross is a graduate of Texas A&M University with a Bachelor of Business Administration
degree in Management.
Benjamin F. Day
Investment Advisor Representative
Mr. Day is primarily responsible for developing relationships in the Mid-Atlantic States. He first
entered the securities industry in 1984 and has sales and trading desk experience in equity,
matched book and fixed income investments. From offices in the east and west coasts, he has
seen most of the major rallies and melt downs of the last thirty years. This background
gives him an educated eye concerning portfolio risk/reward and client expectation. He has over
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fifteen years’ experience in developing and delivering investment portfolio management
seminars.
Mr. Day joined the Valley View team in 2012 and is a registered investment adviser
representative.
Julie S. Gerhardt
Administration
Ms. Gerhardt is the most recent addition to the Valley View team. She is primarily responsible
for administrative and organizational issues. She began her career in the financial industry in
1993 with Legg Mason Wood Walker, and then subsequently with Smith Barney. Ms. Gerhardt
joined the Valley View team in 2013.
c. Descriptions of investigations for improper, fraudulent or unfair activities related to the
sales of securities involving personnel above, if any; and
Ms. Anderson, Mr. Day, Ms. Gerhardt, Mr. Koch, Mr. Long, nor Mr. Ross, have never been
subject to any SEC or regulatory censure litigation, enforcement actions or complaints, nor have
they ever been investigated for alleged improper, fraudulent or unfair activities related to the sale
of securities.
d. Details of methods to inform investment professionals of developments relevant to
governmental investment managers.
Valley View actively pursues relevant forms of continuing education, and our professionals are
members of multiple finance and investment-related government entity service groups, including
the Government Finance Officers’ Association of Texas and Government Treasurers’ Organization
of Texas. We participate in many educational seminars and professional schools, and are frequently
asked to speak or present specific material for many organizations. We routinely monitor proposed
and enacted changes to the PFIA to ensure that our clients implement any amendment that is
required and any optional change that would be beneficial to their portfolio.
As an integral part of attaining and maintaining its SEC registration, Valley View holds an annual
meeting that discusses current regulatory changes that would impact our management of public
funds.
Ms. Anderson and Mr. Long are also staff members with the University of North Texas – Center for
Public Management providing PFIA continuing education, and gaining additional exposure to
relevant public funds topics and solutions.
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D. Investment Approach - Detailed description of Proposer’s investment
management approach, including at a minimum:
• Process to ensure the City’s objectives of safety, liquidity and yield;
Public funds require a different investment approach and fiduciary responsibility to adequately
judge appropriate risk/return opportunities. The City has many essential functions to effectively
serve its constituents. Investing is usually considered a secondary activity. Our service objective
ensures the level of attention and commitment to effectively manage the City’s funds. We
believe in the principles stressed by the PFIA and the City’s Investment Policy:
• Safety
• Liquidity
• Public Trust
• Yield (Risk-Appropriate)
Whether the public fund invests operating or bond funds, these fundamental considerations and
principles will be the same. The management of public funds are scrutinized more than any
other organizations, therefore Valley View takes great care in assessing and addressing risks on
multiple levels to ensure due diligence in minimizing risk exposure.
• Experience in developing investment policies and portfolio strategies for governmental
operating funds;
With a primary focus on managing Texas public funds, Valley View regularly assists in the
development, modification and implementation of investment policies, portfolio strategies and
other investment-related services. We consider those functions as essential to the effective
fulfillment of our contracts and have worked with the City annually in addressing its policy
development needs. Members of the Valley View team have written scores of investment
policies for Texas entities since the PFIA mandated the document in 1987 and regularly provide
instruction through the University of North Texas on the effective and state law-compliant
development of investment policies.
Valley View is intimately familiar with the PFIA and extensively reviews each new investment
option to ensure compliance. Our services will include an initial Investment Policy review and
annual reviews thereafter. Additionally, the Valley View team’s personal Texas-government
experience with spending and other internal polices will augment our interaction.
No matter the objective or funding source of the portfolio, cash flow predictability creates the
baseline for investment strategy development. As stated previously, keeping current-use funds in
expenditure-related maturities or liquid alternatives, while positioning stable and longer range
funds further out the yield curve, provides overall portfolio enhancement. Cash flow forecasting
must be the cornerstone of the investment program. Valley View will work with the City to
develop forecasts that will guide the investment strategy for each fund to ensure the appropriate
mix of liquidity and longer-term asset allocation.
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The resulting cash flow forecast and analysis will help identify the appropriate investment
strategy and help control risks. Our assistance to the City could combine the following steps to
achieve the portfolio’s objectives:
• Actively managing the portfolio to maintain appropriate cash levels,
• Conservatively estimating cash flows and minimum cash balances,
• Appropriately diversifying maturity and investment mix,
• Timely and regular market interaction to smooth price fluctuations,
• Maintaining minimum positions in highly liquid investment types, and
• Strictly adhering to the prohibition on speculative maturity extension.
Ongoing review and forecast revision appropriately positions the City and reduces funding
requirement concerns.
• Types of investment research utilized and the methods for making investment decisions
including maturity and selection;
Valley View prides itself on generating independent research. As the markets and securities
evolve, understanding the potential risk/return largely determines portfolio decisions. For
example, in the early 1990s, inverse floating CMO tranches or classes provided the research
challenge. Today, callable and step-up securities are the popularly pitched “deals of the day.”
Generally, securities with an issuer call option offer a greater purchase yield than non-callable
(bullet) securities. Theoretically, the investor receives this higher yield to compensate for the
risk of call. If rates go down, the security’s value increases, and the issuer calls the security.
The investor is then left with investable funds when interest rates are lower. Conversely, if
yields increase, the value decreases, and the issuer will not call the security. The investor
remains locked-in at the lower yield. In market/opportunity risk terms – callable securities
increase opportunity risk (when yields fall) and increase market risk (when yields rise). The
question should be, “Is the investor adequately compensated for the extra risk?”
The theory was very obvious, but little research addressed the details. Many public funds
investors have been buying callable securities for years. They, unfortunately, never looked back
to determine if their portfolio’s actually earned more than a bullet portfolio. To accurately
inform its clients, Valley View developed an analytical comparison of callable verses bullet
securities.
Our analysis compared the average portfolio yields of a rolling two-year bullet portfolio and a
rolling two-year/three month callable portfolio since 1990. The rolling bullet portfolio averaged
yields greater than the callable portfolio. Buying bullet securities (the lower risk investment)
actually gained over callable securities (the higher risk choice)!
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Conclusion: Over a variety of market conditions, the extra purchase yield of a callable security
does not offset the increased risk from the call. (Unfortunately, step-up securities seem to be
exhibiting a similar disappointing holding period return.)
This callable research is just an example of Valley View’s portfolio-focused capabilities. Other
research projects have been and will continue to be done as client needs and market conditions
dictate.
With the growth of the Internet, investment information and research is available from a
multitude of sources. Bloomberg Investor Services, the Federal Reserve Bank, various federal
agencies, and many other sites provide most of the market information needed to effectively
serve our clients.
• Primary strategies for adding value to portfolios;
Although market and economic considerations are involved in making the investment decisions,
we believe a more important consideration revolves around the client’s cash flow needs. As a
PFIA-oriented investment advisor, we believe providing a dependable and safe investment
structure is a key objective. Market speculation does not factor into this strategy. Of course, we
consider where interest rates might be headed in the short term, but our main focus is on
maintaining a discipline to protect and preserve assets over the long term without taking
inordinate amounts of risk. This discipline begins with the cash flows of the client.
Maturity Distribution – To demonstrate the value that can be added by strategic allocation of
assets out along the yield curve, Valley View has collected data going back for over three
decades. This data yields compelling evidence of the value that can be added by such
allocations. Before maturity extensions can be executed however, an analysis of the City’s cash
flows must be instituted to ensure that adequate liquidity and safety remain at the forefront of the
strategy and objectives.
For example, one strategy model compares a rolling portfolio of two year investments to a
government security-based local government investment pool. The rolling two-year portfolio
has experienced significant average yield advantage over the pool yield. Analyzing the City’s
cash flows and identifying potential non-pool balances could generate similar benefit for that
portion of the portfolio that could be prudently laddered.
Managing Market Risk by Limiting Investment Maturities – Selecting appropriate yield
curve positions for fixed income securities must include an analysis of the potential valuation
risk of that particular maturity. Market value of security positions will vary from the date of
purchase until maturity. Longer-term maturities will be much more volatile than shorter-term
positions and an assessment must be made prior to purchase as to whether the potential variance
is worth the incremental yield of the longer maturities.
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One strategy to mitigate the impact of changing market environments is to maintain a disciplined
approach of regular security purchases through a variety of market conditions. This discipline
generally allows the portfolio to offset unrealized losses with unrealized gains with the strategy
objective to reach a net mark-to-market spread that is lower than that of any individual security.
Adjusting to Market Movements – Current yields have remained dramatically low over the
recent past. Those investors that had practiced a disciplined laddering approach for their fixed
income portfolios fairly successfully weathered the storm. Moving forward, investing too short
reduces current portfolio interest earnings as yields remain historically low. Too long of
maturity, when rates rise rapidly, restricts future interest income and impairs market valuation.
Therefore, gradual targeted implementation of portfolio strategy hedges the portfolio against the
uncertainty and allows the portfolio to build towards its optimum long-term yield curve position.
At the same time, however, the portfolio’s weighted average maturity can be strategically
adjusted to anticipate and accommodate economic market movements. Valley View will work
with the City to identify the appropriate maturity allocation during any given market
environment.
Adding Potential Returns Through Investment Selection – Valley View generally prefers
diversified investment portfolios, and works with each client to establish the optimal mix for
their portfolio. However, most of these clients want us to be nimble and flexible enough to
adjust this structure to market opportunities or current market risks. As an example, not too long
ago, we were focusing our clients on U.S. Government securities that were offering attractive
returns relative to the other issuers in the marketplace. As their risk/return profile and
attractiveness changed, we began to research other opportunities on behalf of our clients. Our
research uncovered significant opportunities available in bank certificates of deposit and other
interest bearing products, and we began to move client monies into those fully insured or
collateralized options. These investments require much greater effort on the part of the
investment advisor and have historically not been included in the arsenal of larger investment
advisors’ recommendations (probably because of the additional time to identify potential sources
and ensure proper document execution). On the other hand, we have found them to be safe (as
long as they are documented appropriately), dependable, and attractive. Since 2008, these
instruments have exceeded the returns of comparable Agency issues by 20 to 75 basis points.
In the current economic environment, Valley View continues to see value in bank deposit
products. We have placed deposits with a number of Texas-based financial institutions, and
continue to expand that list. Additionally, we have utilized Certificate of Deposit Account
Registry Service (CDARS), which is a PFIA-authorized deposit product. For solicitations,
Valley View generally contacts banks statewide to provide rates to various dates. We also send
solicitations to local financial institutions to allow them to offer rates to clients in their vicinity.
These direct-placed CDs are issued in the name of the client. Brokered or mass-marketed CD
programs may be considered if adequate advantage can be achieved.
