HomeMy WebLinkAboutExhibitsExhibit A Fund Revenues, Expenditures and Projected BalancesFY 26-27 Fund Fund NameEstimated 09/30/26 Unallocated ReserveRevenuesAdminReimb InTrans InTotalRevenueExpendituresAdminReimb OutTrans OutTransferto Cap ExpOne Time EquityTotal ExpEstimated 09/30/27 Unallocated Reserve101 General Fund 17,683,223 30,813,813 8,608,587 3,023,273 42,445,673 39,851,819 1,555,924 975,000 42,382,743 42,382,743 17,746,153Debt Service116 Debt Service Fund 609,505 1,240,267 - 590,363 1,830,6302,364,132 - - - 2,364,132 - 2,364,132 76,003Enterprise220 Utility Fund 15,063,047 49,486,220 165,347 - 49,651,567 30,410,742 7,147,973 3,857,936 8,200,000 49,616,651 49,616,651 15,097,963224 Solid Waste Fund 7,439,265 9,339,075 - - 9,339,075 6,312,495 1,747,013 945,307 9,004,815 9,004,815 7,773,525226 Stormwater Drainage Fund 999,818 1,537,500 1,537,500 1,350,216 178,453 1,528,669 1,528,669227 Airport Enterprise Fund379,600 379,600 348,947 30,653 379,600 379,600Internal Service302 Medical Insurance Fund 4,104,453 3,924,690 977,650 4,902,340 4,590,877 - - - 4,590,877 4,590,877 4,415,916306 Capital Equipment Fund 15,779,850 200,000 - 2,000,246 2,200,246 2,094,601 - - - 2,094,601 2,094,601 15,885,495309 Computer Equip. Replacement Fund 1,172,821 18,000 - 1,096,021 1,114,021 1,096,022 - - - 1,096,022 1,096,022 1,190,820Special Revenue601 Court Security SRF 95,977 32,00032,000 - - 30,605 - 30,605 30,605 97,372602 Court Technology SRF 69,949 59,000 - - 59,000 42,600 - - -42,600 42,600 86,349609 Airport SRF 212,110 110,800 - - 110,800 110,800 - - - 110,800 110,800 212,110610 Library SRF 227,789 20,000 - - 20,000 20,000 - - - 20,000 -20,000 227,789611 Police Seizure & Forfeiture SRF 241,729 303,408 - 303,408 303,408 - - - 303,408 - 303,408 241,729612 PD School Resource Officer SRF 227,517 722,363 - 165,300887,663 843,337 - 44,326 - 887,663 887,663 227,517613 PD Fed Equitable Sharing Fds SRF 262,026 163,760 - - 163,760 163,760 - - - 163,760 163,760 262,026614 Police Grants SRF 45,569 20,00020,000 20,00020,000 20,000 45,569619 LEOSE SRF 41,117 49,62649,626 49,62649,626 49,626 41,117623 Homeland Security300,000 300,000 300,000300,000 300,000Hotel/Motel Tax618 Arts & Visitor Center SRF 289,924 252,700 - 252,700 246,849 - - - 246,849 246,849 295,775663 H/M Tax- Tourism & Visitors Cntr 1,477,583 1,160,500- 1,160,500 1,041,008 54,141 56,806 - 1,151,955 1,151,955 1,486,128Endowment402 PEB Trust - Medical Fund 7,110,646 600,000 - - 600,000 -- 977,650 - 997,650 - 997,650 6,712,996461 Oakwood Cemetery Endowment Fund 435,938 10,000 - - 10,000 - - - - - 445,93873,589,856 100,743,322 8,773,934 7,852,853 117,370,109 91,561,239 8,949,127 7,677,660 9,175,000 117,383,026 117,383,026
Exhibit B FY 26-27
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
Exhibit B FY 26-27
2
Proprietary Funds:
Enterprise Funds:
Utility Fund (Water & Wastewater operations)
Solid Waste Fund
Drainage Fund
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
Exhibit B FY 26-27
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Fund is funded by contributions from City employees and monies are used to assist
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.
Exhibit B FY 26-27
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.
Exhibit B FY 26-27
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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
Exhibit B FY 26-27
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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.
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
Exhibit B FY 26-27
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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.
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,
Exhibit B FY 26-27
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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:
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 the
Council has conferred with the City's financial advisor to ensure 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:
Exhibit B FY 26-27
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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.
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.
Exhibit B FY 26-27
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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.
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.
Exhibit B FY 26-27
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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
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 Policy.
The Purchasing department will process all solicitations before posting. Sealed
solicitations must be solicited for purchases that meet, exceed or are anticipated to
exceed $100,000. All purchases exceeding $100,000 in any one fiscal year from any one
vendor whether a single purchase or sequential purchases require city council approval.
The following shows a summary of approved purchasing threshold requirements.
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 $25,000 pursuant to the approval requirement for
purchases as outlines after review by the City Attorney and Finance Director.
F. DISPOSITION OF SURPLUS PROPERTY. The City shall dispose of surplus, obsolete,
damaged, or unusable property in accordance with applicable provisions of the applicable
state and federal laws, the City Charter, and City policies. All property disposals shall be
Dollar Figure
Supervisor
Or Director
Designee
Department
Director
Purchasing
Agent
City
Manager
City
Council
Less than $5,000
$5,000 to less than
$25,000
(Quotation Form and
Purchase Order)
$25,000 to less than
$100,000 (Purchase
Order)
$100,000 or more
Exhibit B FY 26-27
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authorized, documented, and conducted in a manner that ensures transparency,
accountability, fair market value when required, and responsible stewardship of public
assets. Disposal methods, including transfer, trade-in, public sale, auction, recycling,
donation when authorized, or destruction, shall comply with applicable provisions of the
Texas Local Government Code and established City financial and asset management
procedures.
G. LOCAL VENDORS. To support the local economy while maintaining fair and competitive
procurement practices, in accordance with the Texas Local Government Code. A
responsible local vendor may be awarded a contract when its solicitation submission is
within the maximum percentage of up to 10 percent above the lowest responsive
solicitation submitted by a non-local vendor, provided doing so is determined to be in the
City's best interest and all statutory requirements are satisfied.
H. TRAVEL. The City employee travel related reimbursements shall comply with the City's
Travel Policy, applicable current U.S. General Services Administration (GSA) rates, and
approved budgetary requirements. Reimbursement is limited to authorized, necessary,
and reasonable business expenses, supported by required documentation and submitted
within established deadlines. Employees are expected to utilize the most economical
mode of travel available, and all travel expenditures, including transportation, lodging,
meals, and mileage, shall be reimbursed in accordance with the provisions and limitations
established in the City's Travel Policy.
I. CHANGE ORDERS. Change orders may be used to increase or decrease the quantity of
work, materials, or supplies under an awarded competitive bid solicitation, subject to
applicable provisions of Texas Local Government Code 252.048. Changes generally may
not increase or decrease the original contract price by more than 25%; decreases
exceeding 25% require contractor approval, while increases beyond 25% require separate
procurement for the additional work or materials. Change orders must be approved by the
City Council or properly delegated authority in accordance with applicable statutory and
City requirements, and all change orders shall be documented and executed in writing.
J. 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.
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
Exhibit B FY 26-27
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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.
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
Exhibit B FY 26-27
14
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.
IX. INVESTMENTS AND CASH MANAGEMENT
A. DEPOSITORY BANK. A Depository Bank shall be selected by the City Council for a five-
year period, according to Local Government Code Chapter 105.017, 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
Exhibit B FY 26-27
15
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.
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
Exhibit B FY 26-27
16
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
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
Exhibit B FY 26-27
17
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.
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
Exhibit B FY 26-27
18
● 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
Exhibit C FY 26-27 CITY OF HUNTSVILLE, TEXAS
INVESTMENT & BANKING POLICIES
10/1/2026
(Exhibit C) FY 26-27
TABLE OF CONTENTS PART I - INVESTMENT POLICY I. 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
Exhibit C FY 26-27
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. The City will
comply 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 Annual Comprehensive 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 Finance Director, designated as Investment Officer 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 Officer 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.
(Exhibit C) FY 26-27
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 shall attend investment training that includes education in investment controls, security risks, strategy risks, market risks, diversification of investment portfolio and general compliance with state law. 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. 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
(Exhibit C) FY 26-27
3
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.
(Exhibit C) FY 26-27
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 Officer, 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.
(Exhibit C) FY 26-27
5
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, 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 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
(Exhibit C) FY 26-27
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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 City’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 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
(Exhibit C) FY 26-27
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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. The following are not authorized investments under this section: a. obligations whose payment represents the coupon payments on the
outstanding principal balance of the underlying mortgage-backed security
collateral and pays no principal;
b. obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security collateral and bears no interest; c. collateralized mortgage obligations that have a stated final maturity date
greater than 10 years; and d. 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, a savings bank or credit union that are: a. guaranteed or insured by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, 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 Investment Act (PFIA).
B. Authorized investments requiring prior approval of the Finance Committee: 1. Banker’s Acceptances A bankers acceptance is an authorized investment if the banker’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. 2. 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
(Exhibit C) FY 26-27
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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. 3. 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 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.
(Exhibit C) FY 26-27
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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; 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;
(Exhibit C) FY 26-27
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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; 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
(Exhibit C) FY 26-27
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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: 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.
(Exhibit C) FY 26-27
12
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. 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: 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
(Exhibit C) FY 26-27
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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.
(Exhibit C) FY 26-27
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Part III Investment Policy - City of Huntsville
Post-Employment Benefit Plan
(aka “City of Huntsville PEB Trust”)
(Exhibit C) FY 26-27
15
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.
(Exhibit C) FY 26-27
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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.
(Exhibit C) FY 26-27
17
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.
(Exhibit C) FY 26-27
18
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 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
(Exhibit C) FY 26-27
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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
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.
(Exhibit C) FY 26-27
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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.
(Exhibit C) FY 26-27
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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.
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.
(Exhibit C) FY 26-27
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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, 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.
(Exhibit C) FY 25-26
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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.
[Exhibit C] FY 26-27
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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: _____________________________________
[Exhibit C] FY 26-27
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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.
[Exhibit C] FY 26-27
32
C. Equity Options - Domestic
[Exhibit C] FY 26-27
33
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.
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.
[Exhibit C] FY 26-27
34
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 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.
GLOSSARY
[Exhibit C] FY 26-27
35
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. 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.
[Exhibit C] FY 26-27
36
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 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
[Exhibit C] FY 26-27
37
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 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
[Exhibit C] FY 26-27
38
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 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.
[Exhibit C] FY 26-27
39
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.
[Exhibit C] FY 26-27
40
Broker/Dealer List – October 2025 Hilltop Securities 700 Milam St. Suite 1200
Houston TX 77002 FHN 920 Memorial City Way, 11th Floor Houston, TXX 77024 Wells Fargo Securities, LLC 1445 Ross Ave., Suite 210 Dallas, TX 75202
UBS Financial Services, Inc. 10001 Woodloch Forest Drive, Suite 100
The Woodlands, TX 77380
Stifel 100 Motor Parkway, 2nd Floor Happauge, NY 11788 Duncan Williams 11458 W. Travelers Way Circle Houston, TX 77065
Cullen Asher, LLC 325 N St. Paul St., 31st Floor
Dallas, TX 75201
Multi-Bank Securities, Inc. 2400 E. Commercial, Suite 812 Ft. Lauderdale, FL 33308
Vining Sparks, IBG, LP 2107 Elliot Ave, Ste. 208 Seattle, WA 98121
FY 26-27 Fee Schedule
FY 2027 Changes
Processing Fee on all debit/credit card transactions 2.5%
Alcohol Beverages Licenses and Permits (City Fee Only)Variable: Refer to Texas Administrative Code No longer collecting
Copies of Public Information
Variable dependent on document or material type, as set by the Texas
Administrative Code, plus an additional 25%.
Certificate of Compliances
City Limits $45
ETJ $45
Flood Plain $65
Manufactured Home (Placement)$75
Minor Plats (includes amending & replats)$250
Preliminary Plat $350
Final Plats (includes amending & replats)$350
Filing Fees Actual Cost
District Map Amendment $350
Request for Compliance/Zoning Verification Letters $60 each plus any copy expenses
Environmental Assessment Report $125
Variance/Appeal request $350
Conditional Use Permit $350
Subdivision Modification/Waiver $350
Permit Cancellation Fee $50
Vacant Building Fee - Commercial $5,000
Vacant Building Fee - Residential $1,000
Street Name Change $350
Right Of Way Abandonment Administrative Fee $450
Building Permits (Residential)
New Residential/Addition 0 - 500 Sq. Ft / $0.85 per Sq. Ft (Minimum $50.00)
501 - 1000 Sq. Ft / $0.8 per Sq. Ft
1001 - 2000 Sq. Ft / $0.75 per Sq. Ft
Over 2000 Sq. Ft / $0.65 per Sq. Ft
Residential Renovation & Accessory
$65 for the first 250 sq. ft. / lineal ft. + $0.35 per each additional sq. ft./ lineal ft.
over 250 sq. ft./ lineal ft.
