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HomeMy WebLinkAbout1998-11-03 - Regular City CouncilMINUTES OF GENERAL BUSINESS MEETING City of Stephenville - City Council TUESDAY, NOVEMBER 3,1998 - 7:00 P.M. The City Council of the City of Stephenville, Texas, convened on November 3, 1998, at 7:00 p.m., in the Council Chambers at City Hall, 298 West Washington Street, for the purpose of a General Business Meeting, with the meeting being open to the public and notice of said meeting, giving the date, time, place and subject thereof, having been posted as prescribed by Chapter 551, Government Code, Vernon's Texas Codes Annotated, with the following members present, to wit: Mayor Councilmembers Others Attending I. CALL TO ORDER. John Moser Jerry B. Madkins Barbara Terrell Joel Hillin Marshall Shelton K. H. Conatser Rusty Jergins Bea Marin Bill Stanley Don Davis, City Administrator Cindy L. Stafford, City Secretary Randy Thomas, City Attorney Mayor Moser called the meeting to order at 7:00 p.m. and declared a quorum present. The mayor welcomed the Tarleton students who had attended the meeting as a course requirement. II. CITIZENS' GENERAL DISCUSSION Bill Corbin, 1011 Charlotte, Stephenville, Texas, encouraged the council to move swiftly ahead to secure an alternative water source. He then discussed the need for a municipal service center. He said that the water and street employees deserve much better facilities than the ones they are forced to work with at present. General Business Meeting— November 3,1998 Stephenville City Council IH. PLANNING AND ZONING COMMISSION Mayor Moser announced the opening of a public hearing to consider rezoning from B -1 "Neighborhood Business District" to B -2 "Secondary and Highway Business District ", Lot 40, Block 140, City Addition, known as 2116 West Washington Street. Betty Chew, Director of Community Development, gave the following staff report: The Planning and Zoning Commission have considered this request. The Comprehensive Plan's projected land use for the property is commercial. The proposed use for this property is for HEB Grocery to demolish existing structures on the property and redevelop the property with a fueling station. The property is served from a six -inch water main and a six -inch sanitary sewer main, both of which are located in West Washington Street right of way, with existing water and sanitary sewer taps serving the property which can be used for the proposed development. The property has frontage on Washington Street, an 80 -foot right of way in this area. Fire protection is provided from a fire hydrant on the Plaza Shopping Center property, north of subject property. This property is bound to the north and east by B -2 zoning, and to the south and the west by B -1 zoning. The Planning and Zoning Commission recommends the zone change from B -1 to B -2 for this property. Speaking in Support of the Rezoning: Mark Johnson with Bury & Pittman Engineers, San Antonio. This firm is working with HEB on this project. He showed the council a site plan of the property and said that his firm has worked with HEB on approximately 50 different fueling stations throughout the state. The layout for the project is to have a canopy over three pump islands with access to pumps on either side of the island, a cashier kiosk, and restroom facilities. Speaking in Opposition of the Rezoning: No one. Mayor Moser closed the public hearing and asked for council discussion. Council member Conatser moved to adopt ordinance No. 1998 -21 rezoning Lot 40, Block 140, City Addition, from B -1 "Neighborhood Business District" to B -2 "Secondary and Highway Business District". Council member Jergins seconded the motion. The motion passed by unanimous vote. IV. ANNUAL REPORT FROM OMI City Administrator Don Davis reported that Johnny Davis, Project Manager for OMI, was unable to attend the meeting because of an illness. Davis explained that no action is required from the council on this report. If the council deemed it necessary, the report could be placed on the council's next meeting agenda. General Business Meeting — November 3, 1998 Stephenville City Council Council member Madkins moved to accept the report from ONE Council member Terrell seconded the motion. The motion passed by unanimous vote. The report as accepted is as follows: "Operations: The plant staff has done some process control changes to optimize treatment in the aeration basins. Since these changes have been made, we have noticed an increase in percent removal of BOD and TSS. Also, as a result of these changes, the chlorine and sodium bisulfite demands have been reduced. The U.S. EPA requires that wastewater treatment plants remove a minimum of 85% of all contaminants from the wastewater before it enters the waters of the state. The Stephenville plant consistently removes 98% of all contaminants. "Maintenance: Plant staff performed more than seven thousand preventative maintenance procedures for the 1997 -1998 contract year. These procedures include infrared, vibration and amp draw testing on electric control panels, motors and pumps. All procedures are entered in the maintenance management system on the plant computer. "Repairs: Plant operators performed the majority of the repairs at the plant. A repairs tracking tool was used to trend repairs cost on a monthly basis. "Laboratory: All process control tests continue to be done in- house. Samples for permit required analyses are occasionally split with an outside lab to further ensure quality. All toxicity testing passed as well as the TCLP test for sludge. "Safe : During this contract year, there were no injuries or accidents of any kind. Safety is a big issue in wastewater treatment plants due to the multiple