10-26-1999 (City Council) Agenda Packet NOTICE OF MEETING
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Wylie City Council Agenda
Tuesday, October 26, 1999
7:00 p.m.
Wylie Municipal Complex-Council Chambers
2000 State Highway 78 North
Wylie,Texas 75098
Item No. Agenda Item Action Taken
Call to Order
Invocation''
Mark Forrest,Murphy Road Baptist Church
Pledge of Allegiance
Citizens Participation
ITEMS FOR INDIVIDUAL CONSIDERATION
1. Consider and act upon approval of a Resolution for the City Council of the City of Wylie,
Collin County, Texas, to consider adoption of the Locally Preferred Alternative State
Highway 78 Design according to the Local Design and Mobility Task Force's
recommendations and submit the proposed design to the Texas Department of Public
Safety.
2. Consider and act upon authorizing the City Manager to enter into a contract with
Winkelman and Associates in an amount not to exceed$48,000 for survey services related
to the Ballard Street reconstruction- 1999 Bond Program.
3. Consider and act upon a motion to direct the City Manager to enter into a professional
service agreement with Stanland & Associates, As Needed for the re-write of the
Comprehensive Zoning Ordinance for the City of Wylie.
4. Consider and act Upon a preliminary plat/development plan for the Creekside Estates
Addition proposed by Gary Defrain for Campbell Wylie Partners, for the property
generally located at the northeast corner of McCreary Road and McMillan Road and being
all of a certain 296.441 acre tract out of the John W. Mitchell Survey,Abstract No. 589
and the Lewis M. Marshall Survey,Collin County,Texas.
5. Consider and act upon a final plat for Phase I of the Harvest Bend Addition proposed by
Douphrate&Associates,Inc.,for the property generally located at the southwest corner
of FM 2514 (Ballard Street) and Dog Drop Road and being all of a certain 20.054 acre
tract out of the W.D. Penny Survey, Abstract No. 696, City of Wylie, Collin County,
Texas.
6. Consider and act upon approval of a resolution amending the current investment policy as
required by the Texas Government Code, Chapter 2256, Public Fund Investment Act,
Subchapter A-Authorized Investment for Governmental Entities.
NOTICE OF MEETING
Wylie Cit Council Agenda
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Page of___ ,--'
Item No. Agenda Item Action Taken
7. Hold a public hearing and consider and act upon an ordinance of the City of Wylie,
affecting participation of City employees in the Texas Municipal Retirement System
granting the additional rights authorized by Section 854.202(g) of Title 8, Texas
Government Code, as amended,and prescribing the effective date for the ordinance.
Staff,Reports
Work Session
• Presentation & Update from Chris Hoisted, City Engineer/Hogan Corporation
regarding Drainage Issues/Wylie Ranch Estates.
• Update on Animal Shelter
Executive Session
In accordance with Chapter 551,Government Code,Vernon's Texas Codes Annotated(Open Meeting Law).
Section 551.071 Consultation with City Attorney,pending litigation;Lanny R.Payne v.City of Wylie,Texas,
David Perkins,Nick Salisbury,Lt.Myrick,Officer Scott Stowers,a United States Federal Game Warden and
B&B Backhoe,Inc.
Reconvene into Open Meeting
Take any action as a result of Executive Session.
Adjournment.
In addition to specifically identified Executive Sessions, Council may convene into Executive Session at any point
during the open meeting to discuss any item posted on this agenda.Specific sections of the Open Meetings Act will
be identified and announced should Council elect to convene into Executive Session.
I certify that this Notice of Meeting was posted on this the day of , 1999 at 5:00 p.m.as
required by law in accordance with Section 551.042 of the Texas Government Code and appropriate news media contacted.
City Secretary
Date Notice Removed
The Wylie Municipal Complex is Wheelchair accessible. Sign interpretation or other special assistance for disabled
attendees. Must be requested 48 hours in advance by contacting the City Secretary's Office at 972/442-8100 or
TDD 972/442-8170.
WYLIE CITY COUNCIL
AGENDA ITEM NO. /
October 26, 1999
ISSUE:
Consider and act upon approval of a Resolution for the City Council of the City of
Wylie, Collin County, Texas, to consider adoption of the Locally Preferred
Alternative State Highway 78 Design according to the Local Design and Mobility
Task Force's recommendations and submit the proposed design to the Texas
Department of Transportation.
BACKGROUND:
The Texas Department of Transportation has committed to Collin County and to the City
of Wylie to let a contract for the reconstruction of State Highway 78 between F.M. 544
and Eubanks in Fiscal Year 2001. Federal funds will be used for the project and several
processes including an Environmental Impact Statement Process and the development of
a Locally Preferred Alternative Design will be required for completion.
Included with this communication is a copy of a Resolution approved by the City Council
creating the local Task Force. The Task Force met for five meetings to develop the
Locally Preferred Alternative Design for State Highway 78. The project is described in
the Resolution No. 99-19(R) .
If approved by the City Council, the Locally Preferred Alternative will be formally
submitted to Texas Department of Transportation for its formal approval. Staff has had
several informal briefings with Texas Department of Transportation design staff to seek
input and direction. In addition, because the Collin County Commissioner's Court
donation of right-of-way on the west of this project is required, County Judge Ron Harris
and Commissioner Jerry Hoagland have been kept fully informed at ever stage in the
process.
Ultimately approval by Texas Department of Transportation of this design option will be
difficult. The City of Wylie has utilized its registered City Engineer as well as another
state licensed engineer (with over eight years design experience with Texas Department
of Transportation) as technical resources on this project. The collective professional
opinion of these two engineers is that the Locally Preferred Alternative meets or exceeds
the technical design criteria used by Texas Department of Transportation to design
roadway. The professional opinion of the Texas Department of Transportation design
engineers is that there are a few design features that do not match the required design
speed for the roadway or 45 mile per hour.
Specifically, the major issue in dispute is incorporating reverse or "S" curves into the
roadway design. The reverse curves are designed as 1000 foot radius curves. According
to the technical criteria, this fully satisfies the safety requirement. Most importantly, the
reverse curve design features were absolutely necessary to creating 90 degree
intersections, specifically at Ballard Street and Brown Street. The Locally Preferred
Alternative Design enables the safest and most efficient flow of traffic both through State
Highway 78 and the major cross streets at Ballard Street and Brown Street.
The use of reverse curves certainly creates a more aesthetically pleasing roadway. The
addition of wider medians also enhances the natural beauty surrounding and enveloping
the pavement. However, the first and primary concern is safety. If safety criteria is not
met first, nothing else matters.
Another challenging issue focused on the Ballard Street Intersection. The Locally
Preferred Alternative will require that a portion of the property currently being used as
open space be used for the new street alignment. However, when coupled with
anticipated land purchases and the property that will be available when the new street
alignment is established, the amount of parkland will almost double in size. Because
Federal funds are being used on this project, federal rules do not favor the displacement
of parkland in order to construct a roadway.
The City has several options. First, there would be an opportunity to remove Ballard
Street or F. M. 3412 between State Highway 78 and Brown Street or F.M. 2514 from the
F. M. system. Therefore, the Ballard Street portion in question would become a city
street and would be ineligible in the future for state/federal funding.
Another option is to establish that the open space in the area was never formally
dedicated as parkland. The history of this land would establish that previous uses of the
property prior to 1993 were as a fire station and water tower/utility operations storage
site.
The City's expectation and the Task Force's sincerest hope is that the Texas Department
of Transportation and Collin County will share the vision for this community and how the
State Highway 78 relates to the City as a whole. The City should be confident that even
though the Locally Preferred Alignment differs from the standard mold of highway
designs that the Texas Department of Transportation will in the end determine that the
design features do meet the technical safety requirements.
FINANCIAL CONSIDERATIONS:
The City of Wylie has been told that, based on a recommendation formally approved by
the Regional Transportation Council of the North Central Texas Council of Governments,
the that the Texas Transportation Commission will approve a Minute Order in November
1999, appropriating $4.8 million for this project.
OTHER CONSIDERATIONS:
None.
ATTACHMENTS:
Resolution 99-19 (R)
Prepared by App d b Financ City Manager Approval
RESOLUTION NO.
A RESOLUTION FOR THE CITY COUNCIL OF THE CITY OF WYLIE,
COLLIN COUNTY, TEXAS, TO CONSIDER ADOPTION OF THE LOCALLY
PREFERRED ALTERNATIVE STATE HIGHWAY 78 DESIGN ACCORDING
TO THE LOCAL DESIGN AND MOBILITY TASK FORCE'S
RECOMMENDATION AND SUBMIT THE PROPOSED DESIGN TO THE
TEXAS DEPARTMENT OF TRANSPORTATION.
WHEREAS, the Texas Department of Transportation has committed to Collin County
and to the City of Wylie to let a contract for the reconstruction of State Highway (S.H.
78)between F.M. 544 and Eubanks in Fiscal Year 2001;
WHEREAS, the establishment of this contract letting schedule is directly attributed to
the leadership of the Collin County Commissioners' Court and its agreement to donate
right-of-way acquired in the S.H. 78 corridor that will save significant amounts of money,
eliminate right-of-way acquisition, and reduce utility relocations; and
WHEREAS, S.H. 78 serves as a regional intermodal connector in southeast Collin
County between Interstate 30,U.S. 75, F.M. 205, and S.H. 190; and
WHEREAS, the reconstruction of S.H. 78, which travels through the heart of the
community, will have significant and long term impacts on the mobility, economic
viability, land use, and development standards throughout Wylie, including the areas
surrounding the historic downtown; and
WHEREAS, the Federal Government established in Title 49 a process requiring that a
Locally Preferred Alternative (LPA) Design option be completed; by local citizens
impacted by the highway reconstruction project
WHEREAS, the S.H. 78 Local Design and Mobility Task Force was appointed by the
City Council and public meetings were held to complete an LPA; and
WHEREAS, the Task Force used as it guidelines technical criteria used by the Texas
Department of Transportation (TxDot) to establish design speed and other safety
elements; and
WHEREAS, the Task Force also based the LPA on the recently adopted Comprehensive
Land Use and Thoroughfare Plan and Citywide Traffic Study; and
WHEREAS,the Task Force and City Council, on behalf of the citizens of Wylie, wishes
to express their appreciation to TxDot for the privilege and opportunity to present the
LPA for the reconstruction of S.H. 78.
NOW THEREFORE BE IT RESOLVED THAT:
The Task Force recommends approval of a Resolution formally adopting the Locally
Preferred Alternative S.H. 78 Design for submission to the Texas Department of
Transportation.
The features and design elements incorporated into the LPA are consistent with all Tx
DOT adopted design specifications and safety criteria.
The LPA impacts less than twenty-five percent of the total project length and, with a FY
2001 construction letting schedule, sufficient time will enable the design phase to be
completed.
The LPA can be constructed within TxDOT's current project budget.
The LPA fulfills the citizens' primary design objectives of improving safety of school
zones, providing for the safest movement of vehicular and pedestrian traffic, the creation
of new economic growth, enhancing the aesthetic appearance, and profoundly
establishing a unique and quality identity for the City of Wylie.
The LPA contains the following safety features and design elements:
1. The project limits are from F.M. 544 North/Northeast to Eubanks Rd., an
approximate distance of 4.1 miles.
2. A forty-five (45)mile per hour design speed was used.
3. A one hundred (100) ft right-of-way width, utilizing approximately fifty feet
of the former railroad right-of-way on the westside, was established as the
design boundary.
4. The design accommodates a school zone at Birmingham Street.
5. All thoroughfare intersections are designed to cross S.H. 78 at 90-degree
angles.
6. Geometric design does not exceed 1000 foot radius curves allowing for the
safe and efficient movement of traffic at 45 miles per hour.
7. The following streets currently intersecting S.H. 78 will be eliminated.
Calloway, Jackson, First, Second, Masters, Third, Marble, Fourth, and Fifth
Streets.
8. No additional right-of-way is required for acquisition to complete.
RESOLUTION NO. al'19(0)
A RESOLUTION OF THE APPROVAL OF THE CREATION OF THE S.H. 78
LOCAL DESIGN AND MOBILITY TASK FORCE.
WHEREAS, an agreement was reached between the Kansas City Southern
Railway Company (KCS), Collin County, and the City of Wylie that will result in the
donation by KCS to Collin County of portions of the S.H. 78 mainline right-of-way
between Westgate Way and Eubanks and;
WHEREAS, Collin County Commissioners Court has agreed to donate this right-
of-way to the Texas Department of Transportation (TxDOT) for the expedited widening
of S.H. 78 from F.M. 544 to Spring Creek Parkway, to improve the overall mobility in
Southeast Collin County and;
WHEREAS, because the donation of the right-of-way represents a significant
local financial match, the TxDOT has committed to the City of Wylie and Collin County
to complete engineering and design in FY 2000 and to let construction in FY 2001 and;
WHEREAS, in addition to the funding allocated by TxDOT to the S.H. 78
expansion, the City of Wylie secured $3 million in Federal Demonstration Funds for
intersection approach improvements along the S.H. 78 corridor and;
WHEREAS, the completion of a Comprehensive Land Use Plan and City wide
Traffic Study, involving extensive public input, represent important factors influencing
the design of the S.H. 78 expansion and;
WHEREAS,the reconstruction of S.H. 78, which travels through the heart of the
City, will have significant and long-term impacts on the economic viability, land use,
development standards, and mobility of Wylie, and including the areas surrounding the
Historic Downtown and;
WHEREAS, the collective efforts of all entities directly involved, including
Collin County, TxDOT, and the City of Wylie will be necessary to ensure the successful
completion of the project and;
WHEREAS, it is the intent of the Wylie City Council and citizens to create a
Task Force to develop a locally preferred design for the S.H. 78 expansion that will
provide along the corridor for the safest movement of vehicular and pedestrian traffic,
spur economic development activity, enhance the aesthetic appearance and profoundly
establish a unique and quality identity for the City of Wylie.
NOW THEREFORE, BE IT RESOLVED THAT:
1) The Wylie City Council approves the creation of the S.H. 78 Local Design
and Mobility Task Force for the purpose of recommending to City Council a
Locally Preferred Design and Alignment of the S.H. 78 expansion between
F.M. 544 and Spring Creek Parkway and;
2) The Task Force, consisting of fifteen (15) members, will include owners of
businesses and property along S.H. 78, representatives from the Wylie
Chamber of Commerce, Wylie Merchants Association, Wylie Economic
Development Corporation, Collin County, TxDOT, and other citizens from
across the city and;
3) The meeting times, frequency and completion date for the Locally Preferred
Design and Alignment will be determined after discussions with TxDOT. The
first meeting with the Task Force would be held during the week of August 9,
1999.
PASSED AND APPROVED this ,07 day of July 1999.
C \ I
J hn Mondy, Mayor
ATTEST:
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WYLIE CITY COUNCIL
AGENDA ITEM NO.
October 26, 1999
ISSUE:
Consider and act upon authorizing the City manager to enter into a contract with
Winkelman and Associates in an amount not to exceed $48.000 for survey services
related to the Ballard Street reconstruction- 1999 Bond Program.
BACKGROUND:
The 1999 City of Wylie Bond Program included a project to reconstruct a 2.4 mile
portion of Ballard Avenue from Stone Drive to Muddy Creek in the city limits and ETJ of
the City of Wylie. Consistent with City's thoroughfare plan, the road will be constructed
as a four lane undivided road.
The first year program of work establishes that design, engineering and right-of-way
acquisition commence on the Ballard Street project. The survey information will be used
by the engineering firm to establish the final alignment of the roadway.
Collin county voters approved a County Bond Program in 1999. The county Bond also
included funds for improvements to Ballard Street. The City of Wylie has received
permission from Collin County to combine the county funds with City funds and design
and bid a single project.
FINANCIAL CONSIDERATIONS
Available Funds
City of Wylie 1999 Bond $ 1, 000,000.00
Collin County 1999 Bond 700,000.00
Total Available Funds $ 1, 700,000.00
The City of Wylie has programmed during the first year program of work approximately
$1,870,000.00 related to street projects. Collin County has programmed approximately
$1,071,000.00 for Ballard Avenue in October 2000.
Other Considerations
N/A
ir ,_ ? C '
Prepared By Revie d by Finance City Manager Approval
"1 Winkelmann
&Associates, Inc.
CONSULTING CIVIL ENGINEERS ■ SURVEYORS
September 29, 1999
Mr. Mike Collins
City of Wylie
2000 State Hwy. 78 North
Wylie, Texas 75098
RE: Professional Surveying Services
Dear Mr. Collins:
We are very pleased to present this letter contract for professional surveying services in
connection with design survey services for a design topographic survey of Ballard Avenue from
Stone Drive to Muddy Creek (2.4± miles) in the city limits and ETJ of the City of Wylie,
Texas. The area surveyed shall be limited to the existing right of way and 100± either side
of the existing right of way.
