City Council Meeting Agenda Packets 9-20-20221
CITY OF HUNTSVILLE, TEXAS
Andy Brauninger, Mayor Bert Lyle, Position 1 At-Large
Dee Howard Mullins, Position 2 At-Large
Vicki McKenzie, Position 3 At-Large
Pat Graham, Position 4 At-Large
Daiquiri Beebe, Ward 1
Russell Humphrey, Mayor Pro Tem, Ward 2
Deloris Massey, Ward 3
Jon Strong, Ward 4
HUNTSVILLE CITY COUNCIL AGENDA
TUESDAY, SEPTEMBER 20, 2022
WORKSHOP 5:00 P.M. – Large Conference Room
REGULAR SESSION 6:00 P.M. - City Council Chambers
Huntsville City Hall, 1212 Avenue M, Huntsville, Texas, 77340
Persons with disabilities who plan to attend this meeting and may need auxiliary aids or services are requested to
contact the City Secretary’s office (936.291.5413) two working days prior to the meeting for appropriate
arrangements.
WORKSHOP (5:00 p.m.)
DISCUSSION
a. Discuss City Hall Project
Aron Kulhavy, City Manager
MAIN SESSION (6:00 p.m.)
CALL TO ORDER
INVOCATION AND PLEDGES - U.S. Flag and Texas Flag: Honor the Texas Flag. I pledge allegiance to
thee, Texas, one state, under God, one, and indivisible.
PUBLIC HEARING
a. Public Hearing on the Tax Year 2022 (FY 2022/2023) Tax Rate for the City of Huntsville.
Steve Ritter, Finance Director
b. Public Hearing to hear testimony in regards to the 1400 Block of 12th Street, located between Avenue
N and O, to be renamed "Patton Street".
Armon Irones, City Planner
c. Public Hearing to hear testimony in regards to the 1000 Block of Avenue O, located between 10th and
11th Streets, to be renamed "Pease Street".
Armon Irones, City Planner
1. CONSENT AGENDA
The presiding officer will call for public comments before action is taken on these items. (Approval of
Consent Agenda authorizes the City Manager to implement each item in accordance with staff
recommendations. An item may be removed from the Consent Agenda and added to the Statutory Agenda
for full discussion by request of a member of Council.)
a. Consider approving the Minutes from the September 6, 2022 Regular City Council Meeting
Kristy Doll, City Secretary
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b. Consider authorizing the City Manager to enter into a contract for printing and mailing services for
utility bills and informative inserts.
Steve Ritter, Finance Director
c. Consider Resolution 2022-24 approving the Walker County Appraisal District acquisition of a building
through a lease-purchase agreement as proposed by the District.
Aron Kulhavy, City Manager
2. STATUTORY AGENDA
a. Consider approval of Ordinance 2022-24 to adopt the FY 2022/2023 Budget with all policies, fees,
rates, and provisions as referenced therein. Record/rollcall vote required
Steve Ritter, Finance Director
b. Consider approval of Ordinance 2022-25 adopting the Tax Rate and levying taxes for the City of
Huntsville for the FY 2022/2023.
Record/rollcall vote required
Steve Ritter, Finance Director
c. Consider ratifying the increased property tax revenues of $681,900 reflected in the FY 2022/2023
Budget as adopted.
Steve Ritter, Finance Director
d. First Reading - Consider the adoption of Ordinance 2022-27 changing the name of a segment of
Avenue O to "Pease Street".
Armon Irones, City Planner
e. First Reading - Consider the adoption of Ordinance 2022-28 changing the name of a segment of 12th
Street to "Patton Street".
Armon Irones, City Planner
f. First Reading - Consider Ordinance No. 2022-29 - Decline to approve the change in rates requested by
Entergy Texas, Inc. Statement of Intent filed with the City on August 31, 2022
Leonard Schneider, City Attorney
3. CITY COUNCIL/MAYOR/CITY MANAGER
4. REQUESTS FOR CITIZEN PARTICIPATION
(An opportunity for citizens to be heard on any topic and for the City Council to participate in the
discussion. No action will be taken.)
a. Citizens requesting to speak about the Huntsville Public Library
Maureen McIntyre
Lindsey Duncan
Karin Olson
Jade Ellis
John Rhine
Nick Ransford
b. John Jafreh - Speaking on fire bug in Huntsville and leadership in Huntsville
5. MEDIA INQUIRIES RELATED TO MATTERS ON THE AGENDA
6. ITEMS OF COMMUNITY INTEREST
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7. EXECUTIVE SESSION
a. City Council will convene in closed session as authorized by Texas Government Code, Chapter 551,
Section 551.071 to receive legal advice on the proposed TDCJ 2022 Bat Exclusion Project regarding
the TDCJ Cotton Warehouse located in the City of Huntsville.
Leonard Schneider, City Attorney
Daiquiri Beebe, Councilmember Ward 1
b. City Council will convene in closed session as authorized by Texas Government Code, Chapter 551,
Section 551.071 to receive legal advice on Library Policies and Employee Handbook for the City of
Huntsville.
Leonard Schneider, City Attorney
c. City Council will convene in closed session s authorized by Texas Government Code, Chapter 551,
Section 551.071 to receive legal advice Dallas, Fort Worth, Houston, et al v Disney DTC, LLC, Hulu,
LLC and Netflix, Inc, Cause No. DC-22-09128 the 14th District Court of Dallas County
Leonard Schneider, City Attorney
8. RECONVENE
Take action on items discussed in executive session, if needed.
ADJOURNMENT
*If during the course of the meeting and discussion of any items covered by this notice, City Council
determines that a Closed or Executive session of the Council is required, then such closed meeting will be held
as authorized by Texas Government Code, Chapter 551, Section 551.071 – consultation with counsel on legal
matters; 551.072 – deliberation regarding purchase, exchange, lease or value of real property; 551.073 –
deliberation regarding a prospective gift; 551.074 – personnel matters regarding the appointment, employment,
evaluation, reassignment, duties, discipline, or dismissal of a public officer or employee; 551.076 –
implementation of security personnel or devices; 551.087 – deliberation regarding economic development
negotiation; Sec. 551.089 - deliberation regarding security devices or security audits; and/or other matters as
authorized under the Texas Government Code. If a Closed or Executive session is held in accordance with the
Texas Government Code as set out above, the City Council will reconvene in Open Session to take action, if
necessary, on the items addressed during Executive Session.
CERTIFICATE
I, Kristy Doll, City Secretary, do hereby certify that the above notice was posted on the City Hall bulletin board,
a place convenient and readily accessible to the general public at all times, and to the City’s website,
www.HuntsvilleTX.gov, in compliance with Chapter 551, Texas Government Code.
DATE OF POSTING: September 16, 2022 Kristy Doll
TIME OF POSTING: 11:00 a.m. Kristy Doll, City Secretary
TAKEN DOWN:
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CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: a.
Agenda Item: Discuss City Hall Project
Initiating Department/Presenter: City Manager
Presenter:
Aron Kulhavy, City Manager
Recommended Motion: Not applicable
Strategic Initiative:
Discussion:
Previous Council Action:
Financial Implications:
Approvals:
Kristy Doll
Associated Information:
Page 4 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: a.
Agenda Item: Public Hearing on the Tax Year 2022 (FY 2022/2023) Tax Rate for the City of Huntsville.
Initiating Department/Presenter: Finance
Presenter:
Steve Ritter, Finance Director
Recommended Motion: No motion required. This is not an action item.
Strategic Initiative: Goal #6 - Finance - Provide a sustainable , efficient and fiscally sound government
through conservative fiscal practices and resource management.
Discussion: The Texas Tax Code, Sections 26.05, 26.06, and 26.065 require a Public Hearing on the Tax
Rate. Notice of the hearing was published in the Huntsville Item on September 8, 2022 and has been
made available on the City's website.
At the Council's August 2, 2022 meeting, Council approved an item for a tax rate for FY 2022/2023 not to
exceed $0.3075 per $100 valuation. The tax rate used in the FY 2022 - 2023 Budget and in this evening's
item 2.b, Ordinance 2021-25 to adopt a tax rate for FY 2022/2023 is $0.2926 per $100 valuation.
Previous Council Action: None
Financial Implications: None
Approvals:
Steve Ritter
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
Page 5 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: b.
Agenda Item: Public Hearing to hear testimony in regards to the 1400 Block of 12th Street, located
between Avenue N and O, to be renamed "Patton Street".
Initiating Department/Presenter: Development Services
Presenter:
Armon Irones, City Planner
Recommended Motion: Public Hearing only- no action required
Strategic Initiative: Goal #5 - Resource Development - Enhance the quality of life for citizens, businesses
and visitors by leveraging the human and fiscal resources available to the community.
Discussion:
Previous Council Action: None
Financial Implications: None
Approvals:
Kevin Byal
Rick Rudometkin
Kristy Doll
Associated Information:
Page 6 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: c.
Agenda Item: Public Hearing to hear testimony in regards to the 1000 Block of Avenue O, located
between 10th and 11th Streets, to be renamed "Pease Street".
Initiating Department/Presenter: Development Services
Presenter:
Armon Irones, City Planner
Recommended Motion: Public Hearing only- no action required.
Strategic Initiative: Goal #5 - Resource Development - Enhance the quality of life for citizens, businesses
and visitors by leveraging the human and fiscal resources available to the community.
Discussion:
Previous Council Action: None
Financial Implications: None
Approvals:
Kevin Byal
Kristy Doll
Associated Information:
Page 7 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 1.a.
Agenda Item: Consider approving the Minutes from the September 6, 2022 Regular City Council
Meeting
Initiating Department/Presenter: City Secretary
Presenter:
Kristy Doll, City Secretary
Recommended Motion: Move to approve the Minutes from the August 16, 2022, Regular City Council
Meeting.
Strategic Initiative:
Discussion:
Previous Council Action:
Financial Implications:
Approvals:
Kristy Doll
Associated Information:
1. Meeting Minutes September 6, 2022
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MINUTES FROM THE HUNTSVILLE CITY COUNCIL REGULAR MEETING HELD
ON THE 6th DAY OF SEPTEMBER 2022, IN THE CITY HALL, LOCATED AT 1212
AVENUE M, IN THE CITY OF HUNTSVILLE, COUNTY OF WALKER, TEXAS, AT 6:00
P.M.
The Council met in a workshop and regular session with the following:
COUNCILMEMBERS PRESENT: Mayor Brauninger, Mayor Pro Tem Humphrey,
Councilmember Ward 1 Beebe, Councilmember At-Large Position 1 Lyle, Councilmember At-
Large Position 2 Mullins, Councilmember Ward 3 Massey, Councilmember At-Large Position 3
McKenzie, Councilmember Ward 4 Strong, Councilmember At-Large Position 4 Graham
COUNCILMEMBERS ABSENT: None
OFFICERS PRESENT: Aron Kulhavy, City Manager; Kristy Doll, City Secretary; Leonard Schneider,
City Attorney
WORKSHOP (5:00 P.M.)
a. Receive update on the status of the new City Hall project.
Aron Kulhavy, City Manager
MAIN SESSION (6:00 p.m.)
CALL TO ORDER (6:00 p.m.)
Mayor Brauninger called the meeting to order at 6:00 p.m.
INVOCATION AND PLEDGES - U.S. Flag and Texas Flag: Honor the Texas Flag. I pledge
allegiance to thee, Texas, one state, under God, one, and indivisible.
Councilmember Massey gave the invocation and pledges were led by Mayor Brauninger.
PUBLIC HEARING
a. Public Hearing on the FY 2022/2023 proposed Budget
Steve Ritter, Finance Director
Mayor Brauninger opened a Public Hearing at 6:01 p.m.
Steve Ritter presented information regarding the Public Hearing requirements to the
FY2022-2023 proposed budget.
No citizen comments were heard in support of or opposition of the FY 2022/2023
proposed Budget
Mayor Brauninger closed the Public Hearing at 6:03 p.m.
1. CONSENT AGENDA
The presiding officer will call for public comments before action is taken on these items.
(Approval of Consent Agenda authorizes the City Manager to implement each item in
accordance with staff recommendations. An item may be removed from the Consent
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Agenda and added to the Statutory Agenda for full discussion by request of a member of
Council.)
Mayor Brauninger requested Consent Agenda item 1.c. be moved from the Consent Agenda to the
Statutory Agenda for consideration.
a. Consider approving the Minutes from the September 6, 2022, Regular City Council
Meeting.
Kristy Doll, City Secretary
b. Consider authorizing the City Manager to award Change Order No. 1 for Street
Milling/Overlay/Rehab Services, to Larry Young Paving, Inc.
Kevin Byal, Director of Development Services
Councilmember Daiquiri Beebe made a motion to approve the Consent Agenda items a and
b. The motion was seconded by Councilmember Pat Graham. The motion passed 9-0. Yes
- Andy Brauninger, Russell Humphrey, Daiquiri Beebe, Vicki McKenzie, Deloris Massey,
Jon Strong, Pat Graham, Bert Lyle, Deandra (Dee) Mullins; No – None.
2. STATUTORY AGENDA
Consent Agenda item 1.c. was moved from the Consent Agenda to the Statutory Agenda for
consideration.
1.c. Consider approval of Ordinance No. 2022-26 accepting the Certificate of Unopposed
Candidates, declaring each unopposed candidate elected to office, and canceling the
November 8, 2022 Election.
Kristy Doll, City Secretary
Councilmember Daiquiri Beebe made a motion to approve Ordinance No. 2022-26 accepting
the Certificate of Unopposed Candidates, declaring each unopposed candidate elected to
office, and canceling the November 8, 2022 Election. The motion was seconded by
Councilmember Pat Graham. The motion passed 9-0. Yes - Andy Brauninger, Russell
Humphrey, Daiquiri Beebe, Vicki McKenzie, Deloris Massey, Jon Strong, Pat Graham, Bert
Lyle, Deandra (Dee) Mullins; No – None.
a. Motion to postpone approval of the FY 2022/2023 proposed Budget to the
September 20, 2022 Council meeting.
Steve Ritter, Finance Director
Councilmember Daiquiri Beebe made a motion to postpone approval of the FY 2022/2023
proposed Budget to the September 20, 2022 Council meeting. The motion was seconded by
Councilmember Pat Graham. The motion passed 9-0. Yes - Andy Brauninger, Russell
Humphrey, Daiquiri Beebe, Vicki McKenzie, Deloris Massey, Jon Strong, Pat Graham, Bert
Lyle, Deandra (Dee) Mullins; No – None.
b. Consider approving Decision Packages for the FY 2022/2023 Budget
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Steve Ritter, Finance Director
Councilmember Daiquiri Beebe made a motion to approve the Decision Packages listed
as items 2b (1) - (5) on the City Council agenda. The motion was seconded by
Councilmember Vicki McKenzie. The motion passed 9-0. Yes - Andy Brauninger,
Russell Humphrey, Daiquiri Beebe, Vicki McKenzie, Deloris Massey, Jon Strong, Pat
Graham, Bert Lyle, Deandra (Dee) Mullins; No – None
c. Consider authorizing the City Manager to enter into architectural facade
easement agreements with property owners to continue the preservation efforts
of the Richard Haas art murals in the downtown area.
Annel Guadalupe
Councilmember Daiquiri Beebe made a motion to authorize the City Manager to enter into
architectural facade easement agreements with the following property owners as listed to
continue the preservation efforts of the Richard Haas art murals in the downtown area. The
motion was seconded by Councilmember Vicki McKenzie. The motion passed 9-0. Yes -
Andy Brauninger, Russell Humphrey, Daiquiri Beebe, Vicki McKenzie, Deloris Massey, Jon
Strong, Pat Graham, Bert Lyle, Deandra (Dee) Mullins; No – None
1. R & G Interests, LLC - 1021 12th Street
2. GIbbs Brothers & Co - 1110 11th St
3. W.L. Smither Estate (Ralph Lawson)- 1104 11th St. & 1108 11th St.
4. Robert C. Ernst, Jr. - 1113 12th St.
5. Thomas J. Mitchell - 1112 11th St.
6. Gibbs Brothers & Co. -1118 & 1118 1/2 11th
7. Thomas J. Mitchell- 1114 11th St.
8. Carey Lee & Windy R. Looney - 1110 Sam Houston Ave.
9. Friends for the Improvement of the Old Town Theatre - 1023 12th St.
10. John Kerr Smither - 1215-1221 Sam Houston Ave.
11. Gibbs Brothers & Co - 1011 University Ave.
12. Drew Slack Management Corp, Inc - 1114 Sam Houston Ave.
d. First Reading - Consider authorizing the City Manager to award and enter into a
contract with Legacy Builders, Inc., for the construction of the Animal Control
Facility.
Brent Sherrod, Public Works Director
Councilmember Russell Humphrey made a motion to waive the second reading
requirements of the rules of procedure and authorize the City Manager to award and enter
into a contract with Legacy Builders, Inc., for the construction of the Animal Control
Facility in the amount of not to exceed $1,406,370. The motion was seconded by
Councilmember Pat Graham. The motion passed 9-0. Yes - Andy Brauninger, Russell
Humphrey, Daiquiri Beebe, Vicki McKenzie, Deloris Massey, Jon Strong, Pat Graham,
Bert Lyle, Deandra (Dee) Mullins; No – None
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3. CITY COUNCIL/MAYOR/CITY MANAGER
a. Consider the appointments to the City of Huntsville Boards and Commissions for
expired terms or vacant board positions.
Andy Brauninger, Mayor
Mayor Brauninger made a motion to appoint Board and Commission members as presented.
Council confirmed appointments 9-0. Yes - Andy Brauninger, Russell Humphrey, Daiquiri Beebe,
Vicki McKenzie, Deandra (Dee) Mullins, Deloris Massey, Jon Strong, Pat Graham, Bert Lyle;
No:
BOARD NAME SEAT
#
APPOINT/
REAPPOINT
BOARD
MEMBERS
TERM
EXPIRES
ARTS COMMISSION
2 Reappoint Betsy Maloney 08/31/2025
5 Reappoint Rosalyn Kelly 08/31/2025
6 Reappoint Margaret Smith 08/31/2025
HOUSING AUTHORITY
1 Reappoint Sally Dowis 08/31/2024
2 Appoint Sal Salazar 08/31/2023
4 Reappoint Carolyn Lewis 08/31/2024
5 Appoint Linda Roberts 08/31/2023
MAIN STREET PROGRAM ADVISORY BOARD
2 Reappoint Weslie Gray 08/31/2024
3 Reappoint Sandra Gray 08/31/2024
6 Reappoint Cheryl Spencer 08/31/2024
7 Reappoint Malissa Williams 08/31/2024
PARKS AND RECREATION ADVISORY BOARD
6 Appoint Jennifer Harrison 08/31/2024
7 Reappoint Nessa Irving 08/31/2024
9 Reappoint Nate Grigsby 08/31/2025
10 Appoint Lateel Richardson 08/31/2025
11 Appoint Airca Castleberry 08/31/2025
PLANNING COMMISSION
4 Appoint Benjamin Sessions 08/31/2025
5 Reappoint Jim Gumm 08/31/2025
6 Reappoint Rhonda Carpenter 08/31/2025
TOURISM ADVISORY BOARD
2 Appoint George Renner 08/31/2025
3 Reappoint Matt Childers 08/31/2025
6 Appoint Karla Christian 08/31/2024
7 Reappoint Brandon Cooper 08/31/2025
VETERANS AFFAIRS ADVISORY BOARD
1 Reappoint Leigh-Anne Stewart 08/31/2025
5 Reappoint Liesa Hackett 08/31/2025
6 Reappoint Leta Reiner 08/31/2025
7 Appoint Kimberly Klock 08/31/2024
10 Appoint Duane Clark 08/31/2025
12 Appoint Randy Thompson 08/31/2024
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14 Reappoint Trish Faires 08/31/2025
15 Reappoint Robert Kane Jr.08/31/2025
4. REQUESTS FOR CITIZEN PARTICIPATION
(An opportunity for citizens to be heard on any topic and for the City Council to participate in
the discussion. No action will be taken.)
a. Sheila Molitor - Cat Problem
Not present
b. Zelma Gunn - Speaking on getting help to start a business.
Ritchen Matthews and Zelma Gunn addressed the Council.
5. MEDIA INQUIRIES RELATED TO MATTERS ON THE AGENDA
None
6. ITEMS OF COMMUNITY INTEREST
Mayor and Council announced items of community interest.
7. EXECUTIVE SESSION
a. City Council will convene in closed session as authorized by Texas Government
Code, Chapter 551, Section 551.074 – Personnel Matters: regarding the
appointment, employment, evaluation, reassignment, duties, discipline, or
dismissal of a public officer or employee: City Attorney Leonard Schneider.
Leonard Schneider, City Attorney
Council convened into Executive Session at 6:55 p.m.
8. RECONVENE
Take action on item discussed in Executive Session, if needed.
Reconvened from Executive Session into Open Session at 7:12 p.m.
Councilmember Russell Humphrey made a motion to renew legal services with our City
Attorney, Leonard Schneider at the new rate. The motion was seconded by Councilmember
Vicki McKenzie. The motion passed 9-0. Yes - Andy Brauninger, Russell Humphrey,
Daiquiri Beebe, Vicki McKenzie, Deloris Massey, Jon Strong, Pat Graham, Bert Lyle,
Deandra (Dee) Mullins; No – None:
ADJOURNMENT
Mayor Brauninger adjourned the meeting without objection at 7:12 p.m.
ATTEST: CITY OF HUNTSVILLE
__________________________ ________________________________
Kristy Doll, City Secretary Andy Brauninger, Mayor
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CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 1.b.
Agenda Item: Consider authorizing the City Manager to enter into a contract for printing and mailing
services for utility bills and informative inserts.
Initiating Department/Presenter: Finance
Presenter:
Steve Ritter, Finance Director
Recommended Motion: Move to authorize the City Manager to enter into a contract with DataProse,
LLC for printing and mailing services for City utility bills.
Strategic Initiative: Goal #6 - Finance - Provide a sustainable , efficient and fiscally sound government
through conservative fiscal practices and resource management.
Discussion: To provide cost effective and timely delivery of utility bills the City has utilized a printing
and mailing service provider for almost 20 years now. The printing and mailing service is an all-inclusive
service allowing the City to avoid the costs of purchasing or leasing equipment to fold and insert bills
and avoids cost on the maintenance of such equipment. The City also benefits from reduced costs of
printing supplies due to greater discounts the provider receives due to volume and benefits from deeper
postage discounts.
The City issued a request for proposals on August 8, 2022 with a closing date of August 25, 2022.
Evaluation criteria for proposals submitted were 1) qualifications and experience, 2) RFP scope of work
and understanding, 3) references and required forms, and 4) pricing. Proposals were received from 5
firms. The successful firm, based on scoring of the evaluation criteria, was DataProse, LLC.
The contract is for a one year period from October 1, 2022 through September 30, 2023. Terms of the
contract provide that the the contract may be extended for two additional one year periods (October 1,
2023 through September 30, 2024 and October 1, 2024 through September 30, 2025) upon mutual
agreement of the parties.
Approximately 8,500 utility bills are created and mailed each month (102,000 annually) and
approximately 1,250 late notices are created and mailed each month (16,000 annually). The annual cost
estimated for the contract is around $80,000.
Previous Council Action: No previous Council action on this agenda item to award
Financial Implications: Cost for the service is budgeted for in the Utility Billing Division in the Utility
Fund under Postage, Bill Services, and Communications.
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Approvals:
Steve Ritter
Leonard Schneider
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
1. DataProse agreement 2022 draft for 9.20.22 agenda item
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PRODUCTION AGREEMENT
LAST UPDATED – THURSDAY, SEPTEMBER 15, 2022
Client:_________DataProse:_________Page 1 of 4
This Production Agreement (“Agreement”) is made and entered into by and between DataProse LLC, a Texas limited liability company (“DataProse”), and the City of Huntsville,
organized under the laws of Texas (“Client”). The effective date of this Agreement is October 1, 2022 (“Effective Date”). In consideration of the mutual promises and benefits
contained herein, the parties hereby agree as follows:
ARTICLE 1 SCOPE OF PRODUCTION AGREEMENT. DataProse agrees to provide to Client goods and/or services as described in Schedule 1.0 (the “Goods and Services”),
and Client agrees that DataProse shall be its exclusive provider of these Goods and Services during the term of this Agreement. During the term of this Agreement, the Client agrees
to furnish data and documentation for, and DataProse agrees to produce an estimated monthly quantity of 9,700 statements (“Minimum Commitment”), based upon the rates and
terms provided herein. In the event that the Client does not fulfill the Minimum Commitment, then Client shall pay to DataProse a minimum processing fee (“Minimum Processing Fee”) in an amount that shall be calculated based upon the Minimum Commitment and the rates and terms provided herein.
ARTICLE 2 COMPENSATION. In full and complete compensation for all Goods and Services provided by DataProse hereunder, Client agrees to pay DataProse according to rates set forth in Schedule 1.0. DataProse will provide an invoice to Client after each production run consisting of the fees, as outlined in Schedule 1.0 and postage used. Invoices are due upon receipt and will be considered past due if not paid within 30 days. A monthly late charge will be assessed on invoices not paid within thirty (30) days. The late payment charge will be the lesser of (i) 1-1/2% per month, and (ii) the applicable maximum lawful rate of interest, applied to the invoice amount unpaid (30) thirty days after billing to Client.
