City Council

Agenda Request

Agenda Of:

02/20/07

Agenda Request No:

III E

Initiated By:

Jennifer Brown

Asst fiscal services director

Responsible Department:

Fiscal Services

Presented By:

Jennifer Brown

Asst Fiscal Services Director

Department Head:

Linda Symank

Director of Fiscal Services

 

 

Additional Department. Head (s):

n/a

Subject / Proceeding:

Qualified Investment Brokers

Consideration and approval of resolution 07-04

Exhibits:

Resolution 07-04

Clearances

Approval

Legal:

Joe Morris

City Attorney

Executive Director:

n/a

Purchasing:

n/a

Asst. City Manager:

n/a

Budget:

n/a

City Manager:

Allen Bogard

Budget

Expenditure Required:  $

n/a

Amount Budgeted/Reallocation:  $

n/a

Additional Appropriation:  $

n/a

Recommended Action

Consideration and approval of Resolution 07-04 authorizing the opening of securities trading accounts with Wells Fargo Brokerage Services, LLC, and the continuance of accounts with Wachovia Securities, Duncan Williams, Inc., First Southwest Company and Coastal Securities.

 

Executive Summary

Pursuant to the City’s Investment Policy and the Public Funds Investment Act, City Council must annually review and adopt a list of qualified broker/dealers to engage in investment transactions with the City.  Staff mailed questionnaires to 23 broker/dealers and banks in January 2007 and a request for qualifications was published in the City’s official newspaper.  The City received seven responses by the January 31st deadline, and two responses after the deadline.   Of the qualified responses received, five are recommended for approval by the City Council.  Four of the firms, Wachovia Securities, First Southwest Company, Coastal Securities and Duncan Williams, Inc., are currently on the City’s list of approved broker/dealers.  Staff recommends adding one new firm to the list, Wells Fargo Brokerage Services, for a total of five authorized broker/dealers.

 

As required by the Public Funds Investment Act and the City’s Investment Policy, all investment purchases are competitively bid. There are no fees charged directly for these services.  The broker who offers the best return to the City is awarded the sale in each individual transaction.

 

The City’s Investment Policy identifies several criteria to be used in the selection process, including the types of securities traded, volume of trading, % of transactions failing, and similar client base.  In addition, firms are required to provide any litigation of a material nature requiring disclosure in the firm’s annual financial report and references to similar clients, preferably in the Houston metro area.

 

The City’s Investment Policy and the Public Funds Act also require that the qualified representative of the firm execute a written instrument stating in effect that the qualified representative has:

  1. Received and thoroughly reviewed the investment policy of the City; and
  2. Acknowledged that the firm has implemented reasonable procedures and controls in an effort to preclude imprudent investment activities arising out of investment transactions conducted between the City and the organization. 

All five recommended firms have executed such an agreement.

 

There were no banks that responded to the City’s request for qualifications, which would include Certificates of Deposit.  As a result, the attached resolution 07-04 also repeals resolution 05-09, which authorized certificates of deposit accounts with Frost Bank, Southern National Bank and Southwest Bank of Texas.  At this time, the City has adequate investment options that the lack of authorized banks for Certificates of Deposit will not hinder the investment process or the City’s liquidity.

 

Exhibits

 

RESOLUTION NO. 07-04

 

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SUGAR LAND, TEXAS, AUTHORIZING THE OPENING OF SECURITIES ACCOUNTS WITH WELLS FARGO BROKERAGE SERVICES, LLC, AND THE CONTINUANCE OF SECURITIES ACCOUNTS WITH WACHOVIA SECURITIES, DUNCAN WILLIAMS, INC., FIRST SOUTHWEST COMPANY, AND COASTAL SECURITIES.

 

            WHEREAS, Section 2256.025 of the Government Code requires the City of Sugar Land (City) to annually review, revise and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City; and

 

            WHEREAS, the City is authorizing the opening of securities accounts with Wells Fargo Brokerage Services, LLC and the continuance of securities accounts with Wachovia Securities, Duncan Williams, Inc., First Southwest Company and Coastal Securities; NOW THEREFORE;

 

BE IT RESOLVED BY THE CITY COUNCIL

OF THE CITY OF SUGAR LAND, TEXAS:

 

            Section 1.  That it authorizes the opening of securities accounts with Wells Fargo Brokerage Services, LLC and the continuation of securities accounts with Wachovia Securities, Duncan Williams, Inc., First Southwest Company and Coastal Securities (Broker).

 

            Section 2.  That the securities accounts are for the purpose of purchasing and selling securities, as provided by the City's investment policy.  All orders and instructions, written or oral, relating to the securities accounts must be given to the Broker by any two of the individuals designated as "Authorized Individuals" in Exhibit A, and any two of them is authorized and directed to purchase and sell any and all securities for the City, including the power to deliver, or accept delivery of securities.

 

            Section 3.  That the Broker may deal with any of the Authorized Individuals as though the Broker was dealing with the City directly.

 

            Section 4.  That each of the Authorized Individuals is authorized and directed to execute and deliver to the Broker on behalf of the City all agreements, documents, contracts, and other writings that the Broker may require.

 

            Section 5.  That the City Secretary (or other duly designated officer) of the City is authorized and directed to certify, under the City Seal, or otherwise to the Broker:

 

            (a)        A true copy of this Resolution;

 

            (b)        Specimen signatures of each individual empowered by this Resolution;

 

            (c)        A certificate (which, if the Broker requires, is supported by an opinion of the general counsel of the City, or other counsel satisfactory to the Broker) that the City is duly organized and existing, that its charter empowers it to transact the business contemplated in this Resolution, and that no limitation has been imposed upon those powers by constitution, statute, regulations, charter, by-law, or otherwise.

 

            Section 6.  That the Broker may rely upon any certification given in accordance with this Resolution as continuing fully effective unless and until the Broker receives written notice of an amendment, modification or rescission of this Resolution or certification.  The Broker is not liable for any action taken or not taken upon instruction of any Authorized Individual prior to the Broker’s actual receipt of written notice of the termination or impairment of the person's authority.  The failure to supply any specimen signature or any other documentation does not invalidate any transaction which is in accordance with the authority actually granted.

 

            Section 7.  That if there is any change in the office or powers empowered by this Resolution, the City Secretary (or other duly designated officer) will certify the changes to the Broker, in writing, which certification, when the Broker receives it, will terminate the powers of the persons previously authorized and empower the persons thereby substituted.

 

            Section 8.  That Resolution Nos. 05-09 and 05-10 are repealed.

 

 

            APPROVED on _______________________________, 2007.

 

 

 

                                                                                    ____________________________

                                                                                    David G. Wallace, Mayor

 

 

ATTEST:                                                                     Reviewed for Legal Compliance:          

 

                                                                                   

___________________________

Glenda Gundermann, City Secretary                            

 

Attachment:      Exhibit A - Authorized Individuals

 

 

EXHIBIT A

 

AUTHORIZED INDIVIDUALS

 

I, Glenda Gundermann, in my official capacity as City Secretary, certify that any two of the following officers or individuals have been duly authorized to issue instructions concerning the securities account, and that the following are their true signatures.

 

Name                                      Title                                                    Signature

 

 

Dianne Stanford            Chief Accountant                                  ___________________________

 

Donna Svatek               Treasurer                                              ___________________________

 

Jennifer Brown       Assistant Fiscal Services Director    ___________________________

 

           

In Witness Whereof, I have hereunto affixed my hand and the Seal of the City, this ____ day of _________________, 2007.

 

______________________________

Glenda Gundermann, City Secretary