hazards associated with electricity, machinery, water, and chemicals. "Industrial Pretreatment Program: The two industries that are on the program have complied with all requirements of the program. Pilot tests are being conducted by these industries to not only reduce contaminants in the waste stream, but to eliminate them as well. "Community Involvement: The "Adopt a Spot" program has officially been started with the assistance of the Stephenville Chamber of Commerce. Adoption forms are available at the chamber. Newspaper ads will run to notify the public and businesses of this program." General Business Meeting— November 3, 1998 Stephenville City Council V. CONSIDER AN ORDINANCE AMENDING THE AIRPORT ADVISORY BOARD Council member Jergins moved to adopt Ordinance No. 1998 -22 amending the ordinance creating the Airport Advisory board [dated December 4, 1973] by adding two non - voting members to said board who are non - residents of the City of Stephenville; providing for appointment and qualifications of the members of such board and their terms of office; providing for a chairman, vice chairman and secretary for such board; defining the duties of the board; prescribing that members of the board shall serve without compensation; and authorizing payment of expenses of such board. Council member Conatser seconded the motion. The motion passed by unanimous vote. VI. REPORT FROM THE JOINT MEETING OF THE FINANCE AND PERSONNEL COMMITTEES —Auto Allowance Council member Madkins reported that five employees who receive a car allowance — Police Chief, Fire Chief, Director of Utilities, Director of Community Services, and City Administrator. Various options were considered, and the committee is recommending no change for fiscal year 1998 -99. The matter will be reviewed prior to budget workshops for fiscal year 1999 -2000. Mayor Moser referred this item to the Personnel Committee for further study and review. VH. FINANCE COMMITTEE REPORT Proposal for a City Page. Council member Shelton reported that this committee is recommending that one -half page in the Stephenville Empire- Tribune be devoted to city news each month. This would be in lieu of a newsletter to utility customers. Council member Shelton moved to fund a six -month trial for a city page, which will consist of one -half page of city news in the Stephenville Empire- Tribune for a six - month trial period at a cost of $2,850.00. Council member Jergins seconded the motion. The motion passed by unanimous vote. Upon request by the Mayor, City Administrator Davis explained that various means of communicating city news to the public have been investigated in the past. The "city page idea" came from the format used by the City of Fort Worth in the Fort Worth Star - Telegram. Computer Specifications. Council member Shelton acknowledged members of the Division of Computer Information Systems at Tarleton State University for their input on the city's Year 2000 Assessment program. City Administrator Davis reported that Dr. Brad Chilton of this division has assigned a graduate student to General Business Meeting— November 3, 1998 Stephenville City Council work with city staff in developing a web page for the city without any charge to the city. Council member Shelton moved to approve the plans and specifications for a Finance Administration Information System and authorize staff to solicit bids. Council member Jergins seconded the motion. The motion passed by unanimous vote. Annual Review of Investment Policy. Council member Shelton moved to adopt Resolution No. 1998 -7 approving investment policy, broker /dealers, and investment strategies. Council member Conatser seconded the motion. The motion passed by unanimous vote. Quarterly Investment Report. Council member Shelton reported that the Finance Committee received this report. The full council will act on the annual report at the end of the fiscal year. Applications for Child Safety Funds. Council member Shelton reported that the committee received two applications—one from the Stephenville Police Department and one from Ann Shell, representing the DARE program. The Finance Committee is recommending that these requests be denied. The committee felt these agencies should first seek funding from the school district since the primary focus of the programs is school -aged children. Council member Shelton moved to deny the Child Safety Fund requests. Council member Conatser seconded the motion. The motion passed by unanimous vote. TCCFUI Membership. Council member Shelton moved to join the Texas Coalition of Cities on Franchised Utility Issues for $411.00. Council member Jergins seconded the motion. The motion passed by unanimous vote. Upon request by Mayor Moser, City Administrator Davis explained that this coalition deals with all franchise utility issues, e.g., telephone, electric, cable, gas. The City of Stephenville has previously been a member, but it is significant that the city join again since the state legislature will be in session and will be considering issues such as the deregulation of electricity. Council member Stanley took this time to report on the expanded local calling issue with the telephone companies and the Public Utility Commission. Stanley reported on inquiries he and Randy Thomas had made for securing representation before the PUC. Thomas reported that the cost for retaining an attorney exceeded what the city could ever expect to get out of such action. The attorney for the City of Gatesville is pursuing such representation, and Stanley is receiving copies of its activity in such case. General Business Meeting— November 3, 1998 Stephenville City Council North Central Texas Council of Governments Storm Water Proposal Phase II Davis explained