The prices charged by DataProse to Client for the Goods and Services listed in Schedule 1.0 will not be increased for a period of twelve (12) months from the Effective Date of this
Agreement (“Pricing Period”). All DataProse prices are subject to increase following this initial Pricing Period or any subsequent Pricing Period, upon written notice to Client. The
rate of any price increase shall not exceed five (5) percent or the of the preceding year at the completion of any Pricing Period. In the event Client cancels the Agreement as allowed
under the provisions of this Agreement, then payment for all Goods and Services delivered and/or rendered between the cancellation notification date and the effective date of the
cancellation shall be due concurrently upon delivery and/or rendering of such Goods and Services. If Client is a city, county, municipality or other government entity and the
compensation payable to DataProse under this Agreement is subject to future appropriation of funds; Client will notify DataProse at least thirty (30) days in advance of the completion
date of each appropriation cycle during the term of this Agreement.
ARTICLE 3 TERM. The initial term of this Agreement shall commence as of the Effective Date and shall continue for a period of not less than one (1) year, ending on September
30th, 2023, unless terminated earlier in accordance with provisions found elsewhere in this Agreement. This Agreement will renew itself for two successive one (1) year terms unless
written notice of cancellation is received by one party from the other at the end of the initial term or at the end of any succeeding one (1) year renewal term(s) by sending written
notice of non-renewal to the other party no earlier than one hundred fifty (150), and no later than ninety (90), days before the expiration of the then current term.
ARTICLE 4 POSTAGE. Client must maintain a permanent postage deposit in connection with this Agreement. Client shall deposit in advance with DataProse the initial sum specified on Schedule 2.0 as the permanent postage deposit. The amount required to be maintained on deposit with DataProse may be changed by DataProse on a periodic basis due to changes in Client’s volume, postage usage, postal rates or payment history. Client will be notified in writing and in advance if the deposit amount is changed. Upon termination of this Agreement, DataProse shall return the deposit amount to Client after payment for all Goods and Services and postage has been paid by the Client. If this Agreement is terminated due to default of Client, DataProse may apply any of Client’s funds it holds against any sum owed by Client to DataProse upon termination of this Agreement. If Client fails to maintain the deposit at the required levels, or if Client fails to maintain current status of all invoices as described in article 2, or fails to notify DataProse that funds have been appropriated to meet Client’s obligations under this agreement, DataProse may immediately suspend its performance under this agreement and will hold Client’s materials until the
deposit is received.
ARTICLE 5 EXPENSES. When Client has approved the amount of such costs and expenses in advance and in writing, Client will reimburse DataProse for costs and expenses
associated with the delivery and performance of Goods and Services for Client, such as cost of travel, expenses associated with travel, freight, delivery service and other required
supplies in connection with providing the DataProse Goods and Services associated with this Agreement.
ARTICLE 6 TERMINATION. Client or DataProse may terminate this Agreement for an event of default committed by the other party and defined below if such default remains
uncured (30) thirty days after written notice of the default from the party declaring the default has been received by the other party in accordance with Article 15.
(1) Failure of Client to pay for all Goods and Services when due in accordance with the terms of this Agreement. In addition to other remedies provided by
this Agreement and pursuant to law, DataProse has the right to withhold production and mailing of any further production cycles until Client’s account
is brought current.
(2) Any other breach by Client or DataProse of a term or condition of this Agreement.
(3) Non-Appropriation of funds by government entities if Client is a city, county, municipality or other government entity.
If DataProse terminates this Agreement due to Client’s default or the Client terminates this Agreement for any reason other than those specified in Article 3 or this Article 6 prior to
satisfying its Minimum Commitment, the Client agrees that it shall be liable to DataProse for liquidated damages (“Liquidated Damages”) for its early termination, it being understood and agreed to by the parties that the measure of actual damages noted would be difficult to determine. The Liquidated Damages shall be an amount equal to the product of (a) the Minimum Commitment determined on a monthly basis and (b) the sum of the number of months remaining in the current term of the Agreement. Any monthly invoices that are unpaid by the Client at the time of such termination shall be paid in full. As a governmental entity I don’t recommend agreeing to liquidated damages.
ARTICLE 7 FORCE MAJEURE. Neither party shall be responsible for delays or failures in performance resulting from acts or occurrences beyond the reasonable control of such party, including, without limitation: fire, explosion, power failure, flood, earthquake or other act of God; war, revolution, civil commotion, terrorism, or acts of public enemies; any
law, order, regulation, ordinance, or requirement of any government or legal body or any representative of any such government or legal body; or labor unrest, including without
limitation, strikes, slowdowns, picketing or boycotts. In such event, the party affected shall be excused from such performance (other than any obligation to pay money) on a day-
to-day basis to the extent of such interference (and the other party shall likewise be excused from performance of its obligations on a day-to-day basis to the extent such party’s
obligations relate to the performance so interfered with).
ARTICLE 8 CONFIDENTIALITY. Each party agrees that any and all data, reports and documentation supplied by the disclosing party or its affiliates or third parties on disclosing
party’s behalf, which are confidential shall be, subject only to the disclosure required for the performance of receiving party’s obligations hereunder, held in strict confidence and
shall not be disclosed or otherwise disseminated by receiving party without the consent of disclosing party, except as required by applicable law, regulation or legal proceeding.
ARTICLE 9 INDEMNIFICATION. To the extent permitted by law, Client agrees to indemnify and hold DataProse and its affiliates, and their respective officers, directors,
employees, consultants, partners, shareholders, members and contractors harmless for any and all claims, actions, damages, costs (including, without limitation, attorneys’ fees),
injuries or liabilities from any person, firm, or entity whatsoever that may arise in connection with (a) the data, reports or other documentation supplied by Client in connection with
this Agreement or the Goods and Services or (b) Client’s gross negligence or willful misconduct.
ARTICLE 10 WARRANTIES. DataProse shall provide all Goods and Services in a good and first class workmanlike manner in accordance with the terms specifically set forth in Schedule 1.0. The parties hereto agree that this Agreement is only for the Goods and Services. This warranty constitutes the only warranty with respect to the Goods and Services to be provided to Client and is in lieu of all other warranties, written or oral, statutory, express or implied, including, without limitation, the warranties of merchantability and the warranty of fitness for particular purpose. Except and expressly set forth in this Section 10, DATAPROSE EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES WITH REGARD TO THE GOODS AND SERVICES, AND SUCH GOODS AND SERVICES WILL BE DELIVERED AND PERFORMED “AS IS” AND “WITH ALL FAULTS”.
ARTICLE 11 LIMITATION OF LIABILITY. The liability of DataProse with respect to any failure to provide the Goods and Services as required under this Agreement shall in
each case be limited to the compensation paid to DataProse for the defective Goods and Services. DataProse IS NOT LIABLE FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES, INCLUDING LOST PROFIT OR INCOME, even if DataProse has been advised of the possibility of such loss or damage. This provision will not be affected by
DataProse’s failure to correct any defect or replace any defective work product to Client’s satisfaction. Client has accepted this restriction on its right to recover consequential
damages as a part of its bargain with DataProse. Client acknowledges what DataProse charges for its Goods and Services would be higher if DataProse were required to bear
responsibility for Client’s damages. Client IS NOT LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFIT OR INCOME
Page 16 of 120
PRODUCTION AGREEMENT
LAST UPDATED – THURSDAY, SEPTEMBER 15, 2022
Client:_________DataProse:_________Page 2 of 4
ARTICLE 12 GOVERNING LAW AND VENUE. This Agreement shall be governed by and construed, interpreted and enforced in accordance with the laws of the state of Texas
to the exclusion of its conflict of laws provision. Venue shall be in the appropriate state district court in Walker County, Texas or the appropriate federal district court in Texas.
ARTICLE 13 SEVERABILITY. If a court holds any provision of this Agreement to be illegal, unenforceable, or invalid in whole or in part for any reason, the validity and
enforceability of the remaining provisions, or portions of them, will not be affected.
ARTICLE 14 WAIVER; MODIFICATION OF AGREEMENT. No waiver, amendment or modification of any of the terms of this Agreement shall be valid unless in writing and
signed by authorized representatives of both parties hereto. Failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of such rights, nor
shall a waiver by either party in one or more instances be construed as constituting a continuing waiver or as a waiver in other instances.
ARTICLE 15 NOTICE. All notices must be in writing and if not personally delivered, be sent by facsimile, first class mail, nationally recognized overnight delivery service or by
electronic mail. Mailed notices will be effective on the third day after mailing. Notice by personal delivery or delivery service will be effective when delivered. When sent by facsimile
or electronic mail, notice will be effective on the day the transmission is received by the recipient provided that (a) a duplicate copy of the notice is promptly given by overnight
delivery, or (b) the receiving party delivers a written confirmation of receipt. Either party may change the address to which notices are to be sent by giving notice of such a change
to the other party. Addresses for purpose of giving notice are as follows:
If to DataProse:If to Client:
DataProse City of Huntsville1122 W. Bethel Road, Suite 100 1212 Avenue MCoppell, TX 75019 Huntsville, TX 77340Attention: COO Attention: Finance Director
ARTICLE 16 ENTIRE AGREEMENT. This Agreement and its exhibits constitute the final, complete, and exclusive statement of the terms of the Agreement between the parties
pertaining to the production of goods and services for Client by DataProse, and supersede all prior and contemporaneous understandings or agreements of the parties. No party
has been induced to enter into this Agreement by, nor is any party relying on, any representation or warranty outside those expressly set forth in this Agreement.
ARTICLE 17 ATTORNEY FEES. In the event of any claim, dispute or controversy arising out of or relating to this Agreement, including an action for declaratory relief, the
prevailing party in such action or proceeding shall be entitled to recover its court costs and reasonable out-of-pocket expenses not limited to taxable costs, including but not limited
to phone calls, photocopies, expert witness, travel, etc., and reasonable attorney fees to be fixed by the court. Such recovery shall include court costs, out-of-pocket expenses and
attorney fees on appeal, if any.
ARTICLE 18 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto, provided
that, Client shall not be permitted to assign its rights or obligations under this Agreement without the express written consent of DataProse. Any such assignment in violation of the
foregoing sentence shall be null and void.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be executed to be effective as of the Effective Date.
DataProse Client:
By:By: CEO
Date:Title: Date:
Page 17 of 120
PRODUCTION AGREEMENT
LAST UPDATED – THURSDAY, SEPTEMBER 15, 2022
Client:_________DataProse:_________Page 3 of 4
Schedule 1.0 – Fees for Goods & Services
Bill Package (Includes: data processing & simplex, CMYK (full color) imaging front, 8.5x11 white paper, perforated at
3.5” from bottom, #10 window OE, single window RE, folding, inserting, presorting and delivery to USPS)
$0.102 Per Bill
Bill Package (Includes: data processing & duplex, CMYK (full color) imaging front, over black or grey imaging backer, 8.5x11 white paper, perforated at 3.5” from bottom, #10 window OE, single window RE, folding, inserting, presorting and delivery to USPS)
$0.117 Per Bill
Search & ViewBill (Archive Package Includes: data processing, archive creation, search, access & hosting of archive
files for 12 months from creation date)
$0.01 Per Bill
NCOALink – Automated address update service $0.25 Per Address Correction
eBill – Electronic Delivery
Implementation (includes one email template) and initial setup $400.00 One Time
Annual License/Subscription Fee Waived Annually
Additional Email Template Setup (as requested) $300.00 Per Email Template
Standard email transaction $0.075 Per Email
Additional Simplex Impressions – simplex black ink $0.037 Per Impression
Bill Suppression (data processing only – Group Y & Z)$0.035 Per Bill
Oversize Surcharge (8-99 page bills – Group C)$0.39 Per Bill
Oversize Surcharge (100+ page bills – Group D + E)$4.00 Per Bill
Search & Viewbill API $75.00 Per Month
Additional Inserts (Inserting fee/above and beyond what is included in the Bill Package)$0.01 Per Insert
Offline Folding (As requested)$0.01 Per Piece
Basic Set up Fee (Standard Format and Reports)Not Applicable One Time
Technical Services (including additional set-up beyond standard, formatting or custom reports, conditional logic &
insert/forms composition)
$125.00 Per Hour
Freight, Courier & Air Delivery Cost Per Request
Minimum Daily Processing/Production Fee $150.00 Per Day
Postage (1 oz.)$0.455 Per Bill
Schedule 2.0 – Permanent Postage Deposit
Permanent Postage Deposit (Based on two (2) months estimated volume: 9,700 x 2 = 19,400 x $0.455)$8,827.00 (2 months @ $0.455)
Schedule 3.0 – Performance Guarantee
DataProse will deliver Client’s bills within an average of 24 hours from the applicable Determination Date (defined below). Such average time period will be determined by measuring
the number of elapsed business days between each respective Determination Date and the date which 95% or more of the Client’s bills were mailed for consecutive three (3) month
period or a minimum of six (6) production cycles.
Schedule 3.1 – Determination DateThe “Determination Date” is the date which data is received via electronic transmission if prior to 12:00 PM (Noon), Central Time. If data is received after 12:00 PM (Noon), Central Time, the Determination Date is the business day immediately following the date data is received. If data is received on a non-business day (weekend or national holiday) the Determination Date will be the next consecutive business day.
Schedule 3.2 – Approval and/or Business Rule ExceptionIf an Approval has been required by the Client and defined in the business rules for each production run, then the Determination Date will be set by the date and time of
the Approval instead of the receipt of data as defined above. As to any production run, the Performance Guarantee will not apply if Client has not provided all data and
documentation necessary (as dictated by required business rules) to permit DataProse to produce the bills in a timely manner, or if Client fails to approve or report
required changes to DATAPROSE in order to complete the work in a timely manner.
Page 18 of 120
PRODUCTION AGREEMENT
LAST UPDATED – THURSDAY, SEPTEMBER 15, 2022
Client:_________DataProse:_________Page 4 of 4
Schedule 4.0 – Glossary of Terms
Impression Imaging of one side of one piece of paper. Each physical piece of paper can contain two (2) impressions.
USPS United States Postal Service
Laser Imaging The process where the application ink is electro statically applied and bonded to a piece of paper.
Simplex Imaging of one (1) side of a piece of paper only.
Duplex Imaging of both (2) sides of a piece of paper.
OE Outer Envelope – This envelope is used as the carrier mechanism for all information contained in a package to be mailed.
RE Reply Envelope – This envelope is usually utilized by a customer to return information/payment requested by on organization.
Presorting The act of organizing mail according to the rules and regulations defined by the USPS in order to achieve lower postage rates and
increase deliverability of mail.
Business Day Any day in which the USPS as well as the U.S. Federal Reserve are open for business.
U.S. federal holiday All Holidays as defined by the U.S. Federal Reserve.
24x7 24 hours a day, 7 days a week.
Additional Inserts Any item requested to be placed into the mail container above and beyond (a) the bill and (b) the RE .
Container One complete piece of mail packaged into one OE.
Electronic Transmission The act of sending data via DataProse online utility, FTP or Modem
Bill Data and other information pertaining to one (1) account number and usually in reference to one customer
Group The term used by DataProse to define how bills are gathered & produced in order to maximize production capabilities. These
groups are defined as follows:
Group A – 1 ounce bills
Group B – 2 ounce bills
Group C – 8-99 page bills
Group D – 100-499 page billsGroup E – 500+ page billsGroup I – International billsGroup P – Pull bills (Pulled and returned to Account Manager for further action)Group X – Hold bills (combined and sent back to Client)Group Y – Online only bills (Suppress from print only)Group Z – Suppress all
Suppress or Suppression The act of excluding records or bills (based on Client defined criteria) that have been received in the input data stream received
from the Client
Page 19 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 1.c.
Agenda Item: Consider Resolution 2022-24 approving the Walker County Appraisal District acquisition
of a building through a lease-purchase agreement as proposed by the District.
Initiating Department/Presenter: City Manager
Presenter:
Aron Kulhavy, City Manager
Recommended Motion: Move to adopt Resolution 2022-24 approving the Walker County Appraisal
District acquisition of a building through a lease-purchase agreement as proposed by the District.
Strategic Initiative: Goal #5, Resource Development - Enhance the quality of life for citizens, businesses
and visitors by leveraging the human and fiscal resources available to the community.
Discussion: The Walker County Appraisal District has outgrown their current office space located at
1819 Sycamore Avenue. The District is in need of expanded office space and proposes to acquire the
property located at 1060 State Highway 190, Huntsville, TX. The District anticipates that the cost of the
building will be a maximum principal amount of $1,500,000. Because Texas law limits the financing
options of appraisal districts, the Board of the Appraisal District has determined that a lease-purchase
agreement is the most appropriate financing structure for the acquisition. While the final terms of the
agreement are yet to be determined, the lease-purchase agreement: 1) will not exceed twenty-five (25)
years; interest shall accrue at a per annum rate not to exceed 5.0%; and the Appraisal District shall have
the option to purchase the property at the end of the lease term at a nominal amount not to exceed
$5.00. Additionally, the Appraisal District intends that the lease-purchase agreement shall include
provisions allowing for the sale of excess land that may be used to pay toward the principal amount of
the agreement.
The Board of Directors of the Appraisal District has approved the acquisition of the building. However,
acquisition of a new facility requires the approval of three quarters of the taxing units entitled to vote
on the Board of Directors of the Appraisal District. Therefore, the Appraisal District requests that the
City approve the attached resolution authorizing the purchase of the property. Unless the governing
bodies of three-quarters of the taxing units approve the purchase before September 30, 2022, the
Appraisal District will not be able to purchase the building. The other taxing entities within the district
that have considered the matter have either approved the request or have it scheduled for
consideration with a positive recommendation for approval.
Previous Council Action: No previous action has been taken on this item.
Financial Implications: There is no financial implication associated with this item.
Page 20 of 120
Approvals:
Leonard Schneider
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
1. Resolution No 2022-24
2. City of Huntsville (2)
Page 21 of 120
RESOLUTION NO 2022-24
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TX,
APPROVES THE WALKER COUNTY APPRAISAL DISTRICT ACQUISITION OF A
BUILDING THROUGH A LEASE-PURCHASE AGREEMENT
WHEREAS, the Walker County Appraisal District is in need of additional office space
and proposes to fill that need by the acquisition of property located at 1060 Hwy 190, Huntsville,
TX; and
Whereas, the City Council of the City of Huntsville finds it to be in the public interest to
approve the acquisition and financing of that building;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, THAT:
SECTION ONE: The City Council of the City of Huntsville approves the Walker County
Appraisal District acquisition of a building through a lease-purchase agreement as proposed by the
District by resolution dated August 31, 2022, at a maximum principal amount of $1,500,000.
SECTION TWO: The City Council of the City of Huntsville hereby approves the Walker County
Appraisal District entering into a lease-purchase agreement for the purchase of the property,
subject to the following parameters:
a.The term of the Lease shall not exceed twenty-five (25) years;
b.Interest shall accrue at a per annum rate not to exceed 5.0%;
c.Upon expiration of the term of the Lease or the earlier prepayment of the lease payments
the District shall have the option to purchase the Project for a nominal amount not to exceed
$5.00.
PASSED AND APPROVED this 20th day of September 2022.
THE CITY OF HUNTSVILLE
_____________________________
Andy Brauninger, Mayor
ATTEST: APPROVED AS TO FORM:
_____________________________ _______________________________________
Kristy Doll, City Secretary Leonard Schneider, City Attorney
Page 22 of 120
Walker County Appraisal District
CHIEF APPRAISER P.O. BOX 1798 / 1819 SYCAMORE AVE
STACEY M. POTEETE HUNTSVILLE TX 77342-1798
PHONE: (936) 295-0402 FAX: (936) 295-3061
www.walkercad.org
September 2, 2022
Mr. Aron Kulhavy
City of Huntsville
1212 Avenue M
Huntsville TX 77340
Re: acquisition of new office space
Dear Mr. Kulhavy:
Walker County Appraisal District (“Appraisal District”) is in need of expanded office
space and proposes to acquire the property at 1060 Hwy 190, Huntsville, TX. We anticipate that
the cost of the building will be a maximum principal amount of $1,500,000. Because Texas law
limits the financing options of appraisal districts, the Board of the Appraisal District has
determined that a lease-purchase agreement is the most appropriate financing structure for the
acquisition. While the final terms of the agreement are yet to be determined, the lease-purchase
agreement: 1) will not exceed twenty-five (25) years; interest shall accrue at a per annum rate not
to exceed 5.0%; and the Appraisal District shall have the option to purchase the property at the
end of the lease term at a nominal amount not to exceed $5.00. Additionally, the Appraisal District
intends that the lease-purchase agreement shall include provisions allowing for the sale of excess
land that may be used to pay toward the principal amount of the agreement.
The Board of Directors of the Appraisal District has approved the acquisition of the
building. A copy of the resolution is enclosed. However, acquisition of a new facility requires the
approval of three quarters of the taxing units entitled to vote on the Board of Directors of the
Appraisal District. Therefore, the Appraisal District requests that you set this matter on the agenda
of your governing body at the earliest possible time. Unless the governing bodies of three-quarters
of the taxing units approve the purchase within 30 days hereof, the Appraisal District will not be
able to purchase the building. In other words, inaction by a taxing unit is taken as disapproval. We
have drafted a sample resolution for your adaption and consideration.
We look forward to hearing from you. If you would be so kind as to return the enclosed
sample resolution, or whatever form of approval you think best, before September 30, 2022, we
would be most grateful. If you need further information, please do not hesitate to contact me. I
would be glad to appear before your governing body if you think it helpful.
Sincerely yours,
Stacey Poteete, Chief Appraiser
Page 23 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 2.a.
Agenda Item: Consider approval of Ordinance 2022-24 to adopt the FY 2022/2023 Budget with all
policies, fees, rates, and provisions as referenced therein. Record/rollcall vote required
Initiating Department/Presenter: Finance
Presenter:
Steve Ritter, Finance Director
Recommended Motion: Move to pass Ordinance 2022-24 to adopt the FY 2022/2023 Budget with all
policies, fees, rates, and provisions as referenced therein. Record/rollcall vote required
Strategic Initiative: Goal #6 - Finance - Provide a sustainable, efficient and fiscally sound government
through conservative fiscal practices and resource management.
Discussion: This FY 2022/2023 Budget is presented to Council for approval after six months of
preparation by staff, the City Manager’s recommended budget provided to Council on August 12th, a
presentation to Council on July 19th for the operations budget and a presentation on August 2nd for the
Capital Improvement Projects (CIP) , communication with the Finance Committee on Fiscal and
Budgetary Policies, and a Public Hearing on the Budget on September 6th. Also, Decision Packages were
presented for approval and approved at the September 6, 2022 meeting. This budget has been
prepared using a Property Tax Rate of $0.2926.
Previous Council Action: None
Financial Implications: Approval of this item will put in place the Budget for FY 2022/2023.
Approvals:
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
1. Ordinance - Budget adoption
2. Required State Truth in Taxation statement - follows Ordinance
3. Exhibit A Fund Revenue - Expenditures and Projected Balances FY 2023 FINAL
4. Exhibit A1 CIP FY 22-23
5. Exhibit B FY 22-23 Fiscal Policies
6. Exhibit C FY 22-23 Investment Banking Policy with OPEB.PEB Trust - FINAL
Page 24 of 120
Page 25 of 120
ORDINANCE NO. 2022-24
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS,
FINDING THAT ALL THINGS REQUISITE AND NECESSARY HAVE BEEN DONE IN
PREPARATION AND PRESENTMENT OF AN ANNUAL BUDGET; APPROVING AND
ADOPTING THE OPERATING AND CAPITAL IMPROVEMENTS BUDGET FOR THE CITY
OF HUNTSVILLE, TEXAS, FOR THE PERIOD OCTOBER 1, 2022, THROUGH SEPTEMBER
30, 2023; RATIFYING AND APPROVING FISCAL AND BUDGETARY POLICIES; RATIFYING
AND APPROVING THE INVESTMENT AND BANKING POLICIES; RATIFYING AND
APPROVING VARIOUS FEES, RATES AND CHARGES; AND PROVIDING FOR AN
EFFECTIVE DATE HEREOF.
WHEREAS more than thirty days before the end of the City’s fiscal year and more than thirty days before the
adoption of this ordinance, the City Manager of the City Huntsville, Texas, submitted a proposed
budget for the ensuing fiscal year according to Section 11.05 of the Charter of the City of Huntsville,
Texas, and Texas Local Government Code Section 102.005; and
WHEREAS the City Manager filed a copy of the proposed budget with the City Secretary and the budget was
available for public inspection at least fifteen days before the budget hearing and tax levy for the
fiscal year 2022-2023 [Texas Local Government Code § 102.006]; and
WHEREAS the itemized budget shows a comparison of expenditures between the proposed budget and the actual
expenditures for the same or similar purposes for the preceding year and the estimated amount of
money carried for each [Texas Local Government Code § 102.003(a)]; and
WHEREAS the budget contains financial information of the municipality that shows the outstanding obligations
of the City, the available funds on hand to the credit of each fund, the funds received from all sources
during the preceding year; the funds available from all sources during the ensuing year; the estimated
revenue available to cover the proposed budget; and the estimated tax rate required to cover the
proposed budget [Texas Local Government Code § 102.003(b)]; and
WHEREAS notification has been provided to the public concerning the public hearing for the fiscal year 2022 -
2023 budget [Texas Local Government Code § 102.0065]; and
WHEREAS the budget for the year October 1, 2022, through September 30, 2023, has been presented to the City
Council, and the City Council has held a public hearing with all notice as required by law, and all
comments and objections have been considered; and
WHEREAS the fees, rates and charges set out herein are reasonable and necessary and are established and set in
the best interests of the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE,
TEXAS, that:
SECTION 1:City Council adopts the budget for the City of Huntsville, Texas, now before the City Council for
consideration and attached, as the budget for the City for the period of October 1, 2022, through
September 30, 2023.