It is our understanding that the City or the designated engineer shall furnish us with the
proposed centerline alignment prior to dedication document being prepared.
BASIC SERVICES
A. Research and Data Collection
1 . Existing Plats, deeds, county maps and/or city maps
2. City and County tax roles for current ownership
3. City GPS/GIS horizontal and vertical control
B. Field Survey Services
1 . Locate existing property corners
2. Locate existing visible features within the surveyed area (i.e. paving, fences,
buildings, manholes, power poles, etc)
3. Shoot spot elevations at visible features
4. Shoot cross-sections on a + 100 feet interval
C. Office Services
1. Abstracting for adjacent ownership
2. Prepare a working sketch of existing plats and deeds
3. Reduction of raw field data
4. Prepare a strip map of Ballard Road showing existing right of way, adjacent
owners, topographical information (i.e. visible features and spot elevations, etc.)
5. Calculations to determine existing right of way
12800 Hillcrest Rd.,Suite 200 Dallas,Texas 75230 (972)490-7090 Fax(972)490-7099
Mr. Mike Collins Page 2
September 29, 1999
D. Right of way Dedication Exhibits
1. Upon receipt of a city approved centerline and right of way width prepare a field
note description and 8-1/2" x 11" exhibit map for each parcel being dedicated.
2. Prepare easement exhibits as required for construction (i.e. offsite utility
easements, slope easements, etc.)
ADDITIONAL SERVICES
The following are services that are not a part of the Basic Services and not included in the fee
provided:
1. Conferences with attorneys, title company, lenders and/or owners
2. Extraneous revisions or additions to dedication documents or easement exhibits
due to changes in the alignment or right of way widths
3. Underground utility locations by franchise utilities
4. Tree and landscaping locations
5. Abstracting for easements and/or adjoining land owners other than adjoining
land owners
6. Topographic survey for spot elevations outside of survey limits described above
7. Engineering / Planning
8. Any service not specifically address in the Basic Services
SCHEDULE
We propose to deliver the topographical strip map for your review and comments within forty-
five (45) working days, after receiving written authorization to begin.
FEE
We would propose to perform the Basic Services outlined above for a lump sum fee of
$48,000.00 plus reimbursable expenses such as printing, deliveries, and mileage . We will
submit an invoice monthly based on services provided. Payment is due within thirty (30) days
of date of invoice. Additional services will be invoiced on an hourly basis.
In addition to the matters set forth herein, our agreement shall include, and shall be subject
to, the Standard Provisions attached hereto and hereby incorporated herein. The term "the
Client" as used in the attached Standard Provisions shall refer to City of Wylie.
Mr. Mike Collins Page 3
September 29, 1999
We appreciate the opportunity to submit this contract and look forward to working with you
on this project. If this contract meets with your approval, please sign both copies in the
approval space and return one for our files.
Sincerely,
WINKELMANN & ASSOCIATES, INC.
/9
B J. lam, R.P.L.S.
is President
APPROVAL
CITY OF WYLIE
BY:
DATE:
K:\proposal\wylie 1.pro
STANDARD PROVISIONS
WINKELMANN & ASSOCIATES, INC.
The firm shall perform the services outlined in this agreement for the stated fee arrangement.
Access to Site:
Unless the otherwise stated, the Firm will have access to the site for activities necessary for the performance of the services. The Firm will take
precautions to minimize damage due to these activities, but have not included in the fee the cost of restoration of any resulting damage.
Fee:
The total fee, if stated, is valid for a period of 60 days and shall be understood to be an estimate, and shall not be exceeded by more than ten
percent without written approval of the Client. Where the fee arrangement is to be on an hourly basis, the rates shall be those that prevail at the
time services are rendered. The following rates effective through December, 1999:
Personnel: $ 65 to $ 70/Hr.
Principal $110 to $130/Hr. Senior Technician
Senior Professional $ 95 to $100/Hr. Draftsperson/Technician $ 55 to $ 60/Hr.
Professional $ 70 to $ 85/Hr. Support Staff $ 35 to $ 45/Hr.
Professional Intern $ 65 to $ 75/Hr. Field Survey Crew $ 95 to $130/Hr.
Others:
Printing - Bluelines $ 0.50/S.F. Mylar $4/S.F.
Plots - Reproducible Paper/Vellum $2/S.F. Reproducibles $1.50/S.F.
Billings/Pavments
Invoices for the Firm's services shall be submitted, at the Firm's option, either upon completion of such services or on a monthly basis. Invoices
shall be payable within 15 days after invoice date, unless agreed upon differently in contract. If the invoice is not paid within 15 days, the Firm
may, without waiving any claim or right against the Client, and without liability whatsoever to the Client, terminate the performance of the
service. Retainers shall be credit on the final invoice. Reimbursables will be billed with a 15% handling charge.
Late Payments:
In the unlikely event of an account being unpaid 30 days after the invoice date may be subject to a monthly service charge of 1.5% on the then
unpaid balance (18% true and annual rate), at the sole election of the Firm. In the event any portion or all of an account remains unpaid after
billing, the Client shall pay all costs of collection, including reasonable attorney's fees.
If Client for any reason fails to pay the undisputed portion of Engineer's invoices within 30 days of presentation, Engineer shall cease work on the
project and Client shall waive any claim against Engineer, and shall defend and indemnify Engineer from and against any claims for injury or loss
stemming from Engineer's cessation of service. Client shall also pay Engineer the cost associated with premature project demobilization. In the
event the project is remobilized, Client shall also pay the cost of remobilization, and shall renegotiate appropriate contract terms and conditions,
such as those associated with budget, schedule, or scope of services.
In the event any bill or portion thereof is disputed by Client, Client shall notify Engineer within ten days of receipt of bill in question, and Client
and Engineer shall work together to resolve the matter within 60 days of its being called to the Engineer's attention. If resolution of the matter is
not attained within 60 days, either party may terminate this Agreement in accordance with conditions indicated in "Termination of Services".
Indemnification:
The Client shall indemnify and hold harmless the firm and all of its personnel from any and all claims, damages losses and expenses (including
reasonable attorney's fees) arising out of or resulting from the performance of the services, provided that any such claim, damage, loss or
expense is caused in whole or in part by the negligent act, omission, and/or strict liability of the Client, anyone directly or indirectly employed by
the Client (except the Firm), or anyone for whose acts them may be liable.
Risk Allocation:
In recognition of the relative risks, rewards and benefits of the project to both the Client and the Firm, the risks have been allocated such that the
Client agrees that, to the fullest extent permitted by law, the Firm's total liability to the Client for any and all injuries, claims, losses, expenses,
damages or claim except for those from Firm Employee expenses arising out of this agreement from any cause or causes, shall not exceed our
fee. Such causes include, but are not limited to, the Firm's negligence, errors, omission, strict liability, breach of contract or breach of warranty.
Termination of Services:
This agreement may be terminated by the Client or the Firm should the other fail to perform its obligations hereunder. In the event of termination,
the Client shall pay the Firm for all services rendered to the date of termination, all reimbursable expenses, and reimbursable termination
expenses. In the event that no work has been performed on the contract services as a result of actions by other than the Firm, for a period of 90
days, the contract may be considered to be terminated at the discretion of the Firm.
Ownership of Documents:
All documents produced by the Firm under this agreement shall remain the property of the Firm and may not be used by the Client for any other
endeavor without the written consent of the Firm. Upon request, a reproducible copy will be provided to client for their records and use on this
project. The original in the Firm's office remains the official copy.
Applicable Laws:
Unless otherwise specified, this agreement shall be governed by the laws of the State of Texas
No Warranty:
Consultant's makes no warranty, either expressed or impled, as to Consultant's findings, recommendations, plans, specifications, or professional
advice. Consultant has endeavored to perform its services in accordance with generally accepted standards of practice in effect at the time of
performance. Client recognizes that neither Consultant nor any of Consultant's subconsultants or subcontractors owes any fiduciary responsibility
Rev.9/98
to Client.
WYLIE CITY COUNCIL
AGENDA ITEM NO.
October 26, 1999
Issue:
Consider and act upon a motion to direct the City Manager to enter into a professional service agreement
with Stanland & Associates, As Needed for the re-write of the Comprehensive Zoning Ordinance for
the City of Wylie.
Background:
Per Council direction, the City Manager has negotiated a professional service contract with Raymond
E. Stanland of Stanland & Associates for the re-write of the Comprehensive Zoning Ordinance for the
City of Wylie. The contract under consideration is a multiphase re-write of our existing zoning
ordinance and consists of seven (7) phases. According to the schedule (see contract), Council could
consider adopting the initial phase (residential development standards) of the re-write within four (4)
months and the final few phases within eighteen (18) months. Also, it should be noted that the
consultant ( Stanland & Associates) will hire the consultants who developed the City of Wylie
Comprehensive Plan (Wallace, Roberts, & Todd) to assist in this project as outlined in the Scope of
Work. Specifically,the Comprehensive Plan consultants will provide expertise during the development
of all applicable design standards.
Raymond E. Stanland. AICP, with Stanland & Associates will make a presentation at the Council
meeting and be available to answer any questions you may have.
Financial Considerations:
Total project Costs in the amount of$149,220.00
Other Considerations:
Contractual agreements for professional services are exempt from statutory competitive bidding
requirements under the Professional Services Procurement Act and the Texas Local Government Code.
Commission Recommendation:
Not Applicable
Staff Recommendation:
Direct the City Manager to enter into a professional service agreement with Stanland & Associates, As
Needed for the re-write of the Comprehensive Zoning Ordinance for the City of Wylie.
Staff Recommendation:
Professional Service Agreement
44 Ai •r .A61 41 rait-(* (A)
Prepared by Rev e by Finance City Manager Approval
WYLIE CITY COUNCIL
AGENDA ITEM NO. t
October 26, 1999
Issue:
Consider and Act Upon a preliminary plat/development plan for the Creekside Estates Addition
proposed by ';Gary Defrain for Campbell Wylie Partners, for the property generally located at the
northeast corner of McCreary Road and McMillan Road and being all of a certain 296.441 acre tract out
of the John W. Mitchell Survey, Abstract No. 589 and the Lewis M. Marshall Survey, Collin County,
Texas.
Background:
The preliminary plat/development plan under consideration is for Creekside Estates. The applicant is
preliminary platting 296.441 acres in order to develop the property with a master planned single family
residential community. Specifically, the applicant is proposing a master planned community
encompassing single family and open space uses. The development plan aspect of this case is the final
step associated with establishing the PD(Planned Development) zoning requested. In order to establish
a PD(Planned Development), the developer must follow a two-step process which includes submitting
for approval a Conceptual Plan and a Development Plan.
The developer must first submit for approval a Conceptual Plan. The Conceptual Plan must show the
applicant's intent for the use of the land within the proposed development in a graphic manner as
required by Staff, and be supported by written documentation of proposals and standards for
development. The Conceptual Plan must also show thoroughfares, preliminary lotting arrangements and
other pertinent development data deemed necessary.
Once Staff has determined that the applicant has provided sufficient information, a Public Hearing must
be held at which the Conceptual Plan will be submitted to the Planning and Zoning Commission to
consider recommending approval or denial of the Conceptual Plan to the City Council. Once the
Planning and Zoning Commission has taken action, the City Council will call a Public Hearing at which
the Conceptual Plan will be submitted for approval.
The Second phase of establishing a PD District is submitting for approval a Development Plan. The
Development Plan shall set forth the final plans for the PD District and shall conform to the data
presented and approved on the Conceptual Plan. The Development Plan is a complete site inventory
analysis of what is to be developed. The ordinance establishing the PD District will not be approved
until a Development Plan has been approved.
Other Considerations:
• Staff has reviewed the proposed preliminary plat/development plan for Creekside Estates and found
it to be in compliance with the concept plan approved by the Commission and Council. This
preliminary plat/development plan also complies with the Subdivision regulations and other pertinent
ordinances of the City of Wylie.
• The City's traffic consultant (Stanton Foerster) has reviewed the proposed development plan and
is recommending approval. Please note the applicant is aware that their participation in the
signalization of the FM 544/McCreary Road and McMillen/McCreary road intersections will be
required at the time final plats are submitted.
• It should be noted that all issues associated with above ground storm water retention should be
addressed at the time final plats are submitted for consideration and that it is the applicant's
responsibility to provide detailed engineering studies verifying the integrity of the proposed system
(The applicant has submitted a detailed Floodplain Hydrology & Hydraulics study). The City
Engineer will be present to answer any questions the Council may have regarding the applicant's
preliminary drainage and retention plans.
• The applicant is aware that a final plat must be approved prior to the issuance of any building
permits.
Financial Considerations:
Application fee in the amount of$1,633.00 -Paid
Commission Recommendation:
At the October 5, 1999, Planning and Zoning Commission meeting, the Commission voted unanimously
to favorably recommend this case.
Staff Recommendation:
Approval, subject to the following stipulation being verified at the time of final platting: Final approval
of all applicable engineering plans by the City's Consulting Engineer. The Departments of Public Works,
fire, and Community Development concur with this recommendation
Attachments:
Proposed Land Data
Preliminary Plat/Development Plan
Ordinance
A. e2cC )91 )4)141Z.
/74
Prepai d b evie : by mance City Manager Approval
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF WYLIE, TEXAS,
AMENDING THE COMPREHENSIVE ZONING
ORDINANCE OF THE CITY OF WYLIE, AS
HERETOFORE AMENDED, SO AS TO CHANGE THE
ZONING ON THE HEREINAFTER DESCRIBED
PROPERTY TO PD, PLANNED DEVELOPMENT
DISTRICT CLASSIFICATION; PROVIDING FOR THE
REPEAL OF ALL ORDINANCES IN CONFLICT;
PROVIDING A SEVERABILITY CLAUSE; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the Planning and Zoning Commission and the governing body of the City of
Wylie, Texas, in compliance with the laws of the State of Texas with reference to the amendment
of the Comprehensive Zoning Ordinance, have given the requisite notices by publication and
otherwise, and after holding due hearings and affording a full and fair hearing to all property
owners generally and to owners of the affected property, the governing body of the City is of the
opinion and finds that the Comprehensive Zoning Ordinance and Map should be amended;
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
WYLIE, TEXAS:
SECTION 1.
That the Comprehensive Zoning Ordinance of the City of Wylie, Texas, be, and the same
is hereby, amended by amending the Zoning Map of the City of Wylie, to give the hereinafter
described property a new zoning classification of PD, Planned Development District
Classification, said property being described in Exhibits "A&B" attached hereto and made a part
hereof for all purposes.
SECTION 2.
That all ordinances of the City in conflict with the provisions of this ordinance be, and the
same are hereby, repealed and all other ordinances of the City not in conflict with the provisions
of this ordinance shall remain in full force and effect.
SECTION 3.
That the above described property shall be used only in the manner and for the purposes
provided for in the Comprehensive Zoning Ordinance of the City, as amended herein by the
granting of this zoning classification.
SECTION 4.
Any person, firm or corporation violating any of the provisions of this ordinance or the
Comprehensive Zoning Ordinance, as amended hereby, commits an unlawful act and shall be
subject to the general penalty provisions of Section 38 of the Zoning Ordinance, as the same now
exists or is hereafter amended.
SECTION 5.
Should any paragraph, sentence, subdivision, clause, phrase or section of this ordinance be
adjudged or held to be unconstitutional, illegal or invalid, the same shall not affect the validity of
this ordinance as a whole or any part or provision thereof, other than the part so declared to be
invalid, illegal or unconstitutional, and shall not affect the validity of the Comprehensive Zoning
Ordinance as a whole.
SECTION 6.
This ordinance shall be in full force and effect from and after its adoption by the City
Council and publication of its caption as the law and the City Charter provide in such cases.
SECTION 7.
The repeal of any ordinance, or parts thereof, by the enactment of this Ordinance, shall not
be construed as abandoning any action now pending under or by virtue of such ordinance; nor
shall it have the effect of discontinuing, abating, modifying or altering any penalty accruing or to
accrue, nor as effecting any rights of the municipality under any section or provisions of any
ordinances at the time of passage of this ordinance.
DULY PASSED AND APPROVED by the City Council of the City of Wylie,
Texas, this day of , 1999.