Foundation Repair $125
Residential All Other $65.00 per required inspection
Plan Checking Fee
Less than $10,000 valuation No Fee
$10,000 valuation or more One-half of building permit fee
Building Permits (Commercial)
Based on Valuation
Less than $1,000 $65 inspection fee
$1,001 to $50,000 $65 for first $1,000 + $7 per each additional $1,000
$50,001 to $100,000 $280 for the first $50,000 + $6 per each additional $1,000
$100,001 to $500,000 $480 for the first $100,000 + $5 per each additional $1,000
Over $500,001 $1,680 for the first $500,000 + $4 per each additional $1,000
City Secretary
Development Services
Note: For commercial projects over $100,000, Plan Check Fee payable upon application submittal for Plan review/check
Schedule of Fees and Charges
All Municipal Services
1
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Commercial Change of Tenant/Revised Certificate of Occupancy $65
Temporary Certificate of Occupancy Fee $250.00 per request
Electrical Permits - Residential
Fee for issuing each permit
Residential dwelling & accessory permit fees:
(This includes but may not be limited to single family attached, single family
detached, duplex’s, manufactured housing, additions and accessory structures.
Based on the square footage of construction.)
Finished Square Feet
Less than 1,000 square feet $70
1,000 square feet or greater.
$70.00 for the first 1,000 square feet + $7.00 per 100 square feet or fraction thereof
in excess of 1,000 square feet.
Electrical Permits - Commercial & Residential Repairs
All other fees:
(Fees shall be computed on the “total valuation of work”, the dollar value of labor and
materials (total cost to the customer).
$70 $70
Valuation Of Work
$70
Over $2,000.00 to $50,000.00
$70.00 for the first $2,000.00 plus $6.00 for each additional $1,000.00, or fraction
thereof
Over $2,000.00 to $50,000.00
$290.00 for the first $50,000.00 plus $5.00 for each additional $1,000.00, or fraction
thereof
Over $50,000.00 to $500,000.00
$290.00 for the first $50,000.00 plus $4.00 for each additional $1,000.00, or fraction
thereof
Over $500,000.00
$2,090.00 for the first $500,000.00 plus $4.00 for each additional $1,000.00, or
fraction thereof
Fire Standpipe/Line & Sprinkler Permits
Fee for issuing each permit $70
1 to 5 sprinkler heads $10
Over 5 sprinkler heads $1.00 each
Fire Line/Standpipe $100 each
Fire Alarm Permits Based on Valuation
Less than $1,000 $65 Inspection fee
$1,001 to $50,000 $65 for the first $1,000 + $6 per each additional $1,000
$50,001 to $100,000 $280 for the first $50,000 + $5 per each additional $1,000
$100,001 to $500,000 $480 for the first $100,000 + $4 per each additional $1,000
$500,001 and over $1,680 for the first $500,000 + $3 per each additional $1,000
Fire Suppression System Permits
Less than $1,000 $65 Inspection fee
$1,001 to $50,000 $65 for the first $1,000 + $6 per each additional $1,000
$50,001 to $100,000 $280 for the first $50,000 + $5 per each additional $1,000
$100,001 to $500,000 $480 for the first $100,000 + $4 per each additional $1,000
$500,001 and over $1,680 for the first $500,000 + $3 per each additional $1,000
Fuel Dispensing/Storage Permits
Less than $1,000 $65 fee
$1,001 to $50,000 $65 for the first $1,000 + $6 per each additional $1,000
$50,001 to $100,000 $280 for the first $50,000 + $5 per each additional $1,000
$100,001 to $500,000 $480 for the first $100,000 + $4 per each additional $1,000
$500,001 and over $1,680 for the first $500,000 + $3 per each additional $1,000
Grading and Excavation Plan Checking Fee
Less than 5,000 cubic yards No Fee
5,000 to 10,000 cubic yards $20
10,001 to 100,000 cubic yards $20 for first 10,000 CY + $10 per each additional 10,000 CY
100,001 to 200,000 cubic yards $110 for first 100,000 CY + $6 per each additional 10,000 CY
Over 200,001 cubic yards $170 for first 200,000 CY + $3 per each additional 10,000 CY
2
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Grading and Excavation Permits
Less than 50 cubic yards $10
51 to 100 cubic yards $15
101 to 1,000 cubic yards $15 for first 100 CY + $7 per each additional 100 CY
1,001 to 10,000 cubic yards $78 for first 1,000 CY + $6 per each additional 1,000 CY
10,001 to 100,000 cubic yards $132 for first 1,000 CY + $27 per each additional 1,000 CY
Over 100,001 cubic yards $375 for first 10,000 CY + $15 per each additional 1,000 CY
Irrigation Permits
Fee for issuing each permit $65
Commercial project fee $70
1 to 5 sprinkler heads $5
Over 5 sprinkler heads $.30 each
Backflow Prevention Devices
1 to 5 $3.00
Over 5 $2.00 each
Manufactured/Mobile Home Permits
Electrical $65
Placement $75
Plumbing $65
Plumbing Connection with Gas $67
Mechanical $65
Plumbing Permits - Residential
Residential dwelling & accessory permit fees:(This includes but may not be limited to single family attached, single family detached,
duplex’s, manufactured housing, additions and accessory structures. Based on the
square footage of construction.)
Finished Square Feet
Less than 1,000 square feet $75
1,000 square feet or greater.
$75.00 for the first 1,000 square feet + $7.00per 100 square feet or fraction thereof
in excess of 1,000 square feet.
Plumbing Permits - Commercial & Residential Repairs
Commercial project fee $70
Valuation Of Work
Not more than $2,000.00 $70
Over $2,000.00 to $50,000.00
$70.00 for the first $2,000.00 plus $6.00 for each additional $1,000.00, or fraction
thereof
Over $50,000.00 to $500,000.00
$290.00 for the first $50,000.00 plus $5.00 for each additional $1,000.00, or fraction
thereof
Over $500,000.00
$2,090.00 for the first $500,000.00 plus $4.00 for each additional $1,000.00, or
fraction thereof
Mechanical Permits - Residential
Commercial project fee $60
Residential dwelling & accessory permit fees:(This includes but may not be limited to single family attached, single family detached,
duplex’s, manufactured housing, additions and accessory structures. Based on the
square footage of construction.)
Finished Square Feet
Less than 1,000 square feet $75
1,000 square feet or greater.
$75.00 for the first 1,000 square feet + $5.00 per 100 square feet or fraction thereof
in excess of 1,000 square feet.
All other fees:
(Fees shall be computed on the “total valuation of work”, the dollar value of labor and materials (total cost to the customer).
Mechanical Permits - Commercial & Residential Repairs
Commercial project fee $70
Valuation Of Work
Not more than $2,000.00 $75
Over $2,000.00 to $50,000.00
$75.00 for the first $2,000.00 plus $6.00 for each additional $1,000.00, or fraction
thereof
Over $50,000.00 to $500,000.00
$290.00 for the first $50,000.00 plus $5.00 for each additional $1,000.00, or fraction
thereof
Over $500,000.00
$2,090.00 for the first $500,000.00 plus $4.00 for each additional $1,000.00, or
fraction thereof
After Hours Inspection Fee - 4 hr. Minimum $65/hr ($260 Minimum)
Re-Inspection Fee $75
3
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Work performed without a permit Equal to twice the cost of the permit
Sign Permits 25¢/sq. ft. (minimum $5) + $10/linear ft. of sign height + $25/permit
Temporary Sign Permits -Non Profits Only $25
PID Application Fee $50,000
Extra Territorial Jurisdiction Dis-Annexation Application
Application Fee $500
Utility Permits
Water Tap See Other Utility-Related Fee Section
Sewer Tap See Other Utility-Related Fee Section
Fire Line Tap See Other Utility-Related Fee Section
Other Permits
On Site Sewage Facility $200
Moving $100
Demolition $100
Driveway Approach $65
Vendor/Peddler Permits $50 - valid 90 days in 1 location (separate permit required for each location)
Contractor Registration Fees
General Contractor - Residential & Commercial $75
Plumbing - All License Types No Fee
Electrical - All License Types No Fee
Fire Suppression System Installers $75
Irrigator $75
Backflow Tester $75
Swimming Pool/Spa Annual Permits $100
Late Permit Fee (if permit not obtained by May 15th expiration)$200
Food Service Establishment Annual Health Permits Based on # of employees
1-3 Employees $175
4+ employees $275
Late Permit Fee (if permit not obtained by Dec 31st expiration)Equal half the cost of permit fee
Food Service Establishments Pre-Opening Fee $75
Food Service Establishments Re-Inspection Fee $300 $ 200.00
Itinerant Restaurant Permits (1-3 days)$35 per Event
Non-Profit Organizations, Annual Health Permits $75
Mobile Food Units Annual Health Permits $250
Late Permit Fee Equal half the cost of permit fee
Daycare Facilities Annual Health Permits $175
Late Permit Fee Equal half the cost of permit fee
Culverts/Driveways Installations by City Actual Cost
Mobile Food Vendor Permit - Annual $200 (Separate permit required for each location)
Mobile Food Vendor Permit - Temporary $75 (Valid 90 days - separate permit required for each location)
Shared Mobility Device Permits $200 Application Fee + $3.00 per Shareable Mobility Device
Public Improvement and Private Development Project Review Fees
Application Fee $420.00
Per Sheet Review Fee $485.00 per sheet / page
Drainage Plan Review Fee $5,225.00
Traffic Plan Review Fee $5,225.00
Utility Capacity Assessment Fee $4,500.00
GIS/MicroStation Map
Letter size (8.5" x 11")$1.20
Legal size (8.5" x 14")$1.20
Tabloid size (11" x 17")$2.40
Small (18" x 23")$6.00
Medium (24" up to 35")$9.60
Large (greater than 35")$12.00
Map/Plat/Plan Copy/Deed, etc. Fees (copies of existing documents)
Letter size (8.5" x 11")$0.12
Legal size (8.5" x 14")$0.12
Tabloid size (11" x 17")$0.25
Small (18" up to 23")$4
Medium (24" up to 35")$5
Large (36" & greater)$6
Engineering Services
4
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Softball/Baseball Field
Youth Leagues $5 per person
Adult Leagues $10 per person
Day Rental, Private Use (Josey Park field included)$25 per hour
Field Prep $25 - one time at start
Security Deposit $50
Lights $25 per hour of field usage
Tournaments City Residents: $100 plus hourly Rate
Walker County Residents: $125 plus hourly rate
Non-Residents: $150 plus hourly rate
Batting Cage $25 per hour $25 per hour
Soccer/Football Fields
Youth Leagues $5 per person
Adult Leagues $10 per person
Field Rental, Private Use $25 per hour
Field prep $ 50 - one time at start
Security Deposit $50
Lights $25 per night
Tournaments City Residents: $100 plus hourly Rate
Walker County Residents: $125 plus hourly rate
Non-Residents: $150 plus hourly rate
Basketball/Volleyball Court Add Volleyball
Day Rental, Private Use $25 per hour
Youth Leagues $5 per person
Adult Leagues $10 per person
Tournaments City Residents: $100 plus hourly Rate
Walker County Residents: $125 plus hourly rate
Non-Residents: $150 plus hourly rate
Martin Luther King, Jr Center
Rental Fee City Residents: $100 first hour / $25 each additional hour
Walker County Residents: $125 first hour / $25 each additional hour
Non-Residents: $150 first hour / $50 each additional hour
Security Deposit $200
Audio/Visual Deposit $50
Audio/Visual Fee $25
Park Rental
Pavilion Permit -Emancipation Park $50 per hour
Stage at Rather Park /Jane Monday Amphitheater $50 per hour Add Jane Monday
Gazebo Permit - Kate Barr Ross Park $25 per hour
Pavilion/Stage/Gazebo Deposit $100 Changed wording
Cancellation (6-15 Business Days Prior)1/2 of Deposit returned
Cancellation (Within 5 Business Days)No Deposit returned
Event Permit City Residents: $100 first hour / $50 each additional hour
Walker County Residents: $125 first hour / $50 each additional hour
Non-Residents: $150 first hour / $50 each additional hour
Event Permit Security Deposit $200
Zumba Admission
Per Class per Person $2
Program Fees Additional Line Item: Costs Vary
Admission
Adults Age 12 and Up $4.00
Children Age 3 to 11 $2.50
Children Age 2 or less No Charge
Day Care Fees $2.50 per child
Season Pass
Adults Age 12 and Up $50
Children Age 3 to 11 $40
Family $100 for first four members + $20 per each additional member
Swimming Lessons $45 per course
Water Aerobics $75 annually/$25 quarterly
Lap Swimming Fees
Session 1 - September, October and November $25
Session 2 - December, January and February $25
Session 3 - March, April and May $25
Sessions 1, 2 and 3 $60
Pool Rental- Private $100.00 per hour (maximum 2 hours)
Program Fees Varies
Recreation Services
Aquatic Center
5
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Cemetery Space
$1,000
Filing Fee Actual Cost
Landscape Repair Fee after Exhumations $250
Fines - Daily
Fines - Over due
Books 10¢
Magazines 10¢
DVDs $1
Audiobook $1
Music 10¢
Maximums $10
Interlibrary Loans (daily fine)$1
Interlibrary Loans Maximums $30
Board Games $1
Copies & Prints
Black and white 15¢ per page
Color 75¢ per page
Sales (donated items)
Audio Book $1
Music CD $1
Video $1
Hardback Book $1
Paperback Book 25¢ each
Children's Hardback Book 50¢ each
Children's Paperback Book 25¢ each
Walker Co. stories CDs $5
Lost or Damaged Materials
Library Card $1
Lost Materials Replacement cost plus $10 processing fee
Barcode $1
Security Patch $1
Book Jacket $1
Spine Label $1
DVD Case $1
Audio Book Case $5
Board Games (Replaceable Part)$1
Board Games (Non replaceable part)Greater of $10 or half of the cost of the item
Board Game (total replacement)Replacement cost plus $10 processing fee
Room Rentals - Payment due at booking
Deposit for all groups -Refundable if the room is left in good order $150
After-hours surcharge (all groups hourly) $30 Additional expense for holding an event outside business hours.