SECTION 2:The appropriation for the ensuing fiscal year for operating expenses, debt service and capital outlay
budgets shall be fixed and determined as shown in Exhibit A and by reference to the Fund
Summaries with account classification totals in the City Secretary’s office.
SECTION 3:New projects described for fiscal year 2022-2023 in the Capital Improvements budget portion of
the 2022-2023 budget are approved at the cost level indicated, subject to the availability of funding
of project costs (Exhibit A1).
SECTION 4:City Council approves the monthly payment for an eligible employee to the City’s Medical
Insurance Internal Service Fund of $850.00 per month ($10,200.00 annually), per employee electing
coverage.
SECTION 5:City Council approves a budgeted TMRS rate established according to TMRS rates for the benefit
levels elected by the City.
Page 26 of 120
SECTION 6:City Council approves a transfer of an amount equal to four (4.0%) percent of the gross revenues
received during Fiscal Year 2022-2023 from all water, wastewater, and solid waste customers, as a
transfer to the General Fund to compensate the City for the use of streets and rights-of-way by the
Water, Wastewater, and Solid Waste Funds.
SECTION 7:City Council hereby has reviewed and approves the Fiscal and Budgetary, and Purchasing Policies
(Exhibit B).
SECTION 8:City Council approves fees, rates, charges and their associated revenue, which is incorporated into
the budget; Exhibit D. Exhibit D authorizes water, wastewater, and solid waste rate increases as
noted.
SECTION 9: City Council has reviewed and approves the investment policies, strategies, and the Investment and
Banking Policies and Investment Policy Statement for the Post-Employment Benefit Plan (Exhibit
C).
SECTION 10: The City Secretary is directed to maintain a copy of the adopted budget, to file a copy of it with the
City Library and the County Clerk, and to publish a notice saying the budget is available for public
inspection [Texas Local Government Code §§ 102.008 and 102.009(d)].
SECTION 11:Council may amend this budget from time to time as provided by law for the purposes of authorizing
emergency expenditures or for municipal purposes, provided, however, no obligation shall be
incurred or any expenditure made except in conformity with the budget [Texas Local Government
Code §§ 102.009-102.011; Huntsville City Charter §§ 11.06-11.07].
SECTION 12:The City Manager may, within the policies adopted within this budget, authorize transfers between
budget line items; City Council may transfer any unencumbered appropriated balance or portion of
it from one office, department, or agency to another at any time, or any appropriation balance from
one expenditure account to another within a single office, department, or agency of the City
[Huntsville City Charter §11.06.].
SECTION 13:City Council expressly repeals all previous budget ordinances and appropriations if in conflict with
the provisions of this ordinance. If a court of competent jurisdiction declares any part, portion, or
section of this ordinance invalid, inoperative, or void for any reason, such decision, opinion, or
judgment shall in no way affect the remaining portions, parts, or sections, or parts of a section of
this ordinance, which provisions shall be, remain, and continue to be in full force and effect.
SECTION 14: This ordinance shall take effect immediately after its passage.
PASSED AND APPROVED on this, the 20th day of September 2022.
THE CITY OF HUNTSVILLE, TEXAS
Andy Brauninger, Mayor
ATTEST: APPROVED AS TO FORM:
Kristy Doll, City Secretary Leonard Schneider, City Attorney
Page 27 of 120
City of Huntsville, Texas
Annual Operating Budget for Fiscal Year 2022-2023
This budget will raise more total revenue from property taxes than last
year’s budget by $681,900 (9.26%), and of that amount $206,500
(2.80%) is property tax revenue to be raised from new property added
to the tax roll this year.
Record vote on adopting the FY 22-23 Budget:
Councilmember Name Position Vote (Yes/No)
Andy Brauninger Mayor
Daiquiri Beebe Ward 1
Russell Humphrey Ward 2
Deloris Massey Ward 3
Jon Strong Ward 4
Bert Lyle Position 1 at Large
Dee Howard Mullins Position 2 at Large
Vicki McKenzie Position 3 at Large
Pat Graham Position 4 at Large
Property Tax Rate Information:Fiscal Yr 22-23 Fiscal Yr 21-22
Tax Rate adopted $0.2926 $0.3075
No-New-Revenue Tax Rate $0.2836 $0.2975
No-New-Revenue M&O Tax Rate $0.2295 $0.2382
Debt Rate $0.0541 $0.0593
Voter-Approval Tax Rate $0.3179 $0.3392
City Debt Obligations secured by property taxes $40,710,000
Page 28 of 120
Exhibit ACity of HuntsvilleFund Revenues, Expenditures and Projected BalancesFY 2022 - 2023FY 22-23Fund Fund NameEstimated 09/30/22 Unallocated ReserveRevenuesAdminReimb InTrans InTotalRevenueExpendituresAdminReimb OutTrans OutTransferto Cap ExpOne Time EquityTotal ExpEstimated 09/30/23 Unallocated ReserveFund Name101 General Fund 9,571,900 23,133,292 6,522,575 1,452,130 31,107,997 29,336,034 1,421,963 350,000 31,107,997 1,204,635 32,312,632 8,367,265Debt Service116 Debt Service Fund 514,732 1,479,200 - 881,663 2,360,863 2,363,705 - - - 2,363,705 - 2,363,705 511,890Enterprise220 Utility Fund8,998,000 30,627,975 54,668 - 30,682,643 19,140,689 5,468,963 2,322,991 3,750,000 30,682,643 835,707 31,518,350 8,162,293224 Solid Waste Fund 3,602,000 7,437,001 - - 7,437,001 5,374,581 1,055,777 1,006,643 7,437,001 327,765 7,764,766 3,274,235Internal Service302 Medical Insurance Fund 3,226,700 4,294,577 - 4,294,577 4,294,577 - - - 4,294,577 4,294,577 3,226,700306 Capital Equipment Fund 4,462,300 - 1,837,605 1,837,605 588,896 - - - 588,896 588,896 5,711,009309 Computer Equip. Replacement Fund 275,000 - - 380,271380,271 380,271 - - - 380,271 380,271 275,000Special Revenue601 Court Security SRF 68,822 30,00030,000 - - 27,391 - 27,391 27,391 71,431602 Court Technology SRF 70,319 25,000 - - 25,000 61,000 - -- 61,000 61,000 34,319609 Airport SRF40,074 45,650 - 46,750 92,400 92,400 - - - 92,400 92,400 40,074610 Library SRF160,175 16,500 - - 16,500 55,408 - - - 55,408 - 55,408 121,267611 Police Seizure & Forfeiture SRF 242,118 - - - 162,943- - - 162,943 - 162,943 79,175612 PD School Resource Officer SRF 235,304 642,705 - 160,677 803,382 793,070 - 31,027 - 824,097 11,082 835,179 203,507613 PD Fed Equitable Sharing Fds SRF 78,196 - - - - 78,000- - - 78,000 78,000 196614 Police Grants SRF 24,032- 24,032619 LEOSE SRF32,474 -- 26,00026,000 26,000 6,474625 Huntsville Beautification/KHB 19,031 - - - - - - - - - - - 19,031630 TIRZ #1 Fund41,058 340,000 - - 340,000 - - - - - - 381,058665 Hotel/Motel Tax - Statue Contrib 70,936 2,000 - - 2,000 - - - - - - - 72,936Hotel/Motel Tax618 Arts & Visitor Center SRF 177,500 134,533 - 82,230 216,763 216,763 - - - 216,763 31,581 248,344 145,919663 H/M Tax- Tourism & Visitors Cntr 994,600 817,500 -817,500 721,473 65,260 18,554 - 805,287 40,377 845,664 966,436Endowment402 PEB Trust - Medical Fund 5,055,096 50,000 - - 50,000 20,000 - - 20,000 - 20,000 5,085,096418 Library Endowment Fund 119,017 - - - - - - - - - - - 119,017461 Oakwood Cemetery Endowment Fund 384,460 - - - - - - - 384,460038,463,844 69,075,933 6,577,243 4,841,326 80,494,502 63,705,810 6,590,000 4,828,569 4,100,000 79,224,379 2,451,147 81,675,526Page 29 of 120
Exhibit A1 FY 2022-2023
Utility CIP Amount Funding Sources
Miscellaneous Waterline Replacements (Birmingham - (Ave J to Ave H), University - (7th
St. to Thomason), Thomason (FM 247 to University Ave), Ave I (12th to 14th), 14th S. (Ave
I to G), Elm Ave, Ave I, Sam Houston Ave, Fish Hatchery, Trinity Cut off
$ 1,069,000 Utility Fund
Wastewater Line Replacements - Sam Houston, 16th Street, 14th Street, Ave M, Normal
Park Dr., N. of 18th Street $ 306,000 Utility Fund
Wastewater Masterplan & Model Updates $ 200,000 Utility Fund
McGary Creek Lift Station Expansion $ 1,275,000 Utility Fund
Tanyard Creek Liftstation Expansion $ 300,000 Utility Fund
Drainage Impact Fee Study $ 100,000 Utility Fund
1518 University -Storm Sewer Replacement $ 300,000 Utility Fund
17th Street (Ave M to Sam Houston) $ 200,000 Utility Fund
TOTAL - Utility Fund CIP 3,750,000$
General - CIP Amount Funding Sources
Fiber Loop Project 55,000$ General Fund
Eastham Thomason Park Improvemnets 75,000$ General Fund
Kate Barr Ross (KBR) Fields 9 and 10 Parking Lot 150,000$ General Fund
Miscellaneous Sidewalk Improvements 50,000$ General Fund
Airport Runway 20,000$ General Fund
Total General CIP $ 350,000
Total Sources Summary Amount
Utility Fund Contributions 3,750,000$
General Fund Contributions 350,000$
22-23 Total Sources of Funds 4,100,000$
City of HuntsvilleCity of HuntsvilleCity of HuntsvilleCity of Huntsville
FY 2022-2023 Capital Funding Additions and Sources
Page 30 of 120
Exhibit B FY 22-23
1
Fiscal and Budgetary Policies
I. STATEMENT OF PURPOSE
The purpose of the Fiscal and Budgetary Policies is to identify and present an overview of
policies dictated by state law, the City Charter, City ordinances, and administrative policies.
The aim of these policies is to achieve long-term stability and a positive financial condition.
These policies provide guidelines to the administration and finance staff in planning and
directing the City's day-to-day financial affairs and in developing financial recommendations
to the City Council. These policies set forth the basic framework for the overall fiscal
management of the City. Operating independently of changing circumstances and conditions,
these policies assist in the decision-making process. These policies provide guidelines for
evaluating both current activities and proposals for future programs.
These policies represent long-standing principles, traditions and practices which have guided
the City in the past and have helped maintain financial stability. An important aspect of the
policies is the application of budget and fiscal policies in the context of a long-term financial
approach. The scope of these policies span accounting, auditing, financial reporting, internal
controls, operating and capital budgeting, revenue management, cash and investment
management, expenditure control, asset management and debt management.
The City Council and/or Finance Committee annually review and approve the Fiscal and
Budgetary Policies as part of the budget process.
II. BASIS OF ACCOUNTING
A. Accounting in Accordance With GAAP. The City's finances shall be accounted for in
accordance with generally accepted accounting principles as established by the
Governmental Accounting Standards Board.
1. Organization of Accounts. The accounts of the City shall be organized and operated
on the basis of funds. Fund accounting segregates funds according to their intended
purpose and is used to aid management in demonstrating compliance with finance-
related legal and contractual provisions
2. Fund Structure. The City of Huntsville uses the following fund groups:
Governmental Funds:
General Fund
General Obligation Debt Service Fund
Capital Projects Funds
Special Revenue Funds:
Municipal Court Special Revenues
Library Special Revenues
Airport Special Revenues
Police Special Revenues
Hotel/Motel Tax & Arts
Page 31 of 120
Exhibit B FY 22-23
2
Proprietary Funds:
Enterprise Funds:
Utility Fund (Water & Wastewater operations)
Solid Waste
Internal Service Funds:
Medical Insurance
Equipment Replacement
Computer Replacement
Permanent Funds:
Library Endowment
Oakwood Cemetery Endowment
Trust Funds:
Retiree PEB Trust –Medical
Scholarship Fund
Employee Assistance Fund
3. Governmental Fund Types. Governmental funds are used to account for the
government's general government activities and include the General, Special
Revenue, General Obligation Debt Service and Capital Project funds. Governmental
fund types shall use the flow of current financial resources measurement focus and
the modified accrual basis of accounting. Under the modified accrual basis of
accounting, revenues are recognized when susceptible to accrual (i.e., when they are
“measurable and available”). “Measurable” means the amount of the transaction can
be determined and “available” means collectible within the current period or soon
enough thereafter to pay liabilities of the current period. Expenditures are recognized
when the related fund liability is incurred, if measurable, except for principal and
interest on general long-term debt, which are recorded when due, and compensated
absences, which are recorded when payable from currently available financial
resources.
4. Proprietary Fund Types. Proprietary fund types are used to account for the City’s
business type activities (e.g., activities that receive a significant portion of their funding
through user charges). The City has two types of proprietary funds: Enterprise Funds
and Internal Service Funds. The City's Proprietary fund types are accounted for on a
flow of economic resources measurement focus and use the accrual basis of
accounting. Under this method, revenues are recorded when earned and expenses
are recorded at the time liabilities are incurred. Enterprise funds receive their revenues
primarily through user charges for service. Internal Service funds receive their
revenues primarily from the other funds of the City.
5. Permanent Funds. The Library Endowment Fund and Oakwood Cemetery
Endowment Fund are used to account for endowments received by the City. Money
available for expenditures in these funds are the accumulated interest earnings.
6. Trust Funds. The PEB Trust for retirees is used to account for funds designated for
use for retiree Health Insurance costs if needed. Monies in this Fund help to lessen
the City’s Unfunded Accrued Actuarial Liability (UAAL) that is the result of the City
providing a health insurance benefit to certain retirees. The Employee Assistance
Fund is funded by contributions from City employees and monies are used to assist
Page 32 of 120
Exhibit B FY 22-23
3
employees encountering catastrophic illness (examples – cancer, vehicle accidents,
etc.) medical costs. The Scholarship Fund is also funded by contributions from
employee. The monies are used to provide scholarships to graduating seniors of
employees who will be continuing their education at a university, junior/community
college, or a technical school.
7. Encumbrance Accounting. The City shall utilize encumbrance accounting under
which purchase orders, contracts and other commitments for the expenditure of
monies are recorded in order to reserve that portion of the applicable appropriation.
III. OPERATING BUDGET
A. BUDGET PROCESS.
1. Proposed Budget. Section 11.05 of the City Charter requires that the City Manager
submit to the City Council a proposed budget at least 30 days prior to the end of the
fiscal year that presents a complete financial plan for the ensuing year. Public
hearings shall be held in the manner prescribed by the laws of the State of Texas
relating to budgets in cities and towns. The Charter requires that no budget be
adopted or appropriations made unless the total of estimated revenues, income and
funds available shall be equal to or in excess of such budget or appropriations. Past
practice has been to present a draft budget to City Council at least six weeks prior to
fiscal year end.
a. The budget shall include four basic segments for review and evaluation: (1)
personnel costs, (2) base budget (same level of service) for operations and
maintenance costs, (3) decision packages for capital and other (non-capital)
project costs, and (4) revenues.
b. The budget review process shall include City Council participation in the
development of each of the four segments of the proposed budget.
c. The budget process will allow the opportunity for the City Council to address policy
and fiscal issues.
d. A copy of the proposed budget shall be posted on the City’s website when it is
submitted to the City Council.
2. Modified Incremental Approach. The operating budget less prior year supplemental
requests, shall serve as the starting point for budget estimates.
3. Adoption. Upon the presentation of a proposed budget document to the City Council,
the City Council shall call and publicize a public hearing. The City Council shall
subsequently adopt by Ordinance such budget, as it may have been amended, as the
City's Annual Budget, effective for the fiscal year beginning October 1.
As required by Section 11.05 of the Charter, if the City Council takes no action to adopt
a budget on or prior to September 27th, the budget as submitted by the City Manager,
is deemed to have been finally adopted by the City Council.
Page 33 of 120
Exhibit B FY 22-23
4
4. Government Finance Officers Association. The annual budget shall be submitted
to the Government Finance Officers Association (GFOA) for evaluation and
consideration for the Distinguished Budget Presentation Award.
5. Truth in Taxation. Budget development procedures will be in conformance with State
law, outlined in the Truth in Taxation process. In the event of a tax increase, at least
two notices will be given and public hearings held.
B. PLANNING. Budgeting is an essential element of the financial planning, control, and
evaluation process of municipal government. The budget planning process is for a five
year period recognizing that budgets are influenced by decisions made in prior year
budgets and that decisions made in the current year budgets serve a precursor to future
budget requirements. The City shall recognize both short-term needs and objectives in
relation to the long-term goals of the City.
C. PREPARATION. The operating budget is the City’s annual financial operating plan. The
budget includes all of the operating departments of the City, the debt service fund, all
capital projects funds, internal service funds, and all special revenue funds of the City. An
annual budget shall be prepared for all funds of the City, with the exception that capital
projects will be budgeted on a project length basis, rather than an annual basis.
1. Basis of Budget. Operating budgets are adopted on a basis consistent with generally
accepted accounting principles as promulgated by the Governmental Accounting
Standards Board, with exceptions, including that depreciation is not included in the
budget, capital purchases are budgeted in the year of purchase, unmatured interest
on long-term debt is recognized when due, and debt principal is budgeted in the year
it is to be paid.
a. Governmental Fund Types are budgeted on a modified accrual basis, with
exceptions as noted above. Revenues are included in the budget in the year they
are expected to become measurable and available. Expenditures are included in
the budget when they are measurable, a liability is incurred, and the liability will be
liquidated with resources included in the budget.
b. Capital project budgets are project length budgets and are budgeted on a modified
accrual basis.
c. Proprietary fund types are budgeted generally on an accrual basis with exceptions
as noted above. Revenues are budgeted in the year they are expected to be
earned and expenses are budgeted in the year the liability is expected to be
incurred. The emphasis is on cash transactions in lieu of non-cash transactions,
such as depreciation. The focus is on the net change in working capital.
2. Legal Level of Control. The budget shall be adopted at the “legal level of control,”
which is, by Division, within individual funds. The level at which management, without
prior council approval, loses the ability to reapply budgeted resources from one use to
another is known as the budgets’ “legal level of control.” The City has a number of
levels of detail in the operating budgets - the fund, the department, the division, the
object and the line item.
Page 34 of 120
Exhibit B FY 22-23
5
Example:
Fund - General Fund
Department - Public Safety
Division - Police
Object - Salaries, Other Pay and Benefits
Line Item - Regular Salaries
In the above example, the legal level of control is the budget total for the Police
Division. Department Heads may not exceed budget allocations at the object code
level in controllable account without City Manager approval.
3. Identify Available Funds. The budget shall be sufficiently detailed to identify all
available funds. The format will include estimated beginning funds, sources of funds,
uses of funds, and estimated remaining funds at budget year-end. An actual prior
year, estimated current year and proposed budget shall be presented.
4. Interfund Transfers/Charges. A summary showing transfers and charges between
funds will be provided during the budget process to explain the "double counting" of
revenues and expenditures.
5. Periodic Reports. In compliance with Section 11.02(e) of the Charter, the City will
maintain a budgetary control system to ensure adherence to the budget and will
prepare periodic reports comparing actual revenues, expenditures and encumbrances
with budgeted amounts.
6. Self Sufficient Enterprise Funds. Enterprise operations, Utility Fund, Solid Waste,
are intended to be self-sufficient.
7. Administrative Cost Reimbursement. Enterprise fund budgets shall include a
reimbursement to the General Fund to pay a proportionate share of administrative
costs. Documentation to support the transfer shall be presented to City Council during
the budget process.
8. Charges to Other Funds by Internal Service Funds. Charges by internal service
funds to user divisions and funds shall be documented as part of the budget process.
9. Appropriations Lapse. Pursuant with Section 11.06 of the Charter, annual
appropriations lapse at year end. Items purchased through the formal purchase order
system (i.e., the encumbered portions), and not received by fiscal year end, are
presented to City Council for re-appropriation in the subsequent fiscal year. To be
eligible for automatic re-appropriation in a subsequent year, the goods or services
must have been ordered in good faith and appropriated in the year encumbered.. The
original budget is amended to include the re-appropriations. Capital projects budgets
do not lapse at year-end.
10. Performance Indicators and Productivity Indicators. The annual budget, where
possible, will utilize performance measures and productivity indicators.
D. BALANCED BUDGET. The budget shall be balanced using a combination of current
revenues and available funds. Current year operating expenses shall be funded with
current year generated revenues. No budget shall be adopted unless the total of
estimated revenues, income, and funds available is equal to or in excess of such budget.
Page 35 of 120
Exhibit B FY 22-23
6
E. REPORTING. Periodic financial reports shall be prepared to enable the Department
Heads to manage their budgets and to enable monitoring and control of the budget.
F. CONTROL. Operating Expenditure Control is addressed in Section V of these Policies.
G. CONTINGENT APPROPRIATION. The General Fund, Utility Fund and Solid Waste Fund
may have an adequate contingent appropriation. This contingent appropriation, titled
"Reserve for Future Allocation", shall be disbursed only by transfer to another
departmental appropriation. Transfers from this item shall be controlled as outlined in
Section VI, D of these policies.
H. EMPLOYEE BENEFITS. The City budget process shall include a review of employee
benefits.
1. Medical Insurance Fund - The Finance Committee shall review rates to be charged for
employee and dependent coverage.
2. Retirement Plan - The City is a member of the Texas Municipal Retirement System
(TMRS). Employees working at least 1,000 hours per year shall contribute 7% to the
TMRS plan. The City’s match will be established according to TMRS rates for the
benefit levels elected by the City. Any budgeted funds not spent can be deposited
with TMRS to reduce the City’s unfunded liability with Council’s approval or will revert
back to the unallocated monies in the appropriate fund.
3. Workers Compensation Insurance - The City shall participate in the Texas Municipal
League (TML) Workers Compensation Risk Pool. Rates for required coverage will be
established by the Pool, adjusted for experience on an annual basis. Refunds that
may be granted through the pool will be prorated between the City funds. Unspent
monies will revert back to the appropriate fund.
4. Social Security/Medicare - The City does not pay Social Security for employees.
Medicare is paid for employees hired after March 31, 1986 or for those employees
otherwise having access through the City.
5. Recommendations for adjustments to the pay and classification system will be made
annually in order to maintain external parity and internal equity. Recommendations
will be built into the proposed basic budget.
IV. RESERVES/UNALLOCATED FUNDS
A. OPERATING RESERVES/FUND BALANCES. The City shall maintain unallocated
reserves in operating funds to pay expenditures caused by unforeseen emergencies or
for shortfalls caused by revenue declines, and to eliminate any short-term borrowing for
cash flow purposes. Generally, unallocated reserves for all operating funds excluding,
Internal Service Funds, Capital Projects, and Special Revenue Funds shall be maintained
at a minimum amount of 25% of the annual budget (less transfers to capital projects) for
each fund unless specifically identified in this section. Unallocated reserves shall not be
used to support on-going operating expenditures. This reserve is defined as unreserved
current assets less inventory and on-going receivables (ex. utility billing, sales tax) minus
current liabilities payable from these assets.
Page 36 of 120
Exhibit B FY 22-23
7
B. FUND BALANCES USED FOR CAPITAL EXPENDITURES. Reserves shall be used for
one time capital expenditures only if:
1. there are surplus balances remaining after all reserve and fund allocations are made;
or
2. the City has made a rational analysis with justifying evidence that it has an adequate
level of short and long-term resources.
C. SPECIFIC APPROPRIATION BY CITY COUNCIL. If fund balances are used to support
one time capital and onetime non-operating expenditures, the funds must be specifically
appropriated by the City Council.
D. CITY MANAGER’S AUTHORITY TO ASSIGN FUND BALANCE/UNALLOCATED
RESERVES.
At times, the City may be in various planning stages of projects. Each project will
undoubtedly have its own funding considerations and challenges. As a means of
planning for projects and ensuring (when necessary and appropriate) the availability of
Unallocated Reserves to pay for projects, the City Manager is hereby authorized to place
certain Unallocated Reserves in each of the City’s funds in “Assigned” status. The
definition of the term Assigned is as follows: Assigned Unallocated Reserves includes
amounts that are constrained by the City’s intent to be used for a specific purpose but
are neither restricted nor committed (as defined by GASB 54). When Unallocated
Reserves are placed in the “Assigned” status, they are to be noted and reduced as part
of the balance of Unallocated Reserves as calculated in the Fiscal and Budgetary
Policies , Section IV, A. The City Manager may assign Unallocated Reserves under the
following circumstances if the amount exceeds $50,000:
1. Matching funds for grants applied for with approval from the City Council.
2. When the City Manager is presented with documentation illustrating an adopted
Capital Improvement Project is expected to be in excess of budgeted funds.
3. When the City Manager has documented reason to believe that claims will
exceed budgeted revenues in the City’s Medical Insurance Fund.
4. When the City is engaged in litigation for which there is not expected to be third
party insurance coverage.
5. For Economic Development Incentive Agreements and/or Developers
Agreements approved by Council.
6. When the City Manager has documented reason to believe an amendment to the
budget will be necessary for which Unallocated Reserves will be the most likely
source of funds.
7. When the Council has approved a project and directed staff to proceed and the
next sequential step in the project (feasibility study, programming, rate study,
conceptual design, full design or construction) has not yet been identified for
funding.