By
John Mondy, Mayor
ATTEST:
Barbara Salinas, City Secretary
WYLIE CITY COUNCIL
AGENDA ITEM NO. L_6
October 26, 1999
Issues:
Consider and act upon a final plat for Phase iC of the Harvest Bend Addition proposed by Douphrate&
Associates, Inc., for the property generally located at the southwest corner of FM 2514 (Ballard Street)
and Dog Drop Road and being all of a certain 20.054 acre tract out of the W.D. Penny Survey, Abstract
No. 696, City of Wylie, Collin County, Texas.
Background:
The final plat under consideration is for Phase I of the proposed Harvest Bend subdivision. The
applicant is final platting 20.054 acres of land in order to develop the property with single family
residential uses. The property is currently vacant, unplatted, and zoned for SF-3 (Single Family
Residential) uses.
Other Considerations:
• Staff has reviewed the proposed preliminary plat and found it to be in compliance with the
Subdivision Regulations and other pertinent ordinances of the City of Wylie.
• Section 5.01C.(b)of the Subdivision Regulations states that where development phasing of
the land prevents the provision of a second means of access, the city may accept a median
divided street or divided entry to satisfy the requirement of two means of access or approach.
The applicant is proposing a divided approach onto Ballard Street (70 right-of-way). Staff
has reviewed the proposal and is recommending approval. Specifically, the applicant has
stated that phase II will be under construction within the next year and, therefore, will
provide secondary access around the same time homes are being occupied within phase I.
• The applicant is aware that all applicable issues and permits concerning development/access
on the North Texas Municipal Water District Easement must be resolved prior to scheduling
a final plat for hearing by the City Council (Staff will provide a letter from North Texas at
the meeting).
• In an effort to provide some of the newly annexed areas along Parker Road sewer service,
the applicant has agreed (at the applicant's expense) to build an off-site extension of their
service along the south side of Parker Road west to the veterinary office. Said service will
enable the properties along Parker Road to hook up to the sewer system at a later date.
• The applicant is aware that final water and sewer connections must be approved by the
Consulting Engineer.
Financial Considerations:
Plat application fee in the amount of$600.00 - Paid
Commission Recommendation:
At the October 19, 1999, Planning and Zoning Commission meeting, the Commission voted unanimously
to favorably recommend this case per the staff stipulations.
Staff Recommendation:
Approval, subject to engineering approval of the final water and sewer connections. The Department's
of Public Works, Fire, and Community Development concur with this recommendation.
Attachments:
Final Plat Application
Final Plat
Prepared Revs ed by Financ,' City Manager Approval
Feb 05 98 10: 05a Rebecca Rogers 97L-442-8154 F' • 1
REG'D JUN 16 1999
Page 1 of 3 City of Wylie
(1/95)
•
APPLICATION AND FINAL PLAT CHECKLIST
•
Date June16, 1 999
Name of Proposed Development Harvest Bend Addition
Name of Property Owner/Developer B&D Land, L.C. /Harlan Prop. Inc.
Address2314 E. Hebron Parkway,Carrollton Tx Phone 972_939_8871
75010
Owner of Record Same as Above
Address Phone
Name of Land Planner Douphrate & Associates, Inc.
Surveyor/Engineer
Address 2231 Ridge Rd., #200, Rockwall TX 75087 Phone 972-771 -9004
Total Acreage 36 .425 Current Zoning SF-2
Number of Lots/Units 14 9
Signed GvZ
The Final Plat shall generally conform to the Preliminary Plat, as approved by the City Council and
shall be drawn legibly to show all data on a scale not smaller than 1" = 100' with a graphic scale
provided. Six sets of direct prints and three Mylars of all originals, plus one on Mylar to be 17-1/2"
x 23-3/4" shall be submitted. Plats prepared using AutoCad or other computer aided design
techniques shall also provide a copy of all drawings on diskette to the City.
•
The following Final Plat Checklist is used to check compliance with the Wylie Subdivision
Regulations. The following checklist is intended only as a reminder and a guide for those
•
requirements.
Page2of3 . ,
WYLIE CITY COUNCIL
AGENDA ITEM NO. 6,
October 26, 1999
Issue
Consider and act upon approval of a resolution amending the current investment policy as required by
the Texas Government Code, Chapter 2256,Public Fund Investment Act, Subchapter A-Authorized
Investment for Governmental Entities.
Background
Chapter 2256 of the Texas Government Code, requires that the governing body of an investing entity
review its investment policy and investment strategies not less than annually. The Finance Department
has completed its review of the policy, in the light of the amendments to the Code made in the 1999
Legislative Session(House Bill 3009, attached). No changes in the City's policy are required by these
amendments. However, the Finance Department made some changes to the policy to make it a less
cumbersome document.
Changes to the document include the following:
• The current document lists all investments permitted by the law and follows that with a list of
investments not authorized by the City. The revised document lists only those investments
authorized by the City. Investments authorized by the City include obligations of the United
States or its agencies and instrumentalities (e.g., Treasury Notes, FNMA's), Certificates of
Deposit, Repurchase Agreements, Commercial Paper, and Investment Pools. Mutual Funds have
been deleted from the list of authorized investments. The entire text of Chapter 2256, Subchapter
A has been included in the document as Appendix C and details all investments authorized by the
State.
• In the Investment Strategy, the current document lists the specific individual funds (e.g., Street
Capital Project Fund) that the City has set up. In the revised document, the funds are listed by
type (e.g., Capital Project Funds), so that the staff is not required to come to the Council to
revise the document whenever a new fund is created.
• The policy has been reformatted to two columns per page for easier reading and includes three
appendices. Appendix A is the Broker/Dealer Questionnaire, Appendix B is the Certification by
Dealer, and Appendix C, as mentioned above, is the text of Chapter 2256, Subchapter A.
Financial Considerations
None
Other Considerations
Annual review of the investment policies and adoption of any changes to the City's Investment Policy
is mandated by the Public Funds Investment Act, Chapter 2256.005 of the Government Code.
Staff Recommendations
The Staff recommends that Council adopt the amended resolution updating the Investment Policy.
Attachments
Resolution Amending the Investment Policy
Investment Policy
House Bill 3009
) .
')114L,_ L&k'
re ared by eview y Finance City Manager Approval
RESOLUTION NO.
A RESOLUTION of the City Council of the City of Wylie, Texas, amending the current
investment policy, providing for scope of this policy, providing for investment objectives,
providing for an investment committee, providing for delegation of authority, providing
investment strategies by pooled fund groups,providing for standard of care, providing for
other investment guidelines, providing for investments authorized by the City of Wylie,
providing for portfolio diversification and maturity limits, providing for selection of
brokers/dealers, providing for selection of depositories, providing for safekeeping and
custody,providing for record keeping and reporting,providing for ethics and conflicts of
interest, providing for policy revisions, and making various finds and provision related to
the subject.
WHEREAS,the 1999 Legislature of the State of Texas enacted House Bill 3009 amending
the Public Funds Investment Act; and
WHEREAS, the Public Funds Investment Act, as amended, requires the City to adopt an
investment policy by rule, order, ordinance or resolution; and
WHEREAS, the Public Funds Investment Act, as amended, requires that the City's
investment policy be reviewed by the governing body not less than annually;
WHEREAS,the attached investment policy and any incorporated revisions comply with the
Texas Government Code, Chapter 2256, Public Funds Investment Act, Subchapter A- Authorized
Investments for Governmental Entities and Subchapter B - Miscellaneous Provisions as amended;
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WYLIE, THAT the City of Wylie has complied with the requirements of the Public Funds
Investment Act and the Investment Policy, as amended and attached hereto is hereby adopted as the
investment policy of the City effective October 26, 1999.
PASSED AND ADOPTED this 26th day of October, 1999.
CITY OF WYLIE, TEXAS
Mayor
City of Wylie, Texas
INVESTMENT
POLICY
Adopted May 1995
Draft Revision October 26, 1999
CITY OF WYLIE, TEXAS
INVESTMENT POLICY
Table of Contents
I. INTRODUCTION 1
II. SCOPE 1
III. OBJECTIVES 1
Safety 1
Liquidity 1
Diversification 1
Yield 1
IV. INVESTMENT COMMITTEE 2
V. DELEGATION OF AUTHORITY 2
VI. INVESTMENT STRATEGY 3
Operating Funds 3
Debt Service Funds 4
Debt Service Reserve Funds 4
Special Projects and Special Purpose Funds 4
VII. STANDARD OF CARE 4
VIII. INVESTMENTS AUTHORIZED BY THE CITY 5
IX. OTHER INVESTMENT GUIDELINES 6
X. DIVERSIFICATION AND MATURITY LIMITS 6
XI. SELECTION OF BROKER/DEALERS 6
XII. SELECTION OF DEPOSITORIES 7
XIII. SAFEKEEPING AND CUSTODY 8
XIV. RECORD KEEPING AND REPORTING 8
XV. ETHICS AND CONFLICTS OF INTEREST 9
XVI. POLICY REVISIONS 10
APPENDIX A- BROKER/DEALER QUESTIONNAIRE
APPENDIX B - CERTIFICATION BY DEALER
APPENDIX C - PUBLIC FUNDS INVESTMENT ACT
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
I. INTRODUCTION III. OBJECTIVES
Chapter 2256 of Title 10 of the Local Government The City's principal investment objectives, in order of
Code (herein after referred to as the "Public Funds priority, are listed below.
Investment Act")prescribes that each city is to adopt
written rules governing its investment practices and to Safety. The primary objective of the City's investment
define the authority of the investment officer. The activity is the preservation of principal(capital)in the
following Investment Policy addresses the methods, overall portfolio. Each investment transaction shall
procedures, and practices which must be exercised to seek first to ensure that capital losses are avoided,
ensure effective and judicious fiscal management of whether the loss occurs from the default of a security
the City's funds. This Policy shall not apply to the or from erosion of market value.
selection, retention or other issues concerning the
depositories of the City's funds in demand and time Liquidity. The City's investment portfolio will remain
deposits as provided under Chapter 105 of the Local sufficiently liquid to enable the City to meet operating
Government Code. requirements that might be reasonably anticipated.
Liquidity shall be achieved by matching investment
II. SCOPE maturities with forecasted cash flow requirements,by
investing in securities with active secondary markets,
This Policy shall apply to the investment and and by using state or local investment pools.
management of all funds of the City under its control,
other than those expressly excluded herein or by Diversification. The governing body recognizes that in
applicable law or valid agreement. This Policy shall a diversified portfolio,occasional measured losses due
not supersede the restrictions on investment and use to market volatility are inevitable, and must be
applicable to any specific fund and,in the event of any considered within the context of the overall portfolio's
conflict between this Policy and the requirements of return,provided that adequate diversification has been
any fund subject hereto, the specific requirement implemented. Therefore, assets held in the common
applicable to such fund shall be followed as well as all investment portfolio shall be diversified to eliminate
other provisions of this Policy other than those in the risk of loss resulting from one concentration of
conflict. The Employees Deferred Compensation assets in a specific maturity, a specific issuer or a
Agency Fund is excluded from coverage under this specific class of securities.
Policy.
Yield. The investment portfolio goal (benchmark)
In order to make effective use of the City's resources, against which the yield is compared will be established
all monies shall be pooled into one investment bank from time to time by the Finance Director.
account, except for those monies required to be Recommendations by the Investment Committee will
accounted for in other bank accounts as stipulated by be considered when the performance measure is being
applicable laws, bond covenants or contracts. The established. Efforts to seek higher than the above goal
investment bank account will be maintained by pooled must be consistent with risk limitations identified in
fund group for purposes of implementing pooled fund this policy and prudent investment principles. The
strategies and reporting. The income derived from City's investment portfolio shall be designed with the
this pooled investment account shall be distributed by objective of attaining a rate of return which is
fund in accordance with the City's internal procedures. consistent with the risk limitations and cash flow
characteristics of the City's investments.
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 1
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
IV. INVESTMENT COMMITTEE The Director shall develop and maintain written
administrative procedures for the operation of the
An investment committee consisting of the City investment program consistent with this Policy. The
Manager, Director of Finance, designated investment controls shall be designed to prevent, identify and
officer,and an outside ex-officio member,will meet on control losses of public funds arising from deviation
a quarterly basis. The Investment Committee shall be from this Policy, fraud, employee error,
authorized to invite advisors to the meetings as needed, misrepresentation by third parties,or imprudent actions
including,but not limited to,the city attorney and other by employees and officers of the City.
outside advisors.
With written approval from the City Manager, the
The investment officer will present a brief report of Director may delegate any phase of the investment
investment activities to the Investment Committee. management program to members of the City staff.
The primary objectives of the committee will be to Such approval shall state specifically the functions
such person is authorized to perform or that the person
(1) make recommendations to council regarding is authorized to perform all activities of the Director
investment strategies as proposed by the under this Policy. The Director shall obtain and
Director, maintain, at the City's expense, fidelity bonds for
(2) approve a list of authorized brokers, dealers, himself and each of his designees in amounts
banks, savings and loans, credit unions, and determined adequate by the Director(which shall not
pools as recommended by the Director, be less than five percent of the amounts subject to this
(3) recommend to council a list of authorized Policy) for each fiscal year as shown by the approved
training sources for the state mandated budget. No person may engage in an investment
investment training, transaction except as provided under the terms of this
(4) monitor program results. Policy and the internal procedures established by the
Director. A current list of persons authorized to
The committee shall include in its deliberations such transact investment business and wire funds on behalf
topics as performance reports, economic outlook, of the City shall be maintained by the Director.
portfolio diversification, maturity structure, potential
risk to the city's funds, and the target rate of return on Training is required for the Director, and members of
the investment portfolio. The Investment Committee the Director's staff(investment officers)must attend a
shall provide for minutes of its meetings. training session on responsibilities within 12 months of
taking office. One-time comprehensive investment
V. DELEGATION OF AUTHORITY training (i.e., GFOA's Investment and Cash
Management courses) will be required for each
Management responsibility for the investment program investment officer. The Director and investment
is delegated by the City Council to the City Manager officers authorized to conduct transactions for the City
who will designate the Finance Director as Investment pursuant to this policy shall attend at least one
Officer(hereinafter referred to as the "Director"). The investment training session for a total of ten hours of
Director's authority will at all times be limited by training in each two year period. Staff is also required
conformance with all Federal regulations, State of to attend at least one professional association meeting
Texas statutes and other legal requirements including annually. The City of Wylie will encourage its
the City Charter and City Ordinances, including this investment officers to obtain professional credentials.
Policy.
Mandated training must include education in
investment contracts, security risks,market risks, and
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 2
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
compliance with Chapter 2256, Public Funds OPERATING FUNDS. Investment strategies for
Investment of the Government Code. Training must be operating funds have as their primary objective to
from an independent source. The independent training assure that anticipated cash flows are matched with
sources adopted by the City of Wylie are Texas adequate investment liquidity. The secondary
Municipal League (TML), Texas City Management objective is to create a portfolio structure which will
Association(TCMA),Council of Government(COG), experience minimal volatility during economic cycles.
Government Treasurer's Organization of Texas This may be accomplished by purchasing high quality,
(GTOT),Government Finance Officers'Association of short to medium term securities which will
Texas (GFOAT). complement each other in either a laddered or a barbell
structure. The dollar weighted average maturity of 365
At the discretion of either the City Manager or the days or less will be calculated using the stated final
Director and in any event upon the termination or maturity dates of each security.
reassignment of any member of the Director's staff
authorized to conduct transactions for the City pursuant a. Short and Very Liquid Portfolios. The primary
to this Policy, the authority of such person shall be objective for these funds will be liquidity and
revoked and such revocation of authority shall be reasonable market yield. Funds will be invested in
immediately communicated by the Director orally and accordance with the investment policy. The authorized
in writing to each and every depository,broker/dealer, securities chosen or pool utilized for this portfolio will
investment advisor, custodian and other agency or be of the highest quality and marketability supporting
entity with whom the City has any existing or the City's objectives of safety and liquidity. Securities,
continuing relationship in the management of its when not matched to a specific liability, will be short
investments. 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
VI. INVESTMENT STRATEGY sector. Diversification requirements can be fully met
through use of an authorized investment pool.
Investment strategies must be reviewed annually by the
City Council and changes to strategies must be in The weighted average maturity on the pooled
written form from the City Council. Strategies must investment group will be no greater than ninety (90)
address suitability of the investment to the City of days. Because the funds are pooled for investment
Wylie, preservation and safety of principal, purposes, the portfolio will address the varying needs
marketability of the securities,liquidity,diversification of all funds in the pooled fund, recognizing liquidity
and yield. needs as well as the desire to extend slightly for
incremental return on core funds in the pool.