Audio/Visual equipment (per event)$20
Community Room or Board Room
For-profit groups outside Walker County $150 for 1st hour, $50 each subsequent hour
For-profit groups within Walker County $100 for 1st hour, $50 each subsequent hour
Other groups or individuals outside Walker County $25 per hour
Other groups or individuals within Walker County $25
Walker County non-profit No Charge
Outside Walker County non-profits $25
Outside Walker County - parties, receptions, etc.$50
After-hours Surcharge (applicable to all groups)additional $30 per hour
Deposit $150
Cemetery Operations
Library Services
Plot
6
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Tours
Historical Driving Tour $3 per person - $30.00 minimum
Rental of Wynne Home (includes Kitchen)
Brown Wynne Gallery
Non-Profit $45 per hour - 2 hr. minimum
Private $50 per hour - 2 hr. minimum
Meeting Room (includes Kitchen)
Non-Profit $35 per hour - 2 hr. minimum
Private $40 per hour - 2 hr. minimum
Non-Profit $250 up to 4 hours/$40 for each subsequent hour (up to 8 total hours)
Private $350 up to 4 hours/$50 for each subsequent hour (up to 8 total hours)
Porch and Grounds
Non-Profit $45 per hour - 2 hr. minimum
Private $50 per hour - 2 hr. minimum
Kitchen Rental - Outdoor events
Non-Profit $35 per hour - 2 hr. minimum
Private $40 per hour - 2 hr. minimum
Security Deposits-due upon booking Add due upon booking - 25% of fee
Security Fee (Refundable)
40+ persons and outside regular business hours $150
Wynne Home
Monday - Friday
First Floor Access (Entryway, Gallery, Small Gallery, Dining Room, Kitchen, Porch, Grounds)$100 for 1st hour + $50 each subsequent hour
$100 for 1st hour + $50
each subsequent hour
Dining Room & Kitchen Only $50 per hour - 2 hr minimum
$50 per hour - 2 hr
minimum
Outdoor Access Only (Porch and Grounds)$50 per hour - 2 hr minimum
$50 per hour - 2 hr
minimum
Kitchen Add On w/ Outdoor Access $25 per hour - 2 hr minimum
$25 per hour - 2 hr
minimum
Security Deposit (Refundable) - due upon booking $150 $150
Saturday - Sunday
Full Access (First Floor Access & Outdoor Access)$350/day up to 4 hours $350/day up to 4 hours
Security Deposit (Refundable) - due upon booking $150 $150
Rental of Audio Visual
Projector and screen $25
William Hodges Education Building
Meeting Room
Rental Fee $100 for 1st hour + $50 each subsequent hour
Security Deposit - due upon booking $150
Use of Audio/Visual Equipment $20 per rental
Stand with Sam Brick Pavers
4 x 8 paver $100
5 x 8 paver $250
6 x 12 paver $500
12 x 12 paver $1,000
16 x 16 paver $5,000
Event Fees Varies
Big Sam's Honor Club $35
Film Friendly Texas
Total or disruptive use (regular operating hours) of a City of Huntsville building, $500 per day
park, or public area that is not subject to set rental fees.
Partial, non-disruptive use of a City of Huntsville building, or park facility $250 per day
Total closure or obstruction of public street or right-of-way, including parking lots
and on-street parking. Applicants must submit an events permit request to
the Huntsville Police Department $50 per block or lot, per day
Partial closure or obstruction of public street or right-of-way, including parking
lots and on-street parking $25 per block, per day
Use of City parking lots, parking areas, and City streets (for the purpose of
parking film trailers, buses, catering trucks, and other large vehicles) $50 per block or lot, per day
Tourism & Cultural Services
7
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Sexually Oriented Business Permits
Original Application $400
Renewal Application $200
Wrecker Permits $100/yr. Per holder -2 Yr permit + $120/yr. per tow truck-2 Yr permit
Wrecker Driver Permits $12.50 per driver per year, payable for a two-year period
Taxi/Chauffer $100/yr. per taxi
Accident Report $6 $11 online ($5 provider fee)
Fingerprinting Fee $10 per person
Posted Hourly Parking Fee -$1.00 per hr. / Max $5.00
Residential Alarm Fees
0-3 False Alarms No Charge
4-5 False Alarms $25 each
6-8 False Alarms $50 each
Over 8 False Alarms $100 each
Commercial Alarm Fees
0-3 False Alarms No Charge
4-5 False Alarms $50 each
6-8 False Alarms $75 each
Over 8 False Alarms $100 each
Alarm Fees
Initial permit $10 residential/$30 commercial
Alarm Co. Failure to Provide Accurate Info $25
$50
Failure to Notify of Address Changes, etc.$50
Reinstatement Fee $100
Appeal Fee $25
Animals and Fowl
$50
Replacement of lost Dangerous Dog ID Tag $10
Tow Truck Companies
Fee Allowed to be Charged by Tow Truck Company *Not Collected by
City*
All Police Directed Tows $200
Notification $50
Preservation $20
Copies of Open Records
Variable dependent on document or material type, as set by the Texas
Administrative Code, plus an additional 25%.
Huntsville Animal Control Facility Fee Allowed to be Charged by Animal Shelter - *Not Collected by City*
Adoption Fee $85
Owner Surrender $50
Quarantine Fee $35
Boarding Fee (per night)$15
Return to Owner Fees
Impound Fee $35
Boarding Fee (per night)$15
Microchip $25
Vaccines:$10 Each
Dog:
DAPPV $10 Each
Bordetella $10 Each
Cat:
FVRCP $10 Each
Cat/Dog:
Rabies $10 Each
Public Safety
Permittee Fail to Respond to Alarm Location w/in 30 mins at Request of Police
Annual Registration Fee for Dogs Deemed as Dangerous by Animal Control Authority
8
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Flea Prevention:
Cat/Dog: Activyl
0-50 lbs.$10
51-100 lbs.$15
101 and up $20
Bravecto $50
FIV/FELV Test $25
Heartworm Test $25
Nail Trim $5
Deworming:
Cat/Dog:
Under 50 lbs.$5
Over 50 lbs.$10
Heartworm Prevention-Iverhart
Heartworm Test (Mandatory)$25
6-12 lbs.$7/dose of $25 box (6 doses)
12.1-25 lbs.$7/dose of $30 box (6 doses)
25.1-50 lbs.$7/dose of $35 box (6 doses)
50.1-100lbs $7/dose of $40 box (6 doses)
Sterilization:
Dog:
Female (spay)$100
With government assistance $80
Male (neuter) under 50 lbs.$60
Over 50 lbs.$80
Pain Medicine - Pills $5
Cat:
Female (spay)$60
Male (neuter)$40
Pain Medicine - Shot $10
E-Collar:
Recommended for both Cat and Dog $10
Extra fees that may occur are:
In Heat $35
Term spay $45
Cryptorchidism $45-$65 (determined by a Vet)
CapStar $8
Fire Department Cost Recovery - (Non-County Residents)
Motor Vehicle Incidents
Level 1- Basic Incident with hazardous materials assessment and scene
stabilization $494
Level 2- includes level 1 plus clean-up of fluids $562
Level 3- Vehicle Fire $687
Add-ons:
Extrication $1,483
Landing Zone $454
Hazmat
Level 1- Basic response:
Engine response, first responder assignment, perimeter establishment,
evacuations, set-up and command $796
Level 2- Intermediate Response:
Level 1 plus Hazmat team and equipment, Level A or B suit donning, breathing air,
detection equipment, and decon $2,842
Level 3- Advanced Response:
Level 1 and 2 plus recovery and identification of materials, disposal and
environmental clean-up.$6,707
Special Rescues -High Angle, Water Rescues, other Specialized Rescue
Itemized billing:
Per hour per response vehicle +$455
Per hour per rescue person $57
For incidents that require extended time on scene response will be itemized
Engine $455 per hour
Truck $568 per hour
Miscellaneous Equipment $341 per hour
CPR class Fee (non City Employee)$30
9
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Single Family Residential
First 3,000 gallons
.75 inch meter $17.54 per month $ 19.64
1 inch meter $25.65 per month $ 28.73
1.5 inch meter $33.75 per month $ 37.80
2 inch meter $56.02 per month $ 62.74
3 inch meter $220.03 per month $ 246.43
4 inch meter $280.78 per month $ 314.47
6 inch meter $422.52 per month $ 473.22
8 inch meter $584.51 per month $ 654.65
10 inch meter $812.66 per month $ 910.18
Between 3,000 and 7,000 gallons $7.38 per thousand gallons $ 8.27
Between 7,001 and 13,000 gallons $8.12 per thousand gallons $ 9.09
Over 13,000 gallons $9.22 per thousand gallons $ 10.33
Jointly Metered Residential/Multi-Family
First 3,000 gallons
.75 inch meter $17.54 per month $ 19.64
1 inch meter $25.65 per month $ 28.73
1.5 inch meter $33.75 per month $ 37.80
2 inch meter $56.02 per month $ 62.74
3 inch meter $220.03 per month $ 246.43
4 inch meter $280.78 per month $ 314.47
6 inch meter $422.52 per month $ 473.22
8 inch meter $584.51 per month $ 654.65
10 inch meter $812.66 per month $ 910.18
Jointly Metered Residential
Between 3,000 and 7,000 gallons $7.38 per thousand gallons $ 8.27
Over 7,001 gallons $8.12 per thousand gallons $ 9.09
Multi-Family
Over 3,000 gallons $9.22 per thousand gallons $ 10.33
Commercial Metered
First 3,000 gallons
.75 inch meter $20.25 per month $ 22.68
1 inch meter $28.35 per month $ 31.75
1.5 inch meter $36.45 per month $ 40.82
2 inch meter $58.72 per month $ 65.77
3 inch meter $222.74 per month $ 249.47
4 inch meter $283.48 per month $ 317.50
6 inch meter $425.22 per month $ 476.25
8 inch meter $587.22 per month $ 657.69
10 inch meter $812.66 per month $ 910.18
Over 3,000 gallons $9.22 per thousand gallons $ 10.33
Institutional Users
First 3,000 gallons
.75 inch meter $20.25 per month $ 22.68
1 inch meter $28.35per month $ 31.75
1.5 inch meter $36.45 per month $ 40.82
2 inch meter $58.72per month $ 65.77
3 inch meter $222.74 per month $ 249.47
4 inch meter $283.48 per month $ 317.50
6 inch meter $425.22 per month $ 476.25
8 inch meter $587.22 per month $ 657.69
10 inch meter $812.66per month $ 910.18
Over 3,000 gallons $9.97 per thousand gallons
Irrigation
First 3,000 gallons
.75 inch meter $20.25 per month $ 22.68
1 inch meter $28.35 per month $ 31.75
1.5 inch meter $36.45 per month $ 40.82
2 inch meter $58.72 per month $ 65.77
3 inch meter $222.74 per month $ 249.47
4 inch meter $283.48 per month $ 317.50
6 inch meter $425.22 per month $ 476.25
8 inch meter $587.22 per month $ 657.69
Water Services
10
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Residential
Between 3,000 and 7,000 gallons $7.38 per thousand gallons $ 8.27
Between 7,001 and 13,000 gallons $8.12 per thousand gallons $ 9.09
Over 13,000 gallons $9.22 per thousand gallons $ 10.33
Jointly Metered Residential
Between 3,000 and 7,000 gallons $7.38 per thousand gallons $ 8.27
Over 7,001 gallons $9.22 per thousand gallons $ 10.33
Multi-Family
Over 3,000 gallons $9.22 per thousand gallons $ 10.33
Commercial
Over 3,000 gallons $9.22 per thousand gallons $ 10.33
Institutional
Over 3,000 gallons $9.97 per thousand gallons $ 11.17
Fire Hydrant Meters
First 3,000 gallons $222.74 per month $ 249.47
Over 3,000 gallons $9.97 per thousand gallons $ 11.17
Note: Water rates for customers outside the city limits are calculated in the same
manner as rates for customers within the city limits; however, a multiplier of 1.50
shall be applied to the cost components listed above.
11
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Single Family/Jointly Metered Residential
First 2,000 gallons $21.10 per month $ 23.63
Over 2,000 gallons $7.88 per thousand gallons $ 8.83
Note: Each individually metered residential dwelling unit shall be charged a monthly wastewater service charge and a volume charge based upon the
average amount of water consumed during the months of November, December, January and February of each year, rounded to the nearest 100 gallons.
Customers moving onto an existing or newly constructed, single family residential unit shall billed for sewer at eighty percent (80%) of current
monthly consumption up to a maximum monthly amount for 10,000 gallons until the winter month history is established.
Residential customers not connected to the waterworks system of the city shall be billed monthly by the city for wastewater services at a calculated
rate based on the average residential water consumption of sixty-eight hundred (6,800) gallons $58.92, or at a rate based on the average
water consumed during the months of November, December, January and February of each fiscal year from the billing records of a special water district.
Commercial/Institutional Users
First 2,000 gallons $24.35 per month $ 27.27 $ 27.27
Over 2,000 gallons $7.88 per thousand gallons $ 8.83
Commercial customers shall be billed at a rate that is consistent with the regular wastewater charge of similar type businesses, premises or users
receiving service from the city. The utility office supervisor shall recommend for approval such service charge and conditions as deemed appropriate to
the Finance Committee of the City Council and the Finance Committee shall approve the same.