As market conditions change, Valley View will again adjust our selection process. We recognize
that the economic and market conditions over the past few years have been extremely
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challenging and unique. The most important strategy to keep in mind is to ensure that all cash
flow needs are covered and that a laddered approach to investing is diligently practiced. Sector
selection, while important, becomes a secondary consideration as long as the portfolios invest in
the types allowed by the PFIA and individual client investment policies.
Combining all of these concepts into active portfolio management will enhance portfolio return
over the long run. Past market performance does not ensure similar future results. However,
over time, through a variety of market conditions, the potential advantage of cash flow–based
portfolio yield curve position provides substantial value.
Changes to the current portfolio strategy development will be suggested only after thorough
analysis and conclusive evidence that the adjustment provides long-term benefit to the City. The
City has clearly experienced the advantage of prudent investment product selection, interest rate
cycle timing and appropriate yield curve positioning. Valley View’s services will continue to
include the research and analysis necessary for the City to reformulate strategy recommendations
and Valley View will participate in any presentation (formal or informal) designed to gain
approval to implement the desired strategy.
Operating - For the operating portion of the portfolio, Valley View will:
• Review and recommend modifications to the City’s Investment Policy,
• Assist in cash flow forecasting,
• Analyze available products (individual securities and pool/fund options) and institutions,
• Interpret market conditions and trends,
• Determine appropriate asset allocations,
• Advise on long-range strategy selection,
• Implement strategy within a competitive pricing environment,
• Prepare appropriate calculations, accruals and reports,
• Provide independent sources for investment market valuations,
• Comply with Investment Policy and state and federal regulations,
• Review procedures and documentation for management procedures and investment
alternatives,
• Monitor broker/dealer and safekeeping relationships,
• Attend regularly scheduled meetings, and
• Educate City staff on pertinent investment topics.
Combining all of these concepts into active portfolio management will enhance portfolio return
over the long run.
Whether the City invests operating or other funds, the fundamental considerations and principles
stressed above will be the same.
• Suggested performance benchmarks for the City’s portfolio; and
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There are several philosophies on appropriate benchmarks, but for many public entities a simple
standard is the preferred measurement device. Many Texas public funds select the return of
TexPool (or another pool) as their benchmark, because it is a publicly available source and
because a local government investment pool is usually the default strategy. Selection of TexPool
as a benchmark would therefore provide an assessment of the incremental yield gained by active
portfolio management.
The development of a custom benchmark may be needed to effectively assess management
performance. For example, an operating fund that includes short-term obligations and some
longer-term investment capacity, a customized benchmark including a percentage of the return of
TexPool and a percentage of the return of 2-year U.S. Agency Notes may be appropriate. By
designing a benchmark that more accurately depicts the City’s portfolio allocation objective, the
performance of the portfolio against a similarly allocated benchmark would be an appropriate
measurement of success. Valley View will explore all of the options with the City to assure that
the optimal and preferred benchmark is selected.
As speculation is prohibited by the PFIA, and clients tend to hold investments full term,
weighted average yield to maturity is the most common performance standard.
• Daily procedures for portfolio review and client contact.
The needs and desires of the City will dictate the optimum schedule for portfolio review and
meetings. The following minimum review schedule is consistent with the objectives of the City:
• Quarterly strategy/portfolio review and
• Annual performance review.
Market cycles and the City’s cash flow schedule will largely determine appropriate ongoing
interaction. Regular communication will focus on:
• Current cash requirements,
• Specific security opportunities,
• Market information,
• Appropriate transaction execution levels,
• Transaction settlement status, and
• Investment reporting.
Contact and meeting frequency will be based on ebb and flow of the investment portfolio and
other assignments. Certain items are best handled face-to-face; others can effectively be
completed via phone or email. Major market shifts or portfolio modifications may also require
emergency meetings or conference calls to review market trends and appropriately adjust
strategies. Valley View is committed to effective and timely response to the City’s needs and if
additional meetings are necessary, we will be available.
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Mr. Long, Ms. Anderson and Mr. Koch will handle the City’s account. As a team we will
coordinate our efforts and communications with the City. Specific activities or services will be
shared and/or designated to the individual with the most expertise. The City’s experience should
be seamless between the individuals.
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E. Descriptions & Sample Reports - Detailed descriptions and samples of reports
available to the City and their frequency, including methods and formulas used
to calculate yield and performance.
The City has historically generated its own accounting and investment reports. For quarterly
investment reports Valley View customizes each client’s report for a general, yet PFIA-
compliant, Council-level overview. For detailed accounting reports, we utilize the Tracker
portfolio reporting system. We believe this separation of overview and detail allows the Council
to concentrate on the bigger picture of the investment program, and appropriately provides the
required data reports to the Finance personnel.
As mentioned above, for accounting reports, Valley View utilizes Tracker, a web-based
investment reporting service that affords a high degree of flexibility in content and format of
reported information. This information can be produced in PDF reports as well as downloaded
into Excel worksheet form. Additionally, Valley View can allow City staff to have on-line
access to the data in a “Read Only” authorization to maintain the integrity of the data while
allowing the City to view portfolio detail.
There are no licensing fees or other charges passed on to the City for software use.
As with all services provided, we will work with the City to generate any report and/or format
necessary to full your requirements.
The reports use weighted average yield to maturity as the performance measurement standard.
Valley View will prepare monthly accounting reports and quarterly investment reports in
compliance with the PFIA and the City Investment Policy.
Sample quarterly report attached.
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F. Compensation - Proposed compensation for services, either as a flat annual fee
or as a per trade fee with an annual cap.
As with all contracts, a mutually agreed upon fee will provide the City with good value for the
cost and adequate compensation for our efforts and expertise. We offer services with a variety of
fee structures and our fee structure may be negotiated. Valley View will work with the City to
find the optimum contract fee mechanism prior to contract approval. To provide the total service
package described in the RFP, we propose a $35,000 fixed annual fee.
The City would be billed in arrears each quarter.
When comparing Valley View’s contract fees, it is important to consider that Valley View does
not generate any additional revenue, income, soft dollar, or other form of compensation, either
disclosed or undisclosed, related to performing investment advisor services for the City. No
transactions will flow through an affiliated trading desk or be subject to additional price mark-
up. No pool management or referral fees will be generated. No deposit broker or placement fees
will be received. Every strategy recommendation and transaction will be based solely on
fulfilling the City’s objectives.
It is important to understand the benefit of our independence from trading or product-related
revenues. Some advisors derive revenues beyond those that are paid in hard dollars by their
client. As an example, firms that offer investment pool products derive a fee from the
investment pool based upon the dollars that are invested in that product. By recommending
deposits into their pool product, these managers subsidize their contracted fees from that client.
Other firms require that securities be traded through their own trading desks, which typically are
compensated during the trade for providing those services. Both of these techniques are not
noticeable to the client, but ultimately reduce their returns. Valley View’s independence means
that we derive revenues as hard dollar payments from our clients and from no other sources.
Should a selected bond proceeds investment strategy incorporate a flexible repurchase agreement
or other structured investment agreement, Valley View’s fees will be determined by any
applicable I.R.S. guidelines and industry standards, and not included in the assets under
management fee schedule.
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G. Additional Services - Provide description of services and approach for
assisting the City with the following optional services. If these services are not
included in the proposed price above, additional compensation must be clearly
noted.
• Preparation of RFP, review and selection of new depository banking services. The
City’s current depository agreement will expire August 31, 2015 with no renewal
options.
Valley View goes above and beyond the traditional investment advisory services and routinely
provides our clients with other complimentary services.
Primary Depository Bank – Valley View’s primary depository bank selection services generally
involve a Request for Application (“RFA”), and incorporate all necessary activities to successfully
select and contract with the primary depository bank. Some of those activities include the
following, as necessary:
• Analyzing the prior Primary Depository Bank selection process and current operations.
• Reviewing the budget, annual financial report and audit.
• Developing a calendar of events.
• Defining the acceptable area from which prospective applicants will be considered.
• Establishing the criteria by which the applications will be evaluated.
• Preparing a list of financial institutions that will be sent the RFA.
• Preparing a draft RFA.
• Finalizing the RFA with officials and attorney.
• Assisting with hosting a pre-proposal conference.
• Analyzing responses for conformance to the RFA requirements and to determine the best
relative value based on the evaluation criteria.
• Meeting to review the results of the proposal analysis.
• Assisting with the presentation to the Committee/Council for selection of a depository bank
for the new contract period.
With agreement expiration August 31st, it will be prudent to begin the RFA process shortly after
the first of the year to allow adequate time for a thorough and productive RFA process.
• Ongoing review and assistance in implementing best practices in managing its banking,
cash management and cash handling programs.
As stated throughout this response, we believe an investment advisor should function as an
extension of the client’s staff. That objective is achieved by dedicated, independent advice and
consultation. Our client/advisor ratio (and other professional staff commitments) is purposely low
enough to allow the necessary time and energy to fully service each client. We thoroughly research
and implement our recommendations and work with each client to gain comfort and approval for
any procedure or strategy modification. Valley View’s team background extends beyond just
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2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
investment management and includes practical experience in most treasury-related functions. We
will provide that experience as need to the City’s requests.
The City has already experienced our thoroughness in security transaction settlement and financial
institution placement and collateralization. That focus will continue going forward with any other
treasury-related services.
• Evaluation and selection of separate contract for securities clearing and safekeeping, if
needed.
Properly established custodial and safekeeping agreements are essential to safely and effectively
manage the city’s funds. Valley View’s dedicated focus to public funds investment has built
extensive experience in opening and maintaining acceptable custodian and safekeeping accounts.
We will assist the City as necessary with the necessary arrangements.
• Others as might be suggested by the proposer.
As discussed throughout this proposal, cash management is critical to the prudent and proper
implementation of an effective investment strategy. Valley View will assist the City in
researching and developing a cash flow model to more effectively implement cash and
investment strategies. The process with include historical analysis and forward projections.
Modeling potential CIP programs or other projects will also be included.
The City currently has an approved broker/dealer list. If needed, Valley View will assist the City
in reviewing, modifying, and establishing effective broker/dealer relationships. Three criteria
guide Valley View’s approach to managing broker/dealer relationships. They must:
1. Understand and accept the unique objectives of investing public funds,
2. Provide competitive pricing, and
3. Respond appropriately to the needs of the client.
Many times an investment advisor only transacts with its “list” of broker/dealers and the client
loses identity to the broker/dealer community. Valley View’s approach clearly communicates
the client’s role in broker/dealer selection, encourages complete knowledge of each participant,
and provides direct contact information to both parties. If the City re-internalized the investment
management function, the City and its broker/dealers would be prepared.
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2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
H. References - Reference information for Proposer’s five comparable public
sector clients, including at a minimum a description of services provided to
client, length of relationship with client, the point of contact, phone number and
email.
City of Lufkin
Belinda Southern
300 East Shepard
Lufkin, TX 75902
936.633.0305
Full investment advisory services since 1999.
bsouthern@cityoflufkin.com
Brazos River Authority
John Hawes
4600 Cobbs Drive
Waco, TX 76710
254.761.3229
Full investment advisory services since 2008.
jhawes@brazos.org
City of Longview
Angela Coen
300 West Cotton Street
Longview, TX 75601
903.239.5521
Full investment advisory services since 2012.
acoen@longviewtexas.gov
Austin Community College
Ben Ferrell
5930 Middle Fiskville Road
Austin, TX 78752-4390
512.223.7600
Full investment advisory services since 2010.
bferrell@austincc.edu
City of Tyler
Keidric Trimble
212 North Bonner Street
Tyler, TX 75702
903.245.6588
Full investment advisory services since 2009.
ktrimble@tylertexas.com
Please consider our reference list confidential.
