SSLGC 01-07-1999
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MINUTES OF THE ORGANIZATIONAL MEETING OF THE
SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION
THE STATE OF TEXAS ~
COUNTY OF GUADALUPE ~
SCHERTZ/SEGUIN LOCAL ~
GOVERNMENT CORPORATION ~
On this, the 7th day of January, 1999, the Board of Directors (the Board) of the
Schertz/Seguin Local Government Corporation (the Corporation) convened at 1 :30 o'clock p.m. in
the City Council Chambers located at Seguin City Hall, 210 East Gonzales, Seguin, Texas, with the
following members being present and in attendance:
Jim Wolverton
Ramon J. Cook
Sidney Bauer
GIgria Rivera
Director
Director
Director
Director
and with the following absent: Robin D\\yer, constituting a majority of the persons appointed to
the Board and a quorum for the transaction of business, such meeting being the initial meeting of the
Board created under and pursuant to the provisions of the Texas Transportation Corporation Act,
as amended, Section 431.001, Texas Transportation Code (the Act) and Chapter 394.001 et seq., as
amended, Texas Local Government Code, and notice of such meeting having been duly given in
accordance with the provisions of Texas law. Also in attendance were Mayor Mark Stautzenberger,
Mayor Hal Baldwin, Ken Greenwald, Eric V ordenbaum, Kerry Sweatt, and Jack Hamlett.
The meeting was called to order by Mayor of Seguin, Mark Stautzenberger, with introduction
of the Board of Directors and opening remarks by Mayor Stautzenberger and Mayor Hal Baldwin
of Schertz. By a unanimous vote of all Directors present, Mark Stautzenberger was elected to serve
as temporary cbainnan of the meeting. The Board was then advised that the Articles of Incorporation
had been filed with, and a certificate of incorporation issued by, the Secretary of State of the State
of Texas, all as of the 23rd day of December, 1998.
It was detemrined that the first order of business to be considered was the election of officers
of the Corporation prescn'bed,in Article III of the Bylaws. Robin Dwyer was nominated (motion by
Sidney Bauer and seconded by Gloria Rivera) and elected by unanimous vote to serve as President
of the Corporation for a term to expire on September 30 of each year as provided in the Articles of
Incorporation.
Ramon J. Cook was nominated (motion by Jim Wolverton and seconded by Sidney Bauer)
and elected by unanimous vote to serve as Vice-President of the Corporation for a term to expire on
September 30 of each year as provided in the Articles ofIncorporation.
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Jim Wolverton was nominated (motion by Sidney Bauer and seconded by Gloria Rivera) and
elected by unanimous vote to serve as Secretary of the Corporation for a term to expire on September
30 of each year as provided in the Articles ofIncorporation.
All other members of the Board were appointed by acclamation as Assistant Secretaries.
The Vice-President then assumed the duties of the presiding officer in the absence of the
President at the meeting and then announced that the next items of business were to approve the
Articles ofIncorporation and Bylaws.
The next order of business presented to the Board was the adoption of the Articles of
Incorporation fur the Corporation. A draft of the Articles of Incorporation which had been approved
by the City Councils of the City of Schertz, Texas and City of Seguin, Texas (the Governing Bodies),
in connection with their approval and authorization for the creation of the Corporation was then
presented to the Board and discussed. A motion was made by ftm Wolverton and seconded Gloria
Rivera that the Articles of Incorporation, as approved by the Governing Body, be adopted. Upon
a vote being called, such Articles of Incorporation were duly adopted as the Articles ofIncorporation
of the Corporation by a unanimous vote of the Directors present, and a copy of same were directed
to be attached hereto and made a part of the official minutes of the Board.
The next order of business presented to the Board was the adoption of the Bylaws for the
Corporation. A draft of the Bylaws which had been approved by the Governing Bodies in connection
with its approval and authorization for the creation of the Corporation was then presented to the
Board and discussed. A motion was made by Gloria Rivera and seconded by Jim Wolverton that the
Bylaws, as approved by the Governing Body, be adopted. Upon a vote being called, such Bylaws
were duly adopted as the Bylaws of the Corporation by a unanimous vote of the Directors present,
and a copy ofsame were directed to be attached hereto and made a part of the official minutes of the
Board. The Vice President then noted for the record that Kerry Sweatt was appointed as the
Executive Director of the Corporation pursuant to Section 3.6 of the Corporation's bylaws and that
Jack Hamlett was appointed as Treasurer of the Corporation pursuant to Section 3.4 of the
Corporation's Bylaws.
