Item Coversheet


City Council Agenda Request
May 21, 2019


AGENDA REQUEST NO: V.B.

AGENDA OF: City Council Meeting

INITIATED BY: Jennifer Brown, Director of Finance

PRESENTED BY: Jennifer Brown, Director of Finance    

RESPONSIBLE DEPARTMENT: Finance

AGENDA CAPTION:
Consideration of and action on CITY OF SUGAR LAND RESOLUTION NO. 19-18:  A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SUGAR LAND, TEXAS, AUTHORIZING THE OPENING OF SECURITIES ACCOUNTS WITH FTN FINANCIAL AND RICE FINANCIAL PRODUCTS, AND THE CONTINUANCE OF SECURITIES ACCOUNTS WITH MULTI-BANK SECURITIES, INC., LADENBURG THALMANN FINANCIAL SERVICES INC., HILLTOP SECURITIES INC., AND WELLS FARGO BROKERAGE SERVICES; AND THE CONTINUANCE OF AN ACCOUNT WITH WELLS FARGO BROKERAGE SERVICES FOR BROKERED CERTIFICATES OF DEPOSIT.  
RECOMMENDED ACTION:
Consideration and approval of Resolution No. 19-18 authorizing broker/dealers for the City under the Public Funds Investment Act.
EXECUTIVE SUMMARY:

The City prides itself on strong financial management and stewardship of public funds. As such, the City has adopted an investment policy to ensure the City’s financial assets are guided by strong protections and subjected to minimal risk. Of note, the City’s policy is more restrictive than required by state law. Overall, policies and practices such as this one have earned the City national recognition by professional associations and rating agencies.

 

Specifically, the City’s investments are governed by the Public Funds Investment Act (PFIA) under Chapter 2256 of the Texas Government Code. The act requires the City designate Investment Officers and specific broker/dealers that are authorized to conduct investment transactions on behalf of the City.

 

In March 2019, the City issued RFQ No. 2019-17 requesting submission of qualifications from broker/dealers to conduct investment transactions on the City's behalf. The City received twelve responsive submittals. The investment officers reviewed the qualifications of those twelve respondents and recommend the selection of the following broker/dealers to be designated by City Council to do business with the City:

 

  • Ladenburg Thalmann
  • Hilltop Securities
  • Multi-Bank Services
  • Wells Fargo
  • Rice Financial Products
  • FTN Financial

 

The first four brokers above are continuing existing accounts; FTN Financial and Rice Financial will be new brokers for the City. Additionally, Wells Fargo is authorized for Certificates of Deposit, as they are the City's depository bank and manage the CD's purchased through the brokered CD program. 

 

The Investment Policy and Strategy were approved by City Council Resolutions No. 19-14 and 19-16 on May 7, 2019. There were no changes to either document from last year. A copy of the Investment Policy shall be presented to all authorized financial institutions, broker/dealers, and investment pools. Each entity must certify that they have received and reviewed the City’s policy, and acknowledge that they have implemented reasonable procedures and controls to ensure that all transactions are in compliance with the City’s policy. Investment Officers may not purchase securities from any organization that has not delivered such certification to the City. This certification was obtained from each broker/dealer as part of the RFQ process.

 

The Finance Department recommends that the City Council approve Resolution No. 19-18 establishing authorized broker dealers for the City's investment program with Ladenberg Thalmann, Hilltop Securities, Multi-Bank Services, Wells Fargo, Rice Financial Products and FTN Financial, with Wells Fargo also authorized for Certificates of Deposit. This recommendation was reviewed with the City Council's Finance/Audit Committee on May 16, 2019, and the Committee concurred with staff's recommendation.


BUDGET

EXPENDITURE REQUIRED:  N/A

CURRENT BUDGET: N/A

ADDITIONAL FUNDING: N/A

FUNDING SOURCE:N/A

ATTACHMENTS:
DescriptionType
Resolution No. 19-18Resolutions
Presentation_OR5b_052119ccPresentation