Page 24
2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
Certification of Non-Collusion
"The undersigned affirms that they are duly authorized to execute this contract, that this
company, corporation, firm, partnership or individual has not prepared this proposal in collusion
with any other Offeror, and that the contents of this proposal as to prices, terms or conditions of
said proposal have not been communicated by the undersigned nor by any employee or agent to
any other person engaged in this type of business prior to the official opening of this proposal."
A LIMITED LIABILITY COMPANY, chartered in the State of VIRGINIA, authorized to do
business in the State of TEXAS.
Respectfully Submitted,
By: ____________________________________
Richard G. Long, Jr., Manager
Valley View Consulting, L.L.C.
2428 Carters Mill Road
Huddleston, VA 24104-4003
540.297.3419 telephone
540.297.3758 FAX
rglong@yahoo.com
December 16, 2014
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2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
FORM CIQ
CONFLICT OF INTEREST QUESTIONNAIRE
For vendor or other person doing business with local governmental entity
This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session.
This questionnaire is being filed in accordance with Chapter 176, Local Government Code
by a person who has a business relationship as defined by Section 176.001(1-a) with a local
governmental entity and the person meets requirements under Section 176.006(a).
By law this questionnaire must be filed with the records administrator of the local governmental
entity not later than the 7th business day after the date the person becomes aware of facts
that require the statement to be filed. See Section 176.006, Local Government Code.
A person commits an offense if the person knowingly violates Section 176.006, Local
Government Code. An offense under this section is a Class C misdemeanor.
1. Name of person who has a business relationship with local governmental entity.
Not Applicable
2. Check this box if you are filing an update to a previously filed questionnaire.
Not Applicable
3. Name of local government officer with whom filer has employment or business relationship.
Not Applicable
______________________________________________________
Richard G. Long, Jr.
Manager
Valley View Consulting, L.L.C.
December 16, 2014
Page 26
2428 Carters Mill Road, Huddleston, VA 24104
888.853.3778
W-9
Chief Financial Officer
Cash and Investment Manager
Accounting Manager
The investment portfolio of the Brazos River Authority is in compliance with the Public Funds Investment Act and the
Authority's Investment Policy and Investment Strategy Statements.
These reports were compiled using information provided by the Brazos River Authority. No procedures were performed to test the accuracy or completeness
of this information. The market values included in these reports were obtained by Valley View Consulting, L.L.C. from sources believed to be accurate and
represent proprietary valuation. Due to market fluctuations these levels are not necessarily reflective of current liquidation values. Yield calculations are not
determined using standard performance formulas, are not representative of total return yields and do not account for investment advisor fees.
Brazos River Authority
Quarterly Investment Report
For the Quarter Ended
August 31, 2014
Prepared by
Valley View Consulting, L.L.C.
Asset Type Book Value Market Value Book Value Market Value Ave. Yield
Demand/Pools/MMMF 18,056,096$ 18,056,096$ 18,702,811$ 18,702,811$ 0.35%
Securities/CDs 56,881,182 56,882,000 56,225,871 56,226,404 0.69%
Totals 74,937,278$ 74,938,096$ 74,928,682$ 74,929,215$
Total Portfolio 0.60% Total Portfolio 0.58%
Average Yield 1 year Treasury Note 0.12% Average Yield 1 year Treasury Note 0.12%
Quarter 112,038$
Fiscal Year to Date 485,057$
Average Yield for Current Quarter (1)Fiscal Year-to-Date Average Yield (2)
Interest Income
(1) Average Yield for Current Quarter is calculated using quarter end report yield and adjusted book values and does not reflect a total return analysis or account for advisory fees.
(2) Fiscal Year-to-Date Average Yields calculated using quarter end report yields and adjusted book values and does not reflect a total return analysis or account for advisory fees.
Strategy Summary:
The Federal Open Market Committee (FOMC) maintained the Fed Funds target range between 0.00% and 0.25% (actual Fed Funds traded <10
bps). The FOMC continued tapering the Quantitative Easing (QE3) program to $25 billion per month. Tapering is anticipated to eliminate the
program in October. Second quarter 2014 GDP was a strong 4.2% and first quarter was revised up to (2.1%). Employment data remains key as
the FOMC focuses on wage growth, under-employment and overall participation. The US stock markets again touched new highs. International
economical and political struggles weigh on US interest rates. Financial institution deposit yields generally provide the best interest earnings
opportunity, although spreads to security yields have tightened.
Quarter End Results by Investment Category:
May 31, 2014 August 31, 2014
Valley View Consulting, L.L.C.
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August 30, 2013 May 30, 2014 August 29, 2014
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S&P 500
Page 5.
Detail of Investment Holdings
Coupon/ Maturity Settlement Call Original Face/ Purchased Book Market Market Life
Description Ratings YTM Date Date Date Par Value Value Value Price Value (days) Yield
Demand 0.00% 09/01/14 08/31/14 (240,798)$ (240,798)$ (240,798)$ 1.000 (240,798)$ 1 0.00%
BBVA Compass RFB Deposit 0.00% 09/01/14 08/31/14 64,965 64,965 64,965 1.000 64,965 1 0.00%
BBVA Compass Checking 0.36% 09/01/14 08/31/14 2,350,949 2,350,949 2,350,949 1.000 2,350,949 1 0.36%
BBVA Compass Payroll 0.36% 09/01/14 08/31/14 4,895 4,895 4,895 1.000 4,895 1 0.36%
BBVA Compass Savings 0.36% 09/01/14 08/31/14 14,935,644 14,935,644 14,935,644 1.000 14,935,644 1 0.36%
BBVA Compass Employee Benefits 0.36% 09/01/14 08/31/14 13,779 13,779 13,779 1.000 13,779 1 0.36%
Graham Savings 0.25% 09/01/14 08/31/14 9,298 9,298 9,298 1.000 9,298 1 0.25%
SSB MMA 0.19% 09/01/14 08/31/14 1,559,473 1,559,473 1,559,473 1.000 1,559,473 1 0.19%
TexPool AAAm 0.04% 09/01/14 08/31/14 4,607 4,607 4,607 1.000 4,607 1 0.04%
Comerica Bank CD 0.58% 09/24/14 09/24/12 1,011,167 1,011,167 1,011,167 100.000 1,011,167 24 0.58%
Comerica Bank CD 0.58% 10/09/14 10/09/12 2,021,370 2,021,370 2,021,370 100.000 2,021,370 39 0.58%
Independent Bank CD 0.65% 10/22/14 10/22/12 5,057,086 5,057,086 5,057,086 100.000 5,057,086 52 0.65%
Comerica Bank CD 0.57% 12/26/14 12/26/12 1,009,538 1,009,538 1,009,538 100.000 1,009,538 117 0.57%
Frisco TX EDC Bond AA-/Aa3 2.00% 02/15/15 09/20/12 500,000 513,645 502,587 100.624 503,120 168 0.85%
Comerica Bank CD 0.52% 04/29/15 04/29/13 2,058,287 2,058,287 2,058,287 100.000 2,058,287 241 0.52%
Comerica Bank CD 0.53% 05/15/15 05/16/13 2,013,313 2,013,313 2,013,313 100.000 2,013,313 257 0.53%
Southside Bank CD 0.50% 06/08/15 09/16/13 1,003,744 1,003,744 1,003,744 100.000 1,003,744 281 0.50%
Independent Bank CDARS 0.40% 06/11/15 03/13/14 1,703,207 1,703,207 1,703,207 100.000 1,703,207 284 0.40%
Alliance Bank CD 0.75% 07/20/15 07/18/14 3,000,000 3,000,000 3,000,000 100.000 3,000,000 323 0.75%
Comerica Bank CD 0.55% 08/14/15 08/14/13 2,024,668 2,024,668 2,024,668 100.000 2,024,668 348 0.55%
Alliance Bank CD 1.00% 09/02/15 09/02/13 3,611,886 3,611,886 3,611,886 100.000 3,611,886 367 1.00%
Comerica Bank CD 0.68% 12/16/15 09/16/13 2,012,480 2,012,480 2,012,480 100.000 2,012,480 472 0.68%
Comerica Bank CD 0.62% 01/07/16 10/07/13 2,010,352 2,010,352 2,010,352 100.000 2,010,352 494 0.62%
Comerica Bank CD 0.45% 01/25/16 04/23/14 1,001,505 1,001,505 1,001,505 100.000 1,001,505 512 0.45%
Comerica Bank CD 0.56% 02/22/16 02/20/14 2,005,560 2,005,560 2,005,560 100.000 2,005,560 540 0.56%
Comerica Bank CD 0.56% 03/04/16 03/04/14 2,004,699 2,004,699 2,004,699 100.000 2,004,699 551 0.56%
Comerica Bank CD 0.69% 04/07/16 10/07/13 2,011,523 2,011,523 2,011,523 100.000 2,011,523 585 0.69%
Comerica Bank CD 0.60% 04/25/16 04/23/14 4,008,028 4,008,028 4,008,028 100.000 4,008,028 603 0.60%
Comerica Bank CD 0.64% 05/23/16 05/23/14 4,006,456 4,006,456 4,006,456 100.000 4,006,456 631 0.64%
BankTexas CD 0.70% 06/24/16 06/24/14 4,004,681 4,004,681 4,004,681 100.000 4,004,681 663 0.70%
Alliance Bank CD 0.95% 07/18/16 07/18/14 3,126,287 3,126,287 3,126,287 100.000 3,126,287 687 0.95%
Alliance Bank CD 0.95% 08/15/16 08/15/14 2,007,521 2,007,521 2,007,521 100.000 2,007,521 715 0.95%
Comerica Bank CD 1.08% 09/16/16 09/16/13 1,009,927 1,009,927 1,009,927 100.000 1,009,927 747 1.08%
Comerica Bank CD 0.96% 02/28/17 08/28/14 2,000,000 2,000,000 2,000,000 100.000 2,000,000 912 0.96%
74,926,095$ 74,939,740$ 74,928,682$ 74,929,215$ 333 0.60%
(1) (2)
August 31, 2014
(1) Weighted average life - For purposes of calculating weighted average life bank, pool, and money market investments are assumed to mature the next business day.
(2) Weighted average yield to maturity - The weighted average yield to maturity is based on adjusted book value, realized and unrealized gains/losses and investment advisory fees are not considered. The yield for the reporting
month is used for bank, pool, and money market investments.
Valley View Consulting, L.L.C.Page 6.
Valley View Consulting, L.L.C.
Securities/CDs
74%
Pools
0%
Bank Accounts
26%
Portfolio Composition
Page 7.
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
Total Portfolio
Quarter End Book Value
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Book Value Maturity
Distribution
Maturity Date Call Date
Valley View Consulting, L.L.C.
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One Year Treasury Weighted Average Yield
Page 9.