At this time Robin Dwyer arrived and assumed the duties of presiding officer at the meeting
and announced the next order of business presented to the Board was the adoption of a corporate seal
for the Corporation. Upon a vote being called, the Board voted that the corporate seal for the
Corporation be a round seal showing the Corporation's name on the outside circumference with a
star in the middle.
The next order of business presented to the Board was establishing a fiscal year for the
Corporation. A motion was made by Sidney Bauer and seconded by Gloria Rivera. Upon a vote
being called, the Board voted that the fiscal year of the Corporation would be the twelve month
period from October 1 st through September 30th of each year.
The next order of business presented to the Board was the designation of a regular meeting
place and a regular meeting date for the Corporation. A motion was made by Jim Wolverton and
seconded by Sidney Bauer. Upon a vote being called, the Board voted that its regular meeting would
be held the first and third Thursday at 1 :30 p.m. and its regular meeting place would alternate
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between the City of Seguin Council Chambers located at 210 East Gonzales, Seguin, Texas 78156
and the City of Schertz Municipal Building located 1400 Schertz Parkway, Schertz, Texas 78154.
The next order of business presented to the Board was the selection of a depository bank for
the Corporation's funds. A motion was made by Sidney Bauer and seconded by Jim Wolverton.
Upon a vote being called, the Board voted to alternate banks utilizing a bank designated by either the
City of Seguin and the City of Schertz and corresponding with which City Manager is serving in the
Treasurer capacity.
The next order of business was a brief overview, project background and a general discussion
outlining the project scope and phases to supply water alternatives. The briefing was presented to
the Corporation by Crockett Camp. The next meeting of the Board should include a briefing relating
to the plans for the proposed Corporation projects and the preparation of a preliminary budget fur
the Corporation.
The President then asked if there was any other business for the Board to consider an~ none
being oftered, it was moved and seconded that the meeting be adjourned. Upon a vote being taken,
the motion carried by a unanimous vote of all Directors present and the meeting was adjourned at
3 :30 p.m.
MINUTES APPROVED, this the
day of February, 1999.
Signatures of all Directors
Robin Dwyer, President
Ramon 1. Cook, Vice President
Jim Wolverton, Secretary
Sidney Bauer, Director
Gloria Rivera, Director
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543723.1
INVESTMENT POLICY
SCHERTZ/SEGUIN LOCAL GOVERNMENT
CORPORA TION
Adopted and Approved this the
January 7, 1999
TABLE OF CONTENTS
I. PURPOSE . . . .-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. Formal Adoption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. Scope ....................................... 1
C. Review and Amendment ......................... 1
II. OBJECTIVES ............................................ I
A. Investment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. Safety of Principal .............................. 2
D. Standard of Care ............................... 2
E. Investment Advisors and BrokerslDealers ............ 3
F. Authority to Invest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
G. Standards of Ethics .............................4
III. ELIGIBLE INVESTMENTS ................................. 4
IV. RESPONSIBILITY AND CONTROLS ......................... 5
V. COLLATERALIZATION ................................... 5
543723.1
SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION
INVESTMENT POLICY
L PURPOSE
A.
Fonnal Adoption
This Investment Policy (this <<Policy") and the Investment Strategy Statements
contained herein (the <<Investment Strategy Statements"), are authorized by the
Schertz/Seguin Local Government Corporation (the "Corporation") in accordance
with the Public Funds Investment Act, as amended, Chapter 2256, Texas Government
Code (the <<Act").
B.
Scope
This Policy applies to all of the investment activities relating to assets of the
Corporation, excluding bond proceeds generated as a result of the Corporation's debt
issuing ability. This Policy establishes guidelines for: 1) who can invest Corporation
funds; 2) how Corporation funds will be invested; and 3) when and how a periodic
review of investments will be made. In addition to this Policy, bond funds (as defined
by the Internal Revenue Service) shall be managed by their authorizing resolution and
all applicable State of Texas (the "State") and federal law.
C.
Review and Amendment
This Policy and the accompanying Investment Strategy Statements shall be reviewed
annually by the Corporation. In conjunction with the Corporation's annual audit, a
compliance audit of management control of investments and adherence to this Policy
shall be perfonned in compliance with the Act. Amendments must be approved by the
Corporation.