Septic Waste Disposal Fee
Septic Waste Receiving Station $0.09 per gallon
Septic Waste Hauler Permit $100 per year
0 -1 - No Charge
2-3 - $25
6-7 False Alarms 4-5 - $50
8+ False Alarms 6+ - $100
0-3 False Alarms (after hours)1 - $500
4-5 False Alarms (after hours)2-3 - $100
6-7 False Alarms (after hours)4+ - $200
8+ False Alarms (afterhours)$200.00
Residential Property Fee $5.00 per month
Non-Residential Property Fees
Allocated Impervious Area on the Parcel(s) in square feet (sf) X
$0.00152/SF/month
0-3 False Alarms
4-5 False Alarms
After hours Sewer Service Call (After Business hours, problem found to be on
customer side, to include residents, plumbers and contractors)
Stormwater Utility Fees:
Passed by Ordinance # 2024-22 9.17.2024
Sewer Service Call (normal business hours, problem found to be on customer side,
to include residents, plumbers and contractors)
Wastewater Services
12
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Per Month Fee
Residential Collection
Single Family Households-Inside City Limits $26.53 $ 27.33
Additional Collection Cart $14.14 $ 14.57
Business Minimum Inside City Limits Collection $27.91 $ 28.75
Additional Collection Cart $14.14 $ 14.57
Per Month Fee per Unit
Multi-Family Residential Collection
Individually Metered Units With Dumpster $26.53 $ 27.33
Individually Metered Units Without Dumpster $26.53 $ 27.33
Jointly Metered Units Without Dumpster $26.53 $ 27.33
Jointly Metered Units With Dumpster By size of container and number of pickups (see below)
Commercial Collection-INSIDE City Limits-Dumpsters and Roll Offs
Per Month Fee
2 Yard Dumpster
1 Collection per week $86.92 $ 89.53
2 Collections per week $146.07 $ 150.46
3 Collections per week $205.22 $ 211.37
4 Collections per week $264.36 $ 272.29
5 Collections per week $323.52 $ 333.23
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $39.15
Unscheduled/Extra Pickups - Start from Transfer Station $52.21
After Hours/Extra Pickups $84.39
Per Month Fee
4 Yard Dumpster
1 Collection per week $110.53 $ 113.85
2 Collections per week $193.34 $ 199.14
3 Collections per week $276.10 $ 284.38
4 Collections per week $358.88 $ 369.65
5 Collections per week $441.65 $ 454.90
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $54.80
Unscheduled/Extra Pickups - Start from Transfer Station $73.07
After Hours/Extra Pickups $107.21
Per Month Fee
6 Yard Dumpster
1 Collection per week $134.17 $ 138.19
2 Collections per week $240.58 $ 247.49
3 Collections per week $346.98 $ 357.39
4 Collections per week $453.40 $ 467.00
5 Collections per week $559.78 $ 576.58
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $70.44
Unscheduled/Extra Pickups - Start from Transfer Station $93.92
After Hours/Extra Pickups $130.26
Per Month Fee
8 Yard Dumpster
1 Collection per week $157.80 $ 162.53
2 Collections per week $287.83 $ 296.47
3 Collections per week $417.86 $ 430.40
4 Collections per week $547.90 $ 564.34
5 Collections per week $677.94 $ 698.27
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $86.07
Unscheduled/Extra Pickups - Start from Transfer Station $114.78
After Hours/Extra Pickups $153.20
Excessive Wear and Tear of Dumpsters
Dumpster Cleaning $104.34
Dumpster Cleaning and Painting $153.38 $ 383.34
Dumpster Cleaning and Painting when Burned $367.27 $ 597.23
Dumpster Cleaning, Painting and Bottom Replacement when Burned $708.27 $ 1,122.23
Dumpster emptied due to placement of large item
No flat fee, charged as unscheduled pickup from transfer station according to
dumpster size
Each Lid
Replacement Lids and Bars - Stolen, Unauthorized Removal or Damage $42.96 $ 44.75
Solid Waste Services
13
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Per Month Fee Plus Tonnage Fee of $87.69 per ton Per Month Fee Plus Tonnage Fee of $87.69 per ton $ 90.33
Open Top Roll-off - Inside City Limits
1 Collection per week $607.00 $ 715.00
2 Collections per week $1,153.00 $ 1,359.00
3 Collections per week $1,643.00 $ 1,936.00
4 Collections per week $2,190.00 $ 2,581.00
5 Collections per week $2,738.00 $ 3,226.00
Trip Fee Plus Tonnage Fee of $87.69 per ton Per Month Fee Plus Tonnage Fee of $87.69 per ton $ 90.33
Extra Pickups $200.00 $ 250.00
Call In $295.00
Stand-by $295.00
Trip Fee Plus Tonnage Fee of $87.69 per ton Per Month Fee Plus Tonnage Fee of $87.69 per ton $ 90.33
Compacting Roll-off
Scheduled $200.00
Unscheduled $295.00
Extra Pickups $200.00 $ 250.00
Roll-off Inactivity Fee $295.00
Per Trip Based on Compactor Type
Repositioning $100.00
Set Fees and Deposits
$162.23 / per Roll Off
Inside City Limits (To Drop Off Roll-Off) One Time Fee
$1,500 / per Roll Off
Commercial Collections for OUTSIDE City Limits, TDCJ, SHSU - Dumpsters & Roll-offs
Per Month Fee
Commercial Collection By size of container and number of pickups (see below)
2 Yard Dumpster
1 Collection per week $103.47 $ 106.58
2 Collections per week $173.89 $ 179.11
3 Collections per week $244.32 $ 251.65
4 Collections per week $314.73 $ 324.17
5 Collections per week $385.16 $ 396.71
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $46.59
Unscheduled/Extra Pickups - Start from Transfer Station $62.13
After Hours/Extra Pickup $100.46
Per Month Fee
4 Yard Dumpster
1 Collection per week $131.61 $ 135.56
2 Collections per week $230.15 $ 237.06
3 Collections per week $328.70 $ 338.57
4 Collections per week $427.24 $ 440.06
5 Collections per week $525.79 $ 541.57
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $65.24
Unscheduled/Extra Pickups - Start from Transfer Station $86.99
After Hours/Extra Pickup $127.63
Per Month Fee
6 Yard Dumpster
1 Collection per week $159.73 $ 164.52
2 Collections per week $286.40 $ 294.99
3 Collections per week $413.07 $ 425.46
4 Collections per week $539.75 $ 555.94
5 Collections per week $666.41 $ 686.40
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $83.85
Unscheduled/Extra Pickups - Start from Transfer Station $111.81
After Hours/Extra Pickup $155.08
Per Month Fee
8 Yard Dumpster
1 Collection per week $187.85 $ 193.49
2 Collections per week $342.66 $ 352.94
3 Collections per week $497.46 $ 512.38
4 Collections per week $652.25 $ 671.81
5 Collections per week $807.06 $ 831.27
Per Pickup Fee
Unscheduled/Extra Pickups - ONSITE $104.49
Unscheduled/Extra Pickups - Start from Transfer Station $141.80
After Hours/Extra Pickup $189.26
Roll-off Container Set Fee, New Commercial and Existing Commercial Contractors,
DEPOSIT - New Commercial Contractors, Inside City Limits
14
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Per Month Fee Plus Tonnage Fee of $95.82 per ton $ 99.65
Open Top Roll-off
1 Collection per week $758.75 $ 893.75
2 Collections per week $1,441.25 $ 1,698.75
3 Collections per week $2,053.75 $ 2,420.00
4 Collections per week $2,737.50 $ 3,226.25
5 Collections per week $3,422.50 $ 4,032.50
Per Trip Fee Plus Tonnage Fee of $95.82 per ton $ 99.65
Extra Pickups $250.00
Call In $393.28
Stand-by $393.28
Set Fees and Deposits
$184.13 / per roll off
$1,500 / per roll off
Disposal Fees at Scale House
Basic Fee - Inside City Limit $78.00 per ton $ 80.34
Basic Fee - Outside City Limit, TDCJ, SHSU $97.41 per ton $ 101.30
Minimum Fee - Inside City Limit $15.00
Minimum Fee - Outside City Limit, TDCJ and SHSU $20.00
White Goods/Large Furniture - Inside City Limit $78.00 per ton $ 80.34
White Goods/Large Furniture - Outside City Limit, TDCJ and SHSU $97.41 per ton $ 101.30
Yard waste and limbs - Inside City Limit smaller than 4" diameter Free with City Water Bill remove red
Trees, stumps, limbs - Inside City Limit $78.00 DIAMETER GREATER 4" / Free with City Water Bill 80.34 remove red
Trees, stumps, limbs - Outside City Limit, TDCJ and SHSU $97.41 per ton $ 101.30
Tires, Small (i.e. car or pickup truck) - Inside City Limit $4.54 Per Tire
Tires, Small (i.e. car or pickup truck) -Outside City Limit, TDCJ and SHSU $5.68 Per Tire
Tires, Large (i.e. semi-truck) - Inside City Limit $20.43 Per Tire
Tires, Large (i.e. semi-truck) - Outside City Limit, TDCJ and SHSU $24.40 Per Tire
Small dead animal (i.e. dog, cat) - Inside City Limit $5.68 each
Small dead animal (i.e. dog, cat) - Outside City Limit, TDCJ and SHSU $7.09 each
Large dead animal (i.e. cow, horse) - Inside City Limit $78.00 per ton $ 80.34
Large dead animal (i.e. cow, horse) - Outside City Limit, TDCJ and SHSU $97.41 per ton $ 101.30
Roll-off Container Set Fee, New Commercial and Existing Commercial Contractors,
Outside City Limits (To Drop Off Roll-Off) One Time Fee
DEPOSIT - New Commercial Contractors, Outside City Limits
15
FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Meter Accuracy Test $75 per meter or actual cost if cost of making test exceeds $75
Replacement of Water Meter, Lock, or Head $50 per occurrence
Tamper Fee (Water Meter)$100.00 per Occurrence
Negligent damage to meter or any associated to electronic device Replacement Cost
Customer request for meter on/off for repairs $25
Tamper Fee (Fire Hydrant)$500.00 per Occurrence
Portal Service $1 per Meter
Water Tapping Charge
Completed by City Crews
.75 inch water tap - short side $1,200
3/4" Water tap - long side $1,500
1 inch water tap - short side $1,500
1 inch water tap - long side $2,000
2 inch water tap (same side) - short side $2,500
2 inch water tap (road bore) - long side $3,200
ETJ - E series meter additional charge $525
TxDOT Tap Fee-At-Cost Estimate
Completed by Another Entity
.75 inch water meter set only $300
1 inch water meter set only $400
2 inch water meter set only $800
Meters Not Provided by City (Inspection Fee)$250
Sewer Tapping Charge
Location of Stub -
Location of an existing Water/Sewer stub. If the existing tap cannot be located, or
is unusable the customer will pay the cost for a new tap $400 - Non-refundable
Sewer Tap Condition Video Assessment (at customer's request, City Side Only) $400-Normal Business Hours
Connection Fee $200
4 inch sewer tap - short side $1,000
4 inch sewer tap - long side $1,550
4 inch sewer tap manhole in street $1,600
Taps Made by Other Entity (Inspection Fee)$250
TxDOT Tap Fee-At-Cost Estimate
Taps involving excavation or boring in or under TxDOT Regulated streets or
highways will be at cost
Fire Line Tapping Charge
Taps Made by Other Entity (Inspection Fee)$250
Customer request for fire line meter on/off for repairs $50
Service Fee (new and transferred service)$20
Service Fee (Restricted Access Fee)$20
Service Fee (sprinkler on or off)$20
Same Day Service Fee for Suspended Account $50.00
Requests for same day service for suspended account may be taken between
After Hours - after 5pm $75
Residential Security Deposit
Water $40
Wastewater $40
Solid Waste $40
Solid Waste Per Cart $60
Solid Waste Cart Replacement Fee $60
New Construction (Residential & Commercial 3/4" to 2" meter X number of meters)$100
New Construction (Commercial - 3" to 8" meter x number of meters $500
9:00 a.m - 12:00 p.m the day as suspension. Same day service fee is in addition to the
$40 Account suspension Fee. Same day service fee for suspended account is available
only the day of suspension.
Other Utility-Related Fees
Taps involving excavation or boring in or under TxDOT Regulated streets or
highways .
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FY 26-27 Fee Schedule
FY 2027 Changes Schedule of Fees and Charges
Commercial Security Deposit 2 x the average estimated monthly utility service charge
Construction/Contractor Roll-offs (new accounts)$1,500 / per roll off
Construction/Contractor Roll-offs Permit Fee (Commercial Hauler)$100/year/roll-off
Solid Waste Disposal Deposit $500
Wastewater Vendor Deposit $1,500
Fire Hydrant Meter Deposit $500
Penalty for Late Payment 10% of amount of utility service charge
Account Suspension Fee $40
Returned Check Fee $35
Surcharges for Industrial Wastewater Discharges $1.61 per thousand gallons of wastewater
Meter Box Lid Replacement Small -$10 Large -$15
Meter Box Replacement
Small box / lid combo $25
Large box /lid combo $40
Use of City Equipment At Cost/ Current FEMA Rate
Use of City Labor Actual Rate
Tanker Truck Fill (up to 8,000 gallons)$75.00
Tanker Truck Fill over 8,000 gallons $ 75 + $6.59 per thousand gallons over 8,000
Hangar Space
A 1 $560 month
2,3,4,8,9, and 11 $375 month
5,6,7, 10, and 12 $485 month
B 4 and 7 $525 month
1,2,3,5, and 6 $560 month
C 2,3,4,5,8,and 9 $375 month
1,6,7,10,11, and 12 $485 month
D 1,2,3,4,5, and 6 $560 month
T 1 $575 month
Q 1,2, and 3 $290 month
4 $375 month
G 1 $375 month
2,3,4,5,6,7, and 8 $290 month
Tie-Down $75 month
All $10 Daily (Daily rate is waived with the purchase of fuel)
Community Hangar
Small Aircraft $35 Daily (Rate includes tow fee to and from the apron)
Twin Engine/ Larger Aircraft $45 Daily
Small Aircraft $375 Monthly
Twin Engine/ Larger Aircraft $560 Monthly
Fuel Per Gallon Rate
Type
Full Service Avgas 100LL Market Rate
Full Service Jet Fuel Market Rate
Additional Services
Tow Fee $10 (Daily rate is waived with the purchase of fuel
Oils and Supplies Market Rate
Aircraft Cleaning Service
Top wash and Vaccuum
2-4 place Single Engine $140.00
6-place Single Engine $170.00
Light Twin Engine $225.00
Cabin Twin Engine $265.00
Top wash, Belly degrease and Vaccuum
2-4 place Single Engine $240.00
6-place Single Engine $255.00
Light Twin Engine $340.00
Cabin Twin Engine $395.00
Top wash, Belly degrease, Vacuum and wax
2-4 place Single Engine $425.00
6-place Single Engine $510.00
Light Twin Engine $675.00
Cabin Twin Engine $790.00
Huntsville Municipal Airport
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Exhibit E FY26-27
CITY OF HUNTSVILLE TRAVEL POLICY The City will comply with Internal Revenue Service (IRS) regulations when reporting certain travel reimbursements (generally involving non-overnight travel) as reportable income for income tax purposes. Advances for overnight travel must be approved by the Finance Director and submitted 14 days prior to travel.