that there are two issues in relation with the storm water situation. One deals with pollution and contaminants; the other deals with infrastructure. The matter before the council deals with pollution and contaminants. This is an EPA mandate that the city will be required to meet certain standards to guarantee that pollutants (herbicides, fertilizers, household chemicals, etc.) are not allowed to enter into streams. NCTCOG has offered a coalition whereby many cities may join together to address the best way to solve these mandates. Phase I dealt with cities having a population over 100,000, and Phase II deals with smaller cities. Council member Hillin moved to participate with the NCTCOG on Phase II of Storm Water Management for a cost of $1,600.00. Council member Madkins seconded the motion. The motion passed by unanimous vote. VIII. PERSONNEL COMMITTEE REPORT Council member Madkins informed the council that the Police Chief Interview Panel has reviewed the interview process and has developed a list of questions for the five finalists. A recommendation for Police Chief will be made at the November 17 Special Council Meeting. IX. WATER PLANNING COMMITTEE REPORT Council member Terrell reported that the committee met with Tom Ray and Sheryl Franklin with Brazos River Authority and Gary Lacy, Bob Huddleston, and Gayle Pirkle with Upper Leon River Municipal Water District. Ken Choffel with HDR Engineering, Inc. was also present. The meeting was held to discuss the procedures and timetables for contracting the purchase and treatment of way from Proctor Lake, which the council has determined will be the alternate water source for the City of Stephenville. Terrell reported that the council needs to make two decisions at this time: (1) the amount of acre feet of water to be requested and (2) whether to contract with the Brazos River Authority for the purchase of raw water and with the Upper Leon River Municipal Water district for the treatment of the water or contract with the ULRMWD for purchase and treat the raw water. City Administrator Davis reported that since this meeting took place, he and Danny Johnson, Director of Utilities, met with Gary Lacy of the ULRMWD to discuss the arrangement. The ULRMWD is interested in the city contracting with them, and they in turn would acquire the raw water from the BRA. By contracting with ULRMWD, it would eliminate contracting with two separate entities —one for the purchase of raw water and one for the treatment of the water. General Business Meeting — November 3, 1998 Stephenville City Council Council member Jergins moved to enter into a memorandum of agreement with the Brazos River Authority to contract up to 4,200 acre feet of water from Proctor Lake. Council member Shelton seconded the motion. The motion carried by unanimous vote. Council member Stanley noted that he has forwarded memoranda to the Water Planning Committee and Mayor Moser expressing his reservations about the HDR Long Range Water Supply Study and requesting a Water Planning Committee meeting. X. NOMINATIONS COMMITTEE REPORT Council member Conatser reported on the committee's recommendations for board appointments. Council member Conatser moved to appoint Bill Chandler and John Darby as the non - resident members of the Airport Advisory Board and to appoint John Pollan to the board of directors of the Erath County Appraisal District. Council member Madkins seconded the motion. The motion carried by unanimous vote. Conatser also reported that the committee received no recommendations for nomination to the Appraisal Review Board of the Erath County Appraisal District. XI. HOUSEHOLD HAZARDOUS WASTE — Interlocal Agreement with the City of Fort Worth Council member Madkins moved to renew the contract with the City of Fort Worth for the 1999 calendar year. There are two changes in this contract from the current contract: (1) a $2.00 increase in the cost per household and (2) recycled materials (antifreeze, oil, etc.) will be offered to the participating cities. Council member Hillin seconded the motion. The motion passed by unanimous vote. XIL CONSIDER CHANGES IN CITY COUNCIL RULES OF PROCEDURE Council member Jergins moved to amend Section 3. La. Regular Business Meeting of the City Council Rules of Procedure by changing the meeting time of the Regular Business Meeting from 7:00 p.m. to 5:30 p.m. and further to amend Section 3.3 be amended to read as follows: Recessed Meetings. Any meeting of the Council may be recessed to a later date and time, provided that no recess shall be for a longer period than until the next Regular Meeting. Council member Marin seconded the motion. The motion passed by unanimous vote. General Business Meeting— November 3, 1998 Stephenville City Council Discussion was had regarding the intent and clarification of who might be allowed, or prohibited, from speaking during the "Citizens' General Discussion" portion of the agenda. No motion was made. I Council member Conatser moved to adopt the policy that when any council person requests information from any city staff member, the information requested shall be provided in an expeditious manner in the medium requested by the council person requesting it. If, in the opinion of the city administrator, the request is too burdensome, the city administrator may appeal to the council for relief. Council member Shelton seconded the motion, which passed by unanimous vote. Discussion was then had concerning the procedure for calling committee meetings. Council member Shelton moved to adopt the following procedure: When any member of any committee shall request a meeting of a committee, the chairperson of that committee shall call the meeting as expeditiously as practical. If the chairperson