IT.
OBJECTIVES
A.
Investment Strategy
In conjunction with the annual review of this Policy, the Corporation shall review the
separate written investment strategy for each of the Corporation's funds. The
investment strategy must describe the investment objectives for each particular fund
according to the following priorities:
1.
investment suitability,
2.
preservation and safety of principal,
543723.1
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543723.1
D.
1.
3.
4.
5.
6.
B.
1.
c.
1.
liquidity,
marketability prior to maturity of each investment,
diversification, and
yield.
Safety of Principal
The primary objective of all investment activity is the preservation of
capital and the safety of principal in the overall portfolio. Each
investment transaction shall seek to ensure first that capital losses are
avoided, whether they be from securities defaults or erosion of market
value.
Maintenance of Adequate Liquidity
The investment portfolio will remain sufficiently liquid to meet the
cash flow requirements that might be reasonably anticipated. Liquidity
shall be achieved by matching investment maturities with forecasted
cash flow requirements; investing in securities with active secondary
markets; and maintaining appropriate portfolio diversification.
Standard of Care
The standard of care used by the Corporation shall be the "prudent
person rule" and shall be applied in the context of managing the
overall portfolio within the applicable legal constraints. The Act
states:
a.
"Investing shall be made with judgment and care - under
circumstances then prevailing - which persons of prudence,
discretion and intelligence exercise in the management of their
own affairs, not for speculation, but for investment,
considering the probable safety of their capital as well as the
probable income to be derived."
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543723-1
2.
All participants in the investment process shall seek to act responsibly
as custodians of the public trust and shall avoid any transaction that
might impair public confidence in the Corporation.
E.
Investment Advisors and BrokersIDealers
BrokerlDealers eligible to transact investment business with the Corporation shall be
presented a written copy of this Policy. Additionally, the registered principal of the
business organization seeking to transact investment business shall execute a letter to
the Corporation substantially to the effect that the registered principal has:
1.
received and thoroughly reviewed this Policy, and
2.
acknowledged that the organization has implemented reasonable
procedures and controls in an effort to preclude imprudent investment
activities with the Corporation.
The Corporation shall not enter into an investment transaction with a BrokerIDealer
prior to receiving the written instrument described above.
F.
Authority to Invest
The following officers and members of the Board of Directors (or other persons) are
each designated an "Investment Officer", collectively the "Investment Officers" and
"Investment Committee" of the Corporation:
Jack Hamlett
Kerry Sweatt
Anyone of the Investment Officers are authorized to deposit, withdraw, invest,
transfer, execute documentation, and otherwise manage Corporation funds according
to this Policy.
The Investment Officers, shall attend at least one training session, within twelve
months of assuming these duties, that addresses investment controls, security risks,
strategy risks, market risks, and compliance with the Act. Any Corporation staff
member or Investment Officer performing investment duties prior to September 1,
1999, shall complete the required training before September 30, 1999.
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543723.1
G.
Standards of Ethics
Additionally, all Investment Officers shall file with the Texas Ethics Commission and
the Corporation a statement disclosing any personal business relationship with an
entity seeking to sell investments to the Corporation or any relationship within the
second degree by affinity or consanguinity to an individual seeking to sell investments
to the Corporation.
ELIGmLE INVESTMENTS
A.
All funds will be invested in:
1.
Banking Institutions:
Corporation certificate, time and demand deposits at anyone banking
institution shall not exceed Federal Deposit Insurance Corporation or Federal
Home Loan Bank insurance limits which are currently $100,000 unless they
are secured by government securities as further described in III. A(2) and held
by a third party financial institution.
2.
U.S. Government Obligations:
Obligations of the United States or its agencies and instrumentalities,
excluding principal-only and interest-only securities, and collateralized
mortgage obligations and real estate mortgage investment conduits with stated
final maturities greater than ten years and collateralized mortgage obligations
and real estate mortgage investment conduits the interest rate of which is
determined by an index that adjusts opposite to changes in a market index.
3.
Money Market Mutual Funds
Money market mutual funds regulated by the Securities and Exchange
Commission, with a dollar weighted average portfolio maturity of90 days or
less; that fully invest dollar-for-dollar all Corporation funds without sales
commissions or loads; and, whose investment objectives include seeking to
maintain a stable net asset value of $1 per share. The Corporation may not
invest funds under its control in an amount that exceeds 10% of the total
assets of any individual money market mutual fund or exceeds 80% of its
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IV.
v.