The City Manager and/or his designee shall update the Assigned Unallocated Reserve
three times annually as follows:
Page 37 of 120
Exhibit B FY 22-23
8
1. As soon as practical after the Council has adopted the Budget.
2. As soon as practical after the Comprehensive Annual Financial Report is
complete.
3. In conjunction with the annual budget adoption.
The updates described above will be reviewed, discussed and adopted by the Council
Finance Committee.
E. SPECIAL REVENUE FUNDS. Monies in the Special Revenue Funds shall be expended
for their intended purposes, in accordance with an approved budget. There is no reserve
requirement.
F. CAPITAL PROJECT FUNDS. Monies in the Capital Projects Funds shall be expended in
accordance with an approved budget. There is no reserve requirement.
G. INTERNAL SERVICE FUNDS. Working capital in equipment replacement funds will vary
to meet annual fluctuations in expenditures. Monies in the Internal Service Funds shall
be expended for their intended purpose in conformance with the approved budget and
approved replacement schedules. Additions to the Fleet or additional computer
equipment will not be funded from replacement funds without council approval.
H. GENERAL OBLIGATION DEBT SERVICE FUND AND INTEREST ACCOUNTS.
Reserves in the General Obligation Debt Service Fund and Utility Fund’s Interest and
Sinking accounts shall be maintained as required by outstanding bond indentures.
Reduction of reserves for debt shall be done only with City Council approval after Council
has conferred with the City's financial advisor to insure there is no violation of bond
covenants.
I. DEBT COVERAGE RATIOS. Debt Coverage Ratios shall be maintained as specified by
the bond covenants.
J. MEDICAL INSURANCE FUND RESERVE. A reserve shall be established in the City's
Health Insurance Fund to avoid potential shortages. The reserve amount shall be 6
months of budgeted claims for Medical and Dental claims. Such reserve shall be used for
no purpose other than for financing losses under the insurance program.
K. The City shall contract for an actuarial review once every two years related to its OPEB
liability for retiree medical insurance benefit, in accordance with Government Accounting
Standard Board pronouncements.
V. REVENUE MANAGEMENT
A. CHARACTERISTICS OF THE REVENUE SYSTEM. The City strives for the following
optimum characteristics in its revenue system:
1. Simplicity and Certainty. The City shall strive to keep the revenue classification
system simple to promote understanding of the revenue sources. The City shall
describe its revenue sources and enact consistent collection policies to provide
assurances that the revenues are collected according to budgets and plans.
Page 38 of 120
Exhibit B FY 22-23
9
2. Equity. The City shall make every effort to maintain equity in its revenue system
structure. The City shall minimize all forms of subsidization between entities, funds,
services, utilities, and customers.
3. Realistic and Conservative Estimates. Revenues are to be estimated realistically.
Revenues of volatile nature shall be budgeted conservatively.
4. Centralized Reporting. Receipts will be submitted daily to the Finance Department
for deposit and investment. Daily transaction reports and supporting documentation
will be prepared.
5. Review of Fees and Charges. The City shall review all fees and charges annually in
order to match fees and charges with the cost of providing that service.
6. Aggressive Collection Policy. The City shall follow an aggressive policy of collecting
revenues. Utility services will be discontinued (i.e. turned off) for non-payment in
accordance with established policies and ordinances. The attorney responsible for
delinquent tax collection, through the central collection agency, shall be encouraged
to collect delinquent property taxes using an established tax suit policy and sale of real
and personal property to satisfy non-payment of property taxes. A warrant officer will
aggressively pursue outstanding warrants, and the Court will use a collection agency
to pursue delinquent fines.
B. NON-RECURRING REVENUES. One-time or non-recurring revenues will not be used to
finance current ongoing operations. Non-recurring revenues will be used only for one-
time expenditures such as capital needs.
C. PROPERTY TAX REVENUES. All real and business personal property located within the
City shall be valued at 100% of the fair market value based on the appraisal supplied by
the Walker County Appraisal District. Reappraisal and reassessment is as provided by
the Appraisal District. Property tax rates shall be maintained at a rate adequate to fund
an acceptable service level. Based upon taxable values, rates may be adjusted to fund
this service level. Collection services shall be contracted out with a central collection
agency, currently the Walker County Appraisal District.
D. INTEREST INCOME. Interest earned from investment of available monies, whether
pooled or not, shall be distributed to the funds in accordance with the equity balance of
the fund from which monies were invested.
E. USER-BASED FEES AND SERVICE CHARGES. For services associated with a user fee
or charge, the direct and indirect costs of that service shall be offset wholly or partially by
a fee where possible. There shall be an annual review of fees and charges to ensure that
the fees provide adequate coverage of costs of services. Full fee support for operations
and debt service costs shall be required in the Proprietary Funds. Partial fee support shall
be generated by charges for miscellaneous licenses and fines, sports programs, and from
other parks, recreational, cultural activities, and youth programs.
F. UTILITY RATES. The City shall review and adopt utility rates annually that generate
revenues required to cover operating expenditures, meet the legal requirements of
applicable bond covenants, and provide for an adequate level of working capital.
Page 39 of 120
Exhibit B FY 22-23
10
G. COST REIMBURSEMENTS TO THE GENERAL FUND. The General Fund shall be
reimbursed by other funds for a proportionate share of administrative costs.
Documentation to support the transfer shall be presented to City Council as part of the
budget process.
H. INTERGOVERNMENTAL REVENUES/GRANTS/SPECIAL REVENUES. Grant
revenues and other special revenues shall be spent for the purpose(s) intended. The City
shall review grant match requirements and include in the budget all grant revenues and
expenditures.
I. REVENUE MONITORING. Revenues actually received are to be regularly compared to
budgeted revenues.
J. REVENUE PROJECTIONS. Each existing and potential revenue source shall be re-
examined annually.
VI. EXPENDITURE CONTROL
A. APPROPRIATIONS. The responsibility for budgetary control lies with the Department
Head. Department Heads may not approve expenditures that exceed monies available at
the object code level. Capital expenditures are approved by the City Council on a per
project basis.
B. AMENDMENTS TO THE BUDGET. In accordance with the City Charter, the City Council
may transfer any unencumbered appropriated balance or portion thereof from any office,
department, or agency to another at any time.
C. CITY MANAGER'S AUTHORITY TO AMEND BUDGET.
1. Reserve for Future Allocation. The City Manager may authorize transfers of
$50,000 or less from the budgeted Reserve for Future Allocation. For authorizations
of $25,000 or less, the City Manager will report the use of Reserve for Future Allocation
as an informational item. For authorizations between $25,001 and $50,000, the City
Manager shall provide written notice to the Council of his/her intent to authorize a
transfer of Reserve for Future Allocation in excess of $25,000 (but not more than
$50,000), and allow seven (7) business days to pass without a request by a
Councilmember to place the proposed expenditure on a City Council meeting agenda
for full City Council consideration.
2. Transfer Between Line Items. The City Manager may, without prior City Council
approval, authorize transfers between budget line items within a Fund with the
exception that:
a) Transfers from Salary and Benefit accounts shall stay within the Salary and
Benefits account classification/object code.
b) Savings from City Council approved capital purchases may not be spent for other
than their intended purpose;
c) Additions to the Fleet and additional computer equipment may not be purchased
from equipment replacement funds
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Exhibit B FY 22-23
11
3. Capital Project Budgets. The City Manager shall have the authority to transfer
amounts between line items of a capital project budget and to transfer monies from a
project’s Contingency Reserve to fund change orders on the project. The City
Manager, without prior Council approval, may approve a change order to a
construction or engineering contract in an amount not to exceed $50,000, as long as
the cumulative total of all change orders to the project do not exceed the State allowed
maximum of 25% of the original contract price.
D. PURCHASING. All purchases shall be made in accordance with the Purchasing
Procurement and Disposition Policies approved by the Finance Committee. Purchasing
will review all bids before posting. The sealed bid requirement is $50,000 if the anticipated
bid is $50,000 or greater. Purchases of $50,000 and more in any one fiscal year from any
one vendor whether a single purchase or separate or sequential purchases require city
council approval. Purchases of less than $50,000 from a single vendor added to
purchases of less than $50,000 from another vendor creating an asset of $50,000 or more
do not require Council approval. The following shows a summary of approval
requirements for purchases.
APPROVAL REQUIREMENTS FOR PURCHASES
Denotes signature approval
E. CONTRACTS. The City Manager, or Mayor as authorized by Council, shall be the
signature authority on contracts above $8,000 pursuant to the approval requirement for
purchases as outlines after review by the City Attorney and Finance Director.
F. PROMPT PAYMENT. All invoices approved for payment by the proper City authorities
shall be paid by the Finance Department within thirty (30) calendar days of receipt, in
accordance with the provisions of state law. Proper procedures shall be established that
enables the City to take advantage of all purchase discounts, except in the instance where
payments can be reasonably and legally delayed in order to maximize the City's investable
cash.
Dollar Figure
Supervisor
Or Director
Designee
Department
Director
Purchasing
Agent
City
Manager
City
Council
Less than $1,000
$1,000 to less than
$8,000
(Quotation Form and
Purchase Order)
$8,000 to less than
$50,000 (Purchase
Order)
$50,000 or more
Page 41 of 120
Exhibit B FY 22-23
12
VII. CAPITAL IMPROVEMENTS PROGRAM AND THE CAPITAL BUDGET.
A. PROGRAM PLANNING. The City shall develop and maintain a multi-year plan for capital
improvements and make capital improvements in accordance with the approved plan. The
Capital Improvements Program will be updated annually. The Capital Improvements
Program (CIP) is a planning document and does not authorize or fund projects. The
planning time frame for the capital improvements program will normally be five to ten
years.
B. BUDGET PREPARATION. The capital budget shall evolve from the Capital
Improvements Program. Capital project expenditures must be appropriated in the capital
budget. A funding source and resource availability shall be presented to the City Council
at the time a project is presented for funding. The City's Capital Budget is to be prepared
annually in conjunction with the operating budget on a fiscal year basis to ensure that
capital and operating needs are balanced against each other. Projects approved for
funding from the Capital Improvements Program will be included in the Capital Budget.
C. PROJECT LENGTH BUDGET. A budget for a capital project shall be a project length
budget. At the end of the fiscal year, the unspent budget of an approved capital project
shall automatically carry forward to the subsequent fiscal year until the project is
completed. At project end, funds shall be available for project reallocation or returned to
the originating fund.
D. BUDGET AMENDMENT. All budget amendments shall be in accordance with State law.
City Manager authority to amend the budget is identified in Section VI - D.
E. FINANCING PROGRAMS. Alternative financing sources will be explored. The term of
the debt issue may not exceed the expected useful life of the asset.
F. REPORTING. Periodic financial reports shall be prepared to enable the Department
Heads to manage their capital budgets and to enable the Finance Department to monitor,
report, and provide information about the capital budget.
G. EVALUATION CRITERIA. Capital investments shall foster goals of economic vitality,
neighborhood vitality, infrastructure preservation, provide service to areas lacking service
and improve services in areas with deficient services. Evaluation criteria for selecting
which capital assets and projects to include for funding shall include the following:
● mandatory projects ● maintenance projects
● efficiency improvement ● project provides a new service
● policy area projects ● extent of usage
● project's expected useful life ● effect of project on operation and
● availability of state/federal maintenance costs
grants ● elimination of hazards
● prior commitments
VIII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING
A. ACCOUNTING. The Finance Director is responsible for establishing the Chart of
Accounts and for recording financial transactions.
Page 42 of 120
Exhibit B FY 22-23
13
B. AUDITING.
1. Qualifications of the Auditor. Section 11.16 of the City's Charter requires the
City to be audited annually by independent accountants ("auditor"). The CPA firm
must demonstrate that it has staff to conduct the City's audit in accordance with
generally accepted auditing standards and contractual requirements. The auditor
must be licensed by the State of Texas.
2. Responsibility of Auditor to City Council and Finance Committee. The auditor
is retained by and is accountable to the City Council. The auditor shall
communicate directly with the Finance Committee as necessary to fulfill its legal
and professional responsibilities. The auditor's report on the City's financial
statements shall be completed within 120 days of the City's fiscal year end.
3. Selection of Auditor. The City shall request proposals for audit services at least
once every three years. The City shall select the auditor by May 31, of each year.
As required in Section 11.16 of the City Charter, the Auditor is appointed by the
Mayor, with approval of the Council. The Certified Public Accountant shall have
no personal interest, directly or indirectly, in the financial affairs of the City or any
of its officers.
4. Contract with Auditor. The agreement between the independent auditor and the
City shall be in form of a written contract. A time schedule for completion of the
audit shall be included.
5. Scope of Audit. All general purpose statements, combining statements and
individual fund and account group statements and schedules shall be subject to a
full scope audit.
6. Publication of Results of Audit. As required by Section 11.16 of the City Charter,
notice of the completion of the audit shall be published in a newspaper and copies
placed in the office of the Director of Finance and the Huntsville Public Library. A
copy will also be available in the office of the City Secretary.
C. FINANCIAL REPORTING.
1. External Reporting. As a part of the audit, the auditor shall assist with preparation
of a written Annual Comprehensive Financial Report (ACFR) to be presented to
the City Council. The ACFR shall be prepared in accordance with generally
accepted accounting principles (GAAP) and shall be presented annually to the
Government Finance Officers Association (GFOA) for evaluation and
consideration for the Certificate of Achievement for Excellence in Financial
Reporting.
2. Availability of Reports. The annual comprehensive financial report shall be
made available to the elected officials, bond rating agencies, creditors and citizens.
3. Internal Reporting. The Finance Department shall prepare internal financial
reports, sufficient to plan, monitor, and control the City's financial affairs.
Page 43 of 120
Exhibit B FY 22-23
14
IX. INVESTMENTS AND CASH MANAGEMENT
A. DEPOSITORY BANK. A Depository Bank shall be selected by the City Council for a two-
year period, and may be renewed in accordance with the Public Funds Investment Act. A
request for proposal shall be used as the means of selecting a Depository Bank. The
Depository Bank shall specifically outline safekeeping requirements.
B. DEPOSITING OF FUNDS. The Finance Director shall promptly deposit all City funds with
the Depository Bank in accordance with the provisions of the current Bank Depository
Agreement and the City Council approved Investment Policies. Investments and reporting
shall strictly adhere to the City Council approved Investment Policies.
C. INVESTMENT POLICY. All funds shall be invested in accordance with the approved
investment policy. Investment of City funds emphasizes preservation of principal.
Objectives are, in order, safety, liquidity and yield. A procedures manual shall be approved
by the Finance Committee.
D. MONTHLY REPORT. A monthly cash and investment report shall be prepared.
X. ASSET MANAGEMENT
A. FIXED ASSETS AND INVENTORY. A fixed asset of the City is defined as a purchased
or otherwise acquired piece of equipment, vehicle, furniture, fixture, capital improvement,
infrastructure addition, or addition to existing land, buildings, etc. A fixed asset’s cost or
value is $5,000 or more, with an expected useful life greater than one year. Improvements
and infrastructure values are $25,000 or more in cost with a useful life or extension of five
years.
B. MAINTENANCE OF PHYSICAL ASSETS. The City will maintain its physical assets at a
level adequate to protect the City’s capital investment and minimize future maintenance
and replacement costs. The budget will provide for the adequate maintenance and the
orderly replacement of fixed assets.
C. OPERATIONAL PROCEDURES MANUAL. Records shall be purged that do not meet the
capitalization criteria and operational procedures shall be in accordance with a fixed asset
records procedure manual.
D. SAFEGUARDING OF ASSETS. The City's fixed assets will be reasonably safeguarded
and properly accounted for. Responsibility for the safeguarding of the City's fixed assets
lies with the Department Head in whose department the fixed asset is assigned.
F. MAINTENANCE OF RECORDS. The Finance Department shall maintain the records of
the City's fixed assets including description, cost, department of responsibility, date of
acquisition and depreciation where applicable. Records of land and rights-of-way shall be
maintained in the Planning & Development Department.
Page 44 of 120
Exhibit B FY 22-23
15
G. ANNUAL INVENTORY. An annual inventory of assets shall be performed and accounted
for by each department using guidelines established by the Finance Department. Such
inventory shall be performed by the Department Head or the designated agent. The
Department Head shall use a detailed listing and shall be responsible for a complete
review of assigned fixed assets. A signed inventory list shall be returned to the Finance
Department.
G. INFRASTRUCTURE MAINTENANCE. The City recognizes that deferred maintenance
increases future capital costs. Funds shall be included in the budget each year to maintain
the quality of the City’s infrastructure. Replacement schedules should be developed in
order to anticipate this inevitable ongoing and obsolescence of infrastructure.
H. SCHEDULED REPLACEMENT OF ASSETS. As part of the ongoing replacement of
assets, the City has established Equipment Replacement Funds. These funds charge the
user funds, based on the estimated replacement cost and estimated life of the equipment.
The City maintains fleet and computer replacement funds.
XI. DEBT MANAGEMENT
A. DEBT ISSUANCE. The City shall issue debt when the use of debt is appropriate and
specifically approved by the City Council and expenditure of such monies shall be in strict
accordance with the designated purpose.
B. ISSUANCE OF LONG-TERM DEBT. The issuance of long-term debt is limited to use for
capital improvements or projects that cannot be financed from current revenues or
resources and future citizens will receive a benefit from the improvement. Debt may be
issued for the purposes of purchasing land or rights-of-way and/or improvements to land,
street improvements, or construction projects to provide for the general good. For
purposes of this policy, current resources are defined as that portion of fund balance in
excess of the required reserves. The payback period of the debt will be limited to the
estimated useful life of the capital projects or improvements.
C. The City shall strive to schedule debt issues to take advantage of the small issuer status
designation in regard to Federal Arbitrage laws.
D. PAYMENT OF DEBT. When the City utilizes long-term debt financing it will ensure that
the debt is financed soundly by realistically projecting the revenue sources that will be
used to pay the debt; and financing the improvement over a period not greater than the
useful life of the improvement.
E. TYPES OF DEBT.
1. General Obligation Bonds (G.O.'s). General obligation bonds shall be used only to
fund capital assets of the general government, and not used to fund operating needs
of the City. General obligation bonds are backed by the full faith and credit of the City
as well as the ad valorem tax authority of the City. The term of a bond issue shall not
exceed the useful life of the asset(s) funded by the bond issue. General obligation
bonds must be authorized by a vote of the citizens of the City of Huntsville.
2. Revenue Bonds (R.B.'s). Revenue bonds shall be issued as determined by City
Council to provide for the capital needs of any activities where the capital requirements
are necessary for continuation or expansion of a service which produces revenue and
Page 45 of 120
Exhibit B FY 22-23
16
for which the asset may reasonably be expected to provide for a revenue stream to
fund the debt service requirements. The term of the obligation may not exceed the
useful life of the asset(s) to be funded by the bond issue.
3. Certificates of Obligation (C.O.'s). Certificates of obligation may be used in order to
fund capital assets. Debt service for C.O.'s may be either from general revenues or
backed by a specific revenue stream or streams or by a combination of both. C.O.'s
may be used to fund capital assets where full bond issues are not warranted as a result
of the cost of the asset(s) to be funded through the instrument. Infrastructure and
building needs may also be financed with Certificates of Obligation, after evaluation of
financing alternatives by the City’s Financial Advisor. The term of the obligation may
not exceed the useful life of the asset(s) to be funded by the proceeds of the debt
issue.
4. Tax Anticipation Notes. Tax Anticipation Notes may be used to fund capital assets
of the general government or to fund operating needs of the City. Tax Anticipation
Notes are backed by the full faith and credit of the City as well as the ad valorem tax
authority of the City. The term of a note issue shall not exceed the useful life of the
asset(s) funded by the debt issued or seven years whichever is less.
5. Capital Lease. Capital leases may be used to fund capital assets with shorter lives
(generally less than 10 years) for vehicles, equipment and software. The term shall
not exceed the useful life of the assets.
F. METHOD OF SALE. The City shall use a competitive bidding process in the sale of bonds
and certificates of obligation unless some other method is specifically agreed to by City
Council.
G. FINANCIAL ADVISOR. The Finance Committee will recommend to the City Council a
financial advisor to oversee all aspects of any bond issue.
H. ANALYSIS OF FINANCING ALTERNATIVES. Staff will explore alternatives to the
issuance of debt for capital acquisitions and construction projects. These alternatives will
include, but not be limited to, 1) grants in aid, 2) use of reserves, 3) use of current
revenues, 4) contributions from developers and others, 5) leases, and 6) impact fees.
I. DISCLOSURE. Full disclosure of operations shall be made to the bond rating agencies
and other users of financial information. The City staff, with the assistance of financial
advisors and bond counsel, shall prepare the necessary materials for presentation to the
rating agencies, and shall aid in the production of Offering Statements.
J. DEBT STRUCTURING. The City will generally issue debt for a term not to exceed 20
years. The City will exceed a 20-year term only upon recommendation of the City’s
Financial Advisor and in no case shall the term of the debt issue exceed the life of the
asset acquired. The repayment schedule shall approximate level debt service unless
operational matters dictate otherwise or if market conditions indicate a potential savings
could result from modifying the level payment stream. Consideration of market factors,
including tax-exempt qualification, and minimum tax alternatives will be given during the
structuring of long-term debt instruments.
K. FEDERAL REQUIREMENTS. The City will maintain procedures to comply with arbitrage
rebate and other Federal requirements.
Page 46 of 120
Exhibit B FY 22-23
17
L. BIDDING PARAMETERS. The notice of the sale of bonds will be carefully constructed so
as to ensure the best possible bid for the City, in light of the existing market conditions
and other prevailing factors. Parameters to be examined include:
• Limits between lowest and highest coupons
• Coupon requirements relative to the yield curve
• Method of underwriter compensation, discount or premium coupons
• Use of bond insurance
• Call provisions
XII. INTERNAL CONTROLS
A. WRITTEN PROCEDURES. Wherever possible, written procedures shall be established
and maintained by the Finance Department for all functions involving cash handling and/or
accounting throughout the City. These procedures shall embrace the general concepts of
fiscal responsibility set forth in this policy statement.
B. DEPARTMENT HEAD RESPONSIBILITIES. Each Department Head is responsible to
ensure that good internal controls are followed throughout the Department, that all Finance
Department directives or internal controls are implemented, and that all independent
auditor internal control recommendations are addressed.
C. COMPUTER SYSTEM/DATA SECURITY. The City shall provide security of its computer
system and data files through physical security and appropriate backup procedures. A
disaster recovery plan shall be developed by the Information Services Department.
Computer systems shall be accessible only to authorized personnel.
XIII. RISK MANAGEMENT
A. RESPONSIBILITY. A risk manager is responsible for the general risk liability insurance
risk management function of the City. Recommendations for deductibles, limits of
coverage, etc. shall be presented to the Finance Committee for review.
B. EMPLOYEE SAFETY. The City will aggressively pursue opportunities to provide for
employee safety. The goal will be to minimize the risk of loss, with an emphasis on
regularly scheduled safety programs.
C. SELF INSURED HEALTH INSURANCE. A detailed annual report shall be given to the
Finance Committee that includes available funds, expected payouts in the plan,
reinsurance costs and a rate recommendation. The presentation shall include a proposed
budget for a period coinciding with the City's fiscal year.
XIV. ROLE OF THE FINANCE COMMITTEE OF CITY COUNCIL
The finance committee appointed by City Council upon recommendation of the Mayor
shall have responsibilities including:
A. Monitoring and recommending changes to the Investment Policy;
B. Managing the audit;
C. Review of liability insurance coverage’s.
D. Oversight of budget and finances
Page 47 of 120
Exhibit C FY 2012-
2123
CITY OF HUNTSVILLE, TEXAS
INVESTMENT & BANKING
POLICIES
10/1/2022
Page 48 of 120
((Exhibit C) (FY 21024-135 -6221)
TABLE OF CONTENTS
PART I - INVESTMENT POLICYI. Purpose of Policy .............................................1
II. Scope of Policy ...............................................1
III. Designation of Investment Officers ............................1
IV. Investment Training ...........................................2
V. Ethics and Conflict of Interest ...............................2
VI. Objectives ....................................................2
VII. Market Yield (Benchmark)/Market Price of Investments ..........3
VIII. Investment Strategies .........................................3
IX. Prudence/Standard of Care .....................................4
X. Diversification ...............................................4
XI. Maximum Maturities ............................................4
XII. Purchase Procedures ...........................................4
XIII. Collateralization .............................................5
XIV. Safekeeping and Custody .......................................5
XV. Internal Control/Compliance Audit .............................6
XVI. Authorized Financial Dealers and Institutions .................6
XVII. Authorized Investments ................................... 6
XVIII.Investment Pools ..............................................9
XIX. Reporting ....................................................10
XX. Policy Adoption ..............................................11
PART II - BANKING SERVICES POLICY
I. Establishment of Banking Depository ..........................11
II. Collateralization Requirements/Safekeeping and Custody .......12
PART III - INVESTMENT POLICY - POST EMPLOYMENT BENEFIT PLAN (aka PEB
Trust)
I. Introduction .............................................. 15
II. Purpose ................................................... 16
III. Investment Objectives ...................................... 17
IV. Investment Guideline for Asset Management .................. 18
V. Performance Evaluation............ ......................... 21
VI. Investment Manager Selection ............................... 23
VII. Definitions ................................................ 24
Attachment A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
List of Authorized Broker/Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Appendix I - State Law List of Authorized Investments
Page 49 of 120
Exhibit C FY 2012-
2123
1
CITY OF HUNTSVILLE
INVESTMENT AND BANKING POLICIES
PART I - INVESTMENT POLICY
I. PURPOSE OF POLICY
The Public Funds Investment Act (PFIA), Chapter 2256, Texas Government Code prescribes that
each city is to adopt rules governing its investment practices and to define the authority of the
Investment Officer. This policy is adopted by the City Council to direct and limit the financial
affairs of the City of Huntsville. It is the policy of the City of Huntsville to invest public funds in
a manner which will provide the maximum security of principal invested at a reasonable market
rate of return, with consideration of the City’s risk constraints and cash flow needs. Receipt of a
market rate of return will be secondary to the requirements for safety and liquidity. Thethe City
to will be in compliancecomply with all state and local statutes, including the Texas Public Funds
Investment Act.