Per diem will not be granted for day-trip travel. All Travel Expense Forms shall be filled out and signed in ink, not pencil, within ten (10) working days of the return date. The most current standardized form(s) provided by the Finance office must be used and all information requested on the form provided, including the detailed receipts (including lodging even if paid on City Credit Card), purpose of the travel, and agenda/itinerary/certificate, map quest (for personal vehicle). The Department Director is responsible for
authorizing, within budget limits, all travel by themselves or their employees. When traveling for city-related business, mileage reimbursement is based upon the most economical mode of travel that is reasonably available. This includes utilizing City fleet vehicles and carpooling when available. When personal automobiles are used, reimbursement is calculated using the U.S. General Services Administration (GSA) Mileage Rate.
Up to 15 miles can be allowed to cover travel between lodging and conference sites. If using air service, reimbursement will only be for the amount of an economy class ticket. Receipts are required for parking charges and toll road charges. When traveling for city-related business, the City will reimburse the employee a per diem rate based on the length of travel and duration of the event for meals related to overnight travel. Tips are included in the allowance. A department may elect to require receipts and reimburse the actual cost of the meal in lieu of a per-diem up to a maximum of the per
diem rate. The City of Huntsville’s per diem rate is established using the U.S. General Services Administration (GSA) Standard Rate as a benchmark. Although GSA publishes location specific rates for many destinations, the City adopts a standard rate for all travel to support consistent budgeting and ensure responsible stewardship of City resources. Full per diem is $75.00 per day: Overnight travel for a full day session of at least six (6) hours outside the 60-mile radius.
Partial per diem is $60.00 per day: Overnight trip departing after 12 noon or returning before 5:00 pm. When traveling for city-related business, the City will reimburse up to the cost of the sponsoring hotel or necessary and reasonable lodging charges. Governmental type accommodation and rates are to be requested at all times. Charges on the hotel bill other than lodging are to be entered by day under their proper classification. An employee is expected to use the
single room rate. If a non-City employee travels with the employee, the employee will be responsible for the difference in the single rate and increased occupancy charge. In general, the City will NOT reimburse the lodging cost for the night a seminar ends if the employee can reasonably be expected to return home. Employees should minimize overnight stays.
It is generally expected that reimbursement for lodging the night prior to a seminar will be reimbursable only if the driving distance and conference start time make it unreasonable to travel on the day of the seminar/ meeting. If anything other than the room charge and hotel parking appear on the bill that will not be paid by the City, it is the responsibility of
the employee to pay the supplemental charges and not charge the City credit card. If the employee will be requesting reimbursement for any of the supplemental charges, a detailed receipt is required. For example, if the employee uses room service for a meal and is requesting reimbursement (not if the employee is requesting per diem which should not be charged to the credit card), a detailed receipt for the meal is required. Baggage handling is not reimbursable. Valet parking is only reimbursable when self parking is not available. It is the policy of The City of Huntsville that employees be reimbursed for necessary and reasonable job related expenses incurred in the authorized conduct of Citty business. All requests for reimbursement of expenses are subject to documentation and reasonableness and will be honored in conformance with adopted policies and procedures.
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Exhibit F FY26-27
City Of Huntsville
Purchasing Policy
Revised October 1, 2026
Revised December 16, 2025
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Table of Contents
Forward 4
Purpose 4
Mission 4
Governing Authority 4
Compliance and Legal Penalties 4
Purchasing Code of Ethics 4
Objectives of the Purchasing Department 5
User Do’s and Don'ts 5
General Duties of the Purchasing Department 5
Purchasing Thresholds and Procedural Requirements 6
Purchasing Thresholds 6
Historically Underutilized Businesses (HUBs) 7
Contract Award Determination 7
Local Vendors 7
Solicitation Protest 7
Purchase Order Exemptions 8
Vendor Performance Reviews and Debarment 8
Performance Review Requirements 8
Debarment 9
Suspension 9
Reinstatement Requests 9
Exceptions to Competitive Bidding and Alternative Procurement Methods 9
Cooperative Agreements 9
Interlocal Agreements 10
Procurement of Professional and Personal Services 10
Professional Services 10
Personal Services 11
Contract Approval Requirements 11
Sole-Source Exemptions 11
Requirements for Sole Source Justification 12
Legal Authority 12
Authorization and Documentation Requirements 12
Purchasing Department Notification 13
Technology-Related Purchases 13
Expanded Requirements for Cloud-Based Software Vendors 13
Purchases Funded by Grants 14
Change Orders 15
Insurance Requirements 15
General Requirement 16
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Required Coverages 16
Additional Requirements 16
Travel 17
Purchasing Card Program 17
Program Overview 17
Program Oversight 17
Cardholder Eligibility and Agreement 17
Primary Use and Restrictions 17
Prohibited Expenditures 17
Sales Tax Exemption 18
Receipts and Required Documentation 18
Meal and Business Expense Requirements 18
Disputes and Billing Errors 18
When to Use a Purchase Order Instead 19
Enforcement and Compliance 19
Disposition of Surplus Property 19
Sale or Lease of Real Estate 19
Authority and Purpose 19
Real Estate Management and Delegation of Authority 19
Responsibilities of the City Manager 20
Sale of Public Parks 20
Approval Authority for Real Estate Transactions 20
Sale of Real Estate 20
Fair Market Value Requirement 20
Methods of Sale 20
Public Notice Requirements 20
Invitation for Bid Procedures 21
Retention of Mineral Rights 21
Final Recommendation and Council Action 21
Glossary of Terms 22
APPENDIX A – FLOWCHARTS & DIAGRAMS 26
APPENDIX B – Procurement Policies and Procedures for Federal Grant Funds 29
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Forward
The City of Huntsville acknowledges the importance of identifying guidelines for city employees that will enable
them to make purchases for the City, while maintaining the integrity of its financial controls. The purchasing process
starts with the annual budget. The approval of the City’s budget is the way the City Council approves management
to spend on behalf of the City. Purchasing is a key part of the process of turning the authorized city budget into
actual services. That process must be designed to allow staff to maximize results with limited resources while
ensuring compliance with all relevant local, state, and federal laws and regulations. Although the respective
department Directors may have the authority to spend within their budget, they must follow specific purchasing
procedures and possess an understanding of the procedures to ensure a fair purchasing process.
Purpose
This purchasing policy manual provides the necessary methods of procurement for the roles and responsibilities of
both the Purchasing department and all other City departments. The information included will allow the
departments to make decisions necessary to request the purchase of goods and services needed to perform the
functions of their department effectively.
Mission
● Ensure Compliance: Adhere to City Charter, all City policies, as well as applicable state and federal laws
governing procurement.
● Promote Fair Access: Provide equal opportunity for all qualified vendors through a transparent,
competitive procurement process.
● Safeguard Public Funds: Ensure that public funds are used responsibly and efficiently to achieve the best
value for taxpayers.
● Uphold Integrity and Public Trust: Conduct all purchasing activities in a manner that protects the interests
of the City of Huntsville and promotes public confidence in the integrity of the procurement process.
Governing Authority
In accordance with the City Charter, purchasing authority is ultimately vested in the City Council. The City Manager,
serving as the Chief Executive Officer of the City, is authorized to approve purchases of goods and services not
exceeding $100,000, in alignment with policies established by the City Council. Any purchase exceeding $100,000
requires formal approval by the City Council prior to the execution of any contractual obligation. All procurement
activities shall adhere to all City policies, City Charter, and applicable federal, state, and local laws.
Compliance and Legal Penalties
In accordance with Local Government Code 252.062, a municipal officer or employee commits an offense if the
officer or employee intentionally or knowingly makes or authorizes separate, sequential or component purchases
to avoid the competitive bidding requirements. This offense could result in up to a class B misdemeanor.
Purchasing Code of Ethics
City personnel involved directly or indirectly in procurement activities are expected to uphold the standards set
forth in this Purchasing Code of Ethics. This includes individuals involved in specification development, quote or bid
evaluations, requisition approvals, contract oversight, and payment authorization.
To promote shared accountability, all employees participating in purchasing-related decisions shall review and sign
a Purchasing Code of Ethics Acknowledgment Form on an annual basis. The Purchasing Department shall maintain
these acknowledgments as part of the City's procurement compliance records. We Commit To:
● Upholding the highest standards of honesty, integrity, and impartiality in all procurement activities,
avoiding any actions that would result in personal gain or misuse of public trust.
● Avoiding and eliminating all conflicts of interest, both real and perceived, in the execution of our duties.
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● Conducting ourselves in a manner that reflects personal honor and professional ethics, fostering public
confidence in the integrity of the procurement process. ● Ensuring transparency and accountability by openly communicating procurement actions and decisions in
accordance with applicable laws and policies.
● Pursuing ongoing professional development and training to remain current with federal, state, and local
procurement statutes, rules, and best practices.
● Promoting fairness and competition by eliminating processes or practices that create bias or unequal
treatment of vendors.
● Refusing to accept gifts, favors, or gratuities, and refraining from making personal purchases through
business relationships, as such actions compromise the ethical principles of our profession and the public’s
trust.
Objectives of the Purchasing Department
The Purchasing Department is responsible for providing guidance and support to City departments to ensure
compliance with all applicable City policies, City Charter, and applicable federal, state, and local laws governing
procurement. To not limited to competitive sealed solicitations, professional services, cooperative purchasing,
emergency procurements, and sole or single-source acquisitions. User departments are responsible for making
final recommendations to the Mayor and City Council. Purchasing should be included in all pre-purchase planning
meetings to ensure adherence to competitive bidding requirements.
User Do’s and Don'ts
Coordination among City departments is necessary for the process to work effectively. To avoid delays and comply
with all policies and laws, departments should remember the following:
● Don’t commit to or acquire goods or services without an authorized purchasing plan or you could be held
personally liable for the payment.
● Do adhere to the City’s Code of Ethics and avoid activities and behaviors that are unethical or create conflict
of interest or the perception of a conflict of interest.
● Do plan purchases to minimize the use of emergency and expedited purchases. Rush purchases are
generally more expensive and they delay other requisitions already in the system.
● Do plan purchases to allow sufficient time to process purchase requests. The Purchasing Department is
committed to processing all requisitions within a restricted timeframe depending on the dollar threshold
of the purchase. In general, departments should allow:
○ 1-2 business days for purchase order requests less than $3,000 that are not being quoted for
competitive pricing.
○ 0-1 business day to complete HUB verification only for purchases $3,000.01 - $5,000. The
department must obtain an emailed confirmation of HUB vendor verification prior to purchase.
○ 2-3 business days for purchase order requests between $5,000.01 - $25,000 from when the
requisition and informal quotes are received by the Purchasing Department.
○ 2-3 weeks for purchase order requests between $25,000.01 - $100,000 requiring a formal
solicitation process.
○ 4-6 weeks for purchase order requests over $100,000 requiring planning and a formal solicitation
process.
General Duties of the Purchasing Department
The Purchasing Department is responsible for overseeing the City's procurement activities in accordance with
applicable laws, City policies, and ethical standards. In fulfilling this role, the Purchasing Department shall:
● Enforce the policies and procedures established in the City of Huntsville Purchasing Manual and
implement directives issued by the City Manager or their designee;
● Provide support and guidance to departments in the development of specifications to ensure they are
clear, non-restrictive, and promote open competition;
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● Pursue cooperative purchasing opportunities with other governmental entities when such arrangements
are in the best interest of the City; ● Attend and facilitate formal solicitation openings, including pre-opening meetings, and provide procedural
support as needed;
● Serve in an advisory capacity as a non-voting member on evaluation committees for competitive
solicitations;
● Collaborate with user departments to prepare and coordinate solicitation outcomes, including reporting
recommended awards to City Council for formal approval;
● Consolidate purchases of similar goods or services, when practical, to leverage volume pricing and
encourage a more competitive procurement environment;
● Assist department heads in the proper disposition of surplus or scrap materials and coordinate the disposal
of City-owned assets in accordance with City policy;
● Conduct periodic training sessions for City staff involved in purchasing activities to promote consistent
application of procurement procedures;
● Recommend updates or changes to procurement policies and procedures to the Director of Finance, City
Manager, and City Council to safeguard public funds and enhance procurement efficiency and
accountability; and
● Promote fairness, transparency, and vendor confidence in the City’s procurement process by ensuring that
specifications support broad competition and that all responsible vendors are afforded equal opportunity
to compete for City business.