The City of Wylie maintains portfolios by pooled fund
group. The pooled groups utilize four specific b.Slightly Longer and More Aggressive Approach. The
investment strategies designed to address the unique strategy of the pool is to support the objectives of the
characteristics of the pooled funds represented in the investment policy on these funds for safety and assure
portfolio. These pooled fund groups include Operating that cash flows are matched with adequate liquidity
Funds, Debt Service Funds, Debt Service Reserve while obtaining market yields. This will be
Funds,and Capital Projects and Special Purpose Funds. accomplished by purchasing quality short-term liquid
Investment strategies for the funds groups are detailed securities in a laddered structure or utilizing an
below, investment pool. The dollar weighted average maturity
will be 180 days or less to accomplish this goal. The
portfolio shall be diversified to protect against market
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 3
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
and credit risk in any one sector. Diversification quality, with short to intermediate term maturities.
requirements can be fully met through use of an Except as may be required by the bond ordinance
authorized investment pool. specific to an individual issue, securities should be of
high quality, with short to intermediate-term
c. Long Term Portfolio with Substantial Core Funds. maturities. These securities shall be further controlled
Investment strategies for operating funds and through the purchase of securities carrying the highest
commingled pools containing operating funds have as yieldavailable,within the desired maturity and quality
their primary objective the assurance that anticipated range.
cash flows are matched with adequate investment
liquidity. The objectives of the funds will include CAPITAL PROJECTS AND SPECIAL PURPOSE
attainment of the highest market yields. The secondary FUNDS.The investment strategies for special projects
objective is to create a portfolio structure which will or special purpose fund portfolios will have as their
experience minimal volatility during economic cycles. primary objective to assure that anticipated cash flows
This may be accomplished by purchasing quality, are matched with adequate investment liquidity for the
short-term and intermediate securities which will safety of the funds and the completion of the targeted
complement each other in a laddered maturity projects. These portfolios should include at least 10%
structure. These structures will be diversified as to in highly liquid securities to allow for flexibility and
market sector and maturity to protect the funds from marketability of the securities should funds be needed
market and credit risk. The dollar weighted average for unanticipated project outlays. A diversified
maturity of 365 days or less will be calculated using portfolio structured with laddered maturities to match
the stated final maturity dates of each security. anticipated cash flows will be used to provide a
reasonable market yield in those comparable maturity
Operating Funds are: sectors. The stated final maturity dates of securities
General Fund held should not exceed the estimated project
Special Revenue Funds completion date.
Enterprise Funds
Capital Projects and Special Purpose Funds
DEBT SERVICE FUNDS. Investment strategies for are
debt service funds shall have as the primary objective Capital Projects Funds
the assurance of investment liquidity adequate to cover Internal Service Funds
the debt service obligation on the required payment
date. Since this is one of the highest priorities of the
City, securities will be chosen with the highest
priorities of safety. Securities will be chosen for their VII. STANDARD OF CARE
maturity dates and not require the highest degree of
diversification. Securities purchased shall not have a Investments shall be made with judgment and care,
stated final maturity date which exceeds the debt under prevailing circumstances, that a person of
service payment date and shall be chosen secondarily prudence, discretion, and intelligence would exercise
with regard to yield and diversification. in the management of the person's own affairs,not for
speculation, but for investment, considering the
DEBT SERVICE RESERVE FUNDS. The investment probable safety of capital and the probable income to
strategy for the debt service reserve fund shall have as be derived. Investment of funds shall be governed by
the primary objective the ability to generate a the following investment objectives, in order of
dependable revenue stream from securities with a low priority:
degree of volatility. Securities should be of high
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 4
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
(1) preservation and safety of principal; 2. Certificates of deposit and share certificates
issued in the State of Texas with a maximum
(2) liquidity; and security of 18 months or less and insured by
the Federal Deposit Insurance Corporation or
(3) diversification; and its successor or the National Credit Union
Share Insurance Program or its successor, or
(4) yield. secured by obligations that are described in
Section 2256.009(a)of the Government Code.
In determining whether an investment officer has
exercised prudence with respect to an investment 3. Fully collateralized direct repurchase
decision, the determination shall be made taking into agreements with a defined termination date of
consideration: 180 days or less which are secured by
obligations of the United States or its agencies
(1) the investment of all funds, or funds under the and instrumentalities and pledged with a third
City's control, over which the officer had party other than an agent or pledgor in the
responsibility rather than a consideration as to City's name. The agreement must be placed
the prudence of a single investment; and through a primary government securities
dealer, as defined by the Federal Reserve, or
(2) whether the investment decision was by a financial institution doing business in the
consistent with the written investment policy State of Texas. Each issuer of repurchase
of the City. agreements shall be required to sign a master
repurchase agreement.
The Director and his staff shall recognize that the
investment activities of the City are a matter of public 4. Commercial paper that has a stated maturity of
record. Therefore, all participants in the investment 270 days or fewer from the date of its issuance
process shall seek to act responsibly as custodians of and that is rated not less that A-1 or P-1 or an
the public trust. Investment officials shall avoid any equivalent rating by at least two nattionally
transactions that might impair public confidence in the recognized credit rating agencies or one
City's ability to govern effectively. nationally recognized credit rating agency and
is fully secured by an irrevocable letter of
credit issued by a bank organized and existing
VIII.INVESTMENTS AUTHORIZED BY THE under the laws of the United States or any
CITY OF WYLIE state.
Authorized investments for municipal governments in 5. Approved investment pools as described in
the State of Texas are set forth in the Public Funds Section 2256.016 which are continuously rated
Investment Act, as amended (Section 2256.009- no lower than AAA, AAA-m or an equivalent
2256.019, Government Code). Suitable investments rating by at least one nationally recognized
for the City of Wylie are limited to the following. rating agency and have a weighted average
maturity no greater than 90 days.
1. Direct obligations of the United States or its
agents and instrumentalities with a stated
maturity of 2 years or less.
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 5
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
IX. OTHER INVESTMENT GUIDELINES specific class of securities, with the exception of U.S.
Treasury issues. The asset allocation in the portfolio
The City seeks active management of its portfolio should, however, be flexible depending upon the
assets. In order to meet the objectives of this Policy, outlook for the economy and the securities markets.
the City may from time to time sell securities that it
owns in order to better position its portfolio assets. The City will not exceed the following maximum
Sales of securities prior to maturity shall be limits as a percentage of the total portfolio for each of
documented and approved by the Director before such the categories listed below:
a transaction is consummated. Sales of securities Maximum
yielding net proceeds less than 98% of the book value %of Maximum
of the securities must be approved in advance and in Investment Category Portfolio Maturity
writing by the City Manager. Three examples of
situations involving the sale of securities prior to Obligations of the United 100% 2 years
maturity are States or its agencies and
instrumentalities.
(1) swap - to sell an investment to realize a Certificates of Deposit&
capital gain, Share Certificates 30% 18 mon.
(2) to better position selected investments due Repurchase Agreements 100% 90 days
to a change in market conditions, NOT Reverse Repurchase
Agreements
(3) to react to emergency liquidity demands. Commercial Paper 5% 270 days
Each investment transaction must be based upon Investment Pools 100% n/a
competitive quotations received from at least three
broker/dealers who have been approved by the City in The Director shall evaluate how each security
accordance with Texas law. purchased fits into the City's overall investment
strategy.
The purchase and sale of all securities shall be on a
delivery versus payment or payment versus delivery At all times the City shall maintain 10 percent of its
basis(i.e., for securities purchases, monies will not be total investment portfolio in instruments maturing in
released by the City's safekeeping bank until securities 90 days or less. The weighted average maturity of all
are received at the Federal Reserve Bank for further securities and certificates of deposit in the City's total
credit to the City's safekeeping bank. In the case of investment portfolio at any given time (not including
securities sales,monies will be received by the City's cash or demand deposits)shall not exceed one and one-
safekeeping bank via the Federal Reserve Bank as the half years.
securities are simultaneously released to the
purchaser). In this manner the City will always have Maturities shall be selected which provide for both
possession of either its securities or its monies. stability of income and reasonable liquidity.
X. DIVERSIFICATION AND MATURITY XI. SELECTION OF BROKERS/DEALERS
LIMITS
The City shall maintain a list of broker/dealers and
It is the policy of the City to avoid concentration of financial institutions which have been approved for
assets in a specific maturity, a specific issue, or a investment purposes by the investment committee.
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 6
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
(For the purpose of this investment policy, Certification language should be mutually acceptable
Broker/dealer will be used to refer to any brokerage to both parties. An investment officer of the City may
firm, bank, investment pool, or financial institution not buy any securities from a person who has not
with whom the City does investment business). delivered to the City an instrument substantially in the
Securities may only be purchased from those form provided by this policy.
authorized institutions and firms. The authorized
broker/dealers will be reviewed at least annually. To The Director shall review the quality of service and
be eligible, a broker/dealer must meet at least one of financial stability of each broker/dealer and financial
the following criteria: 1) be recognized as a Primary institution approved under this Section at least
Dealer as defined by the New York Federal Reserve annually. Any approved broker/dealer or financial
Market Reports Division; or 2)comply with Securities institution may be removed from the list of approved
and Exchange Commission Rule 15C3-1,the Uniform broker/dealers with the approval of the Director, if in
Net Capital Requirement Rule. the opinion of the Director,the firm has not performed
adequately or its financial position is considered
Broker/dealers will be selected and recommended to inadequate.
the investment committee by the Director on the basis
of their financial stability, expertise in cash XII. SELECTION OF DEPOSITORIES
management and their ability to service the City's
account. Each broker/dealer that has been authorized The City shall maintain a list of authorized banks and
by the City shall be required to submit and annually savings and loans which are approved to provide
update a Broker/Dealer Information Request form Certificates of Deposit. To be eligible for
which includes the firm's most recent financial authorization, a bank or savings and loan must be
statements. The Director shall maintain a file which members of the FDIC and meet the minimum credit
includes the most recent Broker/Dealer Information criteria(described below)of a credit analysis provided
Request forms submitted by each firm approved for by a commercially available bank rating service such
investment purposes. A copy of the submitted as Prudent Man Analysis, Inc., or Sheshunoff Public
Broker/Dealer Information Request forms as well as a Finance Bank Rating Service. Banks or savings and
list of those broker/dealers approved by the City shall loans failing to meet the minimum criteria or, in the
be maintained by the Director(See Appendix A). judgement of the Director, no longer offer adequate
safety for the City will be removed from the list.
Investment Policy Acknowledgment. The City of Wylie
will provide all approved securities dealers with a copy Bank rating guidelines will be calculated using
of the City's Investment Policy. A principal in the firm publicly available information obtained from the
must execute a written statement acknowledging Federal Reserve, the Comptroller of the Currency, or
receipt and review of the policy and a statement the banking institution itself. Data obtained from bank
acknowledging that reasonable procedures and controls rating services will include factors covering the
have been implemented to preclude imprudent following: overall rating, liquidity policy, credit risk
investment activities being conducted between the policy, interest rate policy, profitability and capital
entity and the securities firm (See Appendix B). policy. Financial institutions selected to issue
certificates of deposit to the City in excess of$100,000
All approved broker/dealer firms must have a or that are selected as Safekeeping or Custodial agents
completed City of Wylie broker/dealer questionnaire, for the City shall meet the following criteria: 1)have
investment policy,written acknowledgment per above a Sheshunoff Public Finance Peer Group Rating of
guidelines, executed master repurchase agreement, if thirty or better on a scale of zero to one hundred with
applicable, and current financial information on file. one hundred being the highest rating at the time of
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 7
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
selection or 2) have a Prudent Man Express Analysis The City must approve release of securities in writing
overall rating of three or better on a scale of one to five prior to their removal from the custodial account. A
with one being the highest quality for the most recent telephone facsimile of a written authorization shall be
reporting quarter before the time of selection, and 3) sufficient if the custodian orally confirms receipt of the
qualify as a depository of public funds in the State of transmission and an exact copy of the document is
Texas. retained in the City's files. In no event shall the
custodial bank be an authorized depository bank,issuer
The Director shall maintain a file of the credit rating of repurchase agreements in which the City invests or
analysis reports performed for each approved firm. broker/dealer of securities on behalf of the City.
In addition to the foregoing requirements,with respect All securities shall be confirmed in the name of the
to bond proceeds and reserves or other funds City and delivered to an approved custodial bank or
maintained for debt service purposes, a depository of carried at a Federal Reserve Bank in the name of the
such funds must be selected by competitive bidding by City. The Custodian shall not otherwise deposit
two banks located within the boundaries of the City or purchased or pledged securities. All book entry
if there are not two banks available within the City's securities owned by the City shall be evidenced by a
boundaries that are willing and able to accept such safekeeping receipt issued to the City and signed by the
deposits,then at least three bids must be obtained from appropriate officer at the custodian bank stating that
banks situated in Collin County that are willing and the securities are held in the Federal Reserve system in
able to accept such deposits. a CUSTOMER ACCOUNT naming the City as the
"customer." In addition,the custodian bank will,when
XIII. SAFEKEEPING AND CUSTODY requested, furnish a copy of the delivery advice
received by the custodian bank from the Federal
Investment securities purchased for the City will be Reserve Bank.
delivered by either book entry or physical delivery and
shall be held in third-party safekeeping by a Federal All certificated securities(those transferred by physical
Reserve Member financial institution designated as the delivery) shall: 1) be held by an approved custodian
City's safekeeping and custodian bank. The City may bank or any correspondent bank in New York City
designate more than one custodian bank, but the approved by the Director; and 2) the correspondent
safekeeping banks shall not be a depository bank. The bank or the City's safekeeping bank shall issue a
City shall execute a Safekeeping Agreement with each safekeeping receipt to the City evidencing that the
bank prior to utilizing the custodian's safekeeping securities are held by the correspondent bank for the
services. Only a state or national bank located within City.
the State of Texas may be utilized as a custodian of
securities pledged to secure certificates of deposit. The The original safekeeping receipt for each transaction
safekeeping agreement must provide that the including purchased securities under a repurchase
safekeeping bank will immediately record and agreement and collateral securing deposits will be
promptly issue and deliver a signed safekeeping receipt forwarded to the Director or his designee and held in a
showing the receipt and the identification of the secured file by the City.
security, as well as the City's interest.
XIV. RECORD KEEPING AND REPORTING
The Director shall maintain a list of designated
custodian banks and a copy of the Safekeeping A record shall be maintained of all bids and offerings
Agreement executed with each custodian bank. for securities transactions in order to ensure that the
City receives competitive pricing. All transactions
City of Wylie Investment Policy
(As Revised January 9. 1998)
Page 8
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
shall be documented by the person authorizing the An investment report shall be prepared by the Director
transaction in a form that shows that person's name,the and signed by each officer and employee of the City
party instructed to execute the transaction, the date, a authorized to conduct any of the City's investment
description of the transaction and a brief statement of activity, on a quarterly basis listing all of the
the reason(s) for the transaction. investments held by the City, beginning and ending
market value for period, the current market valuation
At least once each quarter,the Director shall verify that of the investments and transaction summaries,
all securities purchased by or pledged to the City are including a detailed list of the gains and losses
on hand in appropriate form. The City, in conjunction recognized. The market value will be determined by:
with its annual financial audit, shall perform a (1)written reports such as the Wall Street Journal; (2)
compliance audit of management controls on on-line services such as Bloomberg; or (3) through a
investments and adherence to the City's established primary dealer or national bank that is independent of
investment policies. the specific security being valued. The report must
state the pooled fund group for each asset/security.
Each depository of the City's funds shall maintain The report shall explain the total investment return
separate, accurate and complete records relating to all during the previous quarter and compare the portfolio's
deposits of the City's funds, the securities pledged to performance to other benchmarks of performance. If
secure such deposits and all transactions relating to the invested in securities,the City's audit firm must review
pledged securities. Each approved custodian shall the quarterly reports annually and the result of the
maintain separate, accurate and complete records review shall be reported to the City Council by that
relating to all securities received on behalf of the City, auditor.
whether pledged, purchased or subject to repurchase
agreement, as well as all transactions related to such Within 90 days after the end of the City's fiscal year,
securities. In addition, each depository shall file all the Director shall prepare, sign and deliver to the City
reports required by the Texas State Depository Board. Manager and the City Council an annual report on the
Each depository and custodian shall agree to make all City's investment program and investment activity
the records described in this paragraph available to the which has also been signed by each officer and
Director's designee and the City's auditors at any employee of the City authorized to conduct any of the
reasonable time. City's investment activity. The annual report shall
include full year and separate monthly comparisons of
All broker/dealers, custodians, depositories and investment return. Such annual report shall include an
investment advisors shall maintain complete records of analysis of the compliance with this Policy as well as
all transactions that they conducted on behalf of the changes in the applicable laws and regulations during
City and shall make those records available for the previous year and may include any other items of
inspection by the Director or other representatives significance related to the investment program. The
designated by the City Council or City Manager. annual investment report will be reviewed as a part of
the annual audit.