II. SCOPE OF POLICY
This policy applies to all funds or financial resources available for investment by the City
accounted for in the City of Huntsville, Texas Comprehensive Annual Financial Report and
include the General Fund, General Obligation Debt Service Fund, Special Revenue Funds,
Enterprise Funds, Permanent Funds, Internal Service Funds, the City’s self-funded Health
Insurance Fund, and will include any new fund created by the City Council unless specifically
exempted by City Council. All monies may be pooled into one investment account, except for
those monies accounted for in accounts as deemed necessary, or as stipulated by applicable laws,
bond covenants or contracts. These policies do not, however, govern funds that are managed
under separate investment programs such as retirement funds, pension funds, deferred
compensation funds and certain private donations, that are maintained as required by federal and
state law, other local policies, or donor stipulations.
III. DESIGNATION OF INVESTMENT OFFICERS
The authority to manage the City of Huntsville investment program is derived from State Statute,
the City Charter, and these investment policies. Management responsibility for the investment
program is hereby delegated to the City Manager and Finance Director, designated as Investment
Officers for the City of Huntsville, who shall establish written procedures for the operation of the
investment program consistent with this investment policy and shall be responsible for the
operation of the investment program consistent with this investment policy. The Director of
Finance, under general supervision of the City Manager, shall direct the cash management
program of the City. (See City Charter Art. XI). The City Manager and/or Director of Finance
may deposit, withdraw, invest, transfer, and manage City funds. The Investment Officers shall
report to the Finance Committee of City Council. The Finance Committee, appointed by the
Mayor, shall be responsible for monitoring, reviewing and making recommendations regarding
the City’s investment program to the City Council.
The Director of Finance may authorize persons to engage in investment transactions and approve
wire transfers used in the process of investing.
Page 50 of 120
((Exhibit C) (FY 21024-135 -6221)
2
IV. INVESTMENT TRAINING
Not less than once in a two-year period that begins on the City’s first day of the fiscal year the
Finance Director shall receive not less than 10 hours of instruction relating to investment
responsibilities. The Finance Director and City Manager shall attend investment training on an
annual basis that includes education in investment controls, security risks, strategy risks, market
risks, diversification of investment portfolio and general compliance with state law. Not less than
once in a two-year period, the investment officers shall receive not less than 10 hours of instruction
relating to investment responsibilities.Training must be received from an independent source,
approved by the entity’s governing body or investment committee, and taken within twelve
months after taking office or assuming duties.
V. ETHICS AND CONFLICT OF INTEREST
Officers and employees involved in the investment function shall refrain from personal business
activity that could conflict with proper execution of the investment program, or that could impair
their ability to make impartial investment decisions. Employees and investment officials shall
disclose to the Finance Committee of the City Council any material financial interest in financial
institutions that conduct business with the City, and they shall further disclose any large personal
financial/investment positions that could be related to the performance of the City of Huntsville,
particularly with regard to the time of purchases and sales. Investment officers shall comply with
Texas Government Code section 2256.005(I) relating to personal business relationships with a
business organization offering to engage in an investment transaction with the City of Huntsville.
VI. OBJECTIVES
The objectives of the City's investment policies are, in order of priority: preservation and safety
of principal, liquidity and yield/return on investments. The policy must be written, address
investment diversification and the quality and capability of investment management. The
investment portfolio shall be designed with the objective of obtaining a rate of return throughout
budgetary and economic cycles, commensurate with the investment risk constraints and the cash
flow needs.
A.Preservation and safety of principal shall be the foremost objective of the City's investment
program. Preservation and safety of principal shall be obtained through protection of
principal and safekeeping.
1. The City shall control risk of loss due to the failure of a security issuer or guarantor.
Such risk shall be controlled by investing in the safest types of securities, by
qualifying the financial institution with whom the City will transact, and by
portfolio diversification.
2. The City shall also control risks of loss by requiring collateral for depository bank
funds to be held by a financial institution separate from the depository bank.
B.Liquidity shall be achieved by matching investment maturities with forecasted cash flow
requirements and by investing in securities with active secondary markets. A security may
be liquidated to meet unanticipated cash requirements, to redeploy cash into other
investments expected to outperform current holdings, or to otherwise adjust the City's
portfolio.
Commented [RK1]: I will delete the
highlighted section and replace with text in blue.
Page 51 of 120
((Exhibit C) (FY 21024-135 -6221)
3
C.Yield/Return on Investments. The City of Huntsville investment portfolio is designed with
the objective of attaining a rate of return throughout budgetary and economic cycles
commensurate with the City of Huntsville investment risk constraints and the cash flow
characteristics of the portfolio. Investments, other than the overnight cash concentration
account, shall be made in permitted obligations at yields equal to or greater than the bond
equivalent yield on United States Treasury obligations of comparable maturity.
VII. MARKET YIELD (BENCHMARK)
The market yield benchmark shall be a yield equal to the bond equivalent yield on United States
Treasury obligations of comparable maturity.
If selling a security prior to a fixed date maturity at a gain or loss, the investment officers shall notify the Finance Committee of City Council at its next meeting. The City shall monitor the market price of investments as of the end of each month through reports provided by brokers and/or the use of a purchased service or available software.
VIII. INVESTMENT STRATEGIES
The City of Huntsville shall generally invest funds with the intent to hold to maturity. Investment
selection shall be based on legality, appropriateness, liquidity, and risk/return considerations.
Monies designed for immediate expenditure should be passively invested to allow for liquidity to
pay upcoming disbursements, (payroll, debt service payments, payables, etc.), and allow for
structuring the investment portfolio on a “laddered” basis. The City of Huntsville maintains portfolios that utilize four specific investment strategies designed to address the unique characteristics of the fund groups represented in the portfolios:
A.Operating Funds have as their primary objective the assurance that anticipated cash flows are matched with adequate investment liquidity. The secondary objective is to create a
portfolio structure that will experience minimal volatility during economic cycles. The
weighted average days to maturity of these funds shall be less than 365 days and shall be
calculated using the stated final maturity date for each security.
B.Debt Service Funds shall have as the primary objective the assurance of investment
liquidity adequate to cover the debt service obligations on the required payment date.
Securities purchased shall not have a stated final maturity date that exceeds the debt service payment date.
C.Debt Service Reserve Funds shall have as the primary objective the ability to generate a dependable revenue stream to the appropriate debt service fund from securities with a low degree of volatility. In addition to the bond ordinance specific to an individual bond issue, which sets out investment parameters, securities shall have a maturity of less than five
years. Investments shall be limited to obligations of the United States or its agencies and
instrumentalities or in approved investment pools.
D.Special Projects or Special Purpose Fund portfolios will have as their primary objective
to assure that anticipated cash flows are matched with adequate investment liquidity.
These portfolios should include at least 10% in highly liquid securities to allow for flexibility and unanticipated project outlays. The stated final maturity dates of securities held should not exceed the estimated project completion date. A singular repurchase agreement may be utilized if disbursements are allowed in the amount necessary to satisfy any expenditure request. This investment structure is commonly referred to as a flexible repurchase agreement.
Page 52 of 120
((Exhibit C) (FY 21024-135 -6221)
4
IX. PRUDENCE/STANDARD OF CARE
Investments shall be made with the judgment and care, under prevailing circumstances, that a
person of prudence, discretion, and intelligence would exercise in the management of the person’s
own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived. In determining whether the City’s investment officers have
exercised prudence with respect to an investment decision, the determination shall be made taking
into consideration, the investment of all funds, or funds under the City’s control, over which they
have responsibility rather than a consideration as to the prudence of a single investment, and whether the investment decision is consistent with this investment policy.
X. DIVERSIFICATION
The City of Huntsville will diversify its investments by security type and institution. With the
exception of U.S. Treasury securities and authorized pools, no more than 50% of the total
investment portfolio will be invested in a single security type or with a single financial institution.
Diversification will also include terms of maturity as well as instrument type and issue.
Investments shall not exceed more than 20% of the capitalization of the financial institution other
than the main depository. Bond proceeds may be invested in a single security or investment which
exceeds the City=’’s diversification limits if the Investment Officers, with concurrence of the
Finance Committee, determine that such an investment is necessary to comply with Federal
arbitrage restriction or to facilitate arbitrage record keeping and calculation.
XI. MAXIMUM MATURITIES
In order to stabilize yield for budgeting purposes, the City shall maintain a portion of its
investments in obligations with maturities greater than one year. No investment shall be made
with a maturity greater than five years without express authority of the Finance Committee of the
City Council. In determining the amount of investment longer than one year, cash flow and
unallocated reserve funds will be evaluated. The maximum dollar-weighted average maturity
allowed based on the stated maturity date for the portfolio shall not exceed 2 years.
XII. PURCHASE PROCEDURES
The City may, without further bidding, utilize any program established through the Texas Inter-
local Cooperation Act that invests in funds authorized by the Public Funds Investment Act; or
purchase certificates of deposit or other approved securities through its primary depository bank.
When possible, other investments should be made after 3 competitive bids are solicited
(excluding transactions with money market mutual funds, local government investment pools and
when issued securities, which are deemed to be made at prevailing market rates.). Competitive
bids may be solicited orally, in writing, electronically, or in any combination of these methods. An
offer worksheet shall be kept for each bid transaction showing the name of dealer/bank contacted,
amount of principal to be invested, yield quoted, type of investment, fund designation, maturity
date, issue date, length of time invested, and cusip number. Purchase of a security shall not be
made at a price that exceeds the existing market value of the security.
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. The deposit shall be
held in the name of the City of Huntsville and shall be evidenced by a trust receipt of the bank with
which the securities are deposited.
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XIII. COLLATERALIZATION
The Public Funds Collateral Act requires the City to have complete collateralization of all
investments and deposits at the depository banking institution. It will be required for all uninsured
collected balances, plus accrued interest, if any,on two types of investments: certificates of deposit
in excess of FDIC coverage. To anticipate market changes and provide a level of security for all
funds, the collateralization level will be at least 102% of the market value of principal and accrued
interest. The City chooses to limit collateral to obligations of the United States or its agencies and
instrumentalities, and direct obligations of the State of Texas or its agencies and instrumentalities.
Collateral will always be held by an independent third party with whom the entity has a current
custodial agreement.
XIV. SAFEKEEPING AND CUSTODY
All security transactions entered into by the City of Huntsville shall be conducted on a delivery
vs. payment (DVP) basis, with the exception of investment pool funds and mutual funds, and
delivered by either book entry or physical delivery. A Federal Reserve Member financial
institution designated as the City’s safekeeping and custodian bank shall hold these securities in
a third-party safekeeping account. The City may designate more than one custodian bank. . The
City’s custodial or safekeeping institution cannot be a counterpart (broker or dealer) to the
purchase or sale of these securities.
The City shall execute a written Safekeeping Agreement with each bank prior to utilizing the
custodian’s safekeeping services. The Safekeeping Agreement must provide that the safekeeping
bank will immediately record the receipt of purchased or pledged securities on its books and
promptly issue and deliver a signed safekeeping receipt showing the receipt and the identification
of the security as well as the City’s interest.
A) The Investment Officer or his designee shall maintain a list of designated custodian banks and
a copy of the Safekeeping Agreement executed with each custodian bank.
B) The Investment Officer must approve release of securities, in writing, prior to their removal
from the custodian account. An electronic copy shall be sufficient if the custodian orally
confirms receipt of the transmission and an exact copy of the document is retained at the City.
C) All securities shall be confirmed in the name of the City of Huntsville and delivered to an
approved custodial bank or carried at a Federal Reserve Bank in the name of the City of
Huntsville. The custodian shall not otherwise deposit purchased or pledged securities. In
addition, the custodian bank will furnish to the City a copy of the delivery advice received by
the custodian bank from the Federal Reserve Bank.
D) The correspondent or safekeeping bank shall issue a safekeeping receipt to the City
evidencing securities are held in the City’s name.
E) The original safekeeping receipt for each transaction shall be forwarded to the Investment
Officer or his designee.
F) At least quarterly, the Investment Officer or their designee, shall verify that all securities
owned by the City or pledged to the City are held in safekeeping in the City’s custodial bank
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with proper documentation. At least annually, the City’s Investment Program, including the
records of custodians and depositories, shall be subject to a compliance audit of management
controls on investments and adherence to these investment policies reviewed by an
independent Certified Public Accountant selected by the City Council.
XV. INTERNAL CONTROL/COMPLIANCE AUDIT
A system of internal controls shall be established. As part of the Cityy=’s annual audit, an
independent auditor shall review internal controls, investment practices, investment performance,
quarterly reports prepared by the investment officers and the result of the review shall be reported
to the Finance Committee of the City Council. A compliance audit of management control on
investments and adherence to investment policies is to be included.
XVI. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Council shall approve at least three broker/dealers upon recommendation of the Finance
Committee for use by the designated investment officers. The broker/dealers may include primary
dealers and regional dealers that qualify under Securities and Exchange Commission Rule 15C3-
1 (uniform net capital rule).
The selection process shall include a proposal process with potential broker/dealers providing a
completed broker/dealer questionnaire, certification of having read the City of Huntsville
investment policy, proof of National Association of Security Dealers certification and proof of
state registration. The selected broker/dealers must acknowledge in writing that the business
organization has implemented reasonable procedures and control in an effort to preclude
investment transactions conducted between the entity and the organization 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. An investment officer may not buy any securities from a firm that has not
filed this instrument.
An annual review of the financial condition and registrations of qualified bidders is to be
conducted by the City Manager or Finance Director and a current audited financial statement is
required to be on file for each broker/dealer that conducts transactions with the City. The Finance
Committee shall review, revise and adopt a list of qualified brokers that are authorized to engage
in investment transactions with the City.
XVII. AUTHORIZED INVESTMENTS
The City of Huntsville may invest only in the safest type of securities and in accordance with
Texas state law (Appendix I). There are two general categories of authorized investments for the
City of Huntsville: (1) investments which the designated investment officers may invest without
prior approval from the Finance Committee; and, (2) investments that require prior Finance
Committee approval.
A. Authorized investments that do not require prior approval of Finance Committee:
1. Obligations of, or Guaranteed by, Governmental Entities:
a. obligations of the United States or its agencies and instrumentalities;
b. direct obligations of the State of Texas or its agencies and
instrumentalities;
c. other obligations, the principal and interest of which are unconditionally
Commented [SR2]: Need procedure documented –
part of Rachel’s responsibilities quarterly –
s/b on her calendar
Commented [RK3R3]: Would the Statement of
Holdings report with a listing of securities
and their current market values suffice? This
is sent to us every month.
Commented [RK4R3]:
Commented [SR5]: Need to add “, in writing,”
between these 2 words
Commented [SR6]: This part of this sentence
does not seem to go with the previous part.
What is “this authorization” referring to?
Commented [RK7R7]: I’ll show you the wording in PFIA’s section 2256.005 (k-1)
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guaranteed or insured by, or backed by the full faith and credit of, this state
or the United States or their respective agencies and [its] instrumentalities;
d. obligations of states, agencies, counties, cities, and other political
subdivisions of any state rated as to investment quality by a nationally
recognized investment rating firm not less than A or its equivalent.
e. bonds issued, assumed, or guaranteed by the State of Israel; and
f. interest-bearing banking deposits that are guaranteed or insured by the
Federal Deposit Insurance Corporation or its successor or the National
Credit Union Share Insurance Fund or its successor.
e. The following are not authorized investments under this section:
a.1) obligations whose payment represents the coupon payments on the
outstanding principal balance of the underlying mortgage-backed security
security
ccollateral and pays no principal;
2b).obligations whose payment represents the principal stream of cash flow
from the underlying mortgage-backed security collateral and bears no
interest;
c3).collateralized mortgage obligations that have a stated final maturity date
greater than 10 years; and
4d).collateralized mortgage obligations the interest rate of which is
determined by an index that adjusts opposite to the changes in a market
index.
2. Certificates of Deposit:
Certificates of deposit issued by state and national banks, or a savings bank or
credit union domiciled in Texas that are:
a. guaranteed or insured by the Federal Deposit Insurance Corporation, the
National Credit Union Share Insurance Fund, or comparable insurance
entities or their successors; or
b. secured in any other manner and amount provided by law for deposits of
the City.
c. secured through an authorized broker in accordance with the Public Funds
IInvestment Act (PFIA).
B. Authorized investments requiring prior approval of the Finance Committee:
31. Banker’s Acceptances
A bankers acceptance is an authorized investment if the bankers=’s acceptance:
(a) has a stated maturity of 270 days or fewer from the date of its issuance; (b) will be, in accordance with its terms, liquidated in full at maturity; (c) is eligible for
collateral for borrowing from a Federal Reserve Bank; and (d) is accepted by a
bank organized and existing under the laws of the United States or any state, if the
short-term obligations of the bank, or 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 nationally recognized credit rating agency.
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42. Commercial Paper
Commercial paper is an authorized investment if the commercial paper has a stated maturity of 270 days or fewer from the date of its issuance and is rated not
less than A-1 or P-1 or an equivalent rating by at least two nationally recognized
credit rating agencies or one nationally recognized credit rating agency and is fully
secured by an irrevocable letter of credit issued by a bank organized and existing under the laws of the United States or any state. .
53. Mutual Funds
A. A no-load money market mutual fund is an authorized investment if:
(1) the mutual fund is registered with and regulated by the Securities and
Exchange Commission;
(2) provides the investing entity with a prospectus and other information
required by the Securities Exchange Act of 1934 (15 U.S.C. Section 78a
et seq.) or the Investment Company Act of 1940 (15 U.S.C. Section 80a-
1 et seq.); and
3) complies with federal Securities and Exchange Commission Rule 2a-7
(17 C.F.R. Section 270.2a-7), promulgated under the Investment
Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.)
(
B. In addition to a no-load money market mutual fund permitted as an
authorized investment in Subsection (a), a no-load mutual fund is an authorized investment under this subchapter if the mutual fund:
1) is registered with the Securities and Exchange Commission;
2) has an average weighted maturity of less than two years; and
3) either:
(a) has a duration of one year or more and is invested exclusively
in obligations approved by this subchapter; or
(b) has a duration of less than one year and the investment
portfolio is limited to investment grade securities, excluding
asset-backed securities.
C. The City is not authorized by this section to:
1) invest in the aggregate more than 80 percent of its monthly
average fund balance, excluding bond proceeds and reserves and
other funds held for debt service, in money market mutual funds
described in Subsection (a) or mutual funds described in
Subsection (b), either separately or collectively;
2) invest in the aggregate more than 15 percent of its monthly
average fund balance, excluding bond proceeds and reserves and other funds held for debt service, in mutual funds described in
Subsection (b);
3) invest any portion of bond proceeds, reserves and funds held for
debt service, in mutual funds described in Subsection (b); or
4) invest its funds or funds under its control, including bond
proceeds and reserves and other funds held for debt service, in any
one mutual fund described in Subsection (a) or (b) in an amount
that exceeds 10 percent of the total assets of the mutual fund.
C. Effect of Loss of Required Rating
An investment that requires a minimum rating under this subchapter does not qualify as an
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authorized investment during the period the investment does not have the minimum rating.
The City shall take all prudent measures that are consistent with its investment policy to
liquidate an investment that does not have the minimum rating.
XVIII. INVESTMENT POOLS
A. The City may invest in eligible investment pools as defined by the Public Funds Investment
Act, which meet criteria outlined in chapter Texas Government Code section 2256.016 and
section 2256.019. The Council shall authorize participation in the pool by resolution or
ordinance.
B. The City must receive from the pool an offering circular or other similar disclosure
instrument that contains, at a minimum, the following information:
1. a description of eligible investment securities;
2. the maximum average dollar-weighted maturity allowed, based on the stated
maturity date, of the pool;3. the maximum stated maturity date any investment security within the portfolio has;
4. a written statement of investment policy and objectives;
5. the size of the pool;
6. the names of the members of the advisory board of the pool and the dates their
terms expire;
7. the custodian bank that will safe keep the pool’s assets; a description of how the
securities are safeguarded (including the settlement process) and how often the
securities are priced;
8. whether the intent of the pool is to maintain a net asset value of one dollar and the
risk of market price fluctuation;
9. whether the only source of payment is the assets of the pool at market value or
whether there is a secondary source of payment, such as insurance or guarantees, and a description of the secondary source of payment;
10. the name and address of the independent auditor of the pool and how often the
program is audited;
11. the requirements to be satisfied for an entity to deposit funds in and withdraw funds
from the pool including how often and what size deposits and withdrawals are
allowed, and any deadlines or other operating policies required for the entity to
invest funds in and withdraw funds from the pool; and;
12. the performance history of the pool, including yield, average dollar-weighted
maturities, and expense ratios;
13. a description of interest calculations and how it is distributed and how gains and
losses are treated;
Commented [SR8]: Seems to contradict the
previous “C.”
Commented [RK9R9]: I can remove this. This was in our current policy but I do not see
this language in PFIA.
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14. a schedule for receiving statements and portfolio listings;
15. an explanation of whether reserves, retained earnings, etc. are utilized by the pool;
16. a fee schedule, including when and how it is assessed;
17. an explanation of whether the pool is eligible and/or will it accept bond proceeds.
C. To maintain eligibility to receive funds from and invest funds on behalf of an entity under
this chapter, an investment pool must furnish to the investment officer or other authorized
representatives of the entity:
1. investment transaction confirmations; and
2. a monthly report that contains, at a minimum, the following information:
a. the types and percentage breakdown of securities in which the pool is
invested;
b. the current dollar-weighted average maturity, based on the stated maturity
date, of the pool;
c. the current percentage of the pool=’s portfolio in investments that have
stated maturities of more than one year;d. the book value versus the market value of the pool=’s portfolio, using
amortized cost valuation;
e. the size of the pool;
f. the number of participants in the pool;
g. the custodian bank that is safekeeping the assets of the pool;
h. a listing of daily transaction activity of the entity participating in the pool;
i. the yield and expense ratio of the pool;
j. the portfolio managers of the pool; and
k. any changes or addenda to the offering circular.
D. The City by contract may delegate to an investment pool the authority to hold legal title as
custodian of investments purchased with its local funds.
E. “Yield” shall be calculated in accordance with regulations governing the registration of
open-end management investment companies under the Investment Company Act of 1940,
as promulgated from time to time by the Federal Securities and Exchange Commission.
XIX. REPORTING
Within 30 days of the end of each quarter the Finance Director shall prepare and submit to the
City Council a written report of investment transactions for the preceding reporting period. The
report must:
1) Describe in detail the investment position of the entity on the date of the report;
2) Be prepared and signed jointly by all investments officers of the entity;
3) Contain a summary statement of each pooled fund group that states the beginning and ending
market values and fully accrued interest for the reporting period;
4) State the book and market values of each separately invested asset at the end of the reporting
period by the type of asset and fund type invested;
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5) State the maturity date of each separately invested asset that has a maturity date;
6) State the account or fund or pooled group fund in the local government for which each
individual investment was acquired; and
7) State the compliance of the investment portfolio of the local government as is relates to:
a. The investment strategy expressed in the agency’s or local government’s investment
policy; and
b. Relevant provisions of PFIA Sec. 2256.023
8) If the City invests in investments other than money market mutual funds, investment pools or
accounts offered by its depository bank in the form of certificates of deposit, the reports
prepared by the Investment Officer shall be reviewed at least annually by an independent
auditor, and the result of the review shall be reported to the governing body by that auditor;
and;
9) Compare to the benchmark bond equivalent yield or United States Treasury obligation of
comparable maturity.
XX. POLICY ADOPTION
The City of Huntsville investment policy shall be adopted by ordinance of the City Council. The
policy shall be reviewed annually by the Finance Committee, and any modifications made thereto
must be approved by the City Council. Annually, City Council shall adopt a resolution or include
in the budget ordinance information stating that it has reviewed the investment policy and
investment strategies. The resolution/ordinance shall record any changes made to the investment
policy or investment strategies.
PART II - BANKING SERVICES POLICY
I. ESTABLISHMENT OF BANKING DEPOSITORY
A. The City Council shall select a bank, credit union or savings association as its primary
depository for normal banking transactions. In addition, the City may designate one or
more other depositories for investment transactions.
B. The City's primary banking depository shall have a branch located in the City.
C. Not more than four weeks and not less than one week before the City Council considers
applications for its depository, the City shall publish at least once in the City's official
newspaper a notice of the meeting at which applications are to be received.
D. A bank, credit union or savings association desiring to be selected as the city depository
must deliver its application to the City Secretary on or before the time stated in the notice.
The application shall be accompanied by an affidavit disclosing conflicts of interest, if any,
that apply to the selection of the depository. The City's Finance Committee may, as
directed by City Council, review the applications and prepare a recommendation regarding
the selection of depositories for Council.