of the committee feels that the request is not important enough to call a meeting, the chairperson is obligated to canvass the rest of the committee. If one additional member of the committee concurs that the meeting should be called the chairperson is obligated to call the meeting. The motion was seconded by council member Conatser. The motion failed upon the following vote: Ayes: Council members Shelton, Stanley, Conatser. Noes: Council members Madkins, Terrell, Hillin, Jergins, Marin. Council member Conatser moved to refer the matter for calling a committee meeting to the Personnel Committee for further study. Council member Stanley seconded the motion. The motion passed by unanimous vote. XIII. REQUEST TO RECONSIDER CLAIM BY CECIL FORD Cecil Ford thanked the council for allowing him to again address the council on this matter. Ford stated that he was "shocked" at the council's offer of $400.00 to settle this matter. Ford claimed that $400 is only 40% of the damages he is claiming. He asked the council to reconsider it's decision. Mayor Moser advised that this matter would be discussed by the council in executive session. Council member Shelton requested that item C. "Bid Award on Food Service Inspection" be removed from the Consent Agenda. Council member Stanley moved to approve Consent Agenda items A. and B. Council member Madkins seconded the motion, and the motion passed by unanimous roll call vote. General Business Meeting— November 3, 1998 Stephenville City Council XIV. CONSENT AGENDA A. Approval of Minutes — Regular Business Meeting on October 6, 1998 B. Bid Specifications 1. Police Uniforms 2. Animal Control Unit 3. Police Vehicles, Community Services Department Pickups, and Animal Control Pickup C. Bid Award on Food Service Inspection Council member Shelton asked if one of the city staff code enforcement officers could qualify for this position. City Administrator Don Davis reminded the council that this item had been discussed at a budget work session. Taking into consideration the qualifications of a registered food sanitarian, the council thought it best to leave the position under contract. Council member Madkins moved to accept Item C. Bid Award on Food Service Inspection. Council member Hillin seconded the motion, which passed by unanimous roll call vote. Council members Madkins suggested that, if feasible, we advertise in the metroplex newspapers when this position comes up again. XV. CITY ADMINISTRATOR'S REPORT Upon request by council member Jergins, City Administrator Davis gave an update on the West Side Development Project, Byron Street reconstruction, and the College Farm road Bridge. Davis reported that the Byron Street contract has been let. Preconstruction meeting has been held, and determination made that city crews would conduct some of the demolition work, which was started last week [October 26 -30]. Engineers on the West Side Development Project are in the process of completing plans and specifications which should go to the Planning and Development Committee in December. We are trying to finalize the right -of -way acquisition. Ronnie Isham, Director of Community Services, has met with Texas Department of Transportation engineers who were expected to complete the survey work last week. Isham is in touch with the landowners on the issue of right -of -way acquisition. This project is expected to go to contract in June, 1999. General Business Meeting— November 3, 1998 Stephenville City Council XVI. EXECUTIVE SESSION. At 9:10 p.m., Mayor Moser recessed the open portion of the meeting and called the council into executive session in compliance with the provisions of the Texas Open Meetings Law, Subchapter D, Local Government Code, Vernon's Texas Codes, Annotated, in accordance with Sec. 551.072 Deliberate the purchase, exchange, lease, or value of real property and Sec. 551.071(1)(A) Private consultation between the City Council and its attorney to discuss pending or contemplated litigation. A. Cause No. 4722 -97CV, Erath County Court at Law, City of Stephenville v. Cecil Ford B. Strategy for Land Acquisition for Municipal Service Center At 10:07 p.m., Mayor Moser called the council back into regular session. XVII. ACTION TAKEN ON MATTERS DISCUSSED IN EXECUTIVE SESSION (if necessary) Council member Madkins moved to authorize City Attorney Randy Thomas to make an offer in settlement of the Cecil Ford claim. Council member Jergins seconded the motion, which passed by unanimous vote. Council member Jergins moved to authorize Council member Conatser to negotiate with Don Blackwell and Lynn Stewart concerning the purchase of property for the maintenance service center site. Council member Madkins seconded the motion, which passed by unanimous vote. XVIII. ADJOURN There being no further business, the meeting was adjourned at 10:10 p.m. QIQY�� J V Moser, Mayor ATTEST: O rl-q 11 elk �a" � � 1 General Business Meeting— November 3, 1998 Stephenville City Council ORDINANCE NO. 1998 -21 AN ORDINANCE REZONING THE LAND DESCRIBED FROM THE ZONING CLASSIFICATION OF BB =1 "NEIGHBORHOOD BUSINESS DISTRICT" TO BB =2 "SECONDARY AND HIGHWAY BUSINESS DISTRICT ". BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: That certain land in the City of Stephenville being Lot 40, Block 140, City Addition, Erath County, Texas.. And it is hereby rezoned and the zoning classification changed from the classification of BB =1 "Neighborhood Business District" to B_2 "Second= and Highway Business District ", in accordance with the Zoning Ordinance of the City of Stephenville. PASSED AND APPROVED this the third day of November, 1998. ATTEST: Cindy Sta rd, City Secrctaqp Reviewed by Donald B. Davis, City Administrator Randy Thomas, City Attorney Approved as to form and legality ORDINANCE NO. 1998-22 AN ORDINANCE AMENDING THE ORDINANCE CREATING THE AIRPORT ADVISORY BOARD BY ADDING TWO NON -VOTING MEMBERS TO SAID BOARD WHO ARE NON - RESIDENTS OF THE CITY OF STEPHENVILLE; PROVIDING FOR APPOINTMENT AND QUALIFICATIONS OF THE MEMBERS OF SUCH BOARD AND THEIR TERMS OF OFFICE; PROVIDING FOR A CHAIRMAN, VICE CHAIRMAN AND SECRETARY FOR SUCH BOARD; DEFINING THE DUTIES OF THE BOARD; PRESCRIBING THAT MEMBERS OF THE BOARD SHALL SERVE WITHOUT COMPENSATION; AND AUTHORIZING PAYMENT OF EXPENSES OF SUCH BOARD. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: Section One That ordinance passed by the City Council of Stephenville relating to airport Advisory Board for such City, on December 4, 1973 is hereby amended. Section Two There is hereby created the Airport Advisory Board of the City of Stephenville, to be composed of ten (10) members. Eight (8) members shall be resident citizens of the City of Stephenville, Texas. Two (2) members shall be non - resident citizens of the City of Stephenville, and shall not have any voting privileges on said board. Each of the ten members shall be appointed for two -year terms and until their successors are appointed and qualified. Members of the Airport Advisory Board shall be appointed by the Mayor, with the advice and consent of the City Council. Appointments to the Advisory Board shall be made immediately by the Mayor. Section Three The Airport Advisory Board shall select from among its members a chairman and a vice chairman, and it shall adopt, subject to the approval of the City Council, such rules and regulations governing its proceedings as it may deem proper. Such rules and regulations shall not be inconsistent with the ordinances of the City. The Advisory Board shall appoint a secretary, who may, but need not be, a member of the board. The Secretary shall keep a record of all transactions of the board. The manager of the airport shall provide the Advisory Board with all information necessary for the performance of its duties. Airport Advisory Board — Page 1 Section Four The Airport Advisory Board shall from time to time make such general studies of airport construction and operation as may be useful in keeping the municipal airport efficient and adequate to the needs of the city and of the air transportation industry; it shall make recommendations to the City Council in respect to construction, expansion, improvements, maintenance, and operation of such airport. It shall call the manager's attention to any failure by personnel of the airport to carry out any orders or policies adopted by the City Council; and it shall, acting in an advisory capacity, work toward the general improvement of the airport and the advancement of the City as an air transportation center. Section Five No person having any financial interest in any commercial carrier by air, or in any concession, right or privilege to conduct any business or render any service for compensation upon the premises of the municipal airport shall be eligible for membership on the Airport Advisory Board. Section Six All members of the Airport Advisory Board shall serve without compensation, but may be reimbursed for all expenses reasonably incurred by them in the performance of their duties as members of such Board, when authorized by the City Council. PASSED AND APPROVED this 3rd day of November, 1998, at a regular meeting of the City Council of the City of Stephenville, Texas. ( 42&�� lovIoser, Mayor A rrPcT. Reviewed by Donald B. Davis, City Administrator Approved as to form and legality Randy Thomas, City Attorney Airport Advisory Board — Page 2 NO. 1998 - 7 t CITY OF STEPHENVILLE RESOLUTION APPROVING INVESTMENT POLICY, APPROVING BROKER/DEALERS, AND INVESTMENT STRATEGIES Whereas, The Public Funds Act of Texas (the "Act ") as amended, requires the City Council of the City of Stephenville to annually review the investment policy, broker /dealers list, and investment strategies of the City and that the written instrument so adopted shall record any changes made to either the investment policy, broker /dealers list, or investment strategies. Now, Therefore, be it resolved that the Finance /Investment Committee of the City Council of the City of Stephenville, after reviewing the investment policy, broker /dealers list, and investment strategies of the City, hereby adopts the revised/updated policy, broker /dealers list, and investment strategies of the City. The Finance/Investment Committee of the City Council hereby directs that the adopted written document be made a part of these minutes. Adopted this 3rd day of November, 1998. ATTEST: Cindy St ord I o7 City Sec etary i,) i O 11 Donald B. Davis City Administrator / Y�` crA Mark A. Kaiser, CPA Director of Finance CITY OF STEPHENVILLE INVESTMENT POLICY I. POLICY STATEMENT This document is to establish an investment policy which provides clear and concise guidelines for investing City of Stephenville funds; providing for security of capital, diversification and maximum return. It is the policy of the City of Stephenville, Texas ( "City") that the administration of its funds and the investment of those funds shall be handled as its highest public trust. Investments shall be made in a manner which will provide the maximum security of principal invested through limitations and diversification while meeting the daily cash flow needs of the City and conforming to all applicable state and City statutes governing the investment of public funds. The receipt of a market rate of return will be secondary to the requirements for safety and liquidity. It is the intent of the City to be in complete compliance with the City Charter, local law and the Texas Public Funds Investment Act. The earnings