R91-21 05-20-91 RESOLUTION NO. R91-21
A RESOLUTION AUTHORIZING AND APPROVING A PARTICIPATION
AGREEMENT, A FACSIMILE OF SAME BEING ANNEXED HERETO
DESIGNATED EXHIBIT "A" HEREOF AND INCORPORATED HEREIN FOR
ALL PURPOSES BY AND BETWEEN THE TEXAS STATE TREASURER AND
THE CITY OF PEARLANDo
WHEREAS, THE CITY OF PEARLAND is an agency or political
subdivision of the State of Texas (the "Participant") and is empowered
to delegate to a public funds investment pool the authority to invest
funds to act as custodian of investments purchased with local
investment funds; and
WHEREAS, it is in the best interest of the Participant and its
inhabitants to invest local funds in investments that yield the
highest possible rate of return while providing necessary safekeeping
and proteotion of the principal; and
WHEREAS, the Treasurer of the State of Texas acting by and
through the TEXAS TREASURY SAFEKEEPING AND TRUST COMPANY (the "Trust
Company") has created "TEXPOOL", a public funds investment pool to
effectuate the goals of providing investments at the highest possible
yield and maintaining complete safety of the funds of the Participant;
now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS:
~ That the City of Pearland establish an account in its
name with the Trust Company's Public Funds Investment Pool, "TexPool",
for the purpose of transmitting local funds for investment by the
Trust Company in TexPool.
~ That the following individuals whose signatures
appear on Page 2 of this Resolution, are officers or employees of the
Participant and are each hereby authorized to transmit funds to the
Trust Company for investment in TexPool and are each further
authorized to withdraw funds from time to time, to issue letters of
instruction, and to take all other actions deemed if necessary or
appropriate for the investment of local funds:
NAME: JAMES O. DESHAZER TITLE: CITY MANAGER
SIGNATURE: ~ _~~/
NAME: JANET EASTBURN TITLE: FINANCE DIRECTOR
SIGNATURE:__ ,
Section 3. That this Resolution and its authorization shall
continue in full force and effect until amended or revoked by the
Participant and until the Trust Company receives a copy of any such
amendment or revocation, until such time the Trust Company is entitled
to rely on same.
PASSED, APPROVED and ADOPTED on this the _~/~day of ~,
A. D., 1991.
C. V. COPPINGER / /
MAYOR
ATTEST:
APPROV. E~DhAS TO FORM:
LESTER O. RORICK
CITY ATTORNEY
EXHIBIT "A"
TEXAS STATE TREASURY
Texas Local Government Investment Pool
Participation Agreement
PREAMBLE
This participation agreement dated as of the 20 day of MAY ,19
(the "Participation Agreement") is made and entered into by and between the Texas State Treasurer (the
"Treasurer")'and CITY' OF PDARLAND (the "Participant").
WHEREAS, the Interlocal Cooperation Act, TEX. REV. CIV. STAT. ANN. art. 4413 (32)
etlT~l as amended and TEX. REV. CIV. STAT. ANN. art. 4413 (34 (c)) (the "Acts") provide for the
creation of public funds investment pools to which any political subdivision maydelegate, by contract, the
authority to hold legal title as custodian and to make investments purchased with local investment funds;
and
WHEREAS, the Treasurer has created Texas Treasury Safekeeping Trust Company (the
"Trust Company") which 'receives, transfers and disburses money and securities belonging to state
agencies and local political subdivisions of the state and for which the Treasurer is the sole officer and
director and which is managed by Treasury employees; and
WHEREAS, the Treasurer has created the Texas Local Government Investment Pool
C'TexPool") as a public funds investment pool, which TexPool funds shall be invested in certain eligible
investments as more fully described hereafter,
NOW THEREFORE for and in consideration of the mutual promises, covenants and
agreements herein contained and other good valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE I.
DEfiNITIONS -
"ACH" shall mean Automated Clearing House electronic fund transfers.
"Authorized Investments" shall mean, in accordance with the Act, the purchase, sale and investment of
funds under TexPool's control in the following:
1. Obligations of the United States or its agencies and instrumentalities;
2. Direct obligations of the State of Texas or its agencies;
3. Other obligations, the principal of and interest on which are unconditionally guaranteed or insured by the
State of Texas or the United States;
4. Obligations of states, agencies, counties, cities, and other political subdivisions of any state having been
rated as to investment quality by a nationally recognized investment rating firm and having received a
rating of not less than A or its equivalent;
Certificates of Deposit issued by state and national banks rioretcHed in this state that are:
A. Guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor;, or
Secured by obligations that arc described by subdivisions 1-4 of this subsection, which are
intended to include all direct agency or instrumentality issued mortgage backed securities
rated AAA by a nationally recognized rating agency, or by Chapter 726, Acts of the 67th
Legislature, Regular Session, 1981 (art 2529b-1 TEX. REV. CIV. STAT. ANN.), and that
have a market value of not less than the principal mount of the certificates;
cates;
Fully co!lateralized direct repurchase agreements having a defined termination date, secured by obliga-
tions described by Subdivision I of this subsection, pledged with a th ird party selected or approved by the
political entity, and placed thwugh a primary government securities dealer, as defined by the Federal
Reserve, or a bank domiciled in this state; and
Certificates of Deposit issued by savings and loan associations domicHed in this state that are:
A.
Guaranteed or insu red by the Federal Savings and Loan Insurance Corporation or its successors;
or
Secured by obligations that are described by Subdivisions 14 of this subsection, which are
intended to include all direct federal agencies or instrumentality issued mortgage backed
securities that have a market value of not less than the principal amount of the certificates.
Such other investments as may be authorized by TEX. REV. CIV. STAT. ANN. art 842a-2 as amended
from time to time.
"Authorized Representative(s) of the Participant" shall mean those individuals who are authorized to execute documents
and take such other necessary actions under this Participation Agreement as evidenced on behalf of the Participant by duly
enacted resolution of the Participant, a certified copy of which is on file with the Trust Company.
"Authorized Representative(s) of the Trust Company' shall mean those employees of the Treasury authorized to execute
documents and take such other necessary actions including the investment of funds under this Participation Agreement
on behalf of the Trust Company as evidenced by resolution of the Trust Company, a certified copy of which is on file with
the Participant.
"Data Collection Center" shall mean a third party vendor used by the Trust Company to collect and disburse fund
remittance information reported by the Participants.
"Letter of Instructions" shall mean a written authorization and direction to the Trust Company signed by an Authorized
Representative of the Participant.
"Treasury" shall mean the Texas State Treasury Department.
"Wire Transfers" shall mean directly wired transfers of TexPool funds or of Participant's funds through the Federal Reserve
Bank System.
ARTICLE II.
PARTICIPATION REQUIREMENT$
Section 2,01. The Participation Agreement The Participant must execute a Participation Agreement before depositing
any funds into TexPool. Further, a duty certified copy of a resolution by the Participant designating Authorized Representatives
of the Participant must accompany the executed Participation Agreement
Section 2.02. Creation of TexPoo!. The Treasurer, as Trustee, hereby creates and establishes TeatPool as a separat~ and
distincttrustfundt~behe~d~utsidetheTreasuryandt~bemanagedinac~~rdancewiththisP~rticipati~nAgreement forthebene~t
of the Participants. Further, the Treasurer hereby designates and appoints the Trust Company to operate and manage TexPool and,
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to the extent permitted by law, appoints the Trust Company to act as custodian of all monies deposited by the Participant in TexPool
and to receive, hold, invest and manage all monies deposited by the Participant into Ter, PooL By executing this Participation
Agreement, the Participant hereby consents to the foregoing. 'me Treasurer acting through the Trust Company hereby agrees to
mange the Participant's monies with the same degree of care and assuming the same duty to each Participant that is applicable to
the management of funds held inside the Treasury.
Seaion 2.03. Accounts, SubAcounts and Ownership Interest. The Trust Company shall establish and maintain separate
account(s) for each Participant in TexPool in accordance with a duly executed Letter of Instruaions (the "Accounts"). Separate
SubAccounts may also be established within each Account, as so directed from time to time in a Letter of Instructions (the "Sub-
Accounts").
Each Participant shall own an undivided beneficial interest in the assets of TexPool which shall consist of the pwportional
mount each Participant's Accounts bear to the total amount of all Participants' Accounts in TexPool, computed on a daily basis.
An Authorized Representative of the Participant may also eliminate inactive Accounts and Sub Accounts from time to time
if the request is confirmed by a duly executed Letter of Instructions.
ARTICLE IH.
FUND TRANSFERS IN TEXPOOL
Section 3.01. Method of Transfer of Funds. All fund transfers, both deposits and withdrawals, shall be by ACH or by Wire
Transfers. Presentation of physical items for deposit and/or withdrawal will not be accepted. The Participant agrees to effect ACH
deposits and withdrawals by contacting TexPool's Data Collection Center using a touch-tone telephone, a computer with a modern
or by rotary telephone talking to a live operator.
Seaion 3.02. ACH Fund Transfers. in order to remit funds to TexPool, the Participant may inithte an ACH withdrawal
from its designated financial institution account by reporting remittance information via a toll-free telephone call to the Data
Collection Center. The Data Collection Center will immediately notify the Trust Company and the Trust Company vAil credit the
Participant's account with available funds in the amount of the remittance on the next business day. All deposit and withdrawal
instructions for ACH fund transfers must be received by the Data Collection Center before 12'~ p.m. (Austin time) one day prior
to funds transfer on settlement day. in addition the Participant may also initiate ACH credits to TexPool which must be reported
to the Data Collection Center before 12'.30 p.m. (Austin time) one day prior to funds transfer on set~ement day.
The Texas State Treasuzy's Rapid Deposit Program Division shall be responsible for establishing and maintaining the ACH
system and Data Coileaion Center on behaff of all Participants.
Seaion 3.03. Wire Transfers. Notification of all Wire Transfers, including both deposits and withdrawals, must be made
by 10:00 a.m. on the same business day, provided the Participant immediately notifies the Authorized Representative of the Trust
Company by telephone call or by facsimile machine C'fax"). For all Wire Transfer withdrawal requests the Trust Company's
Authorized Representative will perform a call-hack verification and authorization pflor to effectuating any withdrawal.
Seaion 3.04. Deposits. Upon receipt by the Trust Company's Authorized Representative of notification by the Data
Colleaion Center or receipt of any Wire Transfer, the Trust Company will cred it Participant's Accounts with available. funds. Same
day deposits punuant to Seaion 3.03 hereof may only be effeauated by Wire Transfer. All deposits will be accepted regardless of
the day and time it is received by the Trust Company.
Section 3.05. Late Deposits. Because of the fiuauation in investment markets and its effea on investment decisions, late
deposits may not be includable in that days TexPool assets. As used in the seaion, the term "late deposits" shall mean: (a) Wire
Transfers other than those described in Seaion 3.03 and (b) All other deposits received after 12:30 p.m. (Austin time). The
Participant agrees that hte deposits may be segregated into an independent and separate investment overnight only. The
Participant hereby acknowledges that frequently hie day investments are made at a lower interest rate yield, which would diminish
the remainder of the TexPool Participants' investment return income. The Participant agrees that the Trust Company shall use
its best efforts to purchase the highest interest rate yielding investment, however a decision to segregate a late deposit for purchase
of a separate lower yielding investment instrument will be made at the discretion of the Trust Company's Authorized Represen-
tatlye. In the event the Trust Company determines to invest a late deposit in a segregated lower yielding investment instrument,
only the affeaed Participant's Accounts will receive the appropriate income earnings associated with the late deposited investment
on the next business day. The funds will be merged into TexPool on the next business day, For aH deposits received after 12'20 p.m.,
noon (Austin time), and in the event there is no suitable late day investment for a late deposit, the funds will be held in the
ParticIpant's Accounts as a cash (non-interest bearing) deposit in the Tru.~t Compnny's Federal Reserve Bank of Dallas account in
order to maintain complete security of the funds. The funds will be merged into TexPool on the next business day.
Seaion 3.06. Withdrawals. To withdraw funds by Wire Transfer from TeaPool, an Authorized Representative of the
Participant shall issue instructions not later than 10:130 a.nt (Austin time) on the day the funds are to be withdrawn, specifying the
Account or SubAccount and the amount of money to be wired or transferred in immedhtely available funds to 'the Participant's
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designated local bank account. Such instructions may be oral, provided however that a written Letter of Instruction signed by an
Authorized Representative of the Participant is sent to the Trust Company within 24 hours of the oral instructions. M oral
instructions shall be subject Io a ca!l-back verification as described in Section 3.03. Upon receipt of a withdrawal request theTrust
Company will verify that the Participant's Account balance is sufficient to honor the request, and if so, the Trust Company will
transfer the requested funds to the Participant's designa ted local bank account in next day available funds by ACH, unless othet~ise
so instructed by the Participant. Instructions from the Participant to withdraw the total balance in the Accounts or SubAccounts
may include any interest earnings credited to the Accounts or SubAccounts through the day of the withdrawal. In all other
circumstances accrued interest shall be credited daily and paid at the end of the month.
5ection3.07. Late Withdrawals. Samedaywithdrawal requests mnst be received by l0:00a.m. and mayonlybeeffectuated
by Wire Transfer. A late withdrawal request may be subjected to and conditioned upon the ability of the Trust Company to fund
the withdrawal request. However, the Trust Company agrees to use its best efforts to honor such late withdrawal requests and to
notify the Participant immediately with information concerning disposition of the late withdrawal request.
Section 3.08. Separation of Accounts. TexPool was created to establish a fund that may be cornmingled for purposes of
common investment and operational efficiency. However, each Participant shall have separate Accounts and SubAccounts on the
books and records of TexPool which shall be maintained by the Trust Company.
ARTICLE IV.
INVESTMENTS AND DUTIES
Section 4.01. Investments. All monies held in TexPool shall be invested and reinvested by the Authorized Representa-
tives of the Trust Company onl~ in Authorized Investments. TexPooi's available funds that are uninvested shall be held at the Trust
Company's account at the Federal Reserve Bank of Dallas. All investments of both assets and collateral will be in the possession
of the Trust Company and held in its book-entry safekeeping account at the Federal Reserve Bank of Dallas.
Section 4.02. 'Failed Investment Transaclions. In the extraordinary event that a purchase of securities results in a failed
settlement, any resulting uninvested funds shall remain in the Trust Company's Federal Reserve Bank of Dallas account. ff an
alternative investment can be secured after the failure of the trade to settle, TexPool will receive all the income earnings, including
but not limited to, compensation from the purchaser failing in the trade and the interest income from the alternative investment
Section 4.03. Investment Earnings Allocation. All interest earnings in TexPool will be valued daily and credited to the
Participant's Accounts and SubAccounts monthly, on a pro rata allocation basis. All losses, if any, resulting from the investment
of monies in TexPool shall also be allocated on a pro rata allocation basis.
Section 4.04. Specific Investment Requirements. Be, cause TexPooi is designed to give each Participant immediate access
to their funds, the dollar weighted average maturity of the investments in TexPool will not exceed 120 days.
All collateral securing rcpurchas~ agreements will be repriced daily and maintained at a minimum of 100% coverage of the
originally invested principal amount, which shall be reviewed from time to time by the TexPool Advisory Board as part of the
investment Policy.
Section 4.05. TexPool Advisory Board. There has been created the TexPool advisory board (the "Advisory Board") which
consists of at least 10 members, each appointed by the Treasurer for a staggered term of three (3) years. The Advisory Board shall
review and approve an investment policy for TexPool. The Advisory Board shall also have responsibility for any modification or
other amendments of the fee structure which is more fully described in Section 5.01 herein. The Participant by execution of the
Participation Agreement hereby agrees to be bound by all policies, fee schedules, and other rules which may be adopted by the Ad-
Section 4.06 Liability. Neither the Treasurer, the Trust Company, any Treasury employees, nor any of the members of the
Advisor,/Board shall be held liable for any action or omission to act on behalf of the Treasury, Treasury employees, or the
Participants unless caused by gross negligence or willful misconduct.
ARTICLE ¥.
EXPENSES AND REPORTS
SectionS.01. Fees and Expenses. Attached hereto is aschedulcoffces forbasicand specialscrvices. Thc Participantagsees
to pay to the Trust Company an amount set forth in the fee schedule which shall be sufficient to reimburse the Trust Company for
its actual costs of performing its duties under this Participation Agreement. Participant agrees that all fees shall be directly and
automatically assessed and charged against the Participant's Accounts and SubAccounts. The basic services fee shall be calculated
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as a reduction in the da/ly income earned, thus only the net income shaft be aedited to the Participant's account. Fees for special
services shah be charged to each Participant's account as they arc incurred or performed. A schedule of fees shah be sent annually
to the Participant Fees shall only be changed upon the approval of the majority of TexPoo!'s Advisory Board. Each Participant
will be notified thirty (30) days prior to the effective date of any change in the fee schedules.
Section $.02. Penalties for ~. All actual costs, including but not limited to, losses of investment income for TexPool
associated with ACH returns or by failure to timely transmit a Wire Transfer for deposit will be charged against the Participant's
Accounts and SubAccounts unless such failure was beyond the control of the Participant TheTrust Companywill make every effort
to mitigate any adverse cost being incurred by the Participant. The Trust Company shall only recover the actual costs incurred in
the event of any loss.
Section S.03. Reports. The Trust Company shah submit a written report to the Participant which shah include a detailed
· listing of all transactions occurring in the Participant's Accounts and SubAccounts for the previous month, within the first five (5)
business days of the next succeeding month. Such report will indicate the balance remaining in the Participant's Accounts and
SubAccounts, the daily and monthly yields of interest earned, aH deposits and withdrawals, and aH expenses, including the basic
services fee and any special fees assessed, in accordance with generally accepted accounting principles. Additionally, the Trust
Company will maintain copies of the Participant's Accounts and SubAccounts reports in physical or computer form for a minimum
of three prior fiscal years. This information will be available to assist the Participant in any special research or report request Copies
of all Participants' reports shall be available for public examination at the Trust Company's offices at the Treasury. These reports
and summary information shall be presented to the Advisory Board. All records shah be available for inspection at all reasonable
hours of the business day and under reasonable conditions. The Trust Company will attempt to keep confidential aH historical
account information and current balances of the Participant However, the Participant acknowledges that the Trust Company is
subject to the Open Records Act, TEX. REV. CIV. STAT. ANN. art 6252-17a, as mended.
ARTICLE VI.
SPECIFIC PARTICIPANT INFORMATION
Section 6.01. Xccount Number and Password. Each Participant shall be assigned a unique identifying number, and each
Authorized Representative of the Participant shall be assigned a unique identifying password. Additionally, each Account and Sub-.
account will be assigned a unique number. The Participant hereby agrees that the unique passwords and account numbers are
required to implement any deposit or withdrawal to the Participant's Accounts or SubAccounts. The Trust Company agrees that
such account numbers and passwords shall be maintained by the Trust Company and the Trust Company shah decline to disclose
said unique identifying information except with the consent of the Participant or the Participant's Authorized Representative.
Section 6.02. Bank Account. The Participant's local bank account and information is set forth on the attached routing
form. Any amendment or change to the above described information must be submitted in writing to the Trust Company and must
include clear instructions for effecting future deposit and withdrawal transactions. The Trust Company will implement these
changes within 15 business days of receiving the notification. The Trust Companywill forward this information to the Rapid Deposit
Program Division of the Treasury. · ·
Section 6.03. Notices. Any notices, Letters of Instructions, or other information required or permitted to be given
hereunder shall be given in writing and shall be deemed duly given when mailed by registered or certified mall, postage prepaid,
addressed or telefaxed as follows:
To the Panicpant:
Participant Name CITY OF PEARLAND
Contact Person JAMES 0. DESHAZER
CITY MANAGER
Address P.O. BOX 2068
PEARLAND, TX. 77588-)068
Telephone No. (713} 485-2411
TeleF~No. 1713) 485-8764
To the Trust Company:
Richard Scott, Director
Trust Division
Texas State Treasu~ Department
P.O. Box 12608, Capitol Station
Austin, Texas 78711
Telephone No. ($12) 440-4740 or call Toll Free: 1-800-234-LGIP
Telefax No. (512) 440-4749
Section 6.04. Taxpayer Identification Number. The Participant's taxpayer identification number assigned by the Internal
Revenue Sen, ice is: 74-6028909-7 . The Participant hereby agrees to notify the Trust Company of any change
affecting this Taxpayer Identification Number and agrees that unless and until so notified, the Trust Company shall be entitled to
rely on same in providing any and all reports or other information necessary or required by the Federal tax laws as amended from
time to time.
ARTICLE VII.
MISCELLANEOUS
Section 7.01. Sevcmbility. If any provision of this Participation Agreement shall be held or deemed to be in fact illegal,
inoperative or unenforceablc, the same shall not affect any other provision or provisions herein contained or render the same
Invalid, inoperative or uncnforceablc to any extent whatsoever.
Section 7.02. Limitation of Ril-,hts. With the exception of the rights herein expressly conferred, nothing in or to be implied
from this Participation Agreement is intended or shall be construed to give any person other than the parties hereto any legal or
equitable right, remedy or claim under or in respect'to this Participation Agreemen t or any of the covenants, conditions or provisions
herein contained; this Participation Agreement and all of the covenants, conditions and provisions hereof being intended to be and
being for thesolcand cxciusivc benefits to the parties hcretoas herein provided. The Participant furtheragrees that thcTreasurer's
responsibilities hcrcunder arc limited to the management and investment of TexPeol and the providing of reports and information
herein required; neither the Treasurer nor the Trust Company shall be liable for any losses from investments and trausfcrs made
in accordance with the procedures set forth in this Participation Agreement.
Section 7.03. Execution of Counterparts. This Participation Agreement may be simultaneously executed in several
separate counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 7.04. Applicable Law. This Participation Agreement shall be governed by and construed in accordance with the
laws of the State of Tens and is wholly performable in Travis County, Texas.
Section 7.0~. Captions. The captions or headings in this Participation Agreement are for convenience only and in no way
define, limit, or describe the scope or intent of any provisions, articles, or sections of this Participation Agreement.
Section 7.06. Amendments. The Participant and the Trust Company may supplement, amend or modify this Partici-
pation Agreement only if evidenced in a writing signed by both parties.
Section 7.07. Term/nation. This Agreement may be terminated by either party hereto, with or without cause, by tendering
30 days' prior written notice in the manner set forth in Section 6.03 hereof.
Section 7.08. Term. The continuance of this Participation Agreement is subject to and dependent upon appropriation
of the necessary funds by the Texas Legislature. Otherwise, unless terminated in accordance with Section 7.07, it shall be
automat/ca!ly renewed on each anniversary date hereof~
In Vtatness Whereof the parties hereto have caused this Participation Agreement to be executed in multiple counterparts
as of the date first set forth above.
PARTICIPANT
TEXAS STATE TREASURER
Title:
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