E. The City Council may, after considering the application and the recommendation, if any,
of its staff and/or Finance Committee:
Page 60 of 120
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1. select as city depositories one or more banks, credit unions or savings associations
that offer the most favorable terms and conditions for the handling of the municipal
funds; or
2. reject any or all of the applications.
F. The City shall retain the right to withdraw any municipal funds deposited in a depository
that are not immediately required to pay obligations of the City and invest those funds as
outlined in these Investment and Banking Policies.
G. The Director of Finance shall immediately deposit in the depository to the credit of the
City any money received.
H. Except as provided for wire transfers to other depositories or ACH transfers, the funds of
the City may be paid out of a depository only on the checks of the City.
I. I.Checks must be signed by the Mayor and either the City Manager or Finance
Director. A facsimile signature may be used by the Mayor and/or City Manager.
J. Checks must be authorized by the Mayor, City Manager, or Finance Director.
K. No check shall be drawn on a special fund created to pay bonded indebtedness other than
to pay principal or interest on the indebtedness, or to invest the fund as provided by these
polices or law.
L. All checks shall be payable by the depository at its place of business.
M. The Director of Finance may, with approval of Council, pay a bond, coupon, or other
indebtedness of the City at a place other than the depository if by its terms the indebtedness
is payable on maturity at the other location.
II. COLLATERALIZATION REQUIREMENTS/SAFEKEEPING AND CUSTODY
A. All public funds held in a checking account or time deposit at a bank or other depository
shall be secured by eligible security. An eligible security means:
1. a surety bond;
2. investment securities (obligations of the United States or its agencies and
instrumentalities); or
3. ownership or beneficial interest (but not merely an option contract to purchase or sell) any authorized investment.
B.The market value of the investment securities used as collateral shall be at least 102% of
the value equal to the deposits of public funds increased by the amount of any accrued
interest and reduced by the extent of insurance through an agency of the United States.
C. Safekeeping
1. A depository for the City may deposit investment securities pledged to secure
deposits of public funds with a custodian that the City has approved as a custodian
and that is either:
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13
a. A state or national bank domiciled in the State of Texas and which has a capital stock and permanent surplus of not less than $5 million.b. The Texas Treasury Safekeeping Trust Company; or
c. A Federal Reserve Bank or its branches.
2. The securities shall be held in trust by the custodian to secure the deposit of
public funds of the City in the depository pledging the securities.
3. On receipt of the investment securities, the custodian shall immediately, by
book entry or otherwise, identify on its books and records the pledge of the securities to the City and shall promptly issue and deliver to the Director of Finance of the City trust receipts for the securities pledged. The security evidenced by the trust receipts is subject to inspection by the City or its agents at any time.
4. A custodian holding in trust investment securities of a depository may deposit
the pledged securities with a permitted institution. These securities shall be held
by the permitted institution to secure funds deposited by the City in the depository
pledging the securities. On receipt of the securities, the permitted institution shall
immediately issue to the custodian an advice of transaction or other document
evidencing the deposit of the securities. When the pledged securities held by a
custodian are deposited, the permitted institution may apply book entry procedures
to the securities. The records of the permitted institution shall at all times reflect the name of the custodian depositing the pledged securities. The trust receipts the custodian issues to the City shall indicate that the custodian has deposited with the permitted institution the pledged securities held in trust for the depository pledging the securities.
5. The custodian shall maintain separate, accurate, and complete records relating
to the pledged investment securities and all transactions relating to the pledged
investment securities.
D. The Director of Finance shall inform its depositories of significant changes in the amount
or activity of public funds reasonably in advance of such changes.
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SectionPart III Investment Policy - City of
Page 63 of 120
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15
HHuntsville
Post-Employment Benefit Plan
(aka “City of Huntsville PEB Trust”)
Page 64 of 120
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16
Section 1 INTRODUCTION
The City of Huntsville Post Employment Benefit Plan (the “Plan”), a
retirement plan qualified under Internal Revenue Code Section 115,
provides retirement benefits to eligible employees of City of Huntsville.
The assets of the Plan are held in a tax-exempt trust for the benefit of the
Plans’ participants and beneficiaries. The objective of the Plan is to
provide employees with a source of retirement income from accumulated
contributions and investment returns.
The Pension Plan Finance Committee (the “Finance Committee”) is
responsible for overseeing and monitoring the investment of the Plans’
assets. It will generally be responsible for:
A. Promulgating the Plans’ Investment Policy Statement.
B. Selecting the investment funds in which the Plans’ assets will be
invested and/or the investment managers who will be responsible for
investing the Plans’ assets.
C. Reviewing and making changes in the investment funds and/or
investment managers for compliance with the Investment Policy
Statement.
D. Making revisions to the Investment Policy Statement to reflect
changing conditions within the Plans or the investment environment or to
make it more effective.
The Finance Committee is authorized to retain professional investment
advisory services to provide advice with respect to the investment and
monitoring of the Plans’ assets under the guidance of the Finance
Committee.
This Investment Policy Statement is intended to set forth the general
policies that the Finance Committee will apply in selecting, monitoring
and modifying the investments and/or investment managers for the Plans.
While the Finance Committee intends for this Investment Policy
Statement to assist the Finance Committee in satisfying its fiduciary duties
and in making prudent investment decisions, no investment results or
performance is, or can be, guaranteed; and no such guarantee is intended.
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Section 2 PURPOSE
This Investment Policy Statement contains guidelines regarding the
investment of the assets held in trust for the Plan to assist the members
of the Finance Committee in effectively selecting, monitoring and
evaluating the investments and/or investment managers for the Plan.
The purposes of this Investment Policy Statement are to:
A. Set forth the investment objectives, policies and guidelines, which
the Finance Committee judges to be appropriate and prudent, in
consideration of the needs of the Plan.
B. Establish the criteria against which the investments and/or the
investment management organizations selected by the Finance
Committee are to be measured.
C. Set forth the target asset mix for the investment of the Plans’ assets.
D. Serve as a review document to guide the Finance Committee’s
ongoing oversight of the investment of the Plans’ assets.
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Section 3 INVESTMENT OBJECTIVES
It is the intention of the Finance Committee to build and maintain the
Plans’ trust through employer contributions that satisfy legal
requirements and investment returns. The Finance Committee expects
that the amount of investment income plus capital appreciation from
the Plans’ trust combined with contributions to the trust will exceed the
amount of pension payments. Over shorter periods, the Finance
Committee understands that at times investment income plus capital
appreciation plus contributions to the trust may, in total, be less than
the amount of pension payments.
Because of the long-term nature of the Plans’ obligations, the Finance
Committee’s intent is to consider the following goals in managing the
trust:
A. Long-term (i.e., five years and more) performance objectives;
B. Maintenance of cash reserves sufficient to pay benefits under the
Plan; and
C. Achievement of the highest long-term rate of return practicable
without taking excessive risk that could jeopardize the Plans’
funding policy or subject the Plans’ sponsors to undue funding
volatility.
The specific investment performance objective is for the trust to
achieve a rate of investment return over any five-year period that both:
A. Meets or exceeds the Plans’ actuarial interest rate assumption,
B. Exceeds by 2% the rate of inflation (as measured by the Consumer
Price Index for all Urban Consumers),
C. Exceeds the return of the following custom market index: 0% cash,
38% S&P 500, 8% Russell 2000 index, 8% Russell Midcap index,
21% EAFE index, and 25% Barclays Capital Aggregate Bond
index.
In carrying out the foregoing policy and objectives, the trust will be
invested in accordance with the guidelines set forth in Section 4.
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Section 4 INVESTMENT GUIDELINES FOR ASSET
MANAGEMENT
The assets of the Plans will be invested in a manner consistent with
generally accepted standards of fiduciary responsibility. The Finance
Committee will act with the care, skill, prudence and diligence under
the prevailing circumstances that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The Finance
Committee will discharge its duties with respect to the investment of
the trust solely in the interest of the participants and beneficiaries of the
Plan.
The Finance Committee will select appropriate investment alternatives
using the following criteria:
A. The Finance Committee may select investment managers from one
or more of the following:
1) Mutual fund management companies;
2) Banks;
3) Registered investment advisory firms; and
4) Insurance companies.
B. Each investment manager must clearly articulate for the Finance
Committee the investment strategy that will be followed and
document that the strategy has been successfully adhered to over
time.
C. Each investment manager must be able to provide for the Finance
Committee historical quarterly performance numbers calculated on
a time-weighted basis and reported net of all fees.
D. Each investment manager must provide for the Finance Committee
volatility measurements so that an appropriate risk/return profile
can be evaluated.
E. Each investment manager must be able to provide for the Finance
Committee information on its history, key personnel, fee schedules
and expenses, and current investment exposure.
F. A City of Huntsville designated Investment Officer may change the
Target Allocation and ranges and shall report any change to the
Finance Committee
The Finance Committee recognizes that the trust’s long-term
investment performance will be greatly affected by the mix of the asset
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classes in which it is invested; accordingly, because of the policy and
objectives stated in Section 3, the trust’s asset allocation will favor
equity investments.
Specifically, the Finance Committee has identified the following asset
classes to be appropriate for investment by the trust. In addition, the
Finance Committee has defined the following ranges to be used as
parameters of investment percentages the Plans’ assets:
RANGE
MINIMUM MAXIMUM TARGET
Fixed Income Assets:20%30%25%
Large cap 33%43%38%
Mid cap 3%13%8%
Small cap 3%13%8%
International 16%26%21%
Cash/Money Market Assets 0%5%0%
Total 100%
Managers that manage a separate account for the trust shall have full
discretion over portfolio investment decisions, subject to the following
guidelines and restrictions. To the extent that commingled or mutual
fund vehicles are utilized, the investment policies of those vehicles are
the operative documents established herein:
A. Investment managers will be delegated full discretion to exercise all
voting rights including, but not limited to, voting proxies.
B. For purposes of the foregoing, real estate, and securities convertible
to common stock shall be classified as equity assets; money held by
an insurance company in its general account shall be classified as
fixed income assets
Page 69 of 120
((Exhibit C) (FY 21024-135 -6221)
21
C. Each investment manager will diversify each asset class
appropriately and will seek to moderate volatility and risk as is
appropriate for the asset class. The investment manager will not
invest in commodities, private placements, or letter stock. The
investment manager will not engage in non-covered short sales or
margin trading. Transactions consisting of the purchase or sale of
futures or options contracts may be permitted to the extent that they
are used to diversify or equitize the portfolio and not used as
speculative investments. Speculative investment in these
derivatives is not permitted without the previous written approval of
the Finance Committee.
D. The investment manager must ensure, to the extent practicable, that
all equity transactions (whether agency or principal) are executed at
competitive rates and all fixed income transactions are
competitively bid and must explain in writing to the Finance
Committee the reasons for any unusually high transaction costs.
E. The investment manager, when practicable, will disclose to the
Finance Committee any significant change in the investment
manager’s personnel, organization, ownership, or asset
management policy or method.
Page 70 of 120
((Exhibit C) (FY 21024-135 -6221)
22
Section 5 PERFORMANCE
EVALUATION
The investment performance of the individual investments and/or
investment managers will be monitored quarterly and reviewed at least
annually relative to the objectives and guidelines described herein. The
investment performance evaluations may include performance analyses
and comparisons with the appropriate indices and investment fund
universes.
The Finance Committee does not expect to respond to short-term
investment developments, recognizing that the accumulation of value
for eventual retirement benefit payout is generally a long-term
objective and that investment competence must be measured over a
complete market cycle. The Finance Committee, nevertheless, may act
on interim qualitative judgments. Qualitative factors which will be
reviewed on an ongoing basis include any fundamental changes in a
manager’s investment philosophy, organizational structure, financial
condition (including any significant changes in total assets under
management), personnel and fee structure.
The Finance Committee has established as one of its investment fund
and/or investment manager selection criteria that, as a general
proposition, over a complete market cycle, each of the Plans’
investment funds and/or investment managers should typically rank in
the upper half of the universe of all active investment funds and/or
active managers in the same asset class with similar investment
objectives.
Performance Review
The investment options will be reviewed at least annually. Among other
things, the performance review of the investment options may include
the following:
A. The measurement of investment returns.
B. A comparison of investment returns to their appropriate benchmarks.
C. A ranking of investment returns within their appropriate universes.
D. The measurement of risk.
E. An assessment of each investment’s adherence to the stated policies
and objectives.
Page 71 of 120
((Exhibit C) (FY 21024-135 -6221)
23
Termination of Investment Options
Reasons for considering replacing an investment and/or investment
manager may include, but are not limited to:
A. Significant under-performance relative to the appropriate benchmark.
B. Significant under-performance relative to the appropriate universe
average.
C. Significant change in risk (increase or decrease).
D. Change or loss of key personnel, relative to the significance of the
particular investment.
E. Significant increase or decrease in assets under management.
F. A change in business practices.
G. A change in investment style or discipline.
H. Failure to alert the Finance Committee to pertinent changes, lawsuits or
regulatory violations.
I. Investing in non-approved securities.
J. Identification by the Finance Committee of a more suitable investment
option.
Other Review
The Investment Policy Statement will be reviewed at least annually to
determine the continued appropriateness of the Investment Policy
Statement in achieving the stated purpose. However, it is not expected
that the Investment Policy Statement will change frequently. In
particular, short-term changes in the financial markets will not require
adjustments to the Investment Policy Statement.
A review of the program concerning the diversity of options, the use of
options, A review of the program concerning the diversity of options,
the use of the options the growth of the program and any strategic
planning concerning demographics will also be conducted periodically.
The Finance Committee will receive a report on investment
performance quarterly. Investment performance and results will be
presented annually to the Council.
Page 72 of 120
Exhibit C FY
2012-2123
24
Section 6 INVESTMENT MANAGER SELECTION
The assets of the Plan are invested under the supervision of the Finance
Committee. The Finance Committee has chosen to select investment
managers from the following asset classes. In addition the Finance
Committee has established an investment objective for each asset class
and established appropriate benchmarks and universes to be used to
evaluate the investment options.
The Finance Committee understands that the indexes selected have no
fees associated with their returns and the universe average is net of the
fees of the underlying funds. The investment options are not required to
exceed their benchmarks and universes every quarter, but are used as a
basis for judging the appropriateness of the investment option selected
over a full market cycle.
The asset class, objective, benchmark and comparative universe are
outlined in Attachment A.
Page 73 of 120
((Exhibit C) (FY 21024-135 -6221)
25
Section 7 DEFINITIONS
The following terms will have the following meanings:
Investment Manager
“Investment manager” means the asset manager or managers expressly
authorized and empowered to cause its portion of the trust to be invested
and reinvested in its sole discretion (but governed by the provisions of
this Investment Policy Statement) within the asset class or classes for
which it is employed to manage.
Investment Return
“Investment return” means investment income and realized and
unrealized gains and losses, all net of investment fees and expenses.
Market Cycle
For purposes of this Investment Policy Statement a “market cycle” will
be defined as a market peak-to-trough-to-peak (or a trough-to-peak-to-
trough).
Rate of Return
“Rate of return” means the annual rate of investment return.
Investment Officer
“Investment Officer” refers to the council or charter designated officials
with the responsibility of investing City funds. Investment officers are
required to meet educational requirements under the Public funds
Investment Act.
This Statement of Investment Policy approved by the City Council of the City of Huntsville.
Date: ____________________________Approved by: _____________________________________
Page 74 of 120
((Exhibit C) (FY 21024-135 -6221)
26
Attachment A
A. Fixed Income Options
Asset Class Objective Benchmark Universe
Cash/Cash
Equivalents
The investment objective of
the Cash Option is to provide
capital preservation.
The 3-Month Treasury Bill is
the benchmark.
N/A
Intermediate Bond The investment objective of
the Bond Option is to provide
income with a minor focus on
capital growth.
The Bloomberg Barclays
Capital Aggregate Bond
Index is the benchmark.
The Bond Option selected
will be compared to a
universe of Intermediate-
Term Bond mutual funds.
B. High Yield Bond Fund
Asset Class Objective Benchmark Universe
High Yield Bond The investment objective of
the High Yield Bond Fund is
to seek high current income,
assuming greater risks
including: Credit Risk, Default Risk, Interest Rate Risk, Liquidity Risk, Economic
Risk, and Company Risk.
The Bloomberg Barclays
Capital High Yield Bond
Index is the benchmark.
The High Yield Bond
Option will be compared to
a universe of High Yield
Bond mutual funds.
C. Equity Options - Domestic
Asset Class Objective Benchmark Universe
Large
Capitalization
Blend
The investment objective of
the Stock Index option is to
track the performance and
risk of the Standard & Poor’s
500 index.
The S&P 500 Index is the
benchmark. The investment
options will be compared to
the return and the risk of the
benchmark.
The investment option
selected will be compared to
a universe of Large
Capitalization Blend mutual
funds.
Large
Capitalization
Value Style
The investment objective of
the Large Capitalization
Value Option is to provide
long-term growth of capital
primarily using domestic
large capitalization securities
with a value oriented style of
management.
The Russell 1000 Value
Index is the benchmark. The
investment option selected
will be compared to the
return and the risk of the
benchmark.
The Large Capitalization
Value Option will be
compared to a universe of
Large Capitalization Value
mutual funds.
Large
Capitalization
Growth Style
The investment objective of
the Large Capitalization
Growth Option is to provide
long-term growth of capital
primarily using domestic large
capitalization securities with a
growth oriented style of
management.
The Russell 1000 Growth
Index is the benchmark. The
investment option will be
compared to the return and
the risk of the benchmark,
net of investment
management fees.
The investment option
selected will be compared to
a universe of Large
Capitalization Growth
mutual funds, net of
investment management fees.
Page 75 of 120
((Exhibit C) (FY 21024-135 -6221)
27
Asset Class Objective Benchmark Universe
Mid Capitalization
Value Style
The investment objective of
the Mid Capitalization Value
Option is to provide long-term
growth of capital primarily
using domestic mid
capitalization securities with a
value-oriented style of
management.
The Russell Mid-cap Value
Index is the benchmark. The
investment option will be
compared to the return and
the risk of the benchmark.
The investment option
selected will be compared to
a universe of Mid-
capitalization Value mutual
funds.
Mid Capitalization
Blend Style
The investment objective of
the Mid Capitalization Blend
Option is to provide long-term
growth of capital primarily
using domestic mid
capitalization securities with a
blend of value and growth
oriented styles of
management.
The Russell Mid-cap Index is
the benchmark. The
investment option will be
compared to the return and
the risk of the benchmark.
The investment option
selected will be compared to
a universe of Mid
Capitalization Blend mutual
funds.
Mid Capitalization
Growth Style
The investment objective of
the Mid Capitalization Growth
Option is to provide long-term
growth of capital primarily
using domestic mid
capitalization securities with a
growth-oriented style of
management.
The Russell Mid-cap Growth
Index is the benchmark. The
investment option will be
compared to the return and
the risk of the benchmark.
The investment option
selected will be compared to
a universe of Mid
Capitalization Growth
mutual funds.
Small
Capitalization
Value Style
The investment objective of
the Small Capitalization Value
Option is to provide long-term
growth of capital primarily
using domestic small-cap
securities with a value oriented
style of management.
The Russell 2000 Value
Stock Index is the
benchmark. The investment
option will be compared to
the return and the risk of the
benchmark.
The investment option
selected will be compared to
a universe of Small
Capitalization Value mutual
funds.
Small
Capitalization
Blend Style
The investment objective of
the Small Capitalization Blend
Option is to provide long-term
growth of capital primarily
using domestic small-cap
securities with a blend of
value and growth oriented
styles of management.
The Russell 2000 Stock
Index is the benchmark. The
investment option will be
compared to the return and
the risk of the benchmark.
The investment option
selected will be compared to
a universe of Small
Capitalization Blend mutual
funds.
Small
Capitalization
Growth Style
The investment objective of
the Small Capitalization
Growth Option is to provide
long-term growth of capital
primarily using domestic
small-cap securities with a
growth oriented style of
management.
The Russell 2000 Growth
Stock Index is the
benchmark. The investment
option selected will be
compared to the return and
the risk of the benchmark.
The investment option will
be compared to a universe of
Small Capitalization Growth
mutual funds.
Page 76 of 120
(Exhibit D)
29
D. Equity Options – Non U.S.
Asset Class Objective Benchmark Universe
International
Stock
The investment objective of the
International Stock Option is to
provide long-term growth of
capital primarily using
securities of companies located
outside of the United States.
The Morgan Stanley/Capital
International (MSCI) Europe,
Australia and Far East
(EAFE) Stock Index or the
MSCI All Country World
Index ex. US (ACWI ex US)
will be is the benchmark. The
investment option will be
compared to the return and the
risk of the benchmark.
The investment option
selected will be compared to a
universe of International
Stock mutual funds.
Emerging Markets
Stock
The investment objective of the
Emerging Markets Stock
Option is to provide long-term
growth of capital primarily
using securities of companies
located in emerging countries.
The Morgan Stanley/Capital
International (MSCI)
Emerging Markets Stock
Index is the benchmark. The
investment option will be
compared to the return and the
risk of the benchmark.
The investment option
selected will be compared to a
universe of Emerging Market
Stock mutual funds.
Page 77 of 120
[Exhibit D]
30
GLOSSARY
ACH: Automated Clearing House.
AGENCIES: Federal agency securities.
ASKED: The price at which securities are
offered.
BANKERS’ ACCEPTANCE (BA): A draft or
bill of exchange accepted by a bank or trust
company. The accepting institution guarantees
payment of the bill, as well as the issuer.
BID: The price offered by a buyer of securities.
(When you are selling securities, you ask for a
bid.) See Offer.
BOND PROCEEDS: Proceeds from the sale of
bonds, notes, and other obligations issued by an
entity, and reserves and funds maintained by an
entity for debt service purposes.
BOOK VALUE: The original acquisition cost of
an investment plus or minus the accrued
amortization or accretion.
BROKER: A broker brings buyers and sellers
together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time
deposit with a specific maturity evidenced by a
certificate. Large-denomination CD’s are
typically negotiable.
COLLATERAL: Securities, evidence of deposit
or other property which a borrower pledges to
secure repayment of a loan. Also refers to
securities pledged by a bank to secure deposits of
public monies.
COLLATERALIZED MORTGAGE
OBLIGATIONS (CMOs): Debt obligations
collateralized by pools of mortgages. The
collateral can consist of conventional whole loans
or agency-backed securities such as GNMAs,
FNMAs or FHLMCs. The monthly cash flow
generated from the pool is transformed into a
series of securities with differing average lives
and maturities. CMOs are issued by investment
banks, commercial banks, the FNMA and the
FHLMC. The issuer takes a higher yielding
security and carves it up into different classes
with lower interest rates and shorter maturities.
COMMERCIAL PAPER: Commercial Paper
consists of short-term note issues by large
corporations. Maturity is 270 days or less. There
is no explicit coupon rate and interest is figured
on a discount basis in the same manner as for
Treasury Bills.
COMPREHENSIVE ANNUAL FINANCIAL
REPORT (CAFR): The official annual report
for the City of Huntsville. It includes five
combined statements for each individual fund and
account group prepared in conformity with
GAAP. It also includes supporting schedules
necessary to demonstrate compliance with
finance-related legal and contractual provisions,
extensive introductory material, and a detailed
Statistical Section.
COUPON: (a) The annual rate of interest that a
bond’s issuer promises to pay the bondholder on
the bond’s face value. (b) A certificate attached
to a bond evidencing interest due on a payment
date.
CUSIP NUMBER: A unique nine-digit
identification number permanently assigned by
the Committee on Uniform Securities
Identification Procedures to each publicly traded
security at the time of issuance. If the security is
in physical form, the CUSIP number is printed on
its face.
DEALER: A dealer, as opposed to a broker, acts
as a principal in all transactions, buying and
selling for his own account.
DEBENTURE: A bond secured only by the
general credit of the issuer.
Page 78 of 120
[Exhibit D]
31
DELIVERY VERSUS PAYMENT: There are
two methods of delivery of securities: delivery
versus payment and delivery versus receipt.
Delivery versus payment is delivery of securities
with an exchange of money for the securities.
Delivery versus receipt is delivery of securities
with an exchange of a signed receipt for the
securities.
DISCOUNT: The difference between the cost
price of a security and its maturity when quoted
at lower than face value. A security selling below
original offering price shortly after sale also is
considered to be at a discount.
DISCOUNT SECURITIES: Non-interest
bearing money market instruments that are issued
a discount and redeemed at maturity for full face
value, e.g. U.S. Treasury Bills.
DIVERSIFICATION: Dividing investment
funds among a variety of securities offering
independent returns.
FEDERAL CREDIT AGENCIES: Agencies of
the Federal government set up to supply credit to
various classes of institutions and individuals,
e.g. S & L=s, small business firms, students,
farmers, farm cooperatives, and exporters.
FEDERAL DEPOSIT INSURANCE
CORPORATION (FDIC): A federal agency
that insures bank deposits.
FEDERAL FARM CREDIT BANKS (FFCB):
The Federal Farm Credit Banks Consolidated
Systemwide Bonds are obligations of the 37 Farm
Credit Banks. The Farm Credit Administration
which is an independent agency of the U.S.
Government supervises the Farm Credit System.
FEDERAL FUNDS RATE: The rate of interest
at which Fed funds are traded. This rate is
currently pegged by the Federal Reserve through
open-market operations.
FEDERAL HOME LOAN BANKS (FHLB):
The institutions that regulate and lend to savings
and loan associations. The Federal Home Loan
Banks play a role analogous to that played by the
Federal Reserve Bank vis-a-vis member
commercial banks.