Book Value Comparison
Coupon/ Maturity Original Face/Purchase/ Maturity/Call/ Original Face/
Description Rating Yield Date Par Value Book Value Adjustment Adjustment Par Value Book Value
Demand 0.00% 09/01/14 (282,029)$ (282,029)$ 41,232$ -$ (240,798)$ (240,798)$
BBVA Compass RFB Deposit 0.00% 09/01/14 - - 64,965 - 64,965 64,965
BBVA Compass Checking 0.36% 09/01/14 72,190 72,190 2,278,760 - 2,350,949 2,350,949
BBVA Compass Payroll 0.36% 09/01/14 2,919 2,919 1,976 - 4,895 4,895
BBVA Compass Savings 0.36% 09/01/14 16,632,302 16,632,302 - (1,696,658) 14,935,644 14,935,644
BBVA Compass Employee Benefits 0.36% 09/01/14 (1,803) (1,803) 15,581 - 13,779 13,779
Graham Savings 0.25% 09/01/14 69,150 69,150 - (59,853) 9,298 9,298
SSB MMA 0.19% 09/01/14 1,558,761 1,558,761 712 - 1,559,473 1,559,473
TexPool AAAm 0.04% 09/01/14 4,607 4,607 - - 4,607 4,607
Comerica Bank CD 0.52% 06/23/14 4,033,009 4,033,009 - (4,033,009) - -
Alliance Bank CD 1.05% 07/18/14 6,111,168 6,111,168 - (6,111,168) - -
Alliance Bank CD 0.75% 08/15/14 1,005,620 1,005,620 - (1,005,620) - -
Southside Bank CD 0.65% 08/18/14 633,147 633,147 - (633,147) - -
Southside Bank CD 0.65% 08/28/14 3,075,867 3,075,867 - (3,075,867) - -
Com erica Bank CD 0.58% 09/24/14 1,009,690 1,009,690 1,477 - 1,011,167 1,011,167
Comerica Bank CD 0.58% 10/09/14 2,018,417 2,018,417 2,952 - 2,021,370 2,021,370
Independent Bank CD 0.65% 10/22/14 5,048,904 5,048,904 8,182 - 5,057,086 5,057,086
Comerica Bank CD 0.57% 12/26/14 1,008,089 1,008,089 1,449 - 1,009,538 1,009,538
Frisco TX EDC Bond AA-/Aa3 2.00% 02/15/15 500,000 504,007 - (1,420) 500,000 502,587
Comerica Bank CD 0.52% 04/29/15 2,055,591 2,055,591 2,695 - 2,058,287 2,058,287
Comerica Bank CD 0.53% 05/15/15 2,010,626 2,010,626 2,687 - 2,013,313 2,013,313
Southside Bank CD 0.50% 06/08/15 1,002,481 1,002,481 1,263 - 1,003,744 1,003,744
Independent Bank CDARS 0.40% 06/11/15 1,701,491 1,701,491 1,716 - 1,703,207 1,703,207
Alliance Bank CD 0.75% 07/20/15 - - 3,000,000 - 3,000,000 3,000,000
Comerica Bank CD 0.55% 08/14/15 2,021,863 2,021,863 2,804 - 2,024,668 2,024,668
Alliance Bank CD 1.00% 09/02/15 3,602,805 3,602,805 9,081 - 3,611,886 3,611,886
Comerica Bank CD 0.68% 12/16/15 2,009,035 2,009,035 3,445 - 2,012,480 2,012,480
Comerica Bank CD 0.62% 01/07/16 2,007,213 2,007,213 3,138 - 2,010,352 2,010,352
Comerica Bank CD 0.45% 01/25/16 1,000,370 1,000,370 1,135 - 1,001,505 1,001,505
Comerica Bank CD 0.56% 02/22/16 2,002,732 2,002,732 2,828 - 2,005,560 2,005,560
Comerica Bank CD 0.56% 03/04/16 2,001,872 2,001,872 2,827 - 2,004,699 2,004,699
Comerica Bank CD 0.69% 04/07/16 2,008,029 2,008,029 3,494 - 2,011,523 2,011,523
Comerica Bank CD 0.60% 04/25/16 4,001,973 4,001,973 6,055 - 4,008,028 4,008,028
Comerica Bank CD 0.64% 05/23/16 4,000,000 4,000,000 6,456 - 4,006,456 4,006,456
BankTexas CD 0.70% 06/24/16 - - 4,004,681 - 4,004,681 4,004,681
Alliance Bank CD 0.95% 07/18/16 - - 3,126,287 - 3,126,287 3,126,287
Alliance Bank CD 0.95% 08/15/16 - - 2,007,521 - 2,007,521 2,007,521
Comerica Bank CD 1.08% 09/16/16 1,007,183 1,007,183 2,744 - 1,009,927 1,009,927
Comerica Bank CD 0.96% 02/28/17 - - 2,000,000 - 2,000,000 2,000,000
74,933,271$ 74,937,278$ 16,608,146$ (16,616,742)$ 74,926,095$ 74,928,682$
May 31, 2014 August 31, 2014
Valley View Consulting, L.L.C.
Page 10.
Market Value Comparison
Coupon/ Maturity Original Face/Qtr to Qtr Original Face/
Description Rating Discount Date Par Value Market Value Change Par Value Market Value
Demand 0.00% 09/01/14 (282,029)$ (282,029)$ 41,232$ (240,798)$ (240,798)$
BBVA Compass RFB Deposit 0.00% 09/01/14 - - 64,965 64,965 64,965
BBVA Compass Checking 0.36% 09/01/14 72,190 72,190 2,278,760 2,350,949 2,350,949
BBVA Compass Payroll 0.36% 09/01/14 2,919 2,919 1,976 4,895 4,895
BBVA Compass Savings 0.36% 09/01/14 16,632,302 16,632,302 (1,696,658) 14,935,644 14,935,644
BBVA Compass Employee Benefits 0.36% 09/01/14 (1,803) (1,803) 15,581 13,779 13,779
Graham Savings 0.25% 09/01/14 69,150 69,150 (59,853) 9,298 9,298
SSB MMA 0.19% 09/01/14 1,558,761 1,558,761 712 1,559,473 1,559,473
TexPool AAAm 0.04% 09/01/14 4,607 4,607 - 4,607 4,607
Comerica Bank CD 0.52% 06/23/14 4,033,009 4,033,009 (4,033,009) - -
Alliance Bank CD 1.05% 07/18/14 6,111,168 6,111,168 (6,111,168) - -
Alliance Bank CD 0.75% 08/15/14 1,005,620 1,005,620 (1,005,620) - -
Southside Bank CD 0.65% 08/18/14 633,147 633,147 (633,147) - -
Southside Bank CD 0.65% 08/28/14 3,075,867 3,075,867 (3,075,867) - -
Comerica Bank CD 0.58% 09/24/14 1,009,690 1,009,690 1,477 1,011,167 1,011,167
Comerica Bank CD 0.58% 10/09/14 2,018,417 2,018,417 2,952 2,021,370 2,021,370
Independent Bank CD 0.65% 10/22/14 5,048,904 5,048,904 8,182 5,057,086 5,057,086
Comerica Bank CD 0.57% 12/26/14 1,008,089 1,008,089 1,449 1,009,538 1,009,538
Frisco TX EDC Bond AA-/Aa3 2.00% 02/15/15 500,000 504,825 (1,705) 500,000 503,120
Comerica Bank CD 0.52% 04/29/15 2,055,591 2,055,591 2,695 2,058,287 2,058,287
Comerica Bank CD 0.53% 05/15/15 2,010,626 2,010,626 2,687 2,013,313 2,013,313
Southside Bank CD 0.50% 06/08/15 1,002,481 1,002,481 1,263 1,003,744 1,003,744
Independent Bank CDARS 0.40% 06/11/15 1,701,491 1,701,491 1,716 1,703,207 1,703,207
Alliance Bank CD 0.75% 07/20/15 - - 3,000,000 3,000,000 3,000,000
Comerica Bank CD 0.55% 08/14/15 2,021,863 2,021,863 2,804 2,024,668 2,024,668
Alliance Bank CD 1.00% 09/02/15 3,602,805 3,602,805 9,081 3,611,886 3,611,886
Comerica Bank CD 0.68% 12/16/15 2,009,035 2,009,035 3,445 2,012,480 2,012,480
Comerica Bank CD 0.62% 01/07/16 2,007,213 2,007,213 3,138 2,010,352 2,010,352
Comerica Bank CD 0.45% 01/25/16 1,000,370 1,000,370 1,135 1,001,505 1,001,505
Comerica Bank CD 0.56% 02/22/16 2,002,732 2,002,732 2,828 2,005,560 2,005,560
Comerica Bank CD 0.56% 03/04/16 2,001,872 2,001,872 2,827 2,004,699 2,004,699
Comerica Bank CD 0.69% 04/07/16 2,008,029 2,008,029 3,494 2,011,523 2,011,523
Comerica Bank CD 0.60% 04/25/16 4,001,973 4,001,973 6,055 4,008,028 4,008,028
Comerica Bank CD 0.64% 05/23/16 4,000,000 4,000,000 6,456 4,006,456 4,006,456
BankTexas CD 0.70% 06/24/16 - - 4,004,681 4,004,681 4,004,681
Alliance Bank CD 0.95% 07/18/16 - - 3,126,287 3,126,287 3,126,287
Alliance Bank CD 0.95% 08/15/16 - - 2,007,521 2,007,521 2,007,521
Comerica Bank CD 1.08% 09/16/16 1,007,183 1,007,183 2,744 1,009,927 1,009,927
Comerica Bank CD 0.96% 02/28/17 - - 2,000,000 2,000,000 2,000,000
74,933,271$ 74,938,096$ (8,881)$ 74,926,095$ 74,929,215$
May 31, 2014 August 31, 2014
Valley View Consulting, L.L.C.
Page 11.
Allocation - Book Value
August 31, 2014
Description Portfolio Total Current
Operating
Operating
Reserve
Bond
Proceeds
Bond
Reserve Debt Service Repair and
Replacement
Demand (240,798)$ (240,798)$ -$ -$ -$ -$ -$
BBVA Compass RFB Deposit 64,965 64,965 - - - - -
BBVA Compass Checking 2,350,949 2,350,949 - - - - -
BBVA Compass Payroll 4,895 4,895 - - - - -
BBVA Compass Savings 14,935,644 3,017,145 5,500,000 3,063,916 7,186 2,772,598 574,800
BBVA Compass Employee Benefits 13,779 13,779 - - - - -
Graham Savings 9,298 9,298 - - - - -
SSB MMA 1,559,473 - 1,559,473 - - - -
TexPool 4,607 4,607 - - - - -
09/24/14 1,011,167 - 1,011,167 - - - -
10/09/14 2,021,370 - 2,021,370 - - - -
10/22/14 5,057,086 - 5,057,086 - - - -
12/26/14 1,009,538 - - - - - 1,009,538
02/15/15 502,587 502,587 - - - - -
04/29/15 2,058,287 - 2,058,287 - - - -
05/15/15 2,013,313 - 2,013,313 - - - -
06/08/15 1,003,744 797,977 - - 205,768 - -
06/11/15 1,703,207 203,383 - - - - 1,499,824
07/20/15 3,000,000 3,000,000 -
08/14/15 2,024,668 - 1,019,154 - - - 1,005,514
09/02/15 3,611,886 - 2,201,388 - 1,410,497 - -
12/16/15 2,012,480 - 1,006,240 - - - 1,006,240
01/07/16 2,010,352 - 2,010,352 - - - -
01/25/16 1,001,505 - 1,001,505 - - - -
02/22/16 2,005,560 - 2,005,560 - - - -
03/04/16 2,004,699 - 2,004,699 - - - -
04/07/16 2,011,523 - 2,011,523 - - - -
04/25/16 4,008,028 - 4,008,028 - - - -
05/23/16 4,006,456 - 4,006,456 - - - -
06/24/16 4,004,681 - 4,004,681 - - - -
07/18/16 3,126,287 - 3,126,287 - - - -
08/15/16 2,007,521 - 1,383,521 - 624,000 - -
09/16/16 1,009,927 - 1,009,927 - - - -
02/28/17 2,000,000 - 2,000,000 - - - -
Totals 74,928,682$ 9,728,786$ 52,020,016$ 3,063,916$ 2,247,451$ 2,772,598$ 5,095,916$
Valley View Consulting, L.L.C.