from investment will be used in a manner that best serves the public trust and interests of the City. II. SCOPE This investment policy applies to all the investment activities and financial assets of the Government of the City. All financial assets of all funds of the City at the present time and any funds to be created in the future will be administered in accordance with the provisions of these policies. All funds are accounted for in the City's Comprehensive Annual Financial Report (CAFR). This policy serves to satisfy the statutory requirement to define and adopt a formal investment policy. The City commingles its funds into one pooled investment fund for investment purposes for efficiency and maximum investment opportunity. These funds are defined in the CAFR and include: General Fund Capital Projects Fund Special Revenue Fund Debt Service Fund Ill. OBJECTIVES AND STRATEGY Internal Service Fund Utilities Fund Landfill Fund Airport Fund It is the policy of the City that all funds shall be managed and invested with four primary objectives, listed below in order of their priority. These objectives encompass: Page I LARNANCETOLICYUN V ESTIPOL - Safety and Security of Principal The primary objective of the City's investment activity is the preservation of capital in its overall financial portfolio. Each investment transaction will seek first to ensure that capital losses are avoided, whether they be from securities defaults or erosion of market value. To obtain this goal, diversification is required in the portfolio's composition. The highest credit quality and marketable securities will be used to protect the City's assests. The suitability of each investment decision will be made on the basis of these objectives. Liquidily The City's investment portfolio will remain sufficiently liquid to enable it to meet all operating requirements which might be reasonably anticipated. Liquidity will be achieved by matching investment maturities with cash flow requirements. Return on Investment The City's investment portfolio shall be designed with the objective of regularly exceeding the average rate of return on three -month US Treasury Bills. The investment program will seek to augment returns above this threshold consistent with the cash flow of the portfolio, risk limitations identified herein, and prudent investment principles. Local Considerations The City seeks to attain market rates of return on its investments, consistent with constraints imposed by its safety and security objectives, cash flow consideration, and state and local laws that restrict the placement of certain public funds. Strateev The primary objective for these funds will be liquidity and reasonable market yield. Funds will be invested in accordance with the City's Investment Policy. The authorized securities chosen or pool utilized for this portfolio will be of the highest credit quality and marketability supporting the City's objectives of safety and liquidity. Securities, when not matched to a specific liability, will be short term and of a liquid nature to provide adequate liquidity for the City. The portfolio shall be diversified to protect against market and credit risk in any one sector. The weighted average maturity on the pooled investment group will be no greater than one year and is based on the City's cash flow analysis of needs. Because the funds are pooled for investment purposes, the portfolio will address the varying needs of all funds in the pooled fund group, recognizing liquidity needs as well as the desire to extend slightly for incremental return on core funds in the pool. IV. LEGAL LIMITATIONS, RESPONSIBILITIES AND AUTHORITY The City intends for all investment activities to comply with state and local laws. Direct specific investment parameters for the investment of public funds in Texas are found in the Public Funds Investment Act, Chapter 2256, Texas Government Code, (the "Act "). The Act is attached as Exhibit A. The Public Funds Collateral Act, Chapter 2257, Texas Government Code, specifies collateral requirements for all public funds deposits. The Collateral Act is attached as Exhibit B. The Interlocal Cooperation Act, Chapter 791, Texas Government Code, authorizes local governments in Texas to participate in an investment pool established thereunder. That statute and reference to authorized investment in investment pools in the Act, is primary authority for use of investment pools by political subdivisions of the State of Texas. V. DELEGATION OF INVESTMENT AUTHORITY The Financial Director, acting on behalf of the City Council, is designated as the Investment Officer of the City and is responsible for investment management decisions and activities. The Council is also responsible for considering the quality and capability of staff, investment advisors, and consultants involved in investment management and procedures. The Council may contract with a Registered Investment Advisor to assist the Investment Officer in the fulfillment of his responsibilities. All participants in the investment process shall seek to act responsibly as custodians of the public trust. No officer or designee may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Investment officer and approved by the City Manager. VI. PRUDENCE The standard of prudence to be used in the investment function shall be the "prudent person" standard and shall be applied in the context of managing the overall portfolio. This standard states: "Investments shall be made with judgement and care, under circumstances then prevailing, which 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 as well as the expected income to be derived." Limitation of Personal Liability The Investment Officer and those delegated investment