FEDERAL HOME LOAN MORTGAGE
CORPORATION (FHLMC): The Federal
Home Loan Mortgage Corporation, also known
as Freddie Mac, is an agency of the Federal
Government. The Participation Certificates (PC)
issued by Freddie Mac are full faith and credit
obligations of an agency of the U.S. Government.
In that all loans purchased by Freddie Mac are
either FHA/VA mortgages originated by
members of the Federal Home Loan Bank System
or other HUD-approved mortgages.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (FNMA OR FANNIE MAE):
FNMA, like GNMA was chartered under the
Federal National Mortgage Association Act in
1938. FNMA is a federal corporation working
under the auspices of the Department of Housing
and Urban Development (HUD). It is the largest
single provider of residential mortgage funds in
the United States. Fannie Mae, as the corporation
is called, is a private stockholder-owned
corporation. The corporation=s purchases
include a variety of adjustable mortgages and
second loans, in addition to fixed-rate mortgages.
FNMA=s securities are also highly liquid and are
widely accepted. FNMA assumes and guarantees
that all security holders will receive timely
payment of principal and interest.
FEDERAL OPEN MARKET COMMITTEE
(FOMC): Consists of seven members of the
Federal Reserve Board and five of the twelve
Federal Reserve Bank Presidents. The President
of the New York Federal Reserve Bank is a
permanent member, while the other Presidents
serve on a rotating basis. The Committee
periodically meets to set Federal Reserve
guidelines regarding purchases and sales of
Government Securities in the open market as a
means of influencing the volume of bank credit
and money.
FEDERAL RESERVE SYSTEM: The central
bank of the United States created by Congress
and consisting of seven member Board of
Governors in Washington, D.C., 12 regional
banks and about 5,700 commercial banks that are
members of the system.
FINANCIAL INSTITUTIONS: As used in
Page 79 of 120
[Exhibit D]
32
these policies also refers to Security
Broker/Dealers doing business with the City.
FUNDS: Public funds in the custody of a local
government that the investing entity has authority
to invest.
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA OR GINNIE MAE):
Securities influencing the volume of bank credit
guaranteed by GNMA and issued by mortgage
bankers, commercial banks, savings and loan
associations, and other institutions. Security
holder is protected by full faith and credit of the
U.S. Government. Ginnie Mae securities are
backed by the FHA, VA or FMHM mortgages.
The term “pass-throughs” is often used to
describe Ginnie Maes.
INVESTMENT POOL: An entity created under
this code to invest public funds jointly on behalf
of the entities that participate in the pool and
whose investment objectives in order of priority
are (a) preservation and safety of principal; (b)
liquidity; and (c) yield.
LIQUIDITY: A liquid asset is one that can be
converted easily and rapidly into cash without a
substantial loss of value. In the money market, a
security is said to be liquid if the spread between
bid and asked prices is narrow and reasonable
size can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT
POOL (LGIP): The aggregate of all funds from
political subdivisions that are placed in the
custody of the State Treasurer for investment and
reinvestment.
MARKET VALUE: The current face or par
value of an investment multiplied by the net
selling price of the security as quoted by a
recognized market pricing source quoted on the
valuation date.
MASTER REPURCHASE AGREEMENT: A
written contract covering all future transactions
between the parties to repurchase-reverse
repurchase agreements that establishes each
party=s rights in the transactions. A master
agreement will often specify, among other things,
the right of the buyer-lender to liquidate the
underlying securities in the event of default by the
seller-borrower.
MATURITY: The date upon which the principal
or stated value of an investment becomes due and
payable.
MONEY MARKET: The market in which
securities are traded that have one year or less
until their maturity.
MONEY MARKET MUTUAL FUNDS: A
mutual fund with investments that mature within
one year.
MUTUAL FUNDS: A type of investment
company that pools investments from
participants to purchase a portfolio and give to
investors fractional ownership of the created
portfolio. A mutual fund redeems investors=
shares at the net asset value of the shares.
NATIONAL ASSOCIATION OF
SECURITIES DEALERS (NASD): A trade
association that helps regulate the performance of
the over-the-counter securities market.
NET ASSET VALUE (PER SHARE): The
value of the securities underlying one share in the
investment company.
NO-LOAD MONEY MARKET MUTUAL
FUND: A mutual fund that imposes no initial
sales charges or fees.
OFFER: The price asked by a seller of securities.
(When you are buying securities, you ask for an
offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases
and sales of government and certain other
securities in the open market by the New York
Federal Reserve Bank as directed by the FOMC
in order to influence the volume of money and
credit in the economy. Purchases inject reserves
into the bank system and stimulate growth of
money and credit; sales have the opposite effect.
Open market operations are the Federal
Reserve=s most important and most flexible
monetary policy tool.
PORTFOLIO: Collection of securities held by
Page 80 of 120
[Exhibit D]
33
an investor.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity and positions and monthly
financial statements to the Federal Reserve Bank
of New York and are subject to its informal
oversight. Primary dealers include Securities and
Exchange Commission (SEC)-registered
securities broker-dealers, banks, and a few
unregulated firms.
PRUDENT PERSON RULE: An investment
standard. In some states the law requires that a
fiduciary, such as a trustee, may invest money
only in a list of securities selected by the custody
state--the so-called legal list. In other states the
trustee may invest in a security if it is one which
would be bought by a prudent person of
discretion and intelligence who is seeking a
reasonable income and preservation of capital.
QUALIFIED PUBLIC DEPOSITORIES: A
financial institution which does not claim
exemption from the payment of any sales or
compensating use or ad valorem taxes under the
laws of this state, which has segregated for the
benefit of the commission eligible collateral
having a value of not less than its maximum
liability and which has been approved by the
Public Deposit Protection Commission to hold
public deposits.
QUALIFIED REPRESENTATIVE: A person
who holds a position with a business
organization, who is authorized to act on behalf
of the business organization, and who is one of
the following: (A) for a business organization
doing business that is regulated by or registered
with a securities commission, a person who is
registered under the rules of the National
Association of Securities Dealers; (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 branch of the bank or a
person authorized by corporate resolution to act
on behalf of and bind the banking institution; or
(C) for an investment pool, the person authorized
by the elected official or board with authority to
administer the activities of the investment pool to
sign the written instrument on behalf of the
investment pool.
RATE OF RETURN: The yield obtainable on a
security based on its purchase price or its current
market price. This may be the amortized yield to
maturity on a bond the current income return.
RATING AGENCY: A nationally recognized
investment rating firm including Moody’s and
Standard & Poor’s that assigns a rating to a debt
issue.
REPURCHASE AGREEMENT (RP OR
REPO): A holder of securities sells these
securities to an investor with an agreement to
repurchase them at a fixed price on a fixed date.
The security “buyer” in effect lends the “seller”
money for the period of the agreement, and the
terms of the agreement are structured to
compensate him for this. Dealers use RP
extensively to finance their positions. Exception:
When the Fed is said to be doing RP, it is lending
money, that is, increasing bank reserves. State
Statute defines repurchase agreement as a
simultaneous agreement to buy, hold for a
specific time, and sell back at a future date
obligations described in State Statute Section
2256.009 a (1) (obligations of the United States
or its agencies and instrumentalities) at a market
value at the time the funds are disbursed of not
less than the principal amount of the funds
disbursed. The term includes a direct security
repurchase agreement and a reverse repurchase
agreement.
REVERSE REPURCHASE AGREEMENT:
See Repurchase Agreement.
SAFEKEEPING: A service to customers
rendered by banks for a fee whereby securities
and valuables of all types and descriptions are
held in the bank=s vaults for protection.
SEC RULE 15C3-1: See Uniform Net Capital
Rule.
SECONDARY MARKET: A market made for
the purchase and sale of outstanding issues
following the initial distribution.
SECURITIES & EXCHANGE
Page 81 of 120
[Exhibit D]
34
COMMISSION: Agency created by Congress
to protect investors in securities transactions by
administering securities legislation.
SEPARATELY INVESTED ASSET: An account or fund of a state agency or local government that is not invested in a pooled fund group.
STATE AGENCY: An office, department,
commission, board, or other agency that is part of
any branch of state government, an institution of
higher education, and any nonprofit corporation
acting on behalf of any of those entities.
TREASURY BILLS: A non-interest bearing
discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.
TREASURY BOND: Long-term U.S. Treasury securities having initial maturities of more than 10 years.
TREASURY NOTES: A non-interest bearing
discount security issued by the U.S. Treasury to
finance the national debt. Most bills are issued to
mature in three months, six months or one year.
UNIFORM NET CAPITAL RULE: Securities
and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to
purchase securities, one reason new public issues
are spread among members of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.
YIELD: The rate of annual income return on an
investment, expressed as a percentage. (a)
INCOME YIELD is obtained by dividing the
current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO
MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the
date of maturity of the bond.
Page 82 of 120
[Exhibit D]
35
FY 17-18 Approved Broker/Dealer List
Gilbert Ramon
Cantor Fitzgerald & Company
1700 Post Oak Boulevard
2 BLVD Place, Suite 250
Houston, TX 77056
gilbert.ramon@cantor.com
Zachary Brewer
Tony Sekaly
Coastal Securities
920 Memorial City Way, 11th Floor
Houston, TX 77024
ZSB@coastalsecurities.com
tsekaly@bloomberg.net
Chuck Landry
Wells Fargo Securities, LLC
1445 Ross Ave., Suite 210
Dallas, TX 75202
Chuck.Landry@wellsfargo.com
Richard “Dick” Ebert
UBS Financial Services, Inc.
10001 Woodloch Forest Drive, Suite 100
The Woodlands, TX 77380
Richard.ebert@ubs.com
Luke Donenfield
First Empire Securities
100 Motor Parkway, 2nd Floor
Happauge, NY 11788
ldonenfeld@1empire.com
Patrick Boyer
Doug Boyer
Duncan Williams
11458 W. Travelers Way Circle
Houston, TX 77065
Patrick.boyer@duncanwilliams.com
Doug.boyer@duncanwilliams.com
Anne Jenkins
A.J. Capital
24915 Baywick Drive
Spring, TX 77389
Ajcap@earthlink.net
Bank of Oklahoma
BOSC, Inc.
333 West Campbell Road
Suite 350
Richardson, TX 75080
jwall@bokf.com
Greg Pagans
Multi-Bank Securities, Inc.
2400 E. Commercial, Suite 812
Ft. Lauderdale, FL 33308
GPagans@mbssecurities.com
Page 83 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 2.b.
Agenda Item: Consider approval of Ordinance 2022-25 adopting the Tax Rate and levying taxes for the
City of Huntsville for the FY 2022/2023.
Record/rollcall vote required
Initiating Department/Presenter: Finance
Presenter:
Steve Ritter, Finance Director
Recommended Motion: Move to adopt Ordinance 2021-25 adopting the Tax Rate and levying taxes for
the City of Huntsville for the FY 2022/2023. This tax rate is effectively a 3.17% increase in the tax rate.
(The last sentence in the motion is required under Sec. 26.08 of the Texas Tax Code). Record/rollcall
vote required
Strategic Initiative: Goal #6 - Finance - Provide a sustainable, efficient and fiscally sound government
through conservative fiscal practices and resource management.
Discussion: In the City Manager’s Recommended Budget a tax rate of $0.2926 per $100 valuation was
used. The City provided notices concerning a proposed rate of $0.3075 as a maximum rate that could be
adopted and a public hearing on the tax rate in compliance with State statutes. A public hearing was
held earlier this evening at this City Council meeting.
Previous Council Action: None
Financial Implications: There is no financial impact associated with this item. This agenda item has no
financial impact but is related to the agenda item adopting the FY 22/23 Budget where $6,404,500 of
Property Tax Revenue was budgeted for in the General Fund and $1,449,200 of Property Tax Revenue
was budgeted for in the Debt Service Fund.
Approvals:
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
1. Ordinance - adopt the Tax Rate for FY 22-23
Page 84 of 120
ORDINANCE NO. 2022-25
AN ORDINANCE ADOPTING THE TAX RATE AND LEVYING TAXES FOR THE CITY OF
HUNTSVILLE FOR THE 2022-2023 FISCAL YEAR UPON ALL TAXABLE PROPERTY
LOCATED WITHIN AND SUBJECT TO TAXATION IN THE CITY; AND PROVIDING FOR
THE EFFECTIVE DATE HEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS, THAT:
SECTION 1: There is levied and assessed and shall be collected for the 2022-2023 fiscal year ending
September 30, 2023, an ad valorem tax of NO AND 29.26/100 ($0.2926) DOLLARS for each ONE
HUNDRED ($100.00) DOLLARS of assessed value of property located within the city limits of Huntsville,
Texas on January 1, 2022, made taxable by law, which when collected, shall be apportioned among funds
and departments of the city government of the City of Huntsville for these purposes:
General Fund Operations $0.2385
Debt Service for Payment of General Obligations Indebtedness $0.0541
$0.2926
SECTION 2: All property upon which tax is levied shall be assessed on the basis of 100 percent of its
appraised value [Property Tax Code § 26.02].
SECTION 3: This ordinance shall take effect from and after its passage by City Council.
PASSED AND APPROVED on this 20th day of September 2022.
THE CITY OF HUNTSVILLE, TEXAS
Andy Brauninger, Mayor
ATTEST:
Kristy Doll, City Secretary
APPROVED AS TO FORM:
Leonard Schneider, City Attorney
Page 85 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 2.c.
Agenda Item: Consider ratifying the increased property tax revenues of $681,900 reflected in the FY
2022/2023 Budget as adopted.
Initiating Department/Presenter: Finance
Presenter:
Steve Ritter, Finance Director
Recommended Motion: Move to ratify the increased property tax revenues of $681,900 reflected in
the FY 2022/2023 Budget as adopted.
Strategic Initiative: Goal #6 - Finance - Provide a sustainable, efficient and fiscally sound government
through conservative fiscal practices and resource management.
Discussion: Section 102.007(c) of the Texas Local Government Code requires that the governing body,
in a separate vote, ratify the property tax revenue increase reflected in the adopted budget. The
requirement of the vote in this subsection is in addition to and separate from the vote to adopt the
budget or a vote to set the tax rate. The additional property tax revenue amount presumes a tax rate
set at $0.2926/$100 of assessed valuation.
Previous Council Action: None
Financial Implications: There is no financial impact associated with this item.
Approvals:
Steve Ritter
Leonard Schneider
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
Page 86 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 2.d.
Agenda Item: First Reading - Consider the adoption of Ordinance 2022-27 changing the name of a
segment of Avenue O to "Pease Street".
Initiating Department/Presenter: Development Services
Presenter:
Armon Irones, City Planner
Recommended Motion: First Reading - No action necessary.
Strategic Initiative: Goal #5 - Resource Development - Enhance the quality of life for citizens, businesses
and visitors by leveraging the human and fiscal resources available to the community.
Discussion: At the August 16, 2022, City Council meeting, council voted unanimously to direct the City
Manager to initiate the process to rename two city streets in honor of James Patton and Linda Pease.
The process of renaming a street is as follows:
1. Identify all adjacent property owners affected by the name change.
2. Send notice to all abutting property owners of the proposed name change and allow a comment
period.
3. Work with the City Attorney to prepare an ordinance for Council consideration.
4. Conduct a Public Hearing regarding the proposed street name change.
5. If the ordinance is approved, staff will notify the property owners and service providers (post office,
911, utility companies, etc.) of the name change and request the Streets Division to install new street
signs.
6. File the appropriate documents with the County Clerk’s office as needed.
The 1000 block of Avenue O, located between 10th and 11th Streets and running along the Wynne
Home, will be renamed for Ms. Pease. There are three properties currently that would be affected by
the proposed change. A map of the proposed changes is attached to this item.
Previous Council Action: August 16, 2022 - City Council voted unanimously to direct the City
Manager to initiate the process to rename two city streets in honor of James Patton and Linda
Pease.
Financial Implications: There are minimal costs associated with the public hearing and the possible
future installation of street signs associated with this item that can be absorbed within the respective
departmental operating budgets.
Page 87 of 120
Approvals:
Kevin Byal
Kristy Doll
Associated Information:
1. Ordinance 2022-27 - Pease Street
2. 8.16.2022 Council Agenda Item
3. Vicinity Map-Pease Street
4. Property Owner Notifications
Page 88 of 120
ORDINANCE NO. 2022-27
AN ORDINANCE PROVIDING FOR THE CHANGE OF A STREET NAME
WITHIN THE CITY OF HUNTSIVLLE, TEXAS; PROVIDING A REPEALING
CLAUSE; AND PROVIDING A SEVERABILTITY CLAUSE.
WHEREAS, it is the desire of the City Council of the City of Huntsville, Texas to change the
name of a street in the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE:
SECTION 1. That the facts and recitations contained in the preamble of this Ordinance are
hereby found and declared to be true and correct.
SECTION 2. The City Council hereby declares the 1000 Block of the street named “Avenue
O” located between 10th and 11th Streets, within the City limits to now be named
“Pease Street”.
SECTION 3. All other ordinances or parts of ordinances, or resolutions in conflict with the
Ordinance are hereby repealed to the extent of any such conflict.
SECTION 4. If any portion of the Ordinance shall, for any reason, be declared invalid by any
court of competent jurisdiction, such invalidity shall not affect the remaining
provision hereof.
SECTION 5. The City Secretary or appropriate City staff is directed to notify property owners
and other service providers of the name change including, but not limited to, the
local Huntsville Fire Department, the appropriate utilities and franchises, and the
Walker County 911 Emergency Network. Further the City Public Works
Department or appropriate City staff is directed to put up new street signs.
SECTION 6. If is further directed that the City Secretary or appropriate City staff record the
name change in the Official Public Records of Real Property for Walker County
PASSED, APPROVED, and ADOPTED on the ________ day of ____________________, 2022.
__________________________
Andy Brauninger, Mayor
ATTEST: APPROVED AS TO FORM:
____________________________ ___________________________
Kristy Doll, City Secretary Leonard Schneider, City Attorney
Page 89 of 120
CITY COUNCIL AGENDA
8/16/2022
Agenda Item Number: 3.a.
Agenda Item: Consider directing the City Manager to initiate the process to rename two city streets in
honor of James Patton and Linda Pease.
Initiating Department/Presenter: City Council
Presenter:
Deandra (Dee) Mullins, Councilmember
Pat Graham, Councilmember Ward 4
Bert Lyle, Councilmember At-Large Position 1
Recommended Motion: Move to direct the City Manager to initiate the process to rename two city
streets in honor of James Patton and Linda Pease.
Strategic Initiative: Goal #5, Resource Development - Enhance the quality of life for citizens, businesses
and visitors by leveraging the human and fiscal resources available to the community.
Discussion: In honor of the contributions of James Patton and Linda Pease to the Huntsville community,
this request is to initiate the process to rename portions of two City Streets. In addition to the short bio
below about Mr. Patton, an article with information about Ms. Pease's contributions is attached.
James Patton was a native of Huntsville/Walker County. He attended Huntsville High School
and Sam Houston State University. Mr. Patton is known for his 32 years of service as the
County Clerk of Walker County and his brilliant memory of the ancestorial history of everyone
he ran into. Following his retirement from the county, Mr. Patton was the chairman of the
Walker County Historical Commission for 27 years and was the Director of the Gibbs-Powell
House for many years. James was pivotal in the planning of General Sam Houston's Birthday
Celebration, where individuals who were not from Texas could be ceremonially baptized to
become Texans. Mr. Patton never knew a stranger and was loved by everyone. His love for
everyone represents the true meaning of “Home Sweet Huntsville.”
The 1400 block of 12th Street, located between Avenues N and O, would be renamed in honor of Mr.
Patton. There are no properties currently with addresses affected by this proposed change. The 1000
block of Avenue O, located between 10th and 11th Streets and running beside the Wynne Home, would
be renamed for Ms. Pease. There are two properties that would be affected by the proposed change. A
map of the proposed changes is attached to this item.
In order to rename a city street, policy requires that City Council adopt an ordinance providing for the
change after a public hearing on the matter. Written notice will be provided to all real property owners
as indicated by the Appraisal District on the streets in question notifying them of the hearing. Should
this item be approved, staff will schedule the required public hearing, provide the required notices, and
Page 142 of 149Page 90 of 120
prepare an ordinance for Council consideration at a future meeting.
Previous Council Action: Council has taken no action on this item.
Financial Implications: There are minimal costs associated with the pubic hearing and the possible
future installation of street signs associated with this item that can be absorbed within the respective
departmental operating budgets.
Approvals:
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
1. Do You Know_ Linda Pease _ Postcards Magazine
2. Pease-Patton street rename exhibit
Page 143 of 149Page 91 of 120
CITY OF HUNTSVILLE, TXENGINEERING DEPARTMENT / GIS DIVISION
8 CREATED DATE: 9/8/2022
Vicinity Map-Pease StreetHuntsville GIS Division
1 in = 100 ft
0 0.015 0.030.0075 mi
On 8.5 x 11 inch Print
On Any Print Size
Service Layer Credits: City of Huntsville GIS Division
The City of Huntsville, Texas or its employees gives NO warranty, expressed or implied, as to the accuracy, reliability, or completeness of these data. See full GIS Data Disclaimer at: www.huntsvilletx.gov/gis
Page 92 of 120
448 SH 75 N ˑ Huntsville, TX 77320‐1118 ˑ 936‐294‐5700 ˑ 936‐294‐5701 fax ˑ www.huntsvilletx.gov
Our vision for the City of Huntsville is a community that is beautiful, historic, culturally
diverse, affordable, safe, and well planned with great opportunity for our citizens.
Huntsville
September 1, 2022
Marianito Bitara
143 Davis Road
Huntsville, TX 77320
RE: Proposed Street Name Change
Dear Property Owner:
The Huntsville City Council has instructed staff to begin the process of changing the name of
“Avenue O” to “Pease Drive” within the 1000 block of Avenue O between 10th and 11th Streets.
You are receiving notice of this request since you own property that fronts the street in question.
City Council will hold a first reading to consider the name change on September 20, 2022, at
6:00PM at City Hall, 1212 Ave M, Huntsville, TX 77340. Should the Council approve the name
change, the City will install the new sign(s) and notify you and local service providers of this
change.
If you should have any questions concerning this matter, please contact me by email or by phone.
Sincerely,
Armon Irones
City Planner
airones@huntsvilletx.gov
936-294-5781
C I T Y O F
Incorporated in 1845 under the Republic of Texas
Page 93 of 120
448 SH 75 N ˑ Huntsville, TX 77320‐1118 ˑ 936‐294‐5700 ˑ 936‐294‐5701 fax ˑ www.huntsvilletx.gov
Our vision for the City of Huntsville is a community that is beautiful, historic, culturally
diverse, affordable, safe, and well planned with great opportunity for our citizens.
Huntsville
September 1, 2022
Marilyn Denise Bradley and Alexander & Paula Johnson
1014 Avenue O
Huntsville, TX 77320
RE: Proposed Street Name Change
Dear Property Owner:
The Huntsville City Council has instructed staff to begin the process of changing the name of
“Avenue O” to “Pease Drive” within the 1000 block of Avenue O between 10th and 11th Streets.
You are receiving notice of this request since you own property that fronts the street in question.
City Council will hold a first reading to consider the name change on September 20, 2022, at
6:00PM at City Hall, 1212 Ave M, Huntsville, TX 77340. Should the Council approve the name
change, the City will install the new sign(s) and notify you and local service providers of this
change.
If you should have any questions concerning this matter, please contact me by email or by phone.
Sincerely,
Armon Irones
City Planner
airones@huntsvilletx.gov
936-294-5781
C I T Y O F
Incorporated in 1845 under the Republic of Texas
Page 94 of 120
448 SH 75 N ˑ Huntsville, TX 77320‐1118 ˑ 936‐294‐5700 ˑ 936‐294‐5701 fax ˑ www.huntsvilletx.gov
Our vision for the City of Huntsville is a community that is beautiful, historic, culturally
diverse, affordable, safe, and well planned with great opportunity for our citizens.
Huntsville
September 1, 2022
Leona Shaw Supplemental Care Trust
7320 Silver City Drive
Fort Worth, TX 76179
RE: Proposed Street Name Change
Dear Property Owner:
The Huntsville City Council has instructed staff to begin the process of changing the name of
“Avenue O” to “Pease Drive” within the 1000 block of Avenue O between 10th and 11th Streets.
You are receiving notice of this request since you own property that fronts the street in question.
City Council will hold a first reading to consider the name change on September 20, 2022, at
6:00PM at City Hall, 1212 Ave M, Huntsville, TX 77340. Should the Council approve the name
change, the City will install the new sign(s) and notify you and local service providers of this
change.
If you should have any questions concerning this matter, please contact me by email or by phone.
Sincerely,
Armon Irones
City Planner
airones@huntsvilletx.gov
936-294-5781
C I T Y O F
Incorporated in 1845 under the Republic of Texas
Page 95 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 2.e.
Agenda Item: First Reading - Consider the adoption of Ordinance 2022-28 changing the name of a
segment of 12th Street to "Patton Street".
Initiating Department/Presenter: Development Services
Presenter:
Armon Irones, City Planner
Recommended Motion: First Reading, no action necessary.
Strategic Initiative: Goal #5 - Resource Development - Enhance the quality of life for citizens, businesses
and visitors by leveraging the human and fiscal resources available to the community.
Discussion: At the August 16, 2022, City Council meeting, council voted unanimously to direct the City
Manager to initiate the process to rename two city streets in honor of James Patton and Linda Pease.
The process of renaming a street is as follows:
1. Identify all adjacent property owners affected by the name change.
2. Send notice to all abutting property owners of the proposed name change and allow a comment
period.