Page 12.
Allocation - Market Value
August 31, 2014
Description Portfolio Total
Current
Operating
Operating
Reserve
Bond
Proceeds
Bond
Reserve Debt Service Repair and
Replacement
Demand (240,798)$ (240,798)$ -$ -$ -$ -$ -$
BBVA Compass RFB Deposit 64,965 64,965 - - - - -
BBVA Compass Checking 2,350,949 2,350,949 - - - - -
BBVA Compass Payroll 4,895 4,895 - - - - -
BBVA Compass Savings 14,935,644 3,017,145 5,500,000 3,063,916 7,186 2,772,598 574,800
BBVA Compass Employee Benefits 13,779 13,779 - - - - -
Graham Savings 9,298 9,298 - - - - -
SSB MMA 1,559,473 - 1,559,473 - - - -
TexPool 4,607 4,607 - - - - -
09/24/14 1,011,167 - 1,011,167 - - - -
10/09/14 2,021,370 - 2,021,370 - - - -
10/22/14 5,057,086 - 5,057,086 - - - -
12/26/14 1,009,538 - - - - - 1,009,538
02/15/15 503,120 503,120 - - - - -
04/29/15 2,058,287 - 2,058,287 - - - -
05/15/15 2,013,313 - 2,013,313 - - - -
06/08/15 1,003,744 797,977 - - 205,768 - -
06/11/15 1,703,207 203,383 - - - - 1,499,824
07/20/15 3,000,000 3,000,000 - - - -
08/14/15 2,024,668 - 1,019,154 - - - 1,005,514
09/02/15 3,611,886 - 2,201,388 - 1,410,497 - -
12/16/15 2,012,480 - 1,006,240 - - - 1,006,240
01/07/16 2,010,352 - 2,010,352 - - - -
01/25/16 1,001,505 - 1,001,505 - - - -
02/22/16 2,005,560 - 2,005,560 - - - -
03/04/16 2,004,699 - 2,004,699 - - - -
04/07/16 2,011,523 - 2,011,523 - - - -
04/25/16 4,008,028 - 4,008,028 - - - -
05/23/16 4,006,456 - 4,006,456 - - - -
06/24/16 4,004,681 - 4,004,681 - - - -
07/18/16 3,126,287 - 3,126,287 - - - -
08/15/16 2,007,521 - 1,383,521 - 624,000 - -
09/16/16 1,009,927 - 1,009,927 - - - -
02/28/17 2,000,000 - 2,000,000 - - - -
Totals 74,929,215$ 9,729,319$ 52,020,016$ 3,063,916$ 2,247,451$ 2,772,598$ 5,095,916$
Valley View Consulting, L.L.C.
Page 13.
Allocation - Book Value
May 31, 2014
Description Portfolio Total Current
Operating
Operating
Reserve
Bond
Proceeds
Bond
Reserve Debt Service Repair and
Replacement
Demand (282,029)$ (282,029)$ -$ -$ -$ -$ -$
BBVA Compass Checking 72,190 72,190 - - - - -
BBVA Compass Payroll 2,919 2,919 - - - - -
BBVA Compass Savings 16,632,302 1,193,949 9,000,000 3,270,449 10,054 2,558,645 599,204
BBVA Compass Employee Benefits (1,803) (1,803) - - - - -
Graham Savings 69,150 69,150 - - - - -
SSB MMA 1,558,761 - 1,558,761 - - - -
TexPool 4,607 4,607 - - - - -
06/23/14 4,033,009 - 4,033,009 - - - -
07/18/14 6,111,168 3,055,584 3,055,584 - - - -
08/15/14 1,005,620 - 1,005,620 - - - -
08/18/14 633,147 - - - 633,147 - -
08/28/14 3,075,867 - 3,075,867 - - - -
09/24/14 1,009,690 - 1,009,690 - - - -
10/09/14 2,018,417 - 2,018,417 - - - -
10/22/14 5,048,904 - 5,048,904 - - - -
12/26/14 1,008,089 - - - - - 1,008,089
02/15/15 504,007 504,007 - - - - -
04/29/15 2,055,591 - 2,055,591 - - - -
05/15/15 2,010,626 - 2,010,626 - - - -
06/08/15 1,002,481 796,972 - - 205,509 - -
06/11/15 1,701,491 203,178 - - - - 1,498,313
08/14/15 2,021,863 - 1,017,742 - - - 1,004,121
09/02/15 3,602,805 - 2,195,853 - 1,406,951 - -
12/16/15 2,009,035 - 1,004,517 - - - 1,004,517
01/07/16 2,007,213 - 2,007,213 - - - -
01/25/16 1,000,370 - 1,000,370 - - - -
02/22/16 2,002,732 - 2,002,732 - - - -
03/04/16 2,001,872 - 2,001,872 - - - -
04/07/16 2,008,029 - 2,008,029 - - - -
04/25/16 4,001,973 - 4,001,973 - - - -
05/23/16 4,000,000 - 4,000,000 - - - -
09/16/16 1,007,183 - 1,007,183 - - - -
Totals 74,937,278$ 5,618,723$ 56,119,555$ 3,270,449$ 2,255,661$ 2,558,645$ 5,114,245$
Valley View Consulting, L.L.C.
Page 14.
Allocation - Market Value
May 31, 2014
Description Portfolio Total
Current
Operating
Operating
Reserve
Bond
Proceeds
Bond
Reserve Debt Service Repair and
Replacement
Demand (282,029)$ (282,029)$ -$ -$ -$ -$ -$
BBVA Compass Checking 72,190 72,190 - - - - -
BBVA Compass Payroll 2,919 2,919 - - - - -
BBVA Compass Savings 16,632,302 1,193,949 9,000,000 3,270,449 10,054 2,558,645 599,204
BBVA Compass Employee Benefits (1,803) (1,803) - - - - -
Graham Savings 69,150 69,150 - - - - -
SSB MMA 1,558,761 - 1,558,761 - - - -
TexPool 4,607 4,607 - - - - -
06/23/14 4,033,009 - 4,033,009 - - - -
07/18/14 6,111,168 3,055,584 3,055,584 - - - -
08/15/14 1,005,620 - 1,005,620 - - - -
08/18/14 633,147 - - - 633,147 - -
08/28/14 3,075,867 - 3,075,867 - - - -
09/24/14 1,009,690 - 1,009,690 - - - -
10/09/14 2,018,417 - 2,018,417 - - - -
10/22/14 5,048,904 - 5,048,904 - - - -
12/26/14 1,008,089 - - - - - 1,008,089
02/15/15 504,825 504,825 - - - - -
04/29/15 2,055,591 - 2,055,591 - - - -
05/15/15 2,010,626 - 2,010,626 - - - -
06/08/15 1,002,481 796,972 - - 205,509 - -
06/11/15 1,701,491 203,178 - - - - 1,498,313
08/14/15 2,021,863 - 1,017,742 - - - 1,004,121
09/02/15 3,602,805 - 2,195,853 - 1,406,951 - -
12/16/15 2,009,035 - 1,004,517 - - - 1,004,517
01/07/16 2,007,213 - 2,007,213 - - - -
01/25/16 1,000,370 - 1,000,370 - - - -
02/22/16 2,002,732 - 2,002,732 - - - -
03/04/16 2,001,872 - 2,001,872 - - - -
04/07/16 2,008,029 - 2,008,029 - - - -
04/25/16 4,001,973 - 4,001,973 - - - -
05/23/16 4,000,000 - 4,000,000 - - - -
09/16/16 1,007,183 - 1,007,183 - - - -
Totals 74,938,096$ 5,619,542$ 56,119,555$ 3,270,449$ 2,255,661$ 2,558,645$ 5,114,245$
Valley View Consulting, L.L.C.
Page 15.
Report Abbreviations
CD Certificate of Deposit
CDARS Certificate of Deposit Account Registry Service
Demand Demand Deposit Bank Accounts
FFCB Federal Farm Credit Bank
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FRMAC Farmer Agricultural Mortgage Corporation
FCDN Federal Farm Credit Bank - Discount Note
FHDN Federal Home Loan Bank - Discount Note
FMCDN Federal Home Loan Mortgage Corporation - Discount Note
FNDN Federal National Mortgage Association - Discount Note
FRMDN Farmer Agricultural Mortgage Corporation - Discount Note
FNMA MBS Federal National Mortgage Association - Mortgage Backed Security
MMA Money Market Account
MMMF Money Market Mutual Fund
NOW Negotiable Order of Withdrawal Account
Page 16.
City of Georgetown, Texas
Government and Finance Advisory Board
January 28, 2015
SUBJECT:
Consideration and recommendation to implement an expansion of the City’s Infor Enterprise
Asset Management software to enable its use for vehicle fleet management at the City of
Georgetown’s Fleet Service Center - Chris Bryce, Assistant Director – IT; Stan Hohman, Fleet
Maintenance Supervisor; Paul Diaz, Utilities Financial Analyst
ITEM SUMMARY:
At the January 7, 2015 meeting of GGAF, the Subcommittee requested additional information on
this matter including a business analysis of the Infor Fleet module that compared its
implementation costs with its financial benefits. City Staff conducted the analysis using
conservative assumptions about the cost savings gained by delaying capital replacement of
vehicles and improving staff efficiency. Over a standard 5 year lifespan for software, the Infor
Fleet model delivers a substantial financial benefit for the City. This benefit would increase as the
City uses the software over an expected 7 year minimum lifespan.
Staff extends its recommendation that the City expand its existing enterprise asset management
software (Infor EAM) to enable its use for managing the City’s vehicle fleet.
FINANCIAL IMPACT:
Total cost of this project is expected to be $138,516 ($52,375 software costs, $86,141
implementation). The yearly cost of software maintenance is 20% of total purchase costs. First
year of maintenance is included in the total cost.
FY 2015 amount is budgeted under accounts 570-5-0641-51-741 and 570-5-0641-52-102.
SUBMITTED BY:
Chris Bryce, Assistant Director – IT; Stan Hohman, Fleet Maintenance Supervisor; Paul Diaz,
Utilities Financial Analyst
ATTACHMENTS:
Description Type
Infor Fleet Presentation Cover Memo
Fleet Analysis for Infor Cover Memo
1/22/2015
1
Infor Fleet Module
Business Case Analysis
City of Georgetown
Questions for the Board
• Are implementation costs reasonable?