authority under this policy, when acting in accordance with the written procedures and this policy and in accord with the Prudent Person Rule, shall be relieved of personal responsibility and liability in the management of the portfolio provided that deviations from expectations for a specific security's credit risk or market price change or portfolio shifts are reported in a timely manner and that appropriate action is taken to control adverse market effects. Page 3 LAFINANCETOLIMIN VEST2.POL VH. INTERNAL CONTROLS The Investment Officer shall establish a system of written internal controls which will be reviewed annually with the independent auditor of the City. The controls shall be designed to prevent loss of public funds due to fraud, employee error, misrepresentation by third parties, unanticipated market changes, or imprudent actions by employees of the City. Cash Flow Forecasting Cash flow forecasting is designed to protect and sustain cash flow requirements of the City. Supplemental to the financial and budgetary systems, the Investment Officer will maintain a cash flow forecasting process designed to monitor and forecast cash positions for investment purposes. Cash flow will include the historical researching and monitoring of specific cash flow items, payables and receivables as well as overall cash position and patterns. Weighted Average Maturity The portfolio will be structured so that the maximum weighted maturity of the overall portfolio based on the stated maturity dates, will not exceed one year. Audits An annual audit for compliance of the portfolio to this policy will be completed by the external auditor along with a review of the quarterly reports provided to Council. VIII. AUTHORIZED INVESTMENTS Acceptable investments under this policy shall be limited to the instruments listed below. The investments are to be chosen in a manner which promotes diversity or market sector and maturity. The choice of high -grade government investments and high -grade money market instruments is designed to assure the marketability of those investments should liquidity needs arise. A. Obligations of the United States Government, its agencies and instrumentalities, and government sponsoring enterprises, excluding collateralized mortgage obligations (CMOs), not to exceed two year to stated maturity; B. Fully insured or collateralized certificates of deposit from a bank domiciled in the State of Texas and under the terms of a written depository agreement with that bank, not to exceed one year to the stated maturity; C. Repurchase agreement and reverse repurchase agreements as defined by the Public Funds Investment Act, not to exceed 180 days to stated maturity, collateralized with Section VIII.A. above, provided an executed PSA Master Repurchase Agreement is on file with the City and the counter party bank or primary dealer; and D. Constant dollar Texas Local Government Investment Pools as defined by the Public Funds Investment Act. Page 4 LARNANCETOLICY\IN VESTIPOL If additional types of securities are approved for investment by public funds by state statute, they will not be eligible for investment by the City until this policy has been amended and the amended version approved by the City Council. Competitive Bidding Requirement All securities, including certificates of deposit, will be purchased or sold after three (3) offersibids are taken to verify that the City is receiving fair market value /price for the investment. Delivery versus Payment All security transactions, including collateral for repurchase agreements, entered into by the City, shall be conducted on a delivery versus payment (DVP) basis. IX. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS All investments made by the City will be made through either a regional or primary broker /dealer which complies with the City's requirements. The City, or its Investment Advisor, shall maintain a list of financial institutions which are authorized to provide investment services. The list of approved broker /dealers is attached as Exhibit D and part of this policy for Council approval purposes. At a minimum the City shall conduct an annual evaluation of each bank's creditworthiness to determine whether it should be on the "Qualified Institution" listing. Banks shall continuously provide their most recent "Consolidated Report of Condition" (call report). Securities broker /dealers shall meet certain criteria as determined by the Investment Officer. A list of no more than five (5) authorized broker /dealers will be established and maintained. The following criteria must be met by those firms on the list: - provision of an audited financial statement for the most recent period, -proof of certification by the National Association of Securities Dealers (NASD), -proof of current registration with the State Securities Commission, and - completion of a City questionnaire. Every dealer with whom the City transacts business will be provided a copy of this Investment Policy to assure that they are familiar with the goals and objectives of the investment program. The broker /dealer will be required to return a signed copy of the Certification Form substantially in the form provided as Exhibit C. A list of the authorized broker /dealers will be provided to the Council annually for their review. Page 5 LAFINANCETOLICYUN V E M. POL X. DIVERSIFICATION AND MATURITY LIMITATIONS It is the policy of the City to diversify its investment portfolio. Invested funds shall be diversified to minimize risk or loss resulting from over - concentration of assets in a specific maturity, specific issuer, or specific class of securities. Diversification strategies shall be established and periodically reviewed. At a