Purchasing Thresholds and Procedural Requirements
Purchasing Thresholds
● Purchasing Guidelines for Purchases less than $3,000
The Department Director or designee must approve all purchases. Purchases can be made using the
Procurement Card, Direct Billing, or a Purchase Order.
● Purchasing Guidelines for Purchases between $3,000.01 - $5,000
Departments must acquire HUB vendor verification from the Purchasing Department prior to purchase.
Purchases made with a purchase order are exempt from this verification requirement. The Department
Director or designee must approve all purchases. These Purchases can be made using the Procurement
Card, Direct Billing, or a Purchase Order.
● Purchasing Guidelines for Purchases between $5,000.01 - $25,000
Departments are required to obtain three written quotes. The Department Director must approve all
purchase requisitions. The requisition and all supporting documents must be submitted to the Purchasing
Department for review and HUB vendor verification. Once the Purchase Order is confirmed, the
department will be notified to proceed with placing the order and/or picking up the materials upon
confirmation email from the Purchasing Department.
● Purchasing Guidelines for Purchases between $25,000.01–$100,000
Departments are required to obtain three formal (written) quotes. The Department Director must approve
all purchase requisitions. The requisition and all supporting documents must be submitted to the
Purchasing Department for review and HUB vendor verification. The Purchasing Department prepares a
draft Purchase Order and requests the City Manager’s approval. Upon receipt of approval for the purchase,
the purchase order is issued. Once the Purchase Order is confirmed, the department will be notified to
proceed with placing the order and/or picking up the materials upon confirmation email from the
Purchasing Department.
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● Purchasing Guidelines for Purchases $100,000.01 and over
A formal sealed competitive solicitation is required, unless the procurement is exempt by law. The
solicitation process starts with a planning meeting to decide the appropriate solicitation method (IFB, RFP,
RFQ), project timeline, and required documentation. The Department Director must provide an estimated
budget to support planning, compliance, and fiscal review. The Purchasing Department will coordinate,
develop, and issue the solicitation. The requesting department is the subject-matter expert and is
responsible for providing a complete scope of work or specifications for the solicitation. Finally, the
Department Director will submit the recommendation of award to the City Council for approval.
● Purchasing Guidelines for Citywide Solicitations
The Purchasing Department will submit all supporting documentation of Citywide solicitations for City
Council approval. Citywide solicitations are intended to serve multiple departments, such as for janitorial
services, landscaping services, or similar commonly used goods or services.
Historically Underutilized Businesses (HUBs)
In accordance with Texas Local Government Code Section 252.0215, when making a purchase exceeding $3,000
but less than $100,000, the City must contact at least two Historically Underutilized Businesses (HUBs) on a
rotating basis. This requirement is based on the list of HUBs maintained by the Texas Comptroller pursuant to
Texas Government Code Chapter 2161. If no HUBs are listed for the county in which the City is located, the
requirement does not apply.
Because the HUB directory is a live document updated regularly by the Texas Comptroller, Purchasing can provide
current HUB contact information upon request to assist with compliance.
Contract Award Determination
The City of Huntsville awards contracts based on best value and overall benefit to the City. In accordance with
Texas Local Government Code Section 252.043, if competitive sealed solicitation is required, the contract must
be awarded to either:
● The bidder offering the lowest price who also meets all responsibility requirements (e.g., qualifications,
past performance, financial stability).
● The bidder who provides the best overall value to the City, considering both price and other relevant
factors (e.g., quality, service, experience, delivery time, etc.).
To ensure transparency and compliance, bid specifications must clearly state whether the award will be made to
the lowest responsible bidder or based on best value. If the award is for best value, the solicitation must clearly
state the evaluation criteria as permitted under Texas Local Government Code Section 252.043.
All contract award recommendations must have justifying documentation that the award is in the City’s best
interest. This documentation shall be retained in the procurement file.
Local Vendors
To support the local economy while maintaining fair and competitive procurement practices, in accordance with the
Texas Local Government Code. A responsible local vendor may be awarded a contract when its solicitation submission
is within the maximum percentage of up to 10 percent above the lowest responsive solicitation submitted by a non-
local vendor, provided doing so is determined to be in the City's best interest and all statutory requirements are
satisfied.
Solicitation Protest
Any actual or prospective vendor or contractor who is aggrieved in connection with the solicitation or award of a
contract may file a written protest. Protests must be submitted to the Purchasing Department within 10 days post
award and must clearly state the grounds for the protest and the relief requested. The Purchasing Department
will review the protest, conduct any necessary investigations, and issue a written decision within a reasonable
period. The Purchasing Department shall make every effort to settle protests promptly and fairly and will not
proceed with the contested procurement until the protest is resolved, unless failure to do so would pose a
significant risk to operations or the public interest.
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Purchase Order Exemptions
The City of Huntsville recognizes that certain payments and services are routine, statutory, or otherwise governed
by alternative procedures and therefore do not require the issuance of a purchase order for payment authorization.
These exemptions are intended to streamline administrative processing while maintaining fiscal accountability.
The following categories of payments are exempt from the purchase order requirement: ● Tax payments
● Insurance premium payments
● Retirement system contributions
● Debt service payments
● Investment transactions
● Utility service payments
● Payments related to employee payroll deductions
● Interlocal agreements
● Reimbursements or payments to other governmental or regulatory agencies
● Training, travel, and lodging expenses
● Customer deposit refunds
● Captive replacement parts or components for equipment, ● Memberships
● Legal Notices
● Bonds
● Software Maintenance
● Postage and Post office rental
● Purchases under $5,000
Departments remain responsible for ensuring that applicable competitive bidding requirements are met and that
all necessary documentation and approvals are secured in accordance with the City’s fiscal and budgetary policies
prior to initiating payment for any exempt item. The Purchasing Department is available to assist in determining
whether a transaction qualifies for an exemption.
Vendor Performance Reviews and Debarment
The City of Huntsville requires routine evaluation of vendor performance to support transparency, accountability,
and continuous improvement in vendor relations.
Performance Review Requirements
These reports should be submitted using the City's standardized Vendor Performance Report form. Reports should
highlight both positive and negative aspects of vendor conduct. Reports are reviewed and retained by the
Purchasing Department in a centralized tracking system. Negative trends may result in a vendor being placed on a
performance monitoring list or denied future contract opportunities. Positive performance reports may be used to
support future vendor selections, including as part of evaluation criteria in best value solicitations.
● Performance evaluations shall consider the following: ○ Timeliness of delivery or service completion.
○ Quality and conformance to contract specifications.
○ Communication, responsiveness, and professionalism.
○ Billing accuracy and adherence to quoted or contract pricing.
○ Compliance with safety, insurance, and regulatory requirements.
● Departments should complete a Vendor Performance Report:
○ At the conclusion of any project or purchase over $5,000.
○ Prior to renewing annual purchase orders or term contracts.
○ Whenever vendor performance, positive or negative, warrants documentation.
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Debarment
Vendors may be suspended or debarred from future City contracts for: ● Failure to perform in accordance with contract terms.
● Fraudulent, unethical, or deceptive business practices.
● Misrepresentation of qualifications or delivery capabilities.
● Repeated negative performance reports or contract violations.
● Violation of applicable laws or ordinances.
Suspension
The Purchasing Department will issue a Notice of Intent to Debar, detailing the proposed basis for debarment. ● The vendor may submit a written response within 10 business days.
● A final determination will be made by the City Manager, in consultation with the Legal and Finance
Departments.
● Debarment periods may range from six (6) months to three (3) years, depending on the nature and
severity of the offense.
Reinstatement Requests
All vendor reinstatement requests after debarment must be submitted in writing to the City Manager and will be
evaluated on a case-by-case basis. The Purchasing Department will maintain and publish a list of debarred vendors
to ensure transparency and compliance in future procurement processes.
Exceptions to Competitive Bidding and Alternative Procurement Methods
While the City of Huntsville is committed to promoting open and competitive procurement practices, both state
law and City policy recognize that certain purchases may be exempt from traditional competitive bidding
requirements or may be procured through authorized alternative methods. These options enable the City to
respond efficiently to specific operational, legal, or emergency needs while maintaining full compliance with
applicable statutes.
This section outlines the circumstances under which competitive bidding may be waived—such as for professional
services, emergencies, or sole source procurements—as authorized under Texas Local Government Code §
252.022 and Texas Government Code Chapter 2254. It also addresses approved alternative procurement methods,
including the use of cooperative purchasing agreements, interlocal contracts, and state-authorized contract
programs, which fulfill competitive requirements without the need for a City-issued solicitation.
All exemptions and alternative procurement methods must be properly justified, documented, and approved in
coordination with the Purchasing Department to ensure legal compliance, fiscal responsibility, and procurement
transparency.
In addition to the exemptions and methods described herein, Texas law provides several other statutory
exemptions under Local Government Code § 252.022. Departments considering the use of non-competitive
procurement methods not explicitly covered in this section must consult with the Purchasing Department. The
Purchasing Department will provide guidance on the appropriate use of such exemptions and ensure that all
required documentation and approvals are in place.
Cooperative Agreements
The City of Huntsville may utilize cooperative purchasing agreements as an alternative procurement method that
satisfies competitive bidding requirements in accordance with Texas Local Government Code Chapter 791
(Interlocal Cooperation Act) and Section 271.102. Cooperative purchasing agreements allow the City to procure
goods and services through contracts that have been competitively solicited and awarded by another governmental
entity or purchasing cooperative. This method promotes efficiency, reduces administrative burden, and often
results in favorable pricing and terms.
● The City may participate in cooperative programs established by:
○ The State of Texas (e.g., Texas SmartBuy, TXMAS, DIR)
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○ Regional councils of governments
○ Other municipalities, counties, or state agencies ○ Recognized purchasing cooperatives such as BuyBoard, HGACBuy, Omnia Partners, or Sourcewell
● All cooperative agreements must be reviewed and approved by the Purchasing Department prior to use.
The Purchasing Department will verify that:
○ The cooperative contract was competitively awarded in accordance with applicable laws.
○ The vendor is authorized under the contract to provide the goods or services.
○ The scope of the proposed purchase aligns with the terms and pricing of the cooperative
contract.
○ The City’s participation in the cooperative is properly documented.
● Use of a cooperative contract does not exempt a department from:
○ Obtaining appropriate internal approvals based on purchasing thresholds.
○ Submitting a requisition and supporting documentation to the Purchasing Department.
○ Complying with grant or funding source requirements, when applicable.
○ IT review/approval for all technology related purchases.
● When submitting a requisition based on a cooperative agreement, departments must include:
○ A copy of the vendor’s quote referencing the cooperative contract.
○ The cooperative name and contract number on request.
○ Any required supporting documentation verifying pricing and scope.
The Purchasing Department reserves the right to require additional documentation or justification when using a
cooperative agreement, particularly when the procurement exceeds $100,000 and must be presented to City
Council for approval.
Interlocal Agreements
In accordance with Texas Government Code Chapter 791 (Interlocal Cooperation Act), the City of Huntsville may
enter into interlocal agreements with other governmental entities to jointly perform governmental functions or
procure goods and services when it is in the City's best interest to do so.
● While not commonly used for procurement, interlocal agreements may be appropriate when:
○ Another public entity has already competitively awarded a contract the City wishes to utilize; or
piggy back on the contract.
○ Two or more entities collaborate on a shared project or service.
● All interlocal agreements must:
○ Be in writing and outline the scope, duration, responsibilities, and cost-sharing terms.
○ Be approved by the City Manager and City Council if required based on scope or expenditure.
○ Be filed with the City Secretary and retained by the Purchasing Department as part of the official
record.
○ Obtain IT review/approval for all technology related purchases.
Procurement of Professional and Personal Services
Certain services are exempt from the competitive bidding requirements. The City of Huntsville follows the
applicable statutory framework to ensure the proper selection, contracting, and oversight of these specialized
services.
Professional Services
As defined by Texas Government Code 2254.002, the following services are considered professional services when
performed by a licensed or certified individual in the course of their professional practice. These services are
exempt from bidding and must be procured using a qualifications-based selection process, typically initiated
through a Request for Qualifications (RFQ).
● Certified Public Accountants (CPAs)
● Architects
● Landscape Architects
● Land Surveyors
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● Physicians and Surgeons
● Optometrists ● Professional Engineers
● Registered Nurses
● State-Certified or Licensed Real Estate Appraisers
Under Texas Government Code Chapter 2254, contracts for professional services may not be awarded based on
competitive bidding. Instead, providers must be selected on the basis of:
● Demonstrated competence and qualifications,
● A fair and reasonable price, and
● Fees that do not exceed any maximum amount prescribed by law.
Personal Services
Some services may not fall under the definition of “professional services” governed by Texas Government Code
Chapter 2254, but may still be exempt from competitive bidding requirements under Texas Local Government Code
§ 252.022(a)(4) as personal services. These services are those performed personally by the individual contracted
to perform them. To qualify, the compensation under the contract must primarily be for the individual’s labor, not
for ancillary costs such as insurance, materials, or equipment. Additionally, these services are typically based on
the provider’s unique skills, qualifications, or direct involvement, where trust, personal attributes, or one-on-one
interaction is integral to performance.
● Specialized consulting or training where a specific individual’s expertise is essential
● Legal services (typically procured through or approved by the City Attorney)
● Subject-matter experts retained for temporary projects or advisory roles
● Facilitators, mediators, or instructors for specific City programs
All proposed personal service engagements must be submitted to the City Manager and routed through the City
Attorney for case-by-case evaluation and approval to determine whether the exemption applies. IT must
review/approve all technology related purchases. Departments must provide written justification that clearly
outlines the individual’s specific qualifications and explains how the nature of the service meets the statutory and
judicial criteria for exemption.