• Why are we paying to implement?
• Is the RTA data conversion necessary?
• What does the cost benefit analysis
recommend?
City of Georgetown
1/22/2015
2
Current Issues
City of Georgetown
Current Issues
City of Georgetown
1/22/2015
3
Current Issues
City of Georgetown
Current Issues
City of Georgetown
*Recommended Average from Government Fleet Magazine
1/22/2015
4
Current Issues
City of Georgetown
Problem Solving: What are we getting
for the Funds?
Retirement of the RTA system means:
• Replacement of 1999 technology.
• Reduction in work order errors.
• Reduction in collecting and analyzing fleet
data.
• 5% Reduction in capital replacement
costs.
City of Georgetown
1/22/2015
5
Delaying Capital Replacement
• Overview of fleet size: 505 Vehicles
valued at $22.02 M.
• Additional years on capital assets can
have dramatic impacts on the health of the
fund and overall RIO.
City of Georgetown
An Extra Year Really Adds Up
• Fire Ladder Replacement Costs: $1,466,000
with a useful life of ten years: $146,000
• Fire Engine Replacement Costs: $446,000 with
useful life of ten years: $44,600
• Police Car Replacement Costs: $52,000 with a
useful life of six years: $8,666
• Bucket Truck Replacement Costs: $162,000 with
a useful life of nine year: $18,000
City of Georgetown
1/22/2015
6
Proposed Infor Project Costs
City of Georgetown
• Start Up Costs Breakdown
– Software License: $52,000
– Hardware: $3,516
– Implementation: $83,000
Implementation Breakdown
City of Georgetown
Segment Amount
Requirements Definition 8,000
Installation & Configuration 12,000
Data Conversion 9,600
Intergrations 3,200
Testing 12,000
Go‐Live Support 12,000
Training 13,700
Travel 12,500
Total 83,000
1/22/2015
7
Net Impact/RIO
City of Georgetown
Opportunities
• Capital Replacement Schedule
• Fuel Monitoring increases Internal Control,
Audits and controls against possible fraud.
• Preventative maintenance can help in legal,
insurance, safety & risk requirements.
• Help maintain complex assets in Fire, Police and
the new EMS Ambulances.
City of Georgetown
1/22/2015
8
Questions
City of Georgetown
Mechanic to Vehicle Ratio
We hired Justin in 12/13 budget year 436 vehicles 1/73 ratio. Opened Customer Care Center staffed by Denny Herrin
Budget Year Vehicle Count Technicians Mech/Ratio
03/04 284 3 1/95
04/05 290 4 1/73
05/06 314 4 1/79
06/07 343 5 1/69
07/08 373 5 1/75
08/09 391 5 1/78
09/10 398 5 1/80
10/11 408 5 1/82
11/12 429 5 1/86
12/13 436 5 1/87
13/14 456 5 1/92
14/15 504 5 1/101
According to an article in Government Fleet magazine dated February 2011, the typical city & county
mechanic to vehicle ratio is 55 to 60:1
ASE Blue Seal Shop
We have been an ASE Blue Seal Shop for the past 6 years
Staff Certifications
Fleet staff currently hold 97 ASE and EVT certifications
We have 5 staff that are ASE Master certified
We have 2 staff that are Master Fire Apparatus technicians
Technician time saved
15 minutes of saved time per technician because:
Average time spent for each trip is 3 minutes
We hired Becky in 04/05 budget year 284 vehicles 1/95 ratio
We hired Alan in 06/07 budget year 314 vehicles 1/79 ratio
5 less trips to computer throughout day to input information, each time their hands need to be cleaned before using keyboard
and they have to log in each time
Work Order Count
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
OCT 114 198 211 269 307 220 413 294 244
NOV 135 200 162 149 168 155 300 236 387
DEC 167 144 247 237 227 192 238 252 322
JAN 167 176 160 185 227 177 301 202 356
FEB 213 248 205 182 230 260 235 365 360
MARCH 277 258 236 233 240 211 248 300 324
APRIL 192 297 263 233 275 252 305 325 354
MAY 210 281 195 223 288 288 283 267 349
JUNE 144 246 294 251 272 254 317 269 347
JULY 174 333 279 248 224 325 285 243 384
AUG 170 299 221 234 289 250 253 292 319
SEPT 173 213 180 201 284 217 337 172 285
TOTAL 2136 2893 2653 2645 3031 2801 3515 3217 4031
Fleet Past Survey Comments/Responses
We were the highest rated department in the last internal customer service survey
Quality of service was very high
Exceptional, problem was resolved in a timely manner
Excellent, provides expert service and commitment to our apparatus
Excellent service, friendly
Work performed was professional and done right
Great, always prepared to help and make accommodations
Overall great job, I like the new process with the customer service desk
A+ quality of service, I only came in for two tires and got a PM and inspection completed
Outstanding work and done on time
10 out of 10
Overall quality of service is excellent, everyone was very helpful and understanding
Car needed immediate repair and we picked it up in a couple of hours
Great, we were able to get in and right back out
Awesome
I'm always treated like a customer and get better service that at a paid automotive shop. Keep up the good work.
Fleet Growth Over Last Five Years
Class 2009/10 2010/2011 2011/2012 2012/2013 2013/2014 Class Includes
C - cars/sedans 90 90 85 91 91 cars, sedans, police cars
ST - small trucks 115 131 134 138 152 pickups and trucks from small SUV's up to class 5 trucks
LT - large trucks 14 14 15 14 18 class 6 trucks and larger
SE - small equipment 36 48 47 47 50 mowers, golf carts, small utility vehicles, etc.
LE - large equipment 32 35 36 37 47 backhoes, rollers , loaders, graders, roadside mowers, etc.
SEW - sewer equipment 2 3 3 3 5 vacuum trucks, camera van for sewer work
SW - street sweepers 2 2 2 2 2 street sweepers
EU - electric utility 11 13 13 13 14 bucket trucks, digger trucks, boom trucks, crane truck
FT - fire trucks 7 10 12 13 13 engines, rescue truck, brush trucks, tanker
QT - quint ladder trucks 4 3 3 3 3 quints and ladder trucks
TS - small trailers 45 47 47 48 55 small trialers generally with one axle
TL - large trailers 30 33 37 45 49 large trailers with more than one axle, including generators
M - motorcycles 4 4 4 4 6 police motorcycles
Total Unit Count 392 433 438 458 505
Unit Data
Car
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
102-01 2003 $16,082.00 35.92 $1,882.15 $4,692.12 12 $26,000.00
105-04 2011 $42,308.75 4.17 $260.80 $1,198.74 4 $42,000.00
Average 2007 $29,195.38 20.045 $1,071.48 $2,945.43 8 $34,000.00
Marked Police
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
864-02 2007 $36,617.00 102.83 $6,116.68 $20,280.72 8 $52,000.00
864-07 2007 $36,617.00 67.75 $4,060.10 $7,209.29 8 $52,000.00
864-14 2011 $35,104.00 29.12 $1,822.58 $4,233.99 4 $52,000.00
864-18 2011 $35,104.00 33.65 $2,104.87 $4,006.88 4 $52,000.00
864-25 2011 $35,104.00 36.88 $2,318.42 $4,519.75 4 $52,000.00
864-27 2011 $35,104.00 46.6 $2,906.36 $6,805.76 4 $52,000.00
864-33 2011 $35,104.00 49.55 $3,140.08 $7,334.55 4 $52,000.00
864-56 2008 $45,031.00 95.43 $5,761.68 $13,241.47 7 $52,000.00
864-70 2008 $45,031.00 90.72 $5,488.72 $12,514.01 7 $52,000.00
864-71 2008 $45,031.00 85.87 $5,165.32 $10,078.80 7 $52,000.00
864-72 2008 $45,031.00 65.15 $3,919.41 $8,240.82 7 $52,000.00
864-73 2008 $45,031.00 85.5 $5,163.11 $15,322.50 7 $52,000.00
864-74 2008 $45,031.00 80.05 $4,878.62 $9,047.50 7 $52,000.00
864-75 2008 $45,031.00 76.92 $4,707.44 $9,420.78 7 $52,000.00
Average 2008.9 $40,283.64 67.57285714 $4,110.96 $9,446.92 6.1 $52,000.00
Un-marked Police
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
863-107 2005 $21,953.00 42.82 $2,380.04 $6,476.05 10 $35,000.00
863-120 2007 $23,352.00 66.87 $3,910.62 $10,406.62 8 $35,000.00
863-123 2006 $22,140.00 24.46 $1,340.12 $2,793.50 9 $35,000.00
864-111 2004 $21,767.00 40.75 $2,279.83 $4,749.70 11 $35,000.00
864-112 2004 $21,767.00 65.57 $3,655.94 $7,428.43 11 $35,000.00
Average 2005.2 $22,195.80 48.094 $2,713.31 $6,370.86 9.8 $35,000.00
1/2 ton pickup
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
106-08 2011 $20,530.00 12.92 $811.24 $1,622.92 4 $25,000.00
106-09 2011 $20,530.00 11.73 $735.63 $1,540.35 4 $25,000.00
106-15 2011 $16,347.00 11.62 $558.71 $1,183.81 4 $25,000.00
106-17 2011 $16,747.00 22.53 $1,359.53 $9,427.78 4 $25,000.00
108-05 2008 $15,400.00 37.41 $2,289.77 $5,569.08 7 $25,000.00
108-26 2006 $14,230.00 40.34 $2,169.15 $9,213.58 9 $25,000.00
346-02 2004 $13,637.00 19.25 $1,065.77 $2,461.20 11 $25,000.00
550-33 2001 $17,505.00 38.5 $1,998.00 $8,322.97 14 $25,000.00
551-12 2003 $15,732.00 60.01 $3,363.24 $6,641.83 12 $25,000.00
551-15 2004 $14,132.00 43.04 $2,381.96 $7,578.70 11 $25,000.00
Average 2007.0 $16,479.00 29.735 $1,673.30 $5,356.22 8 $25,000.00
Small SUV's
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
602-08 2012 $27,115.00 19.57 $1,203.31 $2,045.04 3 $25,000.00
551-11 2008 $24,947.00 22.76 $1,310.64 $2,603.86 7 $25,000.00
346-07 2008 $24,387.00 15.63 $970.97 $3,332.13 7 $25,000.00
346-08 2008 $24,387.00 12.45 $766.14 $2,781.62 7 $25,000.00
