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HomeMy WebLinkAbout07-25-05 Fiscal Affairs meeting cancelled - no quorum• STATE OF TEXAS )( COUNTY OF HARRIS )( 2%v~!/ C~I?G'~~~r CITY OF LA PORTS )( NOTICE IS HEREBY GIVEN OF A REGULAR MEETING OF FISCAL AFFAIRS COMMITTEE TO BE HELD ON JULY 25, 2005 AT 5:00 P.M. AT LA PORTS CITY HALL COUNCIL CHAMBERS, 604 WEST FAIRMONT PARKWAY, LA PORTS, TEXAS, REGARDING THE ITEMS OF BUSINESS ACCORDING TO THE AGENDA LISTED BELOW: 5:00 P.M. -REGULAR SESSION 1. CALL TO ORDER 2. CONSIDER APPROVAL OF MINUTES OF REGULAR MEETING OF FISCAL AFFAIRS COMMITTEE HELD APRIL 25, 2005. 3. RECEIVE AND REVIEW THIRD QUARTER (FY 2005) INVESTMENT REPORT - C. ALEXANDER 4. REVIEW FRAUD POLICY - C. ALEXANDER 5. RECEIVE AND REVIEW CREDIT CARD REPORT - C. ALEXANDER 6. COMMITTEE COMMENTS 7. ADJOURNMENT There may be a possible quorum of City Council present at this meeting and may participate in discussion at this meeting, however, they will not vote on matters. THIS FACILITY HAS DISABILITY ACCOMMODATIONS AVAILABLE. REQUESTS FOR ACCOMMODATIONS OR INTERPRETIVE SERVICES AT MEETINGS SHOULD BE MADE 48 HOURS PRIOR TO THIS MEETING. PLEASE CONTACT CITY SECRETARY'S OFFICE AT 281-471-5020 OR TDD LINE 281- 471-5030 FOR FURTHER INFORMATION. ~aJl~-~~-'~~ i ~ SAC ~? Martha A. Gillett, TRMC City Secretary Date posted ® • MINUTES OF THE LA PORTE FISCAL AFFAIRS COMMITTEE Apri125, 2005 Call to Order The meeting was called to order by Chairperson Chuck Engelken at 5:03 p.m. Members of Committee Present: Chairperson Chuck Engelken, Mayor Pro Tem Barry Beasley, Councilmember Howard Ebow and Councilmember Tommy Moser Members of Committee Absent: None Members of City Executive Staff and City Employees Present: City Manager Debra Feazelle, Assistant City Manager Cynthia Alexander, Assistant Finance Director Michael Dolby, City Secretary Martha Gillett, Budget Investment Officer Shelley Wolny, Assistant City Manager John Joerns, Secretary Shannon Green, Assistant City Secretary Sharon Harris. Other citizens: Sue Gail Kooken 2. Consider approval of Minutes of Regular Meeting of La Porte Fiscal Affairs Committee Minutes held on January 25, 2005. Motion was made by Committee Howard Ebow to approve the minutes as presented. A second by Committee Member Mayor Pro Tem Barry Beasley. The motion carried unanimously. 3. Discussion Items a. The September 30, 2004 Annual Financial Report was discussed. Assistant City Manager Cynthia Alexander informed the committee the City received the final report late from the auditor. The auditors noted the reason for the delay was due to computer problems. Ms. Alexander noted concerns in bond rating and loss of financial award the City has received for numerous years. b. Financial Advisors was discussed. Ms. Alexander noted the City received six proposals. Staff reviewed the proposals and selected the top two firms. Mr. Engelken and Mr. Beasley joined staff in reviewing the top two firms. The committee was more impressed with RBC Dain Rauscher, Inc. Ms. Alexander further noted legal was reviewing the contract and it would be brought to Council for approval at a future meeting. c. Bond Counsel was discussed. Ms. Alexander informed the group the RFP was out for Bond Council and the proposals closes in the next two weeks. She noted they would be looking for volunteers from the Fiscal Affairs Committee to assist staff in reviewing the proposals. Bany Beasley and Howard Ebow volunteered to serve on the committee. d. Legislative Update Report - Ms. Alexander informed the committee staff was continuing to track the legislative bills and would provide them with report on the final results. Minutes of the La Porte Audit ittee -January 24, 2005 -Page 2 4. Consent Agenda C~ a. Tax Resale Property: Recommend Approval of 7 Parcels - K. Powell b. Tax Resale Property: Recommend Rejection of 1 Parcel - K. Powell Motion was made by Howard Ebow to approve the Consent Agenda as presented. Second by Barry Beasley. The motion carried unanimously. 5. Receive and Review Second Quarter (FY 2005) Investment Report - C. Alexander Ms. Alexander noted Ms. Wolney would be providing the committee with an overview of the report. Ms. Wolney provided~the overview and answered the committee's questions. 6. Receive and review credit card report. - C. Alexander Assistant Finance Director Michael Dolby provided the committee with a review of the credit card report. He noted there were no problems or concerns with any of the transactions. 