Contract Approval Requirements
All contracts for professional or personal services—whether exempt under Texas Government Code Chapter 2254
or Local Government Code Section 252.022—must follow the City’s formal approval and documentation process
to ensure compliance, transparency, and fiscal accountability. Contracts must be:
● Reviewed and approved by the City Attorney for legal sufficiency.
● Approved by the City Manager prior to execution.
● Approved by the City Council if the total contract value is $100,000 or more, in accordance with City
policy and state law.
● Submitted to the Purchasing Department for the issuance of a Purchase Order (PO) before any work
begins or payment is made; and
● Filed with the City Secretary following full execution, in accordance with City records retention and policy
requirements.
The issuance of a Purchase Order is required for all professional and personal service contracts, regardless of
bidding exemptions, to ensure proper authorization, budget verification, and compliance with procurement
procedures.
Sole-Source Exemptions
In limited circumstances, purchases may be exempt from competitive procurement requirements if the goods or
services are available from only one source. These are known as sole-source procurements, and they are permitted
under Texas Local Government Code § 252.022(a)(7) when competition is not feasible. A sole source exemption
may be appropriate when:
● The product or service is proprietary and available only from a single provider.
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● The item is compatible with existing equipment or systems and must be procured from the original
manufacturer or a single authorized distributor. ● The purchase involves specialized services or equipment for which no other source is reasonably
available.
● The provider holds exclusive rights, patents, or intellectual property preventing competition.
Requirements for Sole Source Justification
All sole-source purchases must be supported by a written sole-source justification memo prepared by the
requesting department. The justification must include:
● A clear explanation of why the goods or services are only available from one source;
● Efforts made to identify alternative sources, if any;
● A description of how the item or service is essential to City operations;
● Any documentation from the vendor supporting sole source status (e.g., letter of exclusivity). ● Obtain IT review/approval for all technology related purchases.
The written justification must be approved by the Purchasing Manager prior to issuance of a Purchase Order.
Special Considerations:
● Price reasonableness must still be evaluated and documented, even for sole source purchases.
● Sole source purchases are subject to annual review, and new supporting documentation must be submitted
each fiscal year to justify continued use of the sole source exemption. This requirement ensures the City
maintains transparency, verifies that the conditions justifying sole source procurement remain valid, and
upholds compliance with applicable state and federal procurement regulations. Failure to provide updated
documentation may result in the denial of the exemption and the need to initiate a competitive solicitation
process.
● Sole source designation does not exempt the purchase from approval requirements. Purchases that meet
or exceed the financial threshold requiring City Manager approval must be reviewed and approved by the
City Manager. Purchases that meet or exceed the threshold requiring City Council action must be presented
to and approved by the City Council, regardless of sole source status.
Legal Authority
In accordance with Texas Local Government Code § 252.022(a)(2) and (3), competitive bidding requirements may
be waived when the immediate purchase of goods or services is necessary to:
● Protect the public health, safety, or welfare of the City’s residents; or
● Respond to unforeseen damage to public property, equipment, or infrastructure.
Emergency purchases must be limited to only those materials, services, or equipment necessary to address the
immediate need. When feasible, departments should still obtain written quotes to ensure prudent use of public
funds.
Authorization and Documentation Requirements
The following procedures must be followed to the greatest extent possible during and immediately after the
emergency:
● Written Justification: Emergency purchases exceeding $5,000 must be documented in a written
memorandum prepared by the Department Director.
● The memo must include: ○ A description of the emergency.
○ The items or services procured.
○ The estimated or actual cost.
○ A statement explaining why competitive bidding procedures could not be followed.
● The Department Director must notify the City Manager as soon as practical and no later than the next
business day when an emergency purchase is made outside normal bidding requirements.
● All emergency purchases must be reviewed by the City Manager promptly after the emergency has been
addressed. If the purchase exceeds the applicable financial threshold, it must be presented to the City
Council for formal acknowledgment or approval in accordance with City policy.
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● Cyber Incident Exception: When the City Manager (or designee) declares a cyber incident, the IT Director
may procure containment/monitoring/IR tooling and services immediately. The Department Director
memo (within 1 business day) must include the incident ticket, scope, vendor(s), estimated cost, and
reason normal bidding could not be followed.
● For federally declared emergencies, all emergency purchases must also comply with applicable federal
procurement standards under 2 CFR § 200, including:
○ Cost or price analysis;
○ Documentation of non-competitive procurement justification;
○ Compliance with federally required contract clauses.
Purchasing Department Notification
Departments must notify the Purchasing Department as soon as reasonably possible following an emergency
purchase. The Purchasing Department will assist in reviewing and completing the required documentation, ensure
compliance with applicable procurement requirements, and retain records in accordance with City, state, and
federal standards.
Technology-Related Purchases
All requests for computer hardware, software, telecommunications equipment, and related services or supplies
must be submitted to the Information Technology (IT) Director for review and technical evaluation. The IT Director
is responsible for assessing compatibility with existing systems, identifying the most appropriate source, evaluating
potential alternatives, and making a formal recommendation regarding the purchase.
No purchases of technology-related equipment, software, or services may be made without prior review and
approval from the IT Director. This requirement ensures consistency, system integration, cost-effectiveness, and
adherence to City technology standards.
Technology-related purchases include, without limitation: software (on-prem or cloud), SaaS subscriptions and
renewals, add-on modules or integrations, professional services related to systems, managed/hosted telecom,
mobile device management, multifunction devices with storage, IoT/OT devices, audio/visual systems, security
systems (access control, CCTV/ALPR, body cameras), payment systems, and any device or service connecting to
City networks.
Technology procurements must comply with the Electronic Communications Systems policy (City of Huntsville
Policy & Procedures Manual §12.09).
Expanded Requirements for Cloud-Based Software Vendors
Vendors with access to City data must provide evidence of cybersecurity controls (e.g., SOC 2 Type II or equivalent).
Annual third-party attestation of these controls is required. Vendors must also provide summary results or letters
of attestation for annual vulnerability or penetration tests, along with remediation confirmation upon request.
The City retains ownership of all data and must be granted export rights. Data exports must be provided in a non-
proprietary, accessible format (e.g., CSV, XML, JSON). Within 30 days of contract termination, vendors must provide
all City data exports in the aforementioned non-proprietary accessible format and obtain written confirmation of
successful receipt and verification from the City IT Director prior to any data deletion. Vendors must then certify
secure deletion of all City data, including backups, within 30 days of receiving such confirmation, and provide a
destruction certificate to the City IT Director.
Vendors must agree to City audit rights for data security and service compliance. The City reserves the right to audit
or request independent verification of vendor security and privacy practices, including review of incident response
records, access control logs, and subprocessor agreements. Vendors providing cloud-based or data-hosting
services to the City shall ensure that all City data, including backups and disaster-recovery systems, is stored and
processed within the continental United States. No confidential or restricted data may be transferred,
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stored, or accessed from outside the U.S., in accordance with applicable state cybersecurity guidelines and industry
best practices. Vendors must provide documentation confirming U.S.-based data centers upon request. Failure to
comply may result in disqualification or contract termination.
Vendors must implement and maintain the following minimum technical and administrative controls:
● Access and Authentication: Require multifactor authentication (MFA) for all administrative accounts;
support Single Sign-On (SSO) via SAML or OIDC; enforce least-privilege access.
● Incident Notification and Cooperation: The Vendor is required to notify the City IT Director within 24 hours
of any actual or suspected data breach, security incident, or unauthorized access. Furthermore, the Vendor
must fully cooperate with any City investigations by providing relevant logs, forensic data, and details of
mitigation actions taken.
● Data Protection: Encrypt City data at rest and in transit using current NIST-approved standards (e.g.,
AES-256, TLS 1.2 or higher).
● System Resilience: Maintain defined Recovery Time Objectives (RTO) and Recovery Point Objectives (RPO);
perform annual disaster-recovery and business-continuity testing with documented results.
● Subprocessors: Disclose all subcontractors or subprocessors handling City data prior to engagement and
ensure equivalent security and privacy safeguards.
● Regulatory Compliance: Comply with applicable regulations, including CJIS, HIPAA, PCI DSS, and Tx-RAMP
when relevant. Provide supporting documentation or certification upon request.
● Right to Suspend Connectivity: The City reserves the right to immediately disable system connectivity to
any vendor environment determined to pose a material cybersecurity or privacy risk.
Vendors must maintain active Cyber Liability Insurance with minimum coverage of $1,000,000 per occurrence,
including first-party coverage for data restoration, incident response, regulatory defense, and notification costs.
Proof of coverage must be provided at contract execution and upon each renewal.
Purchases Funded by Grants
Purchases made with grant funds are subject to specific procurement requirements set forth by the awarding
agency. These requirements may differ from the City’s standard purchasing procedures and often include
additional federal or state mandates, documentation, and reporting obligations.
To ensure compliance:
● Departments must coordinate with the Grants Manager for all purchases funded by grant awards. The
Grants Manager will assist in interpreting grant conditions and ensure that procurement activity aligns with
the grant's approved scope and budget.
● A copy of the grant agreement must be provided to the Purchasing Department at the time a requisition is
submitted for a Purchase Order or when initiating a formal solicitation process.
● The Purchasing Department will review the grant agreement to identify and apply any applicable
procurement requirements, including those outlined in Title 2 of the Code of Federal Regulations (2 CFR),
Part 200, specifically §§ 200.317 through 200.327. These may include, but are not limited to:
○ Required federal contract clauses;
○ Competitive procurement thresholds;
○ Solicitation transparency and outreach;
○ Cost and price analysis;
○ Bonding requirements;
○ Use of small, minority, and women-owned businesses;
○ Documentation and record retention.
Failure to follow applicable grant procurement requirements may result in disallowed costs, grant repayment, or
loss of funding eligibility. Therefore, it is essential that departments engage Purchasing early in the planning process
for any grant-funded purchase.
The Purchasing Department and Grants Manager will work collaboratively with user departments to ensure that
all procurement activities conducted under a grant award are fully compliant, properly documented, and
audit-ready.
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Change Orders
Change orders may be used to increase or decrease the quantity of work, materials, or supplies under an awarded
competitive bid solicitation, subject to applicable provisions of Texas Local Government Code 252.048. Changes
generally may not increase or decrease the original contract price by more than 25%; decreases exceeding 25% require
contractor approval, while increases beyond 25% require separate procurement for the additional work or materials.
Change orders must be approved by the City Council or properly delegated authority in accordance with applicable
statutory and City requirements, and all change orders shall be documented and executed in writing.
Even after a bid has been awarded, a city may still increase or decrease the quantity of work to be done or the materials
or supplies to be furnished through the use of a change order. Such changes may not increase or decrease the original
contract price by more than 25 percent. If the city wants to decrease the contract amount by more than 25 percent, it
needs to obtain the approval of the contractor for the change. There is no comparable authority for the city to simply
gain contractor approval to increase the amount of the order by more than 25 percent. In such a situation, the city
would need to seek bids or proposals for the work or products that would be beyond the 25 percent amount.
The city council may also delegate to city staff the authority to approve such change orders if it involves less than a
$50,000 decrease or increase in the contract amount. If a change order for a public works contract in a city with a
population of 240,000 or more involves a decrease or increase of $100,000 or less, or a lesser amount as provided by
ordinance, city council may delegate to city staff the authority to approve such change orders.
These change order approval requirements outlined in Section 252.048 of the Government Code apply only to change
orders for contracts awarded through the competitive bidding procedures required under Section 252.021.
With regard to change orders to public works contracts, cities should be aware that a vendor or a subcontractor may
elect not to proceed with the additional work if: (1) the change order is unsigned; and (2) the aggregate actual or
anticipated value of the additional work plus any other outstanding additional work requests exceeds 10 percent of
the original contract amount. A vendor or a subcontractor in this instance would not be responsible for damages
associated with the choice not to proceed. This provision is applicable to all public works contracts, regardless of
whether the contract was awarded through the competitive bidding procedures required under Section 252.021.
Insurance Requirements
Change orders may be used to increase or decrease the quantity of work, materials, or supplies under an awarded
competitive bid solicitation, subject to applicable provisions of Texas Local Government Code 252.048. Changes
generally may not increase or decrease the original contract price by more than 25%; decreases exceeding 25%
require contractor approval, while increases beyond 25% require separate procurement for the additional work or
materials. Change orders must be approved by the City Council or properly delegated authority in accordance with
applicable statutory and City requirements, and all change orders shall be documented and executed in writing.
Even after a bid has been awarded, a city may still increase or decrease the quantity of work to be done or the
materials or supplies to be furnished through the use of a change order. Such changes may not increase or decrease
the original contract price by more than 25 percent. If the city wants to decrease the contract amount by more than
25 percent, it needs to obtain the approval of the contractor for the change. There is no comparable authority for
the city to simply gain contractor approval to increase the amount of the order by more than 25 percent. In such a
situation, the city would need to seek bids or proposals for the work or products that would be beyond the 25 percent
amount.
The city council may also delegate to city staff the authority to approve such change orders if it involves less than a
$50,000 decrease or increase in the contract amount. If a change order for a public works contract in a city with a
population of 240,000 or more involves a decrease or increase of $100,000 or less, or a lesser amount as provided
by ordinance, city council may delegate to city staff the authority to approve such change orders.
These change order approval requirements outlined in Section 252.048 of the Government Code apply only to change
orders for contracts awarded through the competitive bidding procedures required under Section 252.021.