135-09 2008 $24,387.00 14.89 $918.41 $2,690.46 7 $25,000.00
Average 2008.8 $25,044.60 17.06 $1,033.89 $2,690.62 6.2 $25,000.00
1 ton Utility
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
106-24 2006 $21,489.00 90.73 $5,101.48 $10,592.88 9 $36,000.00
110-07 2007 $31,592.00 35.58 $2,013.02 $6,838.34 8 $54,000.00
110-09 2007 $41,637.00 92.24 $5,302.47 $14,535.40 8 $54,000.00
110-33 2013 $47,986.00 8.5 $543.26 $1,369.36 2 $54,000.00
110-34 2013 $40,290.06 10.4 $660.81 $853.32 2 $41,000.00
108-13 2005 $36,634.00 129.94 $7,367.67 $18,339.05 10 $41,000.00
134-01 2004 $29,167.00 102.87 $5,661.25 $14,862.27 11 $42,000.00
134-05 2007 $31,592.00 76.12 $4,221.54 $9,242.47 8 $35,000.00
134-23 2003 $25,140.00 124.88 $6,928.73 $17,164.63 12 $45,000.00
439-03 1999 $27,949.00 187.52 $9,384.93 $18,072.82 16 $52,000.00
Average 2006.4 $33,347.61 85.878 $4,718.52 $11,187.05 8.6 $45,400.00
Dump Trucks
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
108-01 2002 $45,091.00 160.47 $8,459.25 $19,270.39 13 $80,000.00
108-07 2009 $67,696.00 42.17 $2,542.36 $9,497.57 6 $80,000.00
108-08 2003 $42,432.00 147.89 $7,654.72 $17,763.65 12 $80,000.00
134-07 2008 $60,109.00 119.49 $6,628.56 $15,651.31 7 $80,000.00
134-09 2008 $60,109.00 91.07 $5,164.87 $13,087.68 7 $80,000.00
134-18 2009 $67,696.00 85.13 $5,076.76 $10,686.94 6 $80,000.00
Average 2006.5 $57,188.83 107.7033333 $5,921.09 $14,326.26 8.5 $80,000.00
Mowers
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
736-08 2009 $11,300.64 115.11 $7,114.62 $13,868.95 6 $15,000.00
736-09 2008 $12,325.00 72.71 $4,395.62 $6,822.97 7 $15,000.00
736-23 2010 $11,330.64 41.15 $2,539.87 $4,323.64 5 $15,000.00
736-29 2006 $43,664.97 118.31 $7,031.13 $15,891.95 9 $45,000.00
736-46 2005 $33,000.00 50.03 $2,709.77 $5,557.52 10 $45,000.00
736-58 2013 $13,514.15 11.22 $712.92 $1,775.55 2 $15,000.00
Average 2008.5 $20,855.90 68.08833333 $4,083.99 $8,040.10 6.5 $25,000.00
Golf Carts
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
864-180 2011 $6,890.00 11.42 $725.62 $1,769.68 4 $7,000.00
864-181 2011 $6,890.00 9.38 $596.00 $1,227.89 4 $7,000.00
864-182 2011 $6,890.00 18.88 $1,199.63 $2,472.00 4 $7,000.00
864-183 2011 $6,890.00 14.19 $901.63 $1,610.80 4 $7,000.00
Average 2011 $6,890.00 13.4675 $855.72 $1,770.09 4 $7,000.00
Backhoes
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
106-23 2005 $58,625.41 73.25 $3,814.06 $10,261.77 10 $69,500.00
108-03 2012 $72,360.00 19.12 $1,167.79 $2,758.52 3 $80,000.00
108-12 2009 $75,843.00 61.01 $3,710.37 $6,893.10 6 $80,500.00
108-22 2003 $55,747.05 198.2 $9,780.52 $15,440.65 12 $69,500.00
114-19 2008 $66,283.00 142.51 $8,478.49 $16,386.31 7 $69,500.00
Average 2007.4 $65,771.69 98.818 $5,390.25 $10,348.07 7.6 $73,800.00
Loaders
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
134-02 2005 $98,701.67 127.09 $6,605.97 $14,109.59 10 $210,000.00
134-34 1998 $99,030.00 251.56 $12,648.70 $53,859.05 17 $175,000.00
Average 2001.5 $98,865.84 189.325 $9,627.34 $33,984.32 13.5 $192,500.00
Grader
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
134-37 1999 $123,514.00 174.32 $8,656.06 $33,672.15 16 $175,000.00
Average 1999 $123,514.00 174.32 $8,656.06 $33,672.15 16 $175,000.00
Vacuum Trucks
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
106-59 2003 $216,971.60 603.83 $33,952.76 $129,258.71 12 $330,000.00
110-15 2006 $214,000.00 110.54 $6,066.67 $22,219.14 9 $230,000.00
Average 2004.5 $215,485.80 357.185 $20,009.72 $75,738.93 10.5 $280,000.00
Camera Truck
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
110-08 2011 $139,408.00 31.8 $1,997.02 $3,645.73 4 $150,000.00
Average 2011 $139,408.00 31.8 $1,997.02 $3,645.73 4 $150,000.00
Street Sweepers
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
114-05 2008 $142,881.55 266.75 $16,280.32 $48,193.68 7 $230,000.00
114-10 2004 $108,680.85 553.09 $26,825.77 $82,850.54 11 $230,000.00
Average 2006 $125,781.20 409.92 $21,553.05 $65,522.11 9 $230,000.00
Bucket Trucks
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
106-07 2002 $97,480.00 294.31 $15,399.35 $47,974.96 13 $180,000.00
106-11 2008 $132,535.00 134.68 $8,088.05 $24,760.23 7 $180,000.00
106-31 2008 $160,450.00 100.26 $6,180.77 $17,110.60 7 $180,000.00
106-37 2012 $118,596.00 45.07 $2,863.74 $10,918.40 3 $135,000.00
106-38 2012 $118,596.00 43.74 $2,779.24 $10,835.51 3 $135,000.00
Average 2008.4 $125,531.40 123.612 $7,062.23 $22,319.94 6.6 $162,000.00
Digger Truck
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
106-13 1999 $165,000.00 548.81 $29,109.23 $79,195.95 16 $350,000.00
Average 1999 $165,000.00 548.81 $29,109.23 $79,195.95 16 $350,000.00
Boom/Crane truck
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
106-18 2002 $175,000.00 328.17 $17,269.42 $68,137.41 13 $180,000.00
110-13 1998 $109,000.00 262.21 $14,253.94 $33,100.61 17 $250,000.00
Average 2000 $142,000.00 295.19 $15,761.68 $50,619.01 15 $215,000.00
Fire Engines
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
550-27 2010 $302,660.00 187.25 $11,368.78 $27,971.03 5 $450,000.00
550-30 2012 $375,295.00 58.01 $3,685.95 $8,374.50 3 $450,000.00
550-31 2011 $357,000.00 86.63 $5,432.43 $22,032.27 4 $450,000.00
550-34 2012 $409,516.00 47030 $2,988.28 $8,695.78 3 $450,000.00
550-06 1999 $250,000.00 804.64 $41,019.41 $148,079.83 16 $430,000.00
Average 2008.8 $338,894.20 9633.306 $12,898.97 $43,030.68 6.2 $446,000.00
Fire Brush Trucks
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
550-12 1994 $82,677.00 520.08 $520.08 $45,680.41 21 $400,000.00
550-15 1994 $82,677.00 612.69 $30,845.01 $91,000.80 21 $400,000.00
550-10 2008 $173,587.00 188.08 $11,044.63 $22,517.14 7 $360,000.00
Average 1998.7 $112,980.33 440.2833333 $14,136.57 $53,066.12 16.3 $386,666.67
Fire Ladder Trucks
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
550-03 2004 $503,459.08 607.47 $32,728.14 $144,636.80 11 $1,400,000.00
550-05 2008 $888,456.87 517.62 $30,795.44 $104,482.64 7 $1,600,000.00
550-07 2006 $499,516.12 517.36 $29,053.82 $127,418.90 9 $1,400,000.00
Average 2006 $630,477.36 547.4833333 $30,859.13 $125,512.78 9 $1,466,666.67
Police Motorcycles
Unit number Year Model Purchase Price Labor hours Labor Cost
Total Maintenance
Cost
Years In
Service
Budget
Replacement Cost
864-81 2007 $21,948.00 19.32 $1,088.54 $5,154.51 8 $43,000.00
864-82 2007 $21,948.00 45.94 $2,600.77 $5,932.75 8 $43,000.00
864-83 2007 $21,948.00 61.27 $3,573.99 $12,723.25 8 $43,000.00
864-84 2013 $42,454.56 1.2 $76.25 $697.58 2 $43,000.00
864-85 2013 $42,454.56 7.93 $503.87 $1,470.18 2 $43,000.00
Average 2009.4 $30,150.62 27.132 $1,568.68 $5,195.65 5.6 $43,000.00
Fleet Assets
Fixed Assets
Fleet Original Cost $22,026,846.08
Fleet Depreciated Value $9,967,424.71
Year
Model
Purchase
Price
Labor
hours
Labor
Cost
Total
Maintenance
Cost
Years In
Service
Budget
Replacement
Cost
Sedans 2007 $29,195.38 20.05 $1,071.48 $2,945.43 8.0 $34,000.00
Marked Police 2009 $40,283.64 67.57 $4,110.96 $9,446.92 6.1 $52,000.00
Unmarked Police 2005 $22,195.80 48.09 $2,713.31 $6,370.86 9.8 $35,000.00
1/2 Ton Pickups 2007 $16,479.00 29.74 $1,673.30 $5,356.22 8.0 $25,000.00
SUV, Escapes 2009 $25,044.60 17.06 $1,033.89 $2,690.62 6.2 $25,000.00
I Ton Utility Trucks 2006 $33,347.61 85.88 $4,718.52 $11,187.05 8.6 $45,400.00
Dump Trucks 2007 $57,188.83 107.70 $5,921.09 $14,326.26 8.5 $80,000.00
Mowers 2009 $20,855.90 68.09 $4,083.99 $8,040.10 6.5 $25,000.00
Golf Carts 2011 $6,890.00 13.47 $855.72 $1,770.09 4.0 $7,000.00
Backhoes 2007 $65,771.69 98.82 $5,390.25 $10,348.07 7.6 $73,800.00
Loaders 2002 $98,865.84 189.33 $9,627.34 $33,984.32 13.5 $192,500.00
Grader 1999 $123,514.00 174.32 $8,656.06 $33,672.15 16.0 $175,000.00
Vacuum Trucks 2005 $215,485.80 357.19 $20,009.72 $75,738.93 10.5 $280,000.00
Camera Truck 2011 $139,408.00 31.80 $1,997.02 $3,645.73 4.0 $150,000.00
Street Sweepers 2006 $125,781.20 409.92 $21,553.05 $65,522.11 9.0 $230,000.00
Electric Bucket Trucks 2008 $125,531.40 123.61 $7,062.23 $22,319.94 6.6 $162,000.00
Electric Digger Truck 1999 $165,000.00 548.81 $29,109.23 $79,195.95 16.0 $350,000.00
Boom/Crane Truck 2000 $142,000.00 295.19 $15,761.68 $50,619.01 15.0 $215,000.00
Fire Engines 2009 $338,894.20 9633.31 $12,898.97 $43,030.68 6.2 $446,000.00
Brush Trucks 1999 $112,980.33 440.28 $14,136.57 $53,066.12 16.3 $386,666.67
Ladder Trucks 2006 $630,477.36 547.48 $30,859.13 $125,512.78 9.0 $1,466,666.67
Police Motorcycles 2009 $30,150.62 27.13 $1,568.68 $5,195.65 5.6 $43,000.00
Averages
Fleet Assets
Sedans
Marked Police
Unmarked Police
1/2 Ton Pickups
SUV, Escapes
I Ton Utility Trucks
Dump Trucks
Mowers
Golf Carts
Backhoes
Loaders
Grader
Vacuum Trucks
Camera Truck
Street Sweepers
Electric Bucket Trucks
Electric Digger Truck
Boom/Crane Truck
Fire Engines
Brush Trucks
Ladder Trucks
Police Motorcycles
Useful
Life
Adj.