All sales of securities for less than the book value of
the security shall be approved by the Director and XV. ETHICS AND CONFLICTS OF
reported to the City Council at the next regular INTEREST
meeting. Sales of securities for less than 98 percent of
the book value of the securities must be approved by Officers and employees of the City involved in the
both the City Manager and the Director. investment process shall refrain from personal business
activity that involves any of the City's approved
custodians, depositories,broker/dealers or investment
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 9
CITY OF WYLIE,TEXAS
INVESTMENT POLICY
advisors and shall refrain from investing in any disclosing that personal business interest. An
security issue held by the City. Employees and officers investment officer who is related within the second
shall not utilize investment advice concerning specific degree by affinity or consanguinity to an individual
securities or classes of securities obtained in the seeking to sell an investment to the City shall file a
transaction of the City's business for personal statement disclosing that relationship. A statement
investment decisions, shall in all respects subordinate required under this subsection must be filed with the
their personal investment transactions to those of the Texas Ethics Commission and the governing body of
City, particularly with regard to the timing of the City.
purchases and sales and shall keep all investment
advice obtained on behalf of the City and all XVI. POLICY REVISIONS
transactions contemplated and completed by the City
confidential, except when disclosure is required by This Investment Policy will be reviewed at least
law. annually by the City Manager,Director of Finance and
designated investment officer and revised when
An investment officer of the City who has a personal necessary. All revisions shall be approved by the City
business relationship with an organization seeking to Council.
sell an investment to the City shall file a statement
City of Wylie Investment Policy
(As Revised January 9, 1998)
Page 10
APPENDIX A
CITY OF WYLIE TEXAS
BROKER/DEALER QUESTIONNAIRE
The City of Wylie, Texas, (hereinafter referred to as the "City") manages a multi-million dollar
investment portfolio. The City has established written policies and procedures relating both to its
selection of appropriate portfolio securities and the selection of broker/dealers with whom it
conducts business.
City policy establishes that transactions relating to the purchase and/or sale of negotiable
government securities be conducted only primary securities dealers who regularly report to the
Market Reports Division of the Federal Reserve Bank of New York or dealers who qualify under
the Securities and Exchange Commission Rule 15C3-1 (Uniform Net Capital Rule).
•
The fact that a prospective broker/dealer is associated with one of these firms is not sufficient to
insure its eligibility to conduct business with the City. The demonstrated skill, experience and
reputation of the individual who has direct contact with the City are key factors in his/her
selection as an eligible broker/dealer. •
The following questionnaire is designed to demonstrate a prospective broker/dealer's ability to
properly serve the needs of the City. After review of the prospective broker/dealer's response to
this questionnaire, the City will make a determination as to the eligibility of the broker/dealer to
conduct business with the City. Please answer all questions as fully as possible.
1.Name of Firm
2. Address(local)
3. Address(national)
4.Telephone(local) (national)
5.Direct Representative: Name
Title Telephone
6.Branch Manager: Name
Title Telephone
7.National Supervisor: Name
Title Telephone
8. Is your firm a primary dealer in U.S. Government securities, reporting to the Market Reports
Division of the Federal Reserve Bank of New York? YES or NO
9. Does your firm qualify by complying under the Securities and Exchange Commission Rule
15C3-1,the Uniform Net Capital Requirement Rule? YES or NO
City of Wylie
Broker/Dealer Questionnaire
Page 1 of 3
APPENDIX A
10.How long has the Direct Representative been a Government Securities Broker?
years
11. Identify and provide background information on all personnel who will be accepting orders
(or quoting prices to)City Cash Management Personnel. For each individual,list name, function,
registrations held, states where registered, length of time with the firm, and immediate
supervisor's name and telephone number(attach additional pages,if necessary).
Name Telephone Number
City and State where individual is located
Job Function
Registrations
States where registered
Length of time with firm
Immediate Supervisor Telephone Number
Name - Telephone Number
City and State where individual is located
Job Function
Registrations
States where registered
Length of time with firm
Immediate Supervisor Telephone Number
Name Telephone Number
City and State where individual is located
Job Function
Registrations
States where registered
Length of time with firm
Immediate Supervisor Telephone Number
City of Wylie
Broker/Dealer Questionnaire
Page 2 of 3
APPENDIX A
12. Provide the name and telephone number of the person who performs your day-to-day
operation functions.
Name Telephone Number
13.Who is your clearing bank?
14.What are your wire instructions?
Federal Reserve Bank
Commercial Bank •
ABA Number
Account Number
15.Will the City be charged any fees on delivery or receiving of securities by your firm?
YES or NO
16.Enclose samples of the following documents:
Customer Confirmation of a Transaction
Monthly Customer Statement
Your firm's most recent Annual Report
17. Provide a list of references of public-sector clients who are similar to the City of Wylie and
with whom your direct representative has an established business relationship. The City of Wylie
is particularly interested in references that are located in the State of Texas. For each reference,
please provide the following information:
Name of Client
Address(City and State)
Direct client contact name and telephone number
Length of relationship(years)
Typical investment transactions
City of Wylie
Broker/Dealer Questionnaire
Page 3 of 3
APPENDIX B
CITY OF WYLIE,TEXAS
TEXAS PUBLIC FUNDS INVESTMENT ACT
CERTIFICATION BY DEALER
This certification is executed on behalf of the City of Wylie and
(the Dealer) pursuant to
the Public Funds Investment Act, Chapter 2256, Government Code, Texas Codes
Annotated (the Act) in connection with investment transactions conducted between the
City of Wylie and the Dealer.
The undersigned Qualified Representative of the Dealer hereby certifies on behalf of the
Dealer that
1. The Dealer Qualified Representative is duly authorized to execute this Certification
on behalf of the Dealer, and
2. The Dealer Qualified Representative has received and reviewed the Investment Policy
furnished by the City of Wylie, and
3. The Dealer has implemented reasonable procedures and controls in an effort to
preclude investment transactions conducted between the Dealer and the City of Wylie
that are not authorized by the City's investment policy, except to the extent that this
authorization is dependent on an analysis of the makeup of the entity's entire
portfolio or requires an interpretation of subjective investment standards.
Dealer Qualified Representative
Signature
Name(Printed)
Title
Date
APPENDIX C
CHAPTER 2256. PUBLIC FUNDS INVESTMENT (6) "Investment pool" means an entity created under this code to invest
public funds jointly on behalf of the entities that participate in the pool
SUBCHAPTER A. AUTHORIZED INVESTMENTS FOR and whose investment objectives in order of priority are:
GOVERNMENTAL ENTITIES
(A)preservation and safety of principal;
Sec.2256.001. Short Title.
(B)liquidity;and
This chapter may be cited as the Public Funds Investment Act.
(C)yield.
Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff. Sept. 1, 1995.
(7) "Local government" means a municipality, a county, a school
Sec.2256.002. Defmitions. district, a district or authority created under Section 52(b)(1) or (2),
Article III, or Section 59, Article XVI, Texas Constitution, a fresh
In this chapter: water supply district, a hospital district, and any political subdivision,
authority, public corporation, body politic, or instrumentality of the
(1) "Bond proceeds"means the proceeds from the sale of bonds,notes, State of Texas,and any nonprofit corporation acting on behalf of any of
and other obligations issued by an entity, and reserves and funds those entities.
0
maintained by an entity for debt service purposes.
(8)"Market value"means the current face or par value of an investment
(2) "Book value" means the original acquisition cost of an investment multiplied by the net selling price of the security as quoted by a
plus or minus the accrued amortization or accretion. recognized market pricing source quoted on the valuation date.
(3)"Funds"means public funds in the custody of a state agency or local (9) "Pooled fund group" means an internally created fund of an
government that: investing entity in which one or more institutional accounts of the
investing entity are invested.
(A) are not required by law to be deposited in the state treasury;
and (10) "Qualified representative" means a person who holds a position
with a business organization, who is authorized to act on behalf of the
(B) the investing entity has authority to invest. business organization,and who is one of the following:
(4) "Institution of higher education" has the meaning assigned by (A) for a business organization doing business that is regulated by
Section 61.003,Education Code. or registered with a securities commission, a person who is
registered under the rules of the National Association of Securities
(5) "Investing entity"and"entity"mean an entity subject to this chapter Dealers;
and described by Section 2256.003.
(B) for a state or federal bank, a savings bank,or a state or federal
credit union, a member of the loan committee for the bank or
Public Funds Investment Act
Page 1 of 14
APPENDIX C
branch of the bank or a person authorized by corporate resolution (4) an investment pool acting on behalf of two or more local
to act on behalf of and bind the banking institution;or governments,state agencies,or a combination of those entities.
(C) for an investment pool, the person authorized by the elected Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995.
official or board with authority to administer the activities of the
investment pool to sign the written instrument on behalf of the Sec.2256.004. Applicability.
investment pool.
This subchapter does not apply to:
(11)"School district"means a public school district.
(1)a public retirement system as defined by Section 802.001;
(12) "Separately invested asset" means an account or fund of a state
agency or local government that is not invested in a pooled fund group. (2)state funds invested as authorized by Section 404.024;
(13) "State agency" means an office, department, commission, board, (3) an institution of higher education having total endowments of at
or other agency that is part of any branch of state government, an least$95 million in book value on May 1, 1995;
institution of higher education,and any nonprofit corporation acting on
behalf of any of those entities. (4)funds invested by the Veterans'Land Board as authorized
by Chapter 161, 162,or 164,Natural Resources Code;or
Amended by Acts 1995, 74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995;Acts Text of subd.(5)as added by Acts 1997,75th Leg.,ch.505,Sec.24
1997,75th Leg.,ch. 1421,Sec. 1,eff. Sept. 1, 1997.
Sec.2256.003. Authority to Invest Funds;Entities Subject to this Chapter. (5) registry funds deposited with the county or district clerk under
Chapter 117,Local Government Code.
Each governing body of the following entities may purchase, sell, and
invest its funds and funds under its control in investments authorized under Text of subd.(5)as added by Acts 1997,75th Leg.,ch. 1421,Sec.2
this subchapter in compliance with investment policies approved by theSection
governing body and according to the standard of care prescribed by Section (5) a deferred compensation 401(k)or 457 of the Internal RevenueaCode of 1986(26 U t qualifies under either S C. Section
2256.006:
1 et seq.),as amended.
(1)a local government;
Amended by Acts 1995, 74th Leg., ch.402, Sec. 1,eff. Sept. 1, 1995;Acts
(2)a state agency; 1997,75th Leg., ch. 505, Sec. 24, eff. Sept. 1, 1997,Acts 1997, 75th Leg.,
ch. 1421,Sec.2,eff.Sept. 1, 1997.
(3) a nonprofit corporation acting on behalf of a local government or a
state agency;or Sec. 2256.005. Investment Policies; Investment Strategies; Investment
Officer.
Public Funds Investment Act
Page2of14
APPENDIX C
(a) The governing body of an investing entity shall adopt by rule, order, (2)in writing;
ordinance, or resolution, as appropriate, a written investment policy
regarding the investment of its funds and funds under its control. (3)electronically;or
(b)The investment policies must: (4)in any combination of those methods.
(1)be written; (d) As an integral part of an investment policy, the governing body shall
adopt a separate written investment strategy for each of the funds or group
(2)primarily emphasize safety of principal and liquidity; of funds under its control. Each investment strategy must describe the
investment objectives for the particular fund using the following priorities
(3) address investment diversification, yield, and maturity and the in order of importance:
quality and capability of investment management;and
(1) understanding of the suitability of the investment to the financial
(4)include: requirements of the entity;
(A) a list of the types of authorized investments in which the (2)preservation and safety of principal;
investing entity's funds may be invested; •
(3)liquidity;
(B) the maximum allowable stated maturity of any individual
investment owned by the entity; (4) marketability of the investment if the need arises to liquidate the
investment before maturity;
(C)for pooled fund groups,the maximum dollar-weighted average
maturity allowed based on the stated maturity date for the (5)diversification of the investment portfolio;and
portfolio;
(6)yield.
(D) methods to monitor the market price of investments acquired
with public funds;and (e) The governing body of an investing entity shall review its investment
policy and investment strategies not less than annually. The governing
(E) a requirement for settlement of all transactions, except body shall adopt a written instrument by rule, order, ordinance, or
investment pool funds and mutual funds, on a delivery versus resolution stating that it has reviewed the investment policy and investment
payment basis. strategies and that the written instrument so adopted shall record any
changes made to either the investment policy or investment strategies.
(c)The investment policies may provide that bids for certificates of deposit
be solicited: (f) Each investing entity shall designate, by rule, order, ordinance, or
resolution, as appropriate, one or more officers or employees of the state
(1)orally; agency, local government, or investment pool as investment officer to be
responsible for the investment of its funds consistent with the investment
Public Funds Investment Act •
Page 3of14
APPENDIX C
policy adopted by the entity. Authority granted to a person to invest an subsection,an investment officer has a personal business relationship with a
entity's funds is effective until rescinded by the investing entity or until business organization if:
termination of the person's employment by the investing entity. In the
administration of the duties of an investment officer, the person designated (1) the investment officer owns 10 percent or more of the voting stock
as investment officer shall exercise the judgment and care,under prevailing or shares of the business organization or owns $5,000 or more of the
circumstances, that a prudent person would exercise in the management of fair market value of the business organization;
the person's own affairs. Unless authorized by law, a person may not
deposit,withdraw,transfer, or manage in any other manner the funds of the (2) funds received by the investment officer from the business
investing entity. organization exceed 10 percent of the investment officer's gross income
for the previous year;or
(g) Subsection (f) does not apply to a state agency, local government, or
investment pool for which an officer of the entity is assigned by law the (3) the investment officer has acquired from the business organization
function of investing its funds. during the previous year investments with a book value of$2,500 or
more for the personal account of the investment officer.
Text of subsec.(h)as amended by Acts 1997,75th Leg.,ch.685,Sec. 1
(j)The governing body of an investing entity may specify in its investment
(h) An officer or employee of a commission created under Chapter 391, policy that any investment authorized by this chapter is not suitable.
Local Government Code, is ineligible to be an investment officer for the
commission under Subsection(f)if the officer or employee is an investment (k)A written copy of the investment policy shall be presented to any person
officer designated under Subsection(f)for another local government offering to engage in an investment transaction with an investing entity.
For purposes of this subsection,a business organization includes investment
Text of subsec.(h)as amended by Acts 1997,75th Leg.,ch. 1421,Sec.3 pools. Nothing in this subsection relieves the investing entity of the
responsibility for monitoring the investments made by the investing entity
(h) An officer or employee of a commission created under Chapter 391, to determine that they are in compliance with the investment policy. The
Local Government Code, is ineligible to be designated as an investment qualified representative of the business organization offering to engage in
officer under Subsection (f) for any investing entity other than for that an investment transaction with an investing entity shall execute a written
commission. instrument in a form acceptable to the investing entity and the business
organization substantially to the effect that the business organization has:
(i) An investment officer of an entity who has a personal business
relationship with a business organization offering to engage in an (1)received and reviewed the investment policy of the entity;and
investment transaction with the entity shall file a statement disclosing that
personal business interest. An investment officer who is related within the (2) acknowledged that the business organization has implemented
second degree by affinity or consanguinity, as determined under Chapter reasonable procedures and controls in an effort to preclude investment
573, to an individual seeking to sell an investment to the investment transactions conducted between the entity and the organization that are
officer's entity shall file a statement disclosing that relationship. A not authorized by the entity's investment policy, except to the extent
statement required under this subsection must be filed with the Texas Ethics that this authorization is dependent on an analysis of the makeup of the
Commission and the governing body of the entity. For purposes of this
•
Public Funds Investment Act
Page4of14
APPENDIX C
entity's entire portfolio or requires an interpretation of subjective (With In
toing an invester an tment decision, t officer has thedetermination shall be made
nce
investment standards.
taking into consideration:
(1)The investment officer of an entity may not acquire or otherwise obtain 1 the investment of all funds,or funds under the entity's control, over
any authorized investment described in the investment policy of the ( )
investing entity from a person who has not delivered to the entity the which the officer had responsibility rather than a consideration as to the
instrument required by Subsection(k). prudence of a single investment;and
(m)An investing entity, in conjunction with its annual financial audit, shall (2) whether the investment decision was consistent with the written
perform a compliance audit of management controls on investments and investment policy of the entity.
adherence to the entity's established investment policies. State agencies
shall report the results of the audit performed under this subsection to the Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995.
state auditor. The state auditor shall compile the results of reports received
under this subsection and annually report those results to the legislative Sec. 2256.007. Investment Training; State Agency Board Members and
audit committee. Officers.