minimum, diversification standards by security type and issuer shall be: U.S. Treasuries and securities with the US Government's guarantee 100% U.S. Government agencies and instrumentalities not to exceed 50% Fully insured or collateralized CDS not to exceed 30% Repurchase agreement 100% Local Government Investment Pools Liquidity Pools 100% Maximum percent ownership of pool not to exceed 20% The portfolio shall be diversified by maturities. The Investment Officer, to the extent possible, will attempt to match investment with anticipated cash flow requirements. Matching maturities with cash flow dates will reduce the need to sell securities prior to maturity, thus reducing market risk. Unless matched to a specific requirement, the funds may not be invested more than 20% of the portfolio for a period greater than one (1) year. M. SAFEKEEPING AND COLLATERALIZATION All securities shall be brought on a delivery versus payment basis and be held in safekeeping by either the City, an independent third parry financial institution, or the City's designated depository. All safekeeping arrangements shall be designated by the Investment Officer and an agreement of the terms executed in writing. The third party custodian shall be required to issue safekeeping receipts to the City listing each specific security, rate, description, maturity, cusip number, and other pertinent information. Each safekeeping receipt will be clearly marked that the security is held for the City or pledged to the City. All securities pledged to the City for certificates of deposit or demand deposits shall be held by an independent third party bank domiciled in Texas. The safekeeping bank may not be within the same holding company as the bank from which the securities are pledged. Collateralization Collateralization shall be required on two types of investments: a. certificates of deposits over the FDIC insurance coverage of $100,000, and b. repurchase agreements. Page 6 LARNANCEW OLIMIN V ES T2. POL In order to anticipate market changes and provide a level of additional security for all funds, the collateralization level required will be 102% of the market value of the principal and accrued interest. XII. PERFORMANCE EVALUATION AND REPORTING The Investment Officer shall submit monthly reports to the City Manager and quarterly and annual reports to the City Council containing sufficient information to permit an informed outside reader to evaluate the performance of the investment program. At a minimum, these summary management reports shall contain: Beginning and ending market value of the portfolio by market sector and total portfolio, Beginning and ending book value of the portfolio by market sector and total portfolio, Transactions which change market and book value, Total accrued interest for the period, Overall current yield -to- maturity of the portfolio, Overall weighted average maturity of the portfolio, Maximum maturities, by security, in the portfolio, Total earnings for the month and fiscal year -to -date, and Performance comparison including average yield on 3 -month US Treasury Bill. The detail reports with full information on each individual position in the portfolio including: Par amount Coupon or rate Maturity date Yield -to- maturity Yield at cost Cusip Total coupon interest received Amortization/Accretion Transactions for the period Book value (Beg and End) Market Value (Beg and End) Gain/loss Interest earning accrued The reports will be prepared jointly by all involved in the investment activity and be signed by all staff involved in accordance with the Act. Market Price An independent source will be used to obtain accurate market prices for all securities in the portfolio in order to assure accurate reporting. )III. DEPOSITORIES The City will designate one banking institution through a competitive process as its central banking services provider at least every three years. This institution will be used for normal banking services including disbursements, deposits, lockbox, controlled disbursement and safekeeping of securities. Page 7 LARNANCETOLICYUN VESTIPOL XIV. INVESTMENT POLICY ADOPTION BY CITY COUNCIL The City's investment policy shall be adopted by the City Council. The policy shall be reviewed - on an annual basis by the City Manager and City Council. After its annual review, the Council shall adopt a written resolution approving the Policy and recognizing any changes made to that Policy. PASSED AND APPROVED this the 3rd day of November, 1998. J Moser, Mayor ATTEST: in Xylsta-plwrd, Citi Secre Reviewed by Donald B. Davis City Administrator Randy homas, City Attorney Approved as to form and legality Page 8 L AFINANCETOLIMIN V EM. POL EXHIBITS A AND B PUBLIC FUNDS INVESTMENT ACT (Texas Government Code Section 2256) PUBLIC FUNDS COLLATERAL ACT (Texas Government Code Section 2257) Page 9 L:\FfNANCE\P0LICY\fNVFST2.P0L EXHIBIT C BROKER/DEALER CERTIFICATION FORM as required by Texas Government Code 2256.005(k) CITY OF STEPHENVILLE, TEXAS I, as a registered principal for the firm do hereby certify that I, and the broker covering this account, , have received and both have thoroughly reviewed the investment policy of the City. The firm has implemented reasonable internal procedures and controls in an effort to preclude investments transactions between this firm and the City which do not comply with this policy. Name: Title: Date: Page 10 LAFINANCETOLIMIN V EST2.POL EXHIBIT D APPROVED BROKER/DEALERS as required by Texas Government Code 2256.025 CITY OF STEPHENVILLE, TEXAS Broker/Dealers First Chicago Securities Fuji Securities Smith Barney Everen Securities Stephenville Bank & Trust Local Government Investment Pool TexPool (Public Funds Investment Pool) Page I1 LAFINANCETOLICYUN V ESTIPOL