3. Work with the City Attorney to prepare an ordinance for Council consideration.
4. Conduct a Public Hearing regarding the proposed street name change.
5. If the ordinance is approved, staff will notify the property owners and service providers (post office,
911, utility companies, etc.) of the name change and request the Streets Division to install new street
signs.
6. File the appropriate documents with the County Clerk’s office as needed.
The 1400 block of 12th Street, located between Avenue N and O, will be renamed for Mr. Patton. The
only property currently that would be affected by the proposed change is owned by the City. A map of
the proposed street name change is attached to this item.
Previous Council Action: August 16, 2022 - City Council voted unanimously to direct the City
Manager to initiate the process to rename two city streets in honor of James Patton and Linda
Pease.
Financial Implications: There are minimal costs associated with the public hearing and the possible
future installation of street signs associated with this item that can be absorbed within the respective
departmental operating budgets.
Page 96 of 120
Approvals:
Kevin Byal
Kristy Doll
Associated Information:
1. Ordinance 2022-28- Patton Street
2. 8.16.2022 City Council Agenda Item
3. Vicinity Map-Patton
4. Letter to property owner-City of Huntsville
Page 97 of 120
ORDINANCE NO. 2022-28
AN ORDINANCE PROVIDING FOR THE CHANGE OF A STREET NAME
WITHIN THE CITY OF HUNTSIVLLE, TEXAS; PROVIDING A REPEALING
CLAUSE; AND PROVIDING A SEVERABILTITY CLAUSE.
WHEREAS, it is the desire of the City Council of the City of Huntsville, Texas to change the
name of a street in the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE:
SECTION 1. That the facts and recitations contained in the preamble of this Ordinance are
hereby found and declared to be true and correct.
SECTION 2. The City Council hereby declares the 1400 Block of the street named “12th
Street” located between Avenues N and O, within the City limits to now be
named “Patton Street”.
SECTION 3. All other ordinances or parts of ordinances, or resolutions in conflict with the
Ordinance are hereby repealed to the extent of any such conflict.
SECTION 4. If any portion of the Ordinance shall, for any reason, be declared invalid by any
court of competent jurisdiction, such invalidity shall not affect the remaining
provision hereof.
SECTION 5. The City Secretary or appropriate City staff is directed to notify property owners
and other service providers of the name change including, but not limited to, the
local Huntsville Fire Department, the appropriate utilities and franchises, and the
Walker County 911 Emergency Network. Further the City Public Works
Department or appropriate City staff is directed to put up new street signs.
SECTION 6. If is further directed that the City Secretary or appropriate City staff record the
name change in the Official Public Records of Real Property for Walker County
PASSED, APPROVED, and ADOPTED on the ________ day of ____________________, 2022.
__________________________
Andy Brauninger, Mayor
ATTEST: APPROVED AS TO FORM:
____________________________ ___________________________
Kristy Doll, City Secretary Leonard Schneider, City Attorney
Page 98 of 120
CITY COUNCIL AGENDA
8/16/2022
Agenda Item Number: 3.a.
Agenda Item: Consider directing the City Manager to initiate the process to rename two city streets in
honor of James Patton and Linda Pease.
Initiating Department/Presenter: City Council
Presenter:
Deandra (Dee) Mullins, Councilmember
Pat Graham, Councilmember Ward 4
Bert Lyle, Councilmember At-Large Position 1
Recommended Motion: Move to direct the City Manager to initiate the process to rename two city
streets in honor of James Patton and Linda Pease.
Strategic Initiative: Goal #5, Resource Development - Enhance the quality of life for citizens, businesses
and visitors by leveraging the human and fiscal resources available to the community.
Discussion: In honor of the contributions of James Patton and Linda Pease to the Huntsville community,
this request is to initiate the process to rename portions of two City Streets. In addition to the short bio
below about Mr. Patton, an article with information about Ms. Pease's contributions is attached.
James Patton was a native of Huntsville/Walker County. He attended Huntsville High School
and Sam Houston State University. Mr. Patton is known for his 32 years of service as the
County Clerk of Walker County and his brilliant memory of the ancestorial history of everyone
he ran into. Following his retirement from the county, Mr. Patton was the chairman of the
Walker County Historical Commission for 27 years and was the Director of the Gibbs-Powell
House for many years. James was pivotal in the planning of General Sam Houston's Birthday
Celebration, where individuals who were not from Texas could be ceremonially baptized to
become Texans. Mr. Patton never knew a stranger and was loved by everyone. His love for
everyone represents the true meaning of “Home Sweet Huntsville.”
The 1400 block of 12th Street, located between Avenues N and O, would be renamed in honor of Mr.
Patton. There are no properties currently with addresses affected by this proposed change. The 1000
block of Avenue O, located between 10th and 11th Streets and running beside the Wynne Home, would
be renamed for Ms. Pease. There are two properties that would be affected by the proposed change. A
map of the proposed changes is attached to this item.
In order to rename a city street, policy requires that City Council adopt an ordinance providing for the
change after a public hearing on the matter. Written notice will be provided to all real property owners
as indicated by the Appraisal District on the streets in question notifying them of the hearing. Should
this item be approved, staff will schedule the required public hearing, provide the required notices, and
Page 142 of 149Page 99 of 120
prepare an ordinance for Council consideration at a future meeting.
Previous Council Action: Council has taken no action on this item.
Financial Implications: There are minimal costs associated with the pubic hearing and the possible
future installation of street signs associated with this item that can be absorbed within the respective
departmental operating budgets.
Approvals:
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Associated Information:
1. Do You Know_ Linda Pease _ Postcards Magazine
2. Pease-Patton street rename exhibit
Page 143 of 149Page 100 of 120
CITY OF HUNTSVILLE, TXENGINEERING DEPARTMENT / GIS DIVISION
8 CREATED DATE: 9/8/2022
Vicinity Map-Patton StreetHuntsville GIS Division
1 in = 100 ft
0 0.015 0.030.0075 mi
On 8.5 x 11 inch Print
On Any Print Size
Service Layer Credits: City of Huntsville GIS Division
The City of Huntsville, Texas or its employees gives NO warranty, expressed or implied, as to the accuracy, reliability, or completeness of these data. See full GIS Data Disclaimer at: www.huntsvilletx.gov/gis
Page 101 of 120
448 SH 75 N ˑ Huntsville, TX 77320-1118 ˑ 936-294-5700 ˑ 936-294-5701 fax ˑ www.huntsvilletx.gov
Our vision for the City of Huntsville is a community that is beautiful, historic, culturally
diverse, affordable, safe, and well planned with great opportunity for our citizens.
Huntsville
September 1, 2022
City of Huntsville, Texas
1212 Avenue M
Huntsville, TX 77340
RE: Proposed Street Name Change
Dear Property Owner:
The Huntsville City Council has instructed staff to begin the process of changing the name of
“12th Street” to “Patton Drive” within the 1400 block of 12th Street between Avenues N and O.
You are receiving notice of this request since you own property that fronts the street in question.
City Council will hold a first reading to consider the name change on September 20, 2022, at
6:00PM at City Hall, 1212 Ave M, Huntsville, TX 77340. Should the Council approve the name
change, the City will install the new sign(s) and notify you and local service providers of this
change.
If you should have any questions concerning this matter, please contact me by email or by phone.
Sincerely,
Armon Irones
City Planner
airones@huntsvilletx.gov
936-294-5781
C I T Y O F
Incorporated in 1845 under the Republic of Texas
Page 102 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 2.f.
Agenda Item: First Reading - Consider Ordinance No. 2022-29 - Decline to approve the change in rates
requested by Entergy Texas, Inc. Statement of Intent filed with the City on August 31, 2022
Initiating Department/Presenter: City Attorney
Presenter:
Leonard Schneider, City Attorney
Recommended Motion: FIRST READING -The Council may wait until October 5th to take action. The
next meeting is on October 4th. However, if the Council wishes to waive the two-reading requirement:
Move to temporarily suspend the rules of procedure by waiving the two-reading requirement and to
Adopt Ordinance No. 2022-29 - DECLINING to approve the proposed Rate Schedule for the Entergy
Texas Power Through service.
Strategic Initiative: Goal #6, Finance - Provide a sustainable, efficient and fiscally sound government
through conservative fiscal practices and resource management.
Discussion: The proposed Rate Schedule UODG is a voluntary rate schedule that will apply only to
customers who choose to participate in ETI’s Power Through service. ETI’s new Power Through service is
a distributed generation program, under which small gas-fired generators will be installed at commercial
and industrial customer premises. The generators will serve as back-up generators to participating
customers during system outages. During normal system operating times, ETI will be able to call on
these distributed generation facilities to serve its own system load requirements. Thus, the gas- fired
distributed generation facilities would serve as back-up to specific customers during system outages and
as an ETI resource (generally a peak load resource) at all other times. The proposed Rate Schedule
UODG is a monthly fee that will apply only to host customers that elect to take back-up service from ETI
using Power Through generators sited on their premises. It is site-specific, meaning the fee will be
different for each customer depending on needed generator size, technology being utilized,
interconnections needed, installation, and any other customer-specific costs. It is recommended to
review the Company’s application to determine whether the Company’s request is consistent with PURA
and Commission rules.
Previous Council Action: None
Financial Implications: None at this time
Approvals:
Rick Rudometkin
Aron Kulhavy
Kristy Doll
Page 103 of 120
Associated Information:
1. ORDINANCE NO 2022-29
2. Pages from ETI's Statement of Intent (3)
Page 104 of 120
ORDINANCE NO. 2022-29
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS,
(or “City”) DECLINING TO APPROVE THE CHANGE IN RATES REQUESTED IN
ENTERGY TEXAS, INC.’S (“ETI” OR “COMPANY”) STATEMENT OF INTENT FILED
WITH THE CITY ON AUGUST 31, 2022, AND FINDING AND DETERMINING THAT
THE MEETING AT WHICH THIS ORDINANCE WAS CONSIDERED WAS OPEN TO
THE PUBLIC AND IN ACCORDANCE WITH TEXAS LAW.
WHEREAS, ETI notified the City of its intent to file a statement of intent to offer a new
optional rate related to back-up electric service for commercial and industrial
customers;
WHEREAS, ETI filed with the City its Statement of Intent for Rate Schedule UODG
(“Statement of Intent”);
WHEREAS, he City has duly noticed its consideration of the Company’s Statement of Intent
and is acting within its authority under applicable law;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF HUNTSVILLE,
TEXAS THAT the City DECLINES to approve any and all changes in rates requested by ETI
and included in ETI’s Statement of Intent and that ETI’s proposed new rate
should not be made effective.
PASSED AND APPROVED ON THE SECOND READING THIS_______ day of
________, 2022.
THE CITY OF HUNTSVILLE
__________________________________
Andy Brauninger, Mayor
ATTEST:
________________________________
Kristy Doll, City Secretary
Page 105 of 120
APPROVED:
_______________________________
Leonard Schneider, City Attorney
Page 106 of 120
- 1 -
PUC DOCKET NO. 53992
ENTERGY TEXAS, INC.’S STATEMENT OF INTENT FOR RATE SCHEDULE UODG
§ § §
PUBLIC UTILITY COMMISSION
OF TEXAS
ENTERGY TEXAS, INC.’S STATEMENT OF INTENT
Entergy Texas, Inc. (“ETI” or the “Company”) files this Statement of Intent for approval
of rate schedule UODG (Utility-Owned Distributed Generation) and the associated Customer
Agreement.
I.STATEMENT OF JURISDICTION
The Public Utility Commission of Texas (“Commission”) has exclusive original
jurisdiction over this Statement of Intent pursuant to PURA1 § 14.001 for service provided to
ETI’s environs customers and, pursuant to PURA §§ 32.001(a) and 36.001, for service to
customers within the corporate limits of those cities that have ceded their regulatory jurisdiction
to the Commission. ETI also filed this Statement of Intent with all of the municipalities that
retain exclusive original jurisdiction over ETI’s rates within their corporate limits pursuant to
PURA § 33.001. ETI has plans to appeal to the Commission the actions of its original
jurisdiction cities and will seek consolidation of those appeals with this docket pursuant to the
Commission’s appellate authority under PURA § 32.001(b).
II.DESCRIPTION OF APPLICANT AND AUTHORIZED REPRESENTATIVES
ETI provides fully bundled electric delivery service to approximately 486,000 customers
across 27 counties in southeast Texas. The only customers who will be affected by this
1 Public Utility Regulatory Act, Tex. Util. Code §§ 11.001—66.016 (“PURA”).
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Statement of Intent are those eligible customers who elect to take service under the voluntary
tariff proposed.
ETI’s business address is 350 Pine Street, Beaumont, Texas 77701; its telephone number
is (409) 838-6631. Its authorized representatives in this proceeding are:
Erika N. Garcia Director, Regulatory Affairs Entergy Texas, Inc.
919 Congress Avenue, Suite 740
Austin, Texas 78701 (512) 487-3962 egarci6@entergy.com
George Hoyt Assistant General Counsel Entergy Services, LLC
919 Congress Avenue, Suite 701
Austin, Texas 78701 (512) 487-3945 (512) 487-3958 (fax) ghoyt90@entergy.com
Jay Breedveld Scott Olson DUGGINS WREN MANN & ROMERO, LLP 600 Congress Avenue, Suite 1900
Austin, Texas 78701
(512) 744-9300 (512) 744-9399 (fax) jbreedveld@dwmrlaw.com solson@dwmrlaw.com
ETI requests that all documents related to this Statement of Intent be served upon Mr.
Hoyt’s office, as listed in the previous paragraph.
III. OVERVIEW OF THE FILING
A. Deployment of Natural Gas-Fired Distributed Generation
ETI plans to own and operate clean, natural gas-fired distributed generators of varying
sizes, generally 100 kW up to, but not exceeding, 10 MW,2 located at the premises of hosting
commercial and industrial customers (installed on the Company’s side of the electric meter).
The distributed generation will supply a portion of ETI’s long-term resource needs, be available
2 A generation facility with capacity of 10 megawatts or less does not require a certificate of convenience and necessity pursuant to PURA § 37.058(e).
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to provide capacity and energy benefits to all ETI customers, and enhance the resiliency of ETI’s
electric grid. During normal grid conditions, ETI would control the generation to provide
capacity, energy, and ancillary services to the electrical grid or to otherwise help manage
demand. During an outage, the distributed generators would be available to supply backup
electric service to host customers, allowing them to continue to provide valuable goods and
important services to the community while service to the larger area is restored. Because the
proposed fleet of distributed generation will be used to provide backup electric service to host
customers during a grid outage, ETI refers to the fleet of distributed generation as the “Power
Through” fleet throughout the Company’s Statement of Intent and supporting materials.
Because all of ETI’s customers benefit from the deployment of Power Through
generators, ETI will propose to include the entire cost of installing, operating, and maintaining
the Power Through generators in rates in a subsequent rate setting proceeding. However, the
Company is not seeking a determination regarding the prudence of deploying the generators or
their inclusion in rates at this time.
In this proceeding, ETI seeks approval only of the voluntary tariff – Rate Schedule
UODG – that will be used to charge host customers that elect to take backup service from ETI
using Power Through generators sited on their premises. When the generators are included in
rates via a subsequent proceeding, revenues collected from host customers under Rate Schedule
UODG will be applied as an offset to the revenue requirement associated with those generators
to the benefit of ETI’s overall customer base.
Thus, Power Through generators efficiently meet the needs of host customers and all
other customers alike by providing backup electric service to host customers during an outage, at
a cost less than what a host customer would pay if it were to own and operate a comparable
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generator solely for its own backup power supply, and being available to support the broader
electrical grid at all other times. Power Through generators provide a unique and economic
solution stemming from the ability of a single resource to serve the needs of both host customers
and the broader customer base.
For the reasons summarized in this Statement of Intent and detailed throughout this filing,
ETI’s deployment of a fleet of Power Through generators will provide a number of benefits to
the Company and its customers, including:
•economic, incremental capacity that will satisfy a portion of ETI’s reliability
requirements and mitigate exposure to peaking energy prices;
•a more resilient grid to facilitate restoration efforts following severe weather
events or other major outages;
•a diverse mix of highly flexible and reliable resources that can be used to support
integration of intermittent resources (e.g., solar photovoltaic) and rapidly respond
to changing market conditions;
•capability to reduce distribution infrastructure costs and manage transmission
constraints; and
•a reliable, cost-effective supply of backup electric service for host customers,
which will allow them to continue providing valuable products and services to
their customers and communities during an outage event, thus mitigating harm
and disruption to communities in southeast Texas in the aftermath of such an
event.
These shared benefits serve as the basis for the allocation of costs of Power Through
generators proposed for Rate Schedule UODG.
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B. Rate Schedule UODG and Associated Customer Agreement
Under Rate Schedule UODG, host customers will be charged based on a portion of the
associated equipment, installation, and interconnection capital costs of Power Through
generators as well as ongoing non-fuel operating and maintenance (“O&M”) expenses via a
monthly charge that is calculated and applied similarly to how additional facilities charges are
calculated and applied as revenues to offset costs of distribution and transmission assets that are
added to serve specific customers today. The amount of the monthly charge will reflect the
capital and non-fuel O&M costs of the host customer’s Power Through generator(s) used to
supply backup electric service that exceed ETI’s avoided cost of a larger, central station supply-
side resource – a combustion turbine (“CT”) – grossed up for avoided transmission and
distribution losses. The Customer Agreement specifies the terms and conditions for installing
and operating a Power Through generator at a host customer’s site and how the host customer
will be billed for the supply of backup electric service via a Power Through resource. ETI
requests an effective date of October 5, 2022 for Rate Schedule UODG and the associated form
Customer Agreement.
ETI also proposes that margins earned by a Power Through resource be allocated
between the host customer and all other customers and credited on the host customer’s bill.
Consequently, ETI requests a good cause exception to 16 Tex. Admin. Code (“TAC”) §
25.236(a)(8)(B) and (a)(9) in the Commission’s fuel rule so that host customers would be able to
receive a bill credit for a share of the margins earned by Power Through generators in an amount
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proportionate to their cost responsibility for the Power Through resource, which exceeds 10%.3
The margins would be determined by comparison of the generation offer for a Power Through
generator to revenues received when that offer is selected for dispatch by the Midcontinent
Independent System Operator, Inc.
ETI contemplates that the prudently incurred costs for the deployment, operation, and
maintenance of the Power Through fleet will be recovered through rates like any other
generation asset, but a portion of the costs will be offset by revenues received from host
customers taking backup electric service supplied by Power Through resources pursuant to Rate
Schedule UODG. Prudently incurred costs and offsetting revenues will be included in rates in a
future rate setting proceeding following the approval of Rate Schedule UODG and deployment
of Power Through generators using the new rate schedule.
IV. IDENTIFICATION OF WITNESSES AND SUBJECTS ADDRESSED ETI’s filing includes the written direct testimonies and exhibits of the following
witnesses:
1. Stuart O. Barrett – Mr. Barrett is Vice President, Customer Service of ETI. He provides an overview of the filing and testimony of the other witnesses. Mr.
Barrett also describes the requested regulatory approvals and customer interest in
Power Through. 2. Chris Gilliland – Mr. Gilliland is Manager, Business Operations – Power Through. He explains how a fleet of Power Through distributed generation will
enhance the resiliency of ETI’s grid and meet a portion of the capacity and energy
needs of all of ETI’s customers while also being available to supply backup electric service to host customers in times of outage. Mr. Gilliland also quantifies certain components of the value ETI’s customers can expect from deployment of natural gas-fired distributed generation, which is used to determine how costs will
3 E.g., Application of TXU Electric Company to Implement Price to Beat Fuel Factor, Docket No. 24040,
Order at p. 10, Finding of Fact Nos. 47-50A, Conclusion of Law No. 6 (Dec. 21, 2001) (granting good cause exception to the fuel rule outside the context of a fuel reconciliation proceeding).
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be allocated between host customers and all other customers. Further, Mr.
Gilliland discusses certain technical characteristics of the Power Through
resources. Finally, Mr. Gilliland describes the level of customer interest his team has received in Power Through. 3. David E. Hunt – Mr. Hunt is Senior Manager, Regulatory Policy. He supports
Rate Schedule UODG, which is designed to recover a portion of the Power
Through costs from the host customers, and the associated Customer Agreement. V. NOTICE AND INTERVENTION DEADLINE
As this is a new, voluntary tariff, ETI proposes to provide notice consistent with 16 TAC
§ 22.55, “Notice in Other Proceedings.” Specifically, ETI proposes to provide notice of this
filing by a one-time publication in newspapers of general circulation in ETI’s service area. This
proposed method of notice is consistent with the notice approved in other proceedings proposing
a new, voluntary tariff outside the context of a full base rate proceeding.4
ETI’s proposed form of notice is attached as Attachment A. Pursuant to 16 TAC § 22.55,
ETI proposes an intervention deadline of 45 days following the filing of this Statement of Intent.
VI. DOCUMENTS FILED UNDER SEAL AND MOTION FOR PROTECTIVE ORDER Portions of this filing constitute highly sensitive confidential materials and have been
filed under seal. These materials will be made available to Commission Staff and any intervenors
upon entry of an appropriate Protective Order ensuring preservation of the confidentiality of
these materials. ETI requests that the Commission adopt its standard Protective Order. ETI is
also submitting as part of Attachment B its statement of counsel supporting the confidentiality of
certain documents submitted with its filing.
4 E.g. Entergy Texas, Inc.’s Statement of Intent and Application for Approval of Two Voluntary Renewable Option Tariffs, Rider SVRO and Rider LVRO Community, Docket No. 53153, Order at Conclusion of Law No. 3 (Aug. 25, 2022); Application of El Paso Electric Company to Implement a Voluntary Solar Pilot Program in Texas, Docket No. 44800, Order at Conclusion of Law No. 12 (Sept. 1, 2016).
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VII. CONCLUSION AND PRAYER
ETI respectfully requests that the Commission grant the relief requested in this Statement
of Intent, including:
a) approval of ETI’s proposed method and form of notice;
b) approval of Rate Schedule UODG and the associated form Customer Agreement;
c) approval of the request for a good cause exception to 16 TAC § 25.236(a)(8)(B)
and (a)(9); and
d) such other relief to which ETI may be entitled.
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Dated: August 31, 2022
Respectfully submitted,
George G. Hoyt SBN 24049270 Entergy Services, LLC 919 Congress Avenue, Suite 701
Austin, Texas 78701
(512) 487-3945 (512) 487-3958 (fax) ghoyt90@entergy.com
Jay Breedveld SBN 00790362 Scott Olson SBN 24013266 Duggins Wren Mann & Romero, LLP
600 Congress Avenue, Suite 1900
Austin, Texas 78767-1149 (512) 744-9300 (512) 744-9399 (fax) jbreedveld@dwmrlaw.com
solson@dwmrlaw.com
ATTORNEYS FOR ENTERGY TEXAS, INC.
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CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 4.a.
Agenda Item: Citizens requesting to speak about the Huntsville Public Library
Maureen McIntyre
Lindsey Duncan
Karin Olson
Jade Ellis
John Rhine
Nick Ransford
Initiating Department/Presenter: Other
Presenter:
Recommended Motion: Not applicable
Strategic Initiative:
Discussion:
Previous Council Action:
Financial Implications:
Approvals:
Kristy Doll
Associated Information:
Page 116 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 4.b.
Agenda Item: John Jafreh - Speaking on fire bug in Huntsville and leadership in Huntsville
Initiating Department/Presenter: Other
Presenter:
Recommended Motion: Not applicable
Strategic Initiative:
Discussion:
Previous Council Action:
Financial Implications:
Approvals:
Kristy Doll
Kristy Doll
Associated Information:
Page 117 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 7.a.
Agenda Item: City Council will convene in closed session as authorized by Texas Government Code,
Chapter 551, Section 551.071 to receive legal advice on the proposed TDCJ 2022 Bat Exclusion Project
regarding the TDCJ Cotton Warehouse located in the City of Huntsville.
Initiating Department/Presenter: City Council
Presenter:
Leonard Schneider, City Attorney
Daiquiri Beebe, Councilmember Ward 1
Recommended Motion: Not applicable
Strategic Initiative:
Discussion:
Previous Council Action:
Financial Implications:
Approvals:
Leonard Schneider
Aron Kulhavy
Kristy Doll
Associated Information:
Page 118 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 7.b.
Agenda Item: City Council will convene in closed session as authorized by Texas Government Code,
Chapter 551, Section 551.071 to receive legal advice on Library Policies and Employee Handbook for the
City of Huntsville.
Initiating Department/Presenter: City Attorney
Presenter:
Leonard Schneider, City Attorney
Recommended Motion: Not applicable
Strategic Initiative:
Discussion:
Previous Council Action:
Financial Implications:
Approvals:
Leonard Schneider
Aron Kulhavy
Kristy Doll
Associated Information:
Page 119 of 120
CITY COUNCIL AGENDA
9/20/2022
Agenda Item Number: 7.c.
Agenda Item: City Council will convene in closed session s authorized by Texas Government Code,
Chapter 551, Section 551.071 to receive legal advice Dallas, Fort Worth, Houston, et al v Disney DTC,
LLC, Hulu, LLC and Netflix, Inc, Cause No. DC-22-09128 the 14th District Court of Dallas County
Initiating Department/Presenter: City Attorney
Presenter:
Leonard Schneider, City Attorney
Recommended Motion: Not applicable
Strategic Initiative:
Discussion:
Previous Council Action:
Financial Implications:
Approvals:
Leonard Schneider
Aron Kulhavy
Kristy Doll
Associated Information:
Page 120 of 120