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With regard to change orders to public works contracts, cities should be aware that a vendor or a subcontractor may
elect not to proceed with the additional work if: (1) the change order is unsigned; and (2) the aggregate actual or
anticipated value of the additional work plus any other outstanding additional work requests exceeds 10 percent of
the original contract amount. A vendor or a subcontractor in this instance would not be responsible for damages
associated with the choice not to proceed. This provision is applicable to all public works contracts, regardless of
whether the contract was awarded through the competitive bidding procedures required under Section 252.021.
General Requirement
Vendors and contractors performing work for the City of Huntsville shall furnish and maintain, at their own
expense, insurance coverage that meets or exceeds the minimum requirements outlined below. A Certificate of
Insurance must be submitted to the City prior to issuance of a purchase order or commencement of work.
Required Coverages
The following insurance coverage types and minimum limits shall apply to most contracts. Requirements may be
imposed depending on the nature and scope of the services being provided.
● Commercial General Liability
○ $1,000,000 per occurrence ○ $2,000,000 general aggregate
○ Must include coverage for products/completed operations at a minimum of $1,000,000 per
occurrence.
○ The City must be named as an Additional Insured by endorsement.
● Commercial Automobile Liability
○ $300,000 combined single limit per occurrence
○ Must include coverage for owned, non-owned, and hired vehicles.
● Workers’ Compensation and Employer’s Liability
○ Coverage must comply with all applicable Texas Workers’ Compensation laws.
○ A waiver of subrogation in favor of the City of Huntsville must be included by endorsement.
● Professional Liability Insurance (if applicable)
○ Required for contracts involving professional services (e.g., architectural, engineering, legal,
financial, consulting):
○ Minimum limit of $1,000,000 per claim
○ Coverage shall be maintained for the duration of the contract and for a minimum of two (2) years
after final completion or termination of services.
● Cyber Liability Insurance (if applicable)
○ Required for vendors with access to the City’s networks, systems, confidential data, or personally
identifiable information (PII):
○ Minimum limit of $1,000,000 per claim
○ Coverage must include, at a minimum: data breach response and notification, business
interruption, cyber extortion, and network security liability.
Additional Requirements
The Certificate of Insurance must include the following endorsement language in the Description of Operations:
“Blanket Additional Insured is added in favor of the certificate holder with respect to general liability coverage as
required by written contract. Blanket Waiver of Subrogation is added in favor of the certificate holder with respect
to workers’ compensation coverage as required by written contract.”
Certificate Holder shall be listed as:
City of Huntsville
1212 Avenue M
Huntsville, TX 77340
Policies must provide 30 days’ advance written notice to the City of cancellation, non-renewal, or material
change in coverage.
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The City of Huntsville reserves the right to request certified copies of insurance policies and endorsements at any
time. Insurance coverage must remain in force for the duration of the contract and any extension periods. Failure
to maintain required insurance may result in contract suspension or termination.
Travel
The City employee travel related reimbursements shall comply with the City's Travel Policy, applicable current U.S.
General Services Administration (GSA) rates, and approved budgetary requirements. Reimbursement is limited to
authorized, necessary, and reasonable business expenses, supported by required documentation and submitted within
established deadlines. Employees are expected to utilize the most economical mode of travel available, and all travel
expenditures, including transportation, lodging, meals, and mileage, shall be reimbursed in accordance with the
provisions and limitations established in the City's Travel Policy.
Purchasing Card Program
Any violations of this policy will be considered misuse and may result in disciplinary action.
Program Overview
The City of Huntsville’s Purchasing Card (P-Card) Program is designed to streamline the procurement of low-dollar
goods and services, particularly for travel and training-related expenses. The program offers an efficient alternative
to traditional purchasing methods for allowable purchases under $5,000, while maintaining accountability,
transparency, and compliance with City policy, the City Charter, and applicable state law. Software or SaaS (new or
renewal), cloud credits, and technology services may not be purchased with a P-Card without documented IT
Director approval and a Purchase Order; this applies to any dollar amount.
Program Oversight
The P-Card Program is administered by the Purchasing Card Administrator within the Purchasing Department. This
individual is responsible for training, issuing and maintaining cards, monitoring usage, coordinating billing, and
providing periodic reports to the Director of Finance.
Cardholder Eligibility and Agreement
To participate in the program, employees must be authorized by their Department Head and approved by the City
Manager’s Office. Cardholders must sign a Cardholder Agreement acknowledging receipt of the card and
responsibility for compliance with the Purchasing Card Program policies. This agreement outlines the terms of use,
restrictions, and the consequences of non-compliance.
Primary Use and Restrictions
The Purchasing Card is intended for travel and training related expenses and low-dollar incidental
purchases where the use of a Purchase Order (PO) is impractical Purchases should not be made with a P-
Card when:
● The vendor has a billing account with the City. In such cases, departments must contact the
Purchasing Department for a PO number and use the billing arrangement.
● The purchase exceeds $3,000 without HUB vendor verification from the Purchasing Department.
● The purchase exceeds $5,000 without prior approval from the Finance Director. (Coordinate with
the Program Administrator to ensure all purchasing policies and documentation requirements are
met.)
● The purchase involves controlled, restricted, or capital items (unless approved).
● The item or service is otherwise restricted under City or State policy.
Prohibited Expenditures
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In accordance with the Texas Local Government Code § 271.903, the City of Huntsville Charter, and
applicable City ordinances, P-Cards may not be used for:
● Alcoholic beverages
● Personal expenses of any kind
● Gifts or donations not authorized by City Council
● Cash advances
● Split transactions intended to circumvent dollar thresholds
● Entertainment expenses unrelated to official City business
● Fuel for personal vehicles, unless approved for specific travel
Sales Tax Exemption
The City of Huntsville is exempt from state and local sales tax on all purchases, in accordance with applicable tax
laws. Employees making purchases on behalf of the City are responsible for informing vendors of the City’s
tax-exempt status prior to completing any transaction. It is the responsibility of the cardholder or end user to
ensure that sales tax is not charged or paid. If sales tax is inadvertently billed, the cardholder must request a
corrected invoice or reimbursement.
A copy of the City’s Sales Tax Exemption Certificate is available from the Finance Department upon request.
Receipts and Required Documentation
● All cardholders are required to submit itemized receipts for each purchase. For meals, the receipt must:
○ Clearly identify each attendee;
○ Include the business purpose of the meeting or event;
○ Be accompanied by the “Credit Card Meal Receipt” form, available on the City of Huntsville
Intranet.
● In cases where a receipt is lost, the cardholder must complete the “Record of Lost Procurement Card
Receipt” form, also available on the Intranet, and submit it with their monthly reconciliation. Lost receipts
must be an exception, not a regular occurrence.
● Habitual or single occurrence issues could result in termination of card privileges, written reprimand,
reimbursement, or up to employment termination. Examples include but are not limited to:
o Repeated loss of receipts,
o Unauthorized or unapproved business purchases,
o Personal charges on the card (even if reimbursed),
Meal and Business Expense Requirements
For meals and hospitality charges to be reimbursable under federal guidelines (e.g., 2 CFR § 200.432), they must
meet the following criteria:
● Serve a valid business purpose;
● Be reasonable and necessary;
● Be properly documented with itemized receipts and purpose/attendee list;
● Be approved as part of a travel or training activity or a Council-authorized event.
Disputes and Billing Errors
● Cardholders must make every reasonable effort to resolve disputes or billing errors directly with the
vendor. If the vendor acknowledges the error, a credit should be issued to the purchasing card account.
● If a resolution cannot be reached with the vendor, the cardholder should contact JP Morgan using the
number listed on the back of the purchasing card. JP Morgan may require the submission of a Statement
of Disputed Item to document the issue. ● Disputes must be reported to JP Morgan within 30 calendar days of the transaction date. Cardholders are
encouraged to review statements promptly and initiate contact with vendors within 5 business days of
identifying a discrepancy to allow sufficient time for resolution and escalation if needed.
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● If an acceptable resolution cannot be obtained, the Purchasing Card Program Administrator is available to
assist with resolving the issue. The full amount billed by JP Morgan will be charged to the department’s
account. A credit will be applied to the same account once the issuing bank processes the adjustment.
When to Use a Purchase Order Instead
If a vendor has a billing account with the City of Huntsville, the P-Card should not be used. The department must:
● Confirm with the Purchasing Department whether the vendor is on account;
● Request a Purchase Order (PO) number, usually an Annual Purchase Order;
● Process the purchase through standard billing procedures.
This practice helps maintain centralized vendor billing, ensures appropriate controls, and avoids duplicate
payments.
Enforcement and Compliance
The Purchasing Card is a privilege, not an entitlement. The cardholder is personally responsible for:
● Ensuring all purchases comply with City policies and funding source requirements;
● Submitting receipts and required forms timely;
● Reporting lost or stolen cards immediately;
● Returning the card upon transfer, resignation, or termination.
Any misuse of the card may result in revocation of card privileges, disciplinary action, and/or repayment of
unauthorized charges, consistent with the City’s personnel policies and applicable law.
Disposition of Surplus Property
The City shall dispose of surplus, obsolete, damaged, or unusable property in accordance with applicable
provisions of the applicable state and federal laws, the City Charter, and City policies. All property disposals shall
be authorized, documented, and conducted in a manner that ensures transparency, accountability, fair market
value when required, and responsible stewardship of public assets. Disposal methods, including transfer, trade-
in, public sale, auction, recycling, donation when authorized, or destruction, shall comply with applicable
provisions of the Texas Local Government Code and established City financial and asset management procedures.
All sales or auctions shall be conducted in a fair, transparent manner and properly documented, with proceeds
deposited into the appropriate City fund and the City's fixed-asset and inventory records updated accordingly.
Real property shall be disposed of separately in accordance with applicable provisions of Texas Local Government
Code Chapters 253 and 272, including required public notice, bidding, appraisal, or public auction requirements.
No City employee or official shall dispose of, purchase, or otherwise acquire City property except through an
authorized disposal process. All disposals shall be supported by appropriate records identifying the property,
authorization, method of disposal, purchaser or recipient when applicable, sale proceeds, and final disposition.
Sale or Lease of Real Estate
Authority and Purpose
The sale or lease of City-owned real estate shall be conducted in accordance with the requirements set forth in
Texas Local Government Code Section 272 and the City of Huntsville Charter, Sections 14.12 and 14.13(a)–(b). The
purpose of this section is to establish procedures and guidelines to ensure that all real estate transactions are
carried out in a manner that is transparent, legally compliant, and consistent with the responsibilities of the City
Council, City Management, and the public.
Real Estate Management and Delegation of Authority
Except as otherwise provided in this policy, the City Council delegates to the City Manager the authority to manage
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and maintain all real estate owned or controlled by the City of Huntsville.
Responsibilities of the City Manager
The City Manager, or a designated representative, shall be responsible for the care, maintenance, safekeeping, and
inventory of all City-owned real estate, including the proper handling and retention of deeds and related
documentation.
Sale of Public Parks
In accordance with City Charter Section 14.13(a), no public park, or any portion thereof, may be sold unless the
proposed sale has been submitted to a vote of the qualified voters of the City and approved by a majority of those
voting.
Approval Authority for Real Estate Transactions
The sale or lease of any City-owned real estate shall require the express approval of the City Council.
Sale of Real Estate
The City Manager shall provide written notification to the City Council of the intent to sell real estate no fewer than
twenty-one (21) calendar days prior to initiating any sale procedures. If a Councilmember objects to the proposed
sale, written notice must be submitted to the City Manager. Upon receipt of such objection, the item may be placed
on the next available City Council agenda for discussion and action. If no written objections are received, the City
Manager is authorized to proceed with the sale process beginning on the twenty-second (22nd) calendar day.
Fair Market Value Requirement
City-owned real estate shall not be sold for less than its fair market value, as determined by an independent,
licensed appraiser.
Methods of Sale
City-owned real estate may be sold using one of the following methods:
● Invitation for Bid (IFB): A competitive sealed bid process, with award to the highest responsive and
responsible bidder based solely on price; or
● Brokered Sale: A private sale facilitated by a real estate broker licensed under Texas Occupations Code
Chapter 1101, in accordance with Texas Local Government Code Section 272.001(b). The property must be
listed for at least thirty (30) days on a Multiple Listing Service or other service commonly used by real estate
professionals.
● Public Auction: A sale conducted by a licensed auctioneer or auction firm in accordance with applicable
state and local laws. The property must be advertised publicly in advance of the auction date, and the sale
must be awarded to the highest qualified bidder.
Public Notice Requirements
In accordance with City Charter Section 14.13(b), the Purchasing Department shall publish notice of the proposed
sale in the City’s official newspaper on each publication day for two consecutive weeks, regardless of the method
of sale. The sale shall not be finalized until at least fourteen (14) calendar days have passed from the date of the
last publication.
The notice shall include:
● A legal description and location of the property;
● The method of sale (IFB, brokered sale or public auction);
● Instructions for submitting bids or offers, if applicable;
● The date, time, and location of bid opening (for IFB); and
● Any other relevant sale procedures.
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Invitation for Bid Procedures
When using the IFB method, the following requirements apply:
● The City reserves the right to accept or reject any or all responses.
● All responses must be submitted in sealed envelopes addressed to: Attention: City Secretary, City Hall.
● The date, time, and location of the bid opening must be clearly stated in the solicitation and notice.
● If fewer than two responses are received by the published deadline, the opening shall be automatically
extended for a minimum of twenty-four (24) hours. An addendum shall be issued promptly to
communicate the extension. No responses may be opened until the revised deadline has passed. After the
revised deadline