7. Committee Comments: Barry Beasley questioned the process and inventory procedures for inventory of goods and how we inventory garbage bags. Cynthia Alexander noted she would check on this and report back at the next meeting. Chuck Engelken noted concerns with the garbage bag handout. In addition, he noted concerns with water bills in the Brookglen area and inquired as to whether or not we should perform an audit. Lastly, Mr. Engelken provided the group with a handout of an HGAC Fraud Policy. Tommy Moser noted he had concerns with older citizens paying an increased rate for garbage bags. 8. Adjournment There being no further business to come before the Committee, the meeting was adjourned at 5:45 p.m. Respectfully submitted, Martha A. Gillett, TRMC City Secretary Approved this day of , 2005. Chairperson Chuck Engelken o • CITY OF LA PORTE Interoffice Memorandum TO: Barry Beasley, Councilman Howard Ebow, Councilman Chuck Engelken, Councilman Tommy Moser, Councilman Louis Rigby, Councilman Debra Brooks Feazelle, City Manager FROM: Cynthia Alexander, Assistant City Manager Shelley Wolny, Investment Officer DATE: July 15, 2005 SUBJECT: Quarterly Investment Report • For the third quarter of the 2005 fiscal year, the City's investment portfolio yield has been between 2.79% and 2.93%. The average return on the portfolio for the third quarter of the fiscal year was 2.87%, which is 21 basis points below the average yield of our benchmark, which was 3.14% (see graph below). The current year to date interest earned for the 2005 fiscal year is $656,336. City vs. Benchmark 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% >`}~~ ,~cAb ~QAb `oA c°Ab ~'Ab ~A'~ ~h '~A5 SAh kph .kph Portfolio Yield Benchmark At June 30°i the City's portfolio consisted of 55% in Agency Notes, 25% in Texpool, 9% in TexSTAR and 11% in Logic (see pie chart below). By Investment Type 55% 25% 9% 11% ~ Texpool ~ TexSTAR D Logic D Agency Notes The Fed has increased the overnight rate four times since December 2004, and is likely to increase the rate a few more times. The current overnight rate as of June 30`~ is 3.25. With that said, our main focus is to continue to ladder the portfolio. ~ i At the end of the third quarter, the City's portfolio consisted of 45% of the portfolio maturing overnight (see graph below). 26% of the City's portfolio matures in one year and 29% of the City's portfolio matures in 12-24 months. By Investment Maturity 29% 45% 26% ~ Overnight ®1-12 Months ~ 12-24 Months Currently, the 3-month T-Bill is at 3.04%; 2 year, at 3.64%; 5 year, at 3.77%; and, the 20-year is at 4.35% (see yield curve below). Yield Curve 5.50% 4.50% 3.50% 2.50% 1.50% 0.50% 0 5 10 15 20 3 Months Ago ®Current The overnight rate is currently at 3.25%. We will continue to focus on laddering the portfolio to maintain a constant cash flow and a liquid position. 2 Year T-Note 12.oo°io lo.oo°io s.oo°io 6.oo°io 4.00% 2.00% 0.00% In summary, we will continue to invest the City's funds in conservative investments, as authorized by the Public Funds Investment Act, always keeping in mind Safety first, and then Liquidity and lastly Yield. 2 • Portfolio Composition and Value as of Jsne 30, 2005 100.00% 80.00% Par Book Market Days to Value Value Value Maturity 60.00% Investmem Pools 15,805,734 15,805,734 15,805,734 1 _ -= Agencies 18,982,683 18,982,683 18,843,180 353 ~'~ 20'00% Total 34,788,417 34,768,417 34,648,914 193 0.00% Investment Pools Agencies ~7 ~ J O S tl•Dec-04 - un -04 t~ un- Investment Maturity Schedule as of June 30, 2005 Book Value Percent tdynn 0-3 months 15,805,734 45A3% p,t= 9-12 months 8,992,479 25.85% momb 1-2 year) 9,990,204 28.72% 2 or more yens - 0.00% ~ works Toni 34,788,417 o 100.00% ® - - - Portfolio Performance for the month otJune 2005 Weighted Portfolio BmtJunark Average 3.00% Yield Yield• Maturity Pooled Funds 2.93% 3.22% 6A months 2.00% Bond Funds 3.06% 3.04% 1 day Total ® ® 5.720 1.00% O.OlK6 •7'be pooled funds benchmark is based on the average monthly yield of a 6-month Treasury. Pooled Fords Bond Funds Toni The bond funds bmchmaric yield is based on the average monthly yield of a 3-month Treasury. The total is based on weighted average monthly benchmark yields. O Porttirlio Yield ^ Benchmark Yuld• Portfolio Earnings for months ended June 30, 2005 zs0.two Budaet Actual Percent 200.000 General 236,410 226,725 95.90% Enterprise 41,540 33,368 80.33% 150.000 lntemalService 64,200 66,045 102.87% r00.000 Total 342,150 326,138 95.32% ~~ Gaival P.ntaprise lOtenal Service OBudget ^Aemd Yleld Curve trox sox 00% 50% otn6 sox 00% am6 0096 50% 00% 3 mo 8 mo t yr 2yr Syr ~Apr-05 -~-May~05 -pt-JurM5 WAM • Pooled Funds 10 9 8 7 8 5 4 3 2 1 Apr-05 AAay-05 Jun-05 Average for June % of fiords invested in: 2005 2004 Securities & Paola 9728% 98A3% Bank Depository 2.72% 1.57% Total%offimdsinvested 100.00% 100.00% Gperating Accowt Balance S 973,905 S 548,252 • • O 0 N d C '~ "7 L w C w CD C". ~~1 /. y W U 4.n a a 3 _~ 1. +.