543723-1
monthly average fund balance, excluding bond proceeds and reserves and
other funds held for debt service in money market mutual funds.
4.
Eligible Investment Pools
Eligible Investment Pools as defined in Section 2256.016 of the Act provided
that (a) investment in the particular pool has been authorized by the Board of
Directors; (b) the pool shall have furnished the Investment Officers an offering
circular containing the information required by Section 2256.016(b) of the
Act; ( c) the pool shall furnish to the Investment Officers investment
transaction confirmations with respect to all investments made with it; (d) the
pool shall furnish to the Investment Officers monthly reports that contain the
information required by Section 2256.016(c) of the Act; and (e) whose
investment philosophy and strategy are consistent with this Policy and the
Board's ongoing investment strategy.
B.
No investment will be greater than 5 years in maturity unless approved
by the Corporation.
RESPONSmlLITY AND CONTROLS
A.
Investments will be selected by the Investment Officers of the
Corporation.
B.
Investment records and checking records will be held by the
Treasurer, or his designee
c.
At each regular board meeting occurring at least every three months,
the Treasurer will report to the Board of Directors the Corporation's
investments in compliance with the Act, their disbursements, revenue,
and expenses. The Treasurer's report does not require an independent
audit.
COLLATERALIZA TION
A.
Consistent with the requirements of State law, the Corporation
requires all bank and savings and loan association deposits to be
federally insured or collateralized with eligible securities. Financial
institutions that hold Corporation deposits in excess of the FDIC
insured amount will be required to sign a Depository Agreement (the
"Agreement") with the Corporation and the Corporation's
safekeeping agent. The safekeeping portion of the Agreement shall
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543723.1
1.
2.
3.
4.
5.
B.
1.
define the Corporation's rights to the collateral in case of default,
bankruptcy, or closing and shall establish a perfected security interest
in compliance with federal and State regulations, including:
The Agreement must be in writing;
The Agreement has to be executed by the Depository and the
Corporation contemporaneously with the acquisition of the asset;
The Agreement must be approved by the Board of Directors and the
loan committee of the Depository and a copy of the meeting minutes
must be delivered to the Corporation;
The Agreement must be a part of the Depository's "official record"
continuously since its execution; and
The collateral market value shall be determined using bid price, or the
price received upon sale of collateral.
Allowable Collateral
Certificates of Deposit
a.
Eligible securities for collateralization of deposits are defined
by the Public Funds Collateral Act, as amended, Chapter
2257, Texas Government Code.
b.
The market value of the principal portion of collateral pledged
for certificates of deposit must at all times be equal to or
greater than 102% of the par value of the certificate of deposit
plus accrued interest, less the applicable level of FDIC
Insurance.
c.
The Corporation will review at each regular meeting,
occurring at least every three months, a Treasurer's report to
include monthly reports with market values of pledged
securities from all financial institutions with which the
Corporation has certificates of deposit. The Investment
Committee will monitor adequacy of collateralization levels to
verifY market values and total collateral positions.
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543723,1
C.
D.
1.
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1.
d.
If the collateral pledged for a certificate of deposit falls below
the par value of the deposit, plus accrued interest less FDIC
insurance, the institution issuing the certificate of deposit will
be notified by the Investment Committee and will be required
to pledge additional securities no later than the end of the next
succeeding business day.
Collateral Substitution
Collateralized certificates of deposit and repurchase agreements often
require substitution of collateral. Any broker, dealer, or financial
institution requesting substitution must contact the Investment
Committee for approval and settlement. The substituted security's
value will be calculated and substitution approved if its value is equal
to or greater than the required security level. The Investment
Committee, or a designee, must provide written notification of the
decision to the bank or the safekeeping agent holding the security
prior to any security release. Substitution is allowable for all
transactions, but should be limited, if possible, to minimize potential
administrative problems and transfer expense. The Investment
Committee may limit substitution and assess appropriate fees if
substitution becomes excessive or abusive.
Safekeeping of Certificate of Deposit Collateral
All collateral securing bank and savings and loan deposits must be
held by a third-party banking institution acceptable to and under
contract with the Corporation, or by the Federal Reserve Bank
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