Amended by Acts 1995, 74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995;Acts (a) Each member of the governing board of a state agency and its
1997, 75th Leg., ch. 685, Sec. 1, eff. Sept. 1, 1997; Acts 1997, 75th Leg., investment officer shall attend at least one training session relating to the
ch. 1421,Sec.3,eff.Sept. 1, 1997. person's responsibilities under this chapter within six months after taking
office or assuming duties.
Sec.2256.006. Standard of Care.
(b) The Texas Higher Education Coordinating Board shall provide the
(a) Investments shall be made with judgment and care, under prevailing training under this section.
circumstances,that a person of prudence,discretion, and intelligence would Trainingunder this section must include education in investment
exercise in the management of the person's own affairs,not for speculation, (c)
but for investment, considering the probable safety of capital and the controls, security risks, strategy risks, market risks, and compliance with
probable income to be derived. Investment of funds shall be governed by this chapter.
the following investment objectives,in order of priority:
(d) An investment officer shall attend a training session not less than once
(1)preservation and safety of principal; in a two-year period and may receive training from any independent source
approved by the governing body of the state agency. The investment officer
(2)liquidity;and shall prepare a report on this subchapter and deliver the report to the
governing body of the state agency not later than the 180th day after the last
(3)yield. day of each regular session of the legislature.
•
Public Funds Investment Act
Page5of14
APPENDIX C
Amended by Acts 1995,74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995; Acts
.1997,75th Leg.,ch.73,Sec. 1,eff.May 9, 1997;Acts 1997,75th Leg.,ch. (3) collateralized mortgage obligations directly issued by a federal
1421,Sec.4,eff.Sept. 1, 1997. agency or instrumentality of the United States, the underlying security
for which is guaranteed by an agency or instrumentality of the United
Sec.2256.008. Investment Training;Local Governments. States;
(a) The treasurer, the chief financial officer if the treasurer is not the chief (4) other obligations, the principal and interest of which are
financial officer,and the investment officer of a local government shall: unconditionally guaranteed or insured by, or backed by the full faith
and credit of,this state or the United States or their respective agencies
(1) attend at least one training session relating to the treasurer's or and instrumentalities;and
officer's responsibilities under this subchapter within 12 months after
taking office or assuming duties;and (5) obligations of states, agencies, counties, cities, and other political
subdivisions of any state rated as to investment quality by a nationally
(2) attend an investment training session not less than once in a two- recognized investment rating firm not less than A or its equivalent.
year period and receive not less than 10 hours of instruction relating to
investment responsibilities under this subchapter from an independent (b)The following are not authorized investments under this section:
source approved by the governing body of the local government or a
designated investment committee advising the investment officer as (1) obligations whose payment represents the coupon payments on the
provided for in the investment policy of the local government. outstanding principal balance of the underlying mortgage-backed
security collateral and pays no principal;
(b) Training under this section must include education in investment
controls, security risks, strategy risks, market risks, and compliance with (2) obligations whose payment represents the principal stream of cash
this chapter. flow from the underlying mortgage-backed security collateral and bears
no interest;
Amended by Acts 1995, 74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995;Acts
1997,75th Leg.,ch. 1421,Sec.5,eff.Sept. 1, 1997. (3)collateralized mortgage obligations that have a stated fmal maturity
date of greater than 10 years;and
Sec. 2256.009. Authorized Investments: Obligations of, or Guaranteed by
Governmental Entities. (4) collateralized mortgage obligations the interest rate of which is
determined by an index that adjusts opposite to the changes in a market
(a) Except as provided by Subsection (b), the following are authorized index.
investments under this subchapter:
Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995.
(1) obligations of the United States or its agencies and
instrumentalities; Sec. 2256.010. Authorized Investments: Certificates of Deposit and Share
Certificates.
(2)direct obligations of this state or its agencies and instrumentalities;
Public Funds Investment Act •
Page 6 of 14
APPENDIX C
A certificate of deposit is an authorized investment under this subchapter if (4)is placed through a primary government securities dealer,as defmed
the certificate is issued by a state or national bank domiciled in this state, a by the Federal Reserve, or a fmancial institution doing business in this
savings bank domiciled in this state, or a state or federal credit union state.
•
domiciled in this state and is:
(b)In this section,"repurchase agreement"means a simultaneous agreement
(1)guaranteed or insured by the Federal Deposit Insurance Corporation to buy, hold for a specified time, and sell back at a future date obligations
or its successor or the National Credit Union Share Insurance Fund or described by Section 2256.009(a)(l),at a market value at the time the funds
its successor; are disbursed of not less than the principal amount of the funds disbursed.
The term includes a direct security repurchase agreement and a reverse
(2) secured by obligations that are described by Section 2256.009(a), security repurchase agreement.
including mortgage backed securities directly issued by a federal
agency or instrumentality that have a market value of not less than the (c) Notwithstanding any other law, the term of any reverse security
principal amount of the certificates, but excluding those mortgage repurchase agreement may not exceed 90 days after the date the reverse
backed securities of the nature described by Section 2256.009(b);or security repurchase agreement is delivered.
(3) secured in any other manner and amount provided by law for (d) Money received by an entity under the terms of a reverse security
deposits of the investing entity. repurchase agreement shall be used to acquire additional authorized
investments, but the'term of the authorized investments acquired must
Amended by Acts 1995,74th Leg.,ch. 32, Sec. 1, eff. April 28, 1995;Acts mature not later than the expiration date stated in the reverse security
1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., repurchase agreement.
ch. 1421,Sec.6,eff.Sept. 1, 1997.
Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995.
Sec.2256.011. Authorized Investments: Repurchase Agreements.
Sec.2256.012. Authorized Investments: Banker's Acceptances.
(a)A fully collateralized repurchase agreement is an authorized investment
under this subchapter if the repurchase agreement: A bankers' acceptance is an authorized investment under this subchapter if
the bankers'acceptance:
(1)has a defmed termination date;
(1) has a stated maturity of 270 days or fewer from the date of its
(2)is secured by obligations described by Section 2256.009(a)(1);and issuance;
(3) requires the securities being purchased by the entity to be pledged (2)will be,in accordance with its terms,liquidated in full at maturity;
to the entity, held in the entity's name, and deposited at the time the
investment is made with the entity or with a third party selected and (3)is eligible for collateral for borrowing from a Federal Reserve Bank;
approved by the entity;and and
Public Funds Investment Act
Page7of14
APPENDIX C
(4) is accepted by a bank organized and existing under the laws of the U.S.C.Section 78a et seq.)or the Investment Company Act of 1940(15
United States or any state, if the short-term obligations of the bank, or U.S.C. Section 80a-1 et seq.);
of a bank holding company of which the bank is the largest subsidiary,
are rated not less than A-1 or P-1 or an equivalent rating by at least one (3) has a dollar-weighted average stated maturity of 90 days or fewer;
nationally recognized credit rating agency. and
Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995. (4)includes in its investment objectives the maintenance of a stable net
asset value of$1 for each share.
Sec.2256.013. Authorized Investments: Commercial Paper.
(b) In addition to a no-load money market mutual fund permitted as an
Commercial paper is an authorized investment under this subchapter if the authorized investment in Subsection (a), a no-load mutual fund is an
commercial paper: authorized investment under this subchapter if the mutual fund:
(1) has a stated maturity of 270 days or fewer from the date of its (1)is registered with the Securities and Exchange Commission;
issuance;and
(2)has an average weighted maturity of less than two years;
(2)is rated not less than A-1 or P-1 or an equivalent rating by at least:
(3)is invested exclusively in obligations approved by this subchapter;
(A)two nationally recognized credit rating agencies;or
(4) is continuously rated as to investment quality by at least one
(B) one nationally recognized credit rating agency and is fully nationally recognized investment rating firm of not less than AAA or
secured by an irrevocable letter of credit issued by a bank its equivalent;and
organized and existing under the laws of the United States or any
state. (5) conforms to the requirements set forth in Sections 2256.016(b) and
(c) relating to the eligibility of investment pools to receive and invest
Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995. funds of investing entities.
Sec.2256.014. Authorized Investments:Mutual Funds. (c)An entity is not authorized by this section to:
(a)A no-load money market mutual fund is an authorized investment under (1)invest in the aggregate more than 80 percent of its monthly average
this subchapter if the mutual fund: fund balance, excluding bond proceeds and reserves and other funds
held for debt service, in money market mutual funds described in
(1) is registered with and regulated by the Securities and Exchange Subsection (a) or mutual funds described in Subsection (b), either
Commission; separately or collectively;
(2) provides the investing entity with a prospectus and other
information required by the Securities Exchange Act of 1934 (15
Public Funds Investment Act •
Page 8 of 14
APPENDIX C
(2)invest in the aggregate more than 15 percent of its monthly average (c)To be eligible as an authorized investment:
fund balance, excluding bond proceeds and reserves and other funds (1) the governing body of the entity must specifically authorize
held for debt service,in mutual funds described in Subsection(b);
guaranteed investment contracts as an eligible investment in the order,
(3) invest any portion of bond proceeds, reserves and funds held for ordinance,or resolution authorizing the issuance of bonds;
debt service,in mutual funds described in Subsection(b);or
(2) the entity must receive bids from at least three separate providers
(4) invest its funds or funds under its control, including bond proceeds with no material financial interest in the bonds from which proceeds
and reserves and other funds held for debt service, in any one mutual were received;
fund described in Subsection (a) or (b) in an amount that exceeds 10
percent of the total assets of the mutual fund. (3)the entity must purchase the highest yielding guaranteed investment
contract for which a qualifying bid is received;
Amended by Acts 1995,74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995;Acts (4) price rice of the guaranteed investment contract must take into
1997,75th Leg.,ch. 1421,Sec.7,eff. Sept. 1, 1997. account the reasonaby expected drawdown schedule for the bond
Sec. 2256.015. Authorized Investments for State Agencies: Guaranteed proceeds to be invested;and
Investment Contracts.
(5) the provider must certify the administrative costs reasonably
(a) A guaranteed investment contract is an authorized investment for state expected to be paid to third parties in connection with the guaranteed
agencies for bond proceeds under this subchapter if the guaranteed investment contract.
investment contract:
Amended by Acts 1995,74th Leg., ch.402, Sec. 1,eff. Sept. 1, 1995;Acts
(1)has a defined termination date; 1997,75th Leg.,ch. 1421,Sec.8,eff.Sept. 1, 1997.
(2) is secured by obligations described by Section 2256.009(a)(1), Sec.2256.016. Authorized Investments: Investment Pools.
excluding those obligations described by Section 2256.009(b), in an
amount at least equal to the amount of bond proceeds invested under (a) An entity may invest its funds and funds under its control through an
the contract;and eligible investment pool if the governing body of the entity by rule, order,
ordinance, or resolution, as appropriate, authorizes investment in the
(3)is pledged to the entity and deposited with the entity or with a third particular pool. An investment pool shall invest the funds it receives from
party selected and approved by the entity. entities in authorized investments permitted by this subchapter.
(b) Bond proceeds, other than bond proceeds representing reserves and (b) To be eligible to receive funds from and invest funds on behalf of an
funds maintained for debt service purposes,may not be invested under this entity under this chapter,an investment pool must furnish to the investment
subchapter in a guaranteed investment contract with a term of longer than officer or other authorized representative of the entity an offering circular or
five years from the date of issuance of the bonds. other similar disclosure instrument that contains, at a minimum, the
following information:
Public Funds Investment Act
Page 9 of 14
APPENDIX C
(c)To maintain eligibility to receive funds from and invest funds on behalf
• (1)the types of investments in which money is allowed to be invested; of an entity under this chapter, an investment pool must furnish to the
investment officer or other authorized representative of the entity:
(2) the maximum average dollar-weighted maturity allowed, based on
the stated maturity date,of the pool; (1)investment transaction confirmations;and
(3) the maximum stated maturity date any investment security within (2) a monthly report that contains, at a minimum, the following
the portfolio has; information:
(4)the objectives of the pool; (A) the types and percentage breakdown of securities in which the
pool is invested;
(5)the size of the pool;
(B) the current average dollar-weighted maturity, based on the
(6)the names of the members of the advisory board of the pool and the stated maturity date,of the pool;
dates their terms expire;
(C) the current percentage of the pool's portfolio in investments
(7)the custodian bank that will safekeep the pool's assets; that have stated maturities of more than one year;
(8)whether the intent of the pool is to maintain a net asset value of one (D)the book value versus the market value of the pool's portfolio,
dollar and the risk of market price fluctuation; using amortized cost valuation;
(9) whether the only source of payment is the assets of the pool at (E)the size of the pool;
market value or whether there is a secondary source of payment, such
as insurance or guarantees,and a description of the secondary source of (F)the number of participants in the pool;
payment;
(G)the custodian bank that is safekeeping the assets of the pool;
(10)the name and address of the independent auditor of the pool;
(H) a listing of daily transaction activity of the entity participating
(11) the requirements to be satisfied for an entity to deposit funds in in the pool;
and withdraw funds from the pool and any deadlines or other operating
policies required for the entity to invest funds in and withdraw funds (I)the yield and expense ratio of the pool;
from the pool;and
(J)the portfolio managers of the pool;and
(12) the performance history of the pool, including yield, average
dollar-weighted maturities,and expense ratios. (K)any changes or addenda to the offering circular.
Public Funds Investment Act •
Page 10 of 14
APPENDIX C
(d) An entity by contract may delegate to an investment pool the authority Sec.2256.017. Existing Investments.
to hold legal title as custodian of investments purchased with its local funds.
An entity is not required to liquidate investments that were authorized
(e)In this section, "yield"shall be calculated in accordance with regulations investments at the time of purchase.
governing the registration of open-end management investment companies
under the Investment Company Act of 1940, as promulgated from time to Added by Acts 1995,74th Leg.,ch.76,Sec.5.46(a),eff. Sept. 1, 1995;Acts
time by the federal Securities and Exchange Commission. 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995. Amended by Acts 1997,
75th Leg.,ch. 1421,Sec. 10,eff.Sept. 1, 1997.
(f) To be eligible to receive funds from and invest funds on behalf of an
entity under this chapter,a public funds investment pool created to function Sec.2256.019. Rating of Certain Investment Pools.
as a money market mutual fund must mark its portfolio to market daily,and,
to the extent reasonably possible, stabilize at a $1 net asset value. If the A public funds investment pool must be continuously rated no lower than
ratio of the market value of the portfolio divided by the book value of the AAA or AAA-m or at an equivalent rating by at least one nationally
portfolio is less than 0.995 or greater than 1.005,portfolio holdings shall be recognized rating service or no lower than investment grade by at least one
sold as necessary to maintain the ratio between 0.995 and 1.005. nationally recognized rating service with a weighted average maturity no
greater than 90 days.
(g) To be eligible to receive funds from and invest funds on behalf of an
entity under this chapter, a public funds investment pool must have an Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995.
advisory board composed: Amended by Acts 1997,75th Leg.,ch. 1421,Sec. 11,eff.Sept. 1, 1997.
(1) equally of participants in the pool and other persons who do not Sec.2256.020. Authorized Investments:Institutions of Higher Education.
have a business relationship with the pool and are qualified to advise
the pool,for a public funds investment pool created under Chapter 791 In addition to the authorized investments permitted by this subchapter, an
and managed by a state agency;or institution of higher education may purchase, sell, and invest its funds and
funds under its control in the following:
(2) of participants in the pool and other persons who do not have a
business relationship with the pool and are qualified to advise the pool, (1) cash management and fixed income funds sponsored by organizations
for other investment pools. exempt from federal income taxation under Section 501(f), Internal
Revenue Code of 1986(26 U.S.C.Section 501(f));
(h)To maintain eligibility to receive funds from and invest funds on behalf
of an entity under this chapter, an investment pool must be continuously (2) negotiable certificates of deposit issued by a bank that has a certificate
rated no lower than AAA or AAA-m or at an equivalent rating by at least of deposit rating of at least 1 or the equivalent by a nationally recognized
one nationally recognized rating service. credit rating agency or that is associated with a holding company having a
commercial paper rating of at least A-1, P-1, or the equivalent by a
Amended by Acts 1995, 74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995;Acts nationally recognized credit rating agency;and
1997,75th Leg.,ch. 1421,Sec.9,eff.Sept. 1, 1997.