+ C O °am F ~a J Om ~ F ~I~ o4f D:i 0 0 o c o o e o 0 0 0 0 0 o e 0 0 0 0 0 \~~~ 0 0 0 0 0 0 O~ O~ 00 00 00 O~ O~ 01 00 01 DD 00 01 00 ~ _O 00 0o r r ~ o0 00 00 oo r ao 00 00 O O -- O O O O -- O O O N O 0 0 0 0 0 0 0 0 0 0 O O O O 0 0 e o 0 0 0 0 0 0 0 o e o e e o 0 0 0 0 0 0 0 0 0 0 0 O O O O O O N N N N N~ N N N N N N N N N ~Y .--~ .--~ .-. ~.. ... .-~ .--i ~--~ .--i ~-+ .-+ ~-+ .-. ... 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C ~+ u r.+ ~ y ' . a c~ p • h O O N O M 7 .d ~ ~ ~w ~ .~ y ~ ~a ~ ~ .~ ~ -o c `~° ._ •o s~ ~3 ~ ~ N ~ U y ~ ~ ~ h .~ N p,~ N O ~ ~ U G ~ •--~ CL ~ ~ U_ Cr ~ a+ "" F., U .~ w Q b ~~ ~ .~ F. ~ y ~ ~ 3 C O 3 A ~_ N w U C N C rr N • 4 POLICY ON SUSPECTED MISCONDUCT AND DISHONESTY POLICY Introduction Like all organizations, The City of La Porte is faced with risks from wrongdoing, misconduct, dishonesty and fraud. As with all Municipal business exposures, we must be prepared to manage these risks and their potential impact in a professional manner. The impact of misconduct and dishonesty may include: • The actual financial loss incurred • Damage to the reputation of our organization and our employees • Negative publicity • The cost of investigation • Loss of employees • Loss of costumers • Damaged relationships with our contractors and suppliers • Litigation • Damaged employees morale Our goal is to establish and maintain an environment of fairness, ethics and honesty for our employees, our citizens, our suppliers and anyone else with whom we have a relationship. To maintain such an environment requires the active assistance of every employee and manager every day. The City of La Porte is committed to the deterrence, detection and correction of misconduct and dishonesty. The discovery, reporting and documentation of such acts provides a sound foundation for the protection of innocent parties, the taking of disciplinary action against offenders up to and including dismissal where appropriate, the referral to law enforcement agencies when warranted by the facts, and the recovery of assets. Page 1 7/18/2005- • Purpose C~ The purpose of this document is to communicate city policy regarding the deterrence and investigation of suspected misconduct and dishonesty by employee and others, to provide specific instructions regarding appropriate action in case of suspected violations. Definition of Misconduct and Dishonesty For purpose of this policy, misconduct and dishonesty include but are not limited to: • Acts which violate the City of La Porte's Code of Conduct • Theft or other misappropriation of assets, including assets of the city, our citizens, supplier or other with whom we have a business relationship • Misstatement and other irregularities in the City of La Porte records, including the intentional misstatement of the results of operations • Wrongdoing • Forgery or other alteration of documents • Fraud and other unlawful acts • Any similar acts. The City of La Porte specifically prohibits these and any other illegal activities in the actions of its employees, managers, executives and other responsible for carrying out the organization's activities. Policy and Responsibilities Reporting It is the responsibility of every employee, supervisor, manager and executive to immediately report suspected misconduct or dishonesty to their supervisor. Supervisors, when made aware of such potential acts by subordinates, must immediately report such acts to their supervisor. Any reprisal against any employee or other reporting individual because the individual, in good faith, reported a violation is strictly forbidden. Due to the important yet sensitive nature of the suspected violations, effective professional follow up is critical. Managers, while appropriately concerned about "getting to the bottom" should not in any circumstances perform any investigative or other follow up steps on their own. Concerned but uninformed managers represent one of the greatest threats to proper incident handing. All relevant matters, including suspected but unproved matters, should be referred immediately to those with follow up responsibility. Page 2 7/18/2005- • Additional responsibilities of Supervisors All employees have a responsibility to report suspected violations. However, employees with supervisory and review responsibilities at any level have additional deterrence and detection duties. Specifically, personnel with supervisory or review