Factor
Lifecycle
Cost
Cost/Useful
Life
Useful
Life
Adj.
Factor
Life Cycle
Cost
Cost/Useful
Life Difference
10 1.25 $32,877.16 $3,287.72 11 1.38 $33,245.34 $3,022.30 $265.41
6 0.99 $49,619.42 $8,269.90 7 1.15 $51,175.38 $7,310.77 $959.13
9 0.92 $28,046.59 $3,116.29 10 1.02 $28,696.68 $2,869.67 $246.62
8 1.00 $21,835.22 $2,729.40 9 1.13 $22,504.75 $2,500.53 $228.88
8.5 1.37 $28,733.36 $3,380.39 9.5 1.53 $29,167.33 $3,070.24 $310.15
8.5 0.99 $44,404.58 $5,224.07 9.5 1.10 $45,705.40 $4,811.09 $412.97
12 1.41 $77,414.14 $6,451.18 13 1.53 $79,099.58 $6,084.58 $366.60
6.5 1.00 $28,896.00 $4,445.54 7.5 1.15 $30,132.93 $4,017.72 $427.81
5 1.25 $9,102.62 $1,820.52 6 1.50 $9,545.14 $1,590.86 $229.67
12 1.58 $82,110.75 $6,842.56 13 1.71 $83,472.34 $6,420.95 $421.61
12 0.89 $129,074.12 $10,756.18 13 0.96 $131,591.48 $10,122.42 $633.76
12 0.75 $148,768.11 $12,397.34 13 0.81 $150,872.62 $11,605.59 $791.76
8 0.76 $273,191.65 $34,148.96 9 0.86 $280,404.88 $31,156.10 $2,992.86
10 2.50 $148,522.33 $14,852.23 11 2.75 $149,433.76 $13,584.89 $1,267.35
10 1.11 $198,583.54 $19,858.35 11 1.22 $205,863.78 $18,714.89 $1,143.47
9 1.36 $155,967.68 $17,329.74 10 1.52 $159,349.49 $15,934.95 $1,394.79
9 0.56 $209,547.72 $23,283.08 10 0.63 $214,497.47 $21,449.75 $1,833.33
9 0.60 $172,371.41 $19,152.38 10 0.67 $175,746.01 $17,574.60 $1,577.78
10 1.61 $408,298.53 $40,829.85 11 1.77 $415,238.96 $37,749.00 $3,080.86
10 0.61 $145,469.79 $14,546.98 11 0.67 $148,718.74 $13,519.89 $1,027.09
10 1.11 $769,936.00 $76,993.60 11 1.22 $783,881.87 $71,261.99 $5,731.61
3 0.54 $32,934.01 $10,978.00 4 0.71 $33,861.81 $8,465.45 $2,512.55
Adjustment factor is used to bring the average maintenance cost up to the useful life
Life cycle cost is the total maintenance cost times the adj. factor plus the purchase price
Cost/useful life is the life cycle cost divided by the useful life
Life Cycle Plus 1 YearLife Cycle
City of Georgetown, Texas
Government and Finance Advisory Board
January 28, 2015
SUBJECT:
Overview of the City’s Debt Program, including current outstanding and proposed debt obligations
- Micki Rundell, Chief Financial Officer
ITEM SUMMARY:
FINANCIAL IMPACT:
Each year in preparation for the annual bond issuance process, staff prepares an overview of the
City’s current outstanding debt obligations, as well as, a preview of the upcoming bond issue that
the Council will consider in April 2015. This presentation provides a background on the City’s
debt management program, as well as, debt benchmark and comparison indicators. This overview
will include Revenue Bonds related to the City’s utilities, as well as, both self-supporting and
taxable general debt obligations.
SUBMITTED BY:
Micki Rundell, Chief Financial Officer
ATTACHMENTS:
Description Type
Debt Presentation Cover Memo
1
City of Georgetown
2015 Debt Overview
GGAF Meeting
January 28, 2015
“Why” issue City debt?
Population Growth Demands
Stretches “pay as
you go” resources
– Impacts continued
economic viability
2
Cost / Benefit of Debt Funding
• Long-term debt funding considered for
capital improvements when:
– Useful life of asset exceeds any debt repayment
– Future citizens are benefited
• Maintains stability of City’s tax rate
– Shorter term debt provides consistency for
funding and replacement
Impacts of Bond Ratings
• Rating Agencies review financial and
management conditions
• Determine City’s “Credit Worthiness”
• Impacts interest rates and cost of debt
• City’s Current Bond Rating:
–Standard & Poor’s – reviewed annually
–AA+ General Obligation
–AA Revenue –Just upgraded in 2014
–Moody’s
–A2 General Obligation & Revenue
–
3
Debt Type –General Obligation
• Backed by City’s ability to “tax” for repayment
of debt
– Results in lower interest rates
• General Obligation Bonds
– Repaid through property taxes
– Approved thru referendum by voters
– Usually used for “large” or controversial items &
projects
• Significant impact to the tax payers
• Usually amortized over 20 years
Debt Type -Certificates of Obligation
• Allowed under Texas State Law
– Considered “routine”
– Public Notice required
• Generally considered “Tax Supported”
• Majority - 20 year bonds
– Maturities match life of asset
• City issues self-supporting CO debt
– City saves on interest cost by issuing CO debt
rather than revenue bonds
–Repaid through fees or rates
4
Other Types Tax Supported Debt
• Limited Tax Notes
– Previously used when market conditions are
not favorable or as “bridge” financing
– Doesn’t require “notice of intent”
• Planned for Rivery Summit Project
• Certificates of Participation
– Usually 3 year notes
– Typically used to fund equipment
Debt Type-Revenue Bonds
• Funds the City’s utility infrastructure
– Issued on Electric/Water/Wastewater system
• Currently 20 year bonds – level debt service
– Repaid through system revenue
• “Coverage” required
– Number of times debt service can be divided into
net operating revenues (before capital)
• 1.35 times - bond covenants
• 1.5 times - City Fiscal & Budgetary Policy
5
City’s Current Debt
Outstanding
GO/CO Debt Outstanding
As of December 31, 2014:
$ 103,056,309- Tax Supported
Includes:
• $14,570,000– 2004 Authorization –All issued
• $23,100,000– 2008 Authorization
–$30,400,000 authorized not issued - Roads
– $28,000,000 authorized not issued – Parks
• $29,500,000 – 2011 Authorization –All issued
6
Current Tax Rate Impacts
“I & S” rate = $0.22662/per $100
Includes:
• Certificates of Obligation = $0.11225
• Non-voter approved bonds – routine operations
• General Obligation Bonds = $0.11437
• Voter approved bonds – Issued to date
– 2004 Facilities = $0.032 /Contract w/voters = $0.0825
– 2008 Parks/Roads = $0.042 /Contract w/voters = $0.08
– 2011 Public Safety Training & Operations = $0.041
7
GO/CO Debt Payments
General Debt Capacity
• Allowable Levy -
$1.50 per $100
valuation
• Current levy -
$0.22662
• Percentage of
Allowable used –
15.11%
8
Self- Supporting
GO/CO Debt Outstanding
As of December 31, 2014:
•$16,760,348- Self-supporting
– $13,144,297 - GTEC
– $3,012,205 – Stormwater Drainage
– $603,847 – Airport
CO/GO Debt – YE Historical
Self-supported includes GTEC
Fiscal Year Tax Supported Self-Supported
2004/05 $28,140,892 $20,675,095
2005/06 $37,583,855 $21,111,145
2006/07 $52,326,112 $21,068,888
2007/08 $54,293,528 $20,661,472
2008/09 $57,097,773 $25,692,525
2009/10 $68,987,618 $26,217,382
2010/11 $74,674,860 $25,135,140
2011/12 $97,392,121 $19,457,875
2012/13 $102,337,359 $17,892,426
2013/14 $103,056,309 $16,760,348
9
GO/CO Debt – Breakdown by Type
Revenue Bonds
• Outstanding balances as of
December 31, 2013:
–$30,278,048 - Electric Fund
–$41,875,303 - Water Services Fund
(W/WW)
10
Revenue Debt - YE Historical
Fiscal Year Water Electric
Services Services
2004/05 $30,195,976 $9,868,036
2005/06 $28,076,208 $17,808,792
2006/07 $27,268,155 $23,801,845
2007/08 $32,655,050 $24,624,950
2008/09 $30,359,178 $23,280,822
2009/10 $37,977,843 $24,882,157
2010/11 $35,511,352 $23,218,648
2011/12 $32,467,189 $26,582,814
2012/13 $31,941,806 $26,473,415
2013/14 $41,875,303 $30,278,048
Revenue Debt - Historical
11
City Debt
Performance &
Comparison
Indicators
Total Tax-Guaranteed Debt Per Capita
(Includes Self-supporting Debt)
12
City Assets Net of Related Debt
Debt to Assessed Valuation
Comparison
13
Utility Revenue Bond Coverage
Outstanding Utility Debt per
Customer
14
Total Electric Debt Compared
to Electric Assets
Total Water Service Debt Compared
to Water Service Assets
15
2015 Upcoming Debt
Issues
2015 Budgeted Debt
• Certificates Obligation - $3.8M Tax Supported
– Downtown Projects:
• Sidewalks on 11
th Street and 2nd Street
• Grace Heritage Parking Lot purchase
– Park Projects :
• Williams Dr pool facilities rehab & other improvements
– ADA compliance
• San Jose Splash Pad
– Airport improvements
– Public safety equipment & vehicles
• Provides matching funds for Early Warning System
16
2015 Budgeted Debt
• Certificates Obligation - $3.7 Self-supported
– Transitional Response Vehicles -2
• Repaid through SRF fee recovery revenue
– Stormwater Drainage
• Continue Smith Branch buy-out program
– Westside Svc Center – Conservation Site
• Repaid through conservation fees
• General Obligation Bonds - $4.4M
– 2008 Bond Authorization
• Completes funding for FM1460
2014 Budgeted Debt
• Revenue Bonds - $8M
– Electric improvements
• Solar Farms
• Substation improvements
– Water improvements
• Shell Road Water line
• Rabbit Hill Elevated Storage Tank
– Wastewater improvements
• Westinghouse improvements
• Berry Creek Interceptor
17
For Consideration….Sizing the Issue
Final bond total will be based upon:
• Timing of projects to be funded
• Projects that are delayed not included in bond issue
• Finalized costs are known
• Other funding sources identified
– YE 2014 unexpected General Fund Excess FB
• Estimated $475,000 available
– Audit adjustments will be finalized
– Western District unallocated ROI revenue
– Estimated at $600K less approved 1-time expenses (CM)
Will be discussed with Council on Feb 24
Next Steps:
• Council authorizes SPFI to proceed with
bond documents –Feb 24, 2015
• Council approves “NOTICE OF INTENT”to
issue CO Debt –March 10, 2015
–“Not to Exceed” amount finalized
• Offering documents finalized
• Rating Agency presentation –late March
• April 14 - Bond Sale
– Council adopts Bond Ordinances
• May 15 - Bond Closing
–City receives bond proceeds