Public Funds Investment Act
Page 11 of14
APPENDIX C
(3) corporate bonds, debentures, or similar debt obligations rated by a
nationally recognized investment rating firm in one of the two highest long- (2)be prepared jointly by all investment officers of the entity;
term rating categories,without regard to gradations within those categories.
(3)be signed by each investment officer of the entity;
Added by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995.
(4) contain a summary statement, prepared in compliance with
Sec.2256.021. Effect of Loss of Required Rating. generally accepted accounting principles, of each pooled fund group
that states the:
An investment that requires a minimum rating under this subchapter does
not qualify as an authorized investment during the period the investment (A)beginning market value for the reporting period;
does not have the minimum rating. An entity shall take all prudent
measures that are consistent with its investment policy to liquidate an (B)additions and changes to the market value during the period;
investment that does not
have the minimum rating. (C)ending market value for the period;and
Added by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995. (D)fully accrued interest for the reporting period;
(5) state the book value and market value of each separately invested
Sec.2256.022. Expansion of Investment Authority. asset at the beginning and end of the reporting period by the type of
asset and fund type invested;
Expansion of investment authority granted by this chapter shall require a
risk assessment by the state auditor or performed at the direction of the state (6) state the maturity date of each separately invested asset that has a
auditor. maturity date;
Added by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995. (7)state the account or fund or pooled group fund in the state agency or
local government for which each individual investment was acquired;
Sec.2256.023. Internal Management Reports. and
(a)Not less than quarterly, the investment officer shall prepare and submit (8) state the compliance of the investment portfolio of the state agency
to the governing body of the entity a written report of investment or local government as it relates to:
transactions for all funds covered by this chapter for the preceding reporting
period. (A) the investment strategy expressed in the agency's or local
government's investment policy;and
(b)The report must:
(B)relevant provisions of this chapter.
(1)describe in detail the investment position of the entity on the date of
the report;
Public Funds Investment Act •
Page 12 of 14
APPENDIX C
(c) The report shall be presented not less than quarterly to the governing
body and the chief executive officer of the entity within a reasonable time (2)an entity created under Chapter 392,Local Government Code;or
after the end of the period.
(3)an entity created under Chapter 394,Local Government Code.
(d)If an entity invests in other than money market mutual funds,investment
pools or accounts offered by its depository bank in the form of certificates Added by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995.
of deposit, or money market accounts or similar accounts, the reports
prepared by the investment officers under this section shall be formally Sec.2256.025. Selection of Authorized Brokers.
reviewed at least annually by an independent auditor, and the result of the
review shall be reported to the governing body by that he governing body of an entity subject to this subchapter or the designated
auditor. investment committee of the entity shall, at least annually, review, revise,
and adopt a list of qualified brokers that are authorized to engage in
Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. investment transactions with the entity.
Amended by Acts 1997,75th Leg.,ch. 1421,Sec. 12,eff.Sept. 1, 1997.
Added by Acts 1997,75th Leg.,ch. 1421,Sec. 13,eff.Sept. 1, 1997.
Sec.2256.024. Subchapter Cumulative.
Sec.2256.026. Statutory Compliance.
(a)The authority granted by this subchapter is in addition to that granted by
other law. Except as provided by Subsection(b),this subchapter does not: All investments made by entities must comply with this subchapter and all
federal,state,and local statutes,rules,or regulations.
(1)prohibit an investment specifically authorized by other law;or
Added by Acts 1997,75th Leg.,ch. 1421,Sec. 13,eff.Sept. 1, 1997.
(2)authorize an investment specifically prohibited by other law.
SUBCHAPTER B. MISCELLANEOUS PROVISIONS
(b) Except with respect to those investing entities described in Subsection
(c), a security described in Section 2256.009(b) is not an authorized Sec.2256.051. Electronic Funds Transfer.
investment for a state agency, a local government, or another investing
entity, notwithstanding any other provision of this chapter or other law to Any local government may use electronic means to transfer or invest all
the contrary. funds collected or controlled by the local government.
(c) Mortgage pass-through certificates and individual mortgage loans that Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995.
may constitute an investment described in Section 2256.009(b) are
authorized investments with respect to the housing bond programs operated Sec.2256.052. Private Auditor.
by:
Notwithstanding any other law, a state agency shall employ a private
(1) the Texas Department of Housing and Community Affairs or a auditor if authorized by the legislative audit committee either on the
nonprofit corporation created to act on its behalf; committee's initiative or on request of the governing body of the agency.
Public Funds Investment Act
Page 13 of 14
APPENDIX C
Amended by Acts 1995, 74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995;Acts
Amended by Acts 1995,74th Leg.,ch.402,Sec. 1,eff.Sept. 1, 1995. 1997,75th Leg.,ch. 1423,Sec.8.69,eff.Sept. 1, 1997.
Sec.2256.053. Payment for Securities Purchased by State. Sec.2256.056. Compliance With Other Laws.
The comptroller or the disbursing officer of an agency that has the power to Notwithstanding any other law, a municipality with a population of less
invest assets directly may pay for authorized securities purchased from or than 50,000 may not issue for any purpose or cause to be issued in its behalf
through a member in good standing of the National Association of any installment sale obligation or lease-purchase obligation having the
Securities Dealers or from or through a national or state bank on receiving principal amount of $1 million or more without complying with the
an invoice from the seller of the securities showing that the securities have provisions of Section 3.002, Chapter 53, Acts of the 70th Legislature, 2nd
been purchased by the board or agency and that the amount to be paid for Called Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes),
the securities is just, due, and unpaid. A purchase of securities may not be regardless of whether the obligation was issued individually or in a series of
made at a price that exceeds the existing market value of the securities. related transactions, or whether the obligation was issued with no recourse
to the local government.
Amended by Acts 1995,74th Leg., ch.402, Sec. 1, eff. Sept. 1, 1995; Acts
1997,75th Leg.,ch. 1423,Sec.8.67,eff.Sept. 1, 1997. Added by Acts 1997,75th Leg.,ch. 1421,Sec. 14,eff.Sept. 1, 1997.
Sec.2256.054. Delivery of Securities Purchased by State. SUBCHAPTER C. PAYMENT FOR AND DELIVERY AND DEPOSIT
OF SECURITIES PURCHASED BY STATE[DELETED
A security purchased under this chapter may be delivered to the
comptroller, a bank, or the board or agency investing its funds. The
delivery shall be made under normal and recognized practices in the
securities and banking industries,including the book entry procedure of the
Federal Reserve Bank.
Amended by Acts 1995,74th Leg.,ch.402, Sec. 1,eff. Sept. 1, 1995;Acts
1997,75th Leg.,ch. 1423,Sec.8.68,eff.Sept. 1, 1997.
Sec.2256.055. Deposit of Securities Purchased by State.
At the direction of the comptroller or the agency,a security purchased under
this chapter may be deposited in trust with a bank or federal reserve bank or
branch designated by the comptroller, whether in or outside the state. The
deposit shall be held in the entity's name as evidenced by a trust receipt of
the bank with which the securities are deposited.
Public Funds Investment Act
Page 14 of 14
76(R)HB 3009 Enrolled version-Bill Text http://www.capitol.state.tx.us/cgi-...B&BILLSUFFIX=03009&VERSION=5&TYPE=B
1-1 AN ACT
1-2 relating to investments and audits under the Public Funds
1-3 Investment Act.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2256.002 (10) , Government Code, is amended
1-6 to read as follows:
1-7 (10) "Qualified representative" means a person who
1-8 holds a position with a business organization, who is authorized to
1-9 act on behalf of the business organization, and who is one of the
1-10 following:
1-11 (A) for a business organization doing business
1-12 that is regulated by or registered with a securities commission, a
1-13 person who is registered under the rules of the National
1-14 Association of Securities Dealers;
1-15 (B) for a state or federal bank, a savings bank,
1-16 or a state or federal credit union, a member of the loan committee
1-17 for the bank or branch of the bank or a person authorized by
1-18 corporate resolution to act on behalf of and bind the banking
1-19 institution; [er]
1-20 (C) for an investment pool, the person
1-21 authorized by the elected official or board with authority to
1-22 administer the activities of the investment pool to sign the
1-23 written instrument on behalf of the investment pool; or
1-24 (D) for an investment management firm registered
2-1 under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1
2-2 et sea. ) or, if not subject to registration under that Act,
2-3 registered with the State Securities Board, a person who is an
2-4 officer or principal of the investment management firm.
2-5 SECTION 2 . Section 2256.003, Government Code, is amended to
2-6 read as follows :
2-7 Sec. 2256.003 . AUTHORITY TO INVEST FUNDS; ENTITIES SUBJECT
2-8 TO THIS CHAPTER. (a) Each governing body of the following
2-9 entities may purchase, sell, and invest its funds and funds under
2-10 its control in investments authorized under this subchapter in
2-il compliance with investment policies approved by the governing body
2-12 and according to the standard of care prescribed by Section
2-13 2256.006:
2-14 (1) a local government;
2-15 (2) a state agency;
2-16 (3) a nonprofit corporation acting on behalf of a
2-17 local government or a state agency; or
2-18 (4) an investment pool acting on behalf of two or more
2-19 local governments, state agencies, or a combination of those
2-20 entities.
2-21 (b) In the exercise of its powers under Subsection (a) , the
2-22 governing body of an investing entity may contract with an
2-23 investment management firm registered under the Investment Advisers
2-24 Act of 1940 (15 U.S.C. Section 80b-1 et seq. ) or with the State
2-25 Securities Board to provide for the investment and management of
2-26 its public funds or other funds under its control. A contract made
2-27 under authority of this subsection may not be for a term longer
3-1 than two years. A renewal or extension of the contract must be
3-2 made by the governing body of the investing entity by order,
3-3 ordinance, or resolution.
3-4 (c) This chapter does not prohibit an investing entity or
3-5 investment officer from using the entity's employees or the
3-6 services of a contractor of the entity to aid the investment
3-7 officer in the execution of the officer' s duties under this
3-8 chapter.
3-9 SECTION 3 . Section 2256.004, Government Code, as amended by
3-10 Chapters 505 and 1421, Acts of the 75th Legislature, Regular
1 of 5 10/21/1999 1:58 PM
76(R)HB 3009 Enrolled version-Bill Text http://www.capitol.state.tx.us/cgi-...B&BILLSUFFIX=03009&VERSION=5&TYPE=B
3-11 Session, 1997, is amended to read as follows:
3-12 Sec. 2256.004 . APPLICABILITY. (a) This subchapter does not
3-13 apply to:
3-14 (1) a public retirement system as defined by Section
3-15 802 .001;
3-16 (2) state funds invested as authorized by Section
3-17 404.024;
3-18 (3) an institution of higher education having total
3-19 endowments of at least $95 million in book value on May 1, 1995;
3-20 (4) funds invested by the Veterans' Land Board as
3-21 authorized by Chapter 161, 162, or 164, Natural Resources Code;
3-22 [er]
3-23 (5) registry funds deposited with the county or
3-24 district clerk under Chapter 117, Local Government Code; or[—]
3-25 (6) [ (5) ] a deferred compensation plan that qualifies
3-26 under either Section 401 (k) or 457 of the Internal Revenue Code of
3-27 1986 (26 U.S.C. Section 1 et seq. ) , as amended.
4-i (b) This subchapter does not apply to an investment donated
4-2 to an investing entity for a particular purpose or under terms of
4-3 use specified by the donor.
4-4 SECTION 4 . Section 2256.005, Government Code, is amended by
4-5 amending Subsections (f) , (k) , and (m) and adding Subsections (n)
4-6 and (o) to read as follows:
4-7 (f) Each investing entity shall designate, by rule, order,
4-8 ordinance, or resolution, as appropriate, one or more officers or
4-9 employees of the state agency, local government, or investment pool
4-10 as investment officer to be responsible for the investment of its
4-11 funds consistent with the investment policy adopted by the entity.
4-12 If the governing body of an investing entity has contracted with
4-13 another investing entity to invest its funds, the investment
4-14 officer of the other investing entity is considered to be the
4-15 investment officer of the first investing entity for purposes of
4-16 this chapter. Authority granted to a person to invest an entity' s
4-17 funds is effective until rescinded by the investing entity.. [e-]
4-18 until the expiration of the officer's term or the termination of
4-19 the person's employment by the investing entity, or if an
4-20 investment management firm, until the expiration of the contract
4-21 with the investing entity. In the administration of the duties of
4-22 an investment officer, the person designated as investment officer
4-23 shall exercise the judgment and care, under prevailing
4-24 circumstances, that a prudent person would exercise in the
4-25 management of the person's own affairs, but the governing body of
4-26 the investing entity retains ultimate responsibility as fiduciaries
4-27 of the assets of the entity. Unless authorized by law, a person
5-1 may not deposit, withdraw, transfer, or manage in any other manner
5-2 the funds of the investing entity.
5-3 (k) A written copy of the investment policy shall be
5-4 presented to any person offering to engage in an investment
5-5 transaction with an investing entity or to an investment management
5-6 firm under contract with an investing entity to invest or manage
5-7 the entity' s investment portfolio. For purposes of this
5-8 subsection, a business organization includes investment pools and
5-9 an investment management firm under contract with an investing
5-10 entity to invest or manage the entity's investment portfolio.
5-11 Nothing in this subsection relieves the investing entity of the
5-12 responsibility for monitoring the investments made by the investing
5-13 entity to determine that they are in compliance with the investment
5-14 policy. The qualified representative of the business organization
5-15 offering to engage in an investment transaction with an investing
5-16 entity shall execute a written instrument in a form acceptable to
5-17 the investing entity and the business organization substantially to
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5-18 the effect that the business organization has:
5-19 (1) received and reviewed the investment policy of the
5-20 entity; and
5-21 (2) acknowledged that the business organization has
5-22 implemented reasonable procedures and controls in an effort to
5-23 preclude investment transactions conducted between the entity and
5-24 the organization that are not authorized by the entity' s investment
5-25 policy, except to the extent that this authorization is dependent
5-26 on an analysis of the makeup of the entity's entire portfolio or
5-27 requires an interpretation of subjective investment standards.
6-1 (m) An investing entity other than a state agency, in
6-2 conjunction with its annual financial audit, shall perform a
6-3 compliance audit of management controls on investments and
6-4 adherence to the entity's established investment policies. [Etatc
6-5 a9eneies sha l epe t the exults e€ the—a of ���€e rred uftder
6-6 subsection to else state audite .The state ''te l �p'
6-7 the results of reports received under this bsectio an'' a ally
6-8 report those results to the legislative audit committee.]
6-9 (n) Except as provided by Subsection (o) , at least once
6-10 every two years a state agency shall arrange for a compliance audit
6-11 of management controls on investments and adherence to the agency' s
6-12 established investment policies. The compliance audit shall be
6-13 performed by the agency's internal auditor or by a private auditor
6-14 employed in the manner provided by Section 321.020. Not later than
6-15 January 1 of each even-numbered year, a state agency shall report
6-16 the results of the most recent audit performed under this
6-17 subsection to the state auditor. A state agency also shall report
6-18 to the state auditor other information the state auditor determines
6-19 necessary to assess compliance with laws and policies applicable to
6-20 state agency investments. A report under this subsection shall be
6-21 prepared in a manner the state auditor prescribes.
6-22 (o) The audit requirements of Subsection (n) do not apply to
6-23 assets of a state agency that are invested by the comptroller under
6-24 Section 404.024.
6-25 SECTION 5 . Section 2256.007 (c) , Government Code, is amended
6-26 to read as follows:
6-27 (c) Training under this section must include education in
7-1 investment controls, security risks, strategy risks, market risks,
7-2 diversification of investment portfolio, and compliance with this
7-3 chapter.
7-4 SECTION 6. Section 2256.008, Government Code, is amended to
7-5 read as follows:
7-6 Sec. 2256.008. INVESTMENT TRAINING; LOCAL GOVERNMENTS. (a)
7-7 Except as provided by Subsection (b) , the [The] treasurer, the
7-8 chief financial officer if the treasurer is not the chief financial
7-9 officer, and the investment officer of a local government shall:
7-10 (1) attend at least one training session from an
7-11 independent source approved by the governing body of the local
7-12 government or a designated investment committee advising the
7-13 investment officer as provided for in the investment policy of the
7-14 local government and containing at least 10 hours of instruction
7-15 relating to the treasurer's or officer' s responsibilities under
7-16 this subchapter within 12 months after taking office or assuming
7-17 duties; and
7-18 (2) except as provided by Subsection (b) , attend an
7-19 investment training session not less than once in a two-year period
7-20 and receive not less than 10 hours of instruction relating to
7-21 investment responsibilities under this subchapter from an
7-22 independent source approved by the governing body of the local
7-23 government or a designated investment committee advising the
7-24 investment officer as provided for in the investment policy of the
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7-25 local government.
7-26 (b) An investing entity created under authority of Section
7-27 52 (b) , Article III, or Section 59, Article XVI, Texas Constitution,
8-1 that has contracted with an investment management firm under
8-2 Section 2256.003 (b) and has fewer than five full-time employees or
8-3 an investing entity that has contracted with another investing
8-4 entity to invest the entity's funds may satisfy the training
8-5 requirement provided by Subsection (a) (2) by having an officer of
8-6 the governing body attend four hours of appropriate instruction in
8-7 a two-year period. The treasurer or chief financial officer of an
8-8 investing entity created under authority of Section 52 (b) , Article
8-9 III, or Section 59, Article XVI, Texas Constitution, and that has
8-10 fewer than five full-time employees is not required to attend
8-11 training required by this section unless the person is also the
8-12 investment officer of the entity.
8-13 (c) Training under this section must include education in
8-14 investment controls, security risks, strategy risks, market risks,
8-15 diversification of investment portfolio, and compliance with this
8-16 chapter.
8-17 (d) Not later than December 31 each year, each individual,
8-18 association, business, organization, governmental entity, or other
8-19 person that provides training under this section shall report to
8-20 the comptroller a list of the governmental entities for which the
8-21 person provided required training under this section during that
8-22 calendar year. An individual's reporting requirements under this
8-23 subsection are satisfied by a report of the individual' s employer
8-24 or the sponsoring or organizing entity of a training program or
8-25 seminar.
8-26 SECTION 7. Section 2256.009 (a) , Government Code, is amended
8-27 to read as follows:
9-1 (a) Except as provided by Subsection (b) , the following are
9-2 authorized investments under this subchapter:
9-3 (1) obligations of the United States or its agencies
9-4 and instrumentalities;
9-5 (2) direct obligations of this state or its agencies
9-6 and instrumentalities;
9-7 (3) collateralized mortgage obligations directly
9-8 issued by a federal agency or instrumentality of the United States,
9-9 the underlying security for which is guaranteed by an agency or
9-10 instrumentality of the United States;
9-11 (4) other obligations, the principal and interest of
9-12 which are unconditionally guaranteed or insured by, or backed by
9-13 the full faith and credit of, this state or the United States or
9-14 their respective agencies and instrumentalities; [ate]
9-15 (5) obligations of states, agencies, counties, cities,
9-16 and other political subdivisions of any state rated as to
9-17 investment quality by a nationally recognized investment rating
9-18 firm not less than A or its equivalent; and
9-19 (6) bonds issued, assumed, or guaranteed by the State
9-20 of Israel.
9-21 SECTION 8. Section 2256.014 (c) , Government Code, is amended
9-22 to read as follows:
9-23 (c) An entity is not authorized by this section to:
9-24 (1) invest in the aggregate more than 15 [8-9] percent
9-25 of its monthly average fund balance, excluding bond proceeds and
9-26 reserves and other funds held for debt service, in [moncy markct
9-27 mutual fundo dcocribcd in Cub3cction (a) or] mutual funds described
10-1 in Subsection (b) [, either 3cparatcly or collectively] ;
10-2 (2) [invc3t in the aggregate morc than 15 percent of
10-3 i s meal hly—average €und Bala ee, e a n i✓Y ' n
10-4 rcocrvcs and other fulado hc14 €er debt 3crvec, in--m l €ands
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10-5 dcocribcd in Eubocction (b) ;]
10-6 [ (3) ] invest any portion of bond proceeds, reserves
10-7 and funds held for debt service, in mutual funds described in
10-8 Subsection (b) ; or
10-9 (3) [ (4) ] invest its funds or funds under its control,
10-10 including bond proceeds and reserves and other funds held for debt
10-11 service, in any one mutual fund described in Subsection (a) or (b)
10-12 in an amount that exceeds 10 percent of the total assets of the
10-13 mutual fund.
10-14 SECTION 9. The heading for Section 2256.015, Government
10-15 Code, is amended to read as follows:
10-16 Sec. 2256. 015. AUTHORIZED INVESTMENTS [FOR CTATP ACENCIEG] :
10-17 GUARANTEED INVESTMENT CONTRACTS.
10-18 SECTION 10. Section 2256.015 (a) , Government Code, is amended
10-19 to read as follows:
10-20 (a) A guaranteed investment contract is an authorized
10-21 investment [for otatc agcncico] for bond proceeds under this
10-22 subchapter if the guaranteed investment contract:
10-23 (1) has a defined termination date;
10-24 (2) is secured by obligations described by Section
10-25 2256.009 (a) (1) , excluding those obligations described by Section
10-26 2256.009 (b) , in an amount at least equal to the amount of bond
10-27 proceeds invested under the contract; and
11-1 (3) is pledged to the entity and deposited with the
11-2 entity or with a third party selected and approved by the entity.
11-3 SECTION 11. This Act takes effect September 1, 1999.
11-4 SECTION 12 . The importance of this legislation and the
11-5 crowded condition of the calendars in both houses create an
11-6 emergency and an imperative public necessity that the
11-7 constitutional rule requiring bills to be read on three several
11-8 days in each house be suspended, and this rule is hereby suspended.
President of the Senate Speaker of the House
I certify that H.B. No. 3009 was passed by the House on May
11, 1999, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 3009 on May 28, 1999, by a non-record
vote.
Chief Clerk of the House
I certify that H.B. No. 3009 was passed by the Senate, with
amendments, on May 26, 1999, by a viva-voce vote.
Secretary of the Senate
APPROVED:
Date
Governor
5 of 5 10/21/1999 1:58 PM
WYLIE CITY COUNCIL
AGENDA ITEM NO.
October 26, 1999
Issue
Hold a public hearing and consider and act upon', an ordinance of the City of Wylie, affecting
participation of City employees in the Texas Municipal Retirement System granting the additional rights
authorized by Section 854.202(g)of Title 8, Texas Government Code, as amended, and prescribing the
effective date for the ordinance.
Background
House bill 2168, adopted by the Texas Legislature during its 1995 legislative session, provides that
Texas Municipal Retirement System (TMRS) member cities can adopt retirement benefits at any age
with 20 years of service credit. If an employee has service credit at more than one member city, all cities
for which he worked must have adopted the 20 year retirement provision in order for the employee to
be eligible for full retirement benefits with 20 years of service credit. The bill requires that TMRS first
prepare an actuarial study of the cost for each city to adopt this provision. Second, the bill requires that
the City hold a public hearing pursuant to the notice provisions of the Texas Open Meetings Act,
Chapter 551 of the Texas Government Code. Finally, the bill requires that the City adopt this provision
by ordinance.
The 20 year retirement option was presented to the City Council for approval during the fiscal year
1999-2000 budget process and has been incorporated into the budget adopted by the City Council on
September 14, 1999.
Financial Considerations
The adoption of the 20 year retirement benefit in Fiscal Year 1999-2000 raised the City's contribution
rate by 0.15%from 8.05%to 8.20%. The effect on the General Fund budget was an increase in TMRS
contributions of$4,150. The Utility Fund budget increase is $680. The 4B Sales Tax Revenue Fund
and the Wylie Economic Development Fund budgets both increased $120.
Other Considerations
N/A
Staff Recommendation
It is recommended that the City Council adopt this ordinance.
Attachments
Ordinance Adopting Retirement Eligibility at Any Age with 20 Years of Service Credit
Section 854.202, Texas Government Code
)1()A (- - ,
re red by Revie by Finance City Manager Approval
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF WYLIE, AFFECTING
PARTICIPATION OF CITY EMPLOYEES IN THE TEXAS
MUNICIPAL RETIREMENT SYSTEM GRANTING THE
ADDITIONAL RIGHTS AUTHORIZED BY SECTION 854.002(g) OF
TITLE 8, TEXAS GOVERNMENT CODE, AS AMENDED; AND
PROVIDING FOR AN EFFECTIVE DATE
WHEREAS,the 74th Legislature of the State of Texas,meeting in Regular Session,passed
House Bill 2168, which inter alia, amended Section 854.202(g) of the Texas Government
Code that allows Texas Municipal Retirement System ("TMRS") cities to adopt retirement
eligibility at any age with 20 years of service credit, and
WHEREAS, Governor George W. Bush approved House Bill 2168 after its passage, and
House Bill 2168 took effect September 1, 1995, and
WHEREAS, all legal notices have been given in the manner and form set forth by law, and
all other requirements, including a public hearing,have been fulfilled, and
WHEREAS, the City Council of Wylie, Texas ("City Council") has investigated and
determined that it would be beneficial and advantageous to the employees of the City of
Wylie to grant retirement eligibility at any age with 20 years of service credit, and
WHEREAS,the City Council adopted the Fiscal Year 1999-2000 budget on September 14,
1999,which included funds for the adoption of retirement eligibility at any age with 20 years
of service credit;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Wylie,
Texas, as follows:
Section 1. Pursuant to the provisions of Section 854.202(g) of Subtitle G of Title 8, Texas
Government Code, as amended, which Subtitle shall herein be referred to as the "TMRS
Act,"the City of Wylie,Texas, adopts the following provisions affecting participation of its
employees in the Texas Municipal Retirement System("System"):
(a)Any employee of the City who is a member of the System is eligible to retire and
receive a service retirement annuity if the member has at least 20 years of credited
service in the System performed for one or more municipalities that have adopted a
like provision under Section 854.202(g) of the TMRS Act.
(b)Prior to adopting this ordinance,the governing body of the City has (1)prepared
an actuarial analysis of member retirement annuities at 20 years of service; and(2)
held a public hearing pursuant to the notice provisions of the Texas Open Meetings
Act, Chapter 551, Texas Government Code.
(c) The rights hereinabove authorized shall be in addition to the plan provisions
heretofore adopted and in force at the effective date of this ordinance pursuant to the
TMRS Act.
Section 2. This ordinance shall become effective on the first day of January in the year
2000.
DULY PASSED AND APPROVED by the City Council of the City of Wylie,Texas,this 26th day
of October, 1999.
John Mondy, Mayor
ATTEST:
Barbara Salinas, City Secretary
- , Vtl TEXAS MUNICIPAL RETIREMENT SYSTEM
Over fifty years of retirement security for municipal employees.
P. 0. Box 149153 • AusnN,TEXAS 78714-9153 • 1200 NORTH INTERSTATE 35 • www.tmrs.org
ADMINISTRATION: (512)476-7577 OR TOLL-FREE(877) 634-8595 • FAX: (512)476-2903
MEMBER SERVICES:TOLL-FREE(800) 924-8677 • FAX: (512)476-5576
September 29, 1999
WA FAX: 972/442-8105
AND U.S. MAIL
Ms. Barbara LeCocq
Personnel Manager
City of Wylie
2000 Hwy 78 North
•
Wylie, Texas 75098-0428
Dear Barbara:
House Bill 2168 provides that cities can adopt retirement eligibility at any age with 20 years of
service credit. The Bill requires that TMRS first prepare an actuarial study of the cost for each
city to adopt this provision. Second, the Bill requires that the City hold a public hearing pursuant
to the notice provisions of the Texas Open Meetings Act, Chapter 551 of the Texas Government
Code. Finally, the Bill requires that the City adopt this provision by ordinance.
The System's actuary has prepared the actuarial study for the City. If the City elects to adopt
the "20 year any age" retirement eligibility effective January 1, 2000, the additional cost for this
provision will be +0.15% of payroll, and the total the contribution rate for the year 2000 will be
8.20% (8.05% + 0.15% = 8.20%).
If your City would like to see the effect 20 year any age retirement would have on an employee's
retirement benefit, we recommend that you select 4 or 5 representative employees, and allow us
to prepare retirement estimates for those individuals.
If we can provide any additional information regarding this or any other TMRS plan
improvement, please feel free to call on us.
Sincerely,
Eric W. Davis
Director of Administration
EWD/dhl
Enclosure
Government Code-Chapter 854 http://capitol.tic.state.tx.us/statutes/codes/GV000215.html
(a) The governing body of a municipality having an effective date
of participation in the retirement system before May 29, 1969, by
ordinance may authorize eligibility for a service retirement
annuity as provided by this section.
(b) The governing body may authorize a member who is an employee
of the municipality to be eligible for service retirement who is
at least 50 years old and has at least 25 years of credited
service performed for one or more municipalities that either have
authorized eligibility under this section or are subject to
Section 854.102 (d) , or to terminate employment and remain
eligible to retire and receive a service retirement annuity at
any time after the member attains an applicable age provided by
law for service retirement of employees of the municipality, if
the member has at least 20 years of credited service performed
for one or more municipalities that either have authorized
eligibility under this section or are subject to Section
854 .102 (d) .
(c) A governing body may not adopt an ordinance under this
section unless the actuary first determines that all obligations
charged against the municipality's account in the municipality
accumulation fund, including the obligations proposed in the
ordinance, can be funded by the municipality within its maximum
contribution rate and within its amortization period.
Acts 1981, 67th Leg. , p. 1876, ch. 453, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1981, 67th Leg. , 1st C.S. , p. 224, ch. 18,
Sec. 82, eff. Jan. 1, 1982 . Renumbered from Vernon' s Ann.Civ.St.
Title 110B, Sec. 64.201 and amended by Acts 1989, 71st Leg. , ch.
179, Sec. 1, eff. Sept. 1, 1989.
Sec. 854 .202 . Additional Optional Service Retirement Eligibility.
(a) The governing body of a municipality that has an effective
date of participation in the retirement system after December 31,
1975, or that has previously authorized updated service credits,
by ordinance may authorize eligibility for a service retirement
annuity as provided by this section for a member who is or was an
employee of any participating department of the municipality.
(b) The governing body may authorize a member to retire and
receive a service retirement annuity, if the member:
(1) is at least 50 years old and has at least 25 years of
credited service performed for one or more municipalities that
have authorized eligibility under this subdivision; or
(2) is at least 60 years old and has at least 10 years of
credited service performed for one or more municipalities that
either have authorized eligibility under this subdivision or
have a participation date in the retirement system after August
26, 1979.
(c) The governing body may authorize a member who is or was an
employee of the municipality to terminate employment and remain
eligible to retire and receive a service retirement annuity at
any time after the member attains an applicable age and service
requirement, if the member has at least 10 years of credited
service performed for one or more municipalities that either have
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authorized eligibility under this subsection or are subject to
Section 854.102 (e) .
(d) An ordinance adopted under this section must also include
the provisions specified in Section 852 .105. A governing body
may not adopt an ordinance under this section unless the actuary
first determines, on the basis of mortality and other tables
adopted by the board of trustees, that all obligations of the
municipality to the municipality accumulation fund, including
obligations proposed under the ordinance, can be funded by the
municipality within its maximum contribution rate and within its
amortization period.
(e) The governing body shall specify the effective date of an
ordinance under this section, which may be the first day of any
month after the month in which the actuary makes the
determination required by Subsection (d) .
(f) The governing body may authorize a member to retire and
receive a service retirement benefit if the member has at least
25 years of credited service performed for one or more
municipalities that either have authorized eligibility under this
subdivision or have a participation date in the retirement system
after September 1, 1987.
(g) The governing body may authorize a member to retire and
receive a service retirement benefit if the member has at least,
20 years of credited service performed for one or more\
municipalities that have authorized eligibility under this,
subsection.
(h) Before a governing body may elect to authorize a member to
retire pursuant to Subsection (g) , the governing body shall:
(1) prepare an actuarial analysis of member retirement
annuities at 20 years of service; and
(2) hold a public hearing.
(i) The public hearing required under Subsection (h) shall be
held pursuant to the notice provisions of the Texas Open Meetings
Act, Chapter 551, Texas Government Code.
Acts 1981, 67th Leg. , p. 1876, ch. 453, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1981, 67th Leg. , 1st C.S. , p. 224, ch. 18,
Secs. 83, 84, eff. Jan. 1, 1982; Acts 1987, 70th Leg. , ch. 183,
Sec. 8, eff. Aug. 31, 1987. Renumbered from Vernon's Ann.Civ.St.
Title 110B, Sec. 64 .202 and amended by Acts 1989, 71st Leg. , ch.
179, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1995, 74th Leg. , ch. 514, Sec. 23, eff. Sept. 1,
1995; Acts 1995, 74th Leg. , ch. 712, Secs. 2, 3, eff. Sept. 1,
1995.
Sec. 854 .203 . Optional Increase in Retirement Annuities.
(a) The governing body of a participating municipality by
ordinance, from time to time but not more frequently than once in
each 12-month period, may authorize and provide for increased
annuities to be paid to retirees and beneficiaries of deceased
retirees of the municipality. An annuity increased under this
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