authority have three additional responsibilities First, you must become aware of what can go wrong on your area of authority. Second, you must put into place and maintain effective monitoring, review and control procedures that will prevent acts of wrongdoing. Third, you must put into place and maintain effective monitoring, review and control procedures that will detect acts of wrongdoing promptly should prevention efforts fail. Authority to carry out these three additional responsibilities is often delegated to subordinates. However, accountability for their effectiveness cannot be delegated and will remain with supervisors and manager. Assistance in effectively carrying out these responsibilities is available upon request through the City Manager's Office. Responsibility and Authority for Follow Up and Investigation The City Manager, Human Resources, Finance and Police have the primary responsibility for all investigations involving all acts of fraud by a city employee. The assistance of the Police Department may be required in any investigation. Properly designated members of the investigators will have: • Free and unrestricted access to all city records. • The authority to examine, copy and/or remove all or any portion of the contents of files, desks, cabinets, and other storage facilities (whether on electronic or other form) without the prior knowledge or consent of any individual who might use or have custody of any such items or facilities when it is within scope of investigative or related follow up procedures. All investigations of alleged wrongdoing will be conducted in accordance with applicable City of La Porte procedures. Page 3 7/18/2005- • Reported Incident Follow Up Procedure Care must be taken in the follow up of suspected misconduct and dishonesty to avoid acting on incorrect or unsupported accusations, to avoid alerting suspected individuals that follow up and investigation is underway, and to avoid making statements which could adversely affect the city, an employee, or other parties. Accordingly, the general procedures for follow up and investigation of reported incidents are as follows: 1. Employees and others must immediately report all factual details as indicated above under Policy. 2. The City Manager, Human Resources, Finance, and Police have the responsibility for follow up and, if appropriate, investigation of all reported incidents. 3. All records related to the reported incidents will be retained wherever they reside. 4. Do not communicate with the suspected individuals or organizations about the matter under investigation. 5. In appropriate circumstances and at the appropriate time, Human Resources Department will notify the employee's Director and the Director of Finance. 6. The Director of Finance will notify the City Manager of all reported incidents so that it may be determined whether this matter should be brought to the attention of the Fiscal Affairs Committee. 7. City Manager, Human Resources, and the Director of Finance may also obtain the advice of Legal at any time throughout the course of an investigation or other follow up activity on any matter related to the report, investigation steps, proposed disciplinary action or any anticipated litigation. 8. Neither the existence nor the results of investigations or other follow up activity will be disclosed or discussed with anyone other than those persons who have a legitimate need to know in order to perform their duties and responsibilities effectively. 9. All inquiries from an attorney or any other contacts from outside of the company, including those form law enforcement agencies or from the employee under investigation, should be referred to Legal. Investigative or other follow up activity will be carried out without regard to the suspected individual's position, level or relationship with the City of La Porte. Page 4 7/18/2005- • • Questions or Clarifications related to This Policy All questions or other clarifications of this policy and its related responsibilities should be addressed to the Finance Department, who shall be responsible for the administration, revision, interpretation, and application of this policy. Approval (City Manager) Date Acknowledgment My signature signifies that I have read this policy and that I understand my responsibilities related to the prevention, detection and reporting of suspected misconduct and dishonesty. I further acknowledge that I am not aware of any activity that would require disclosure under this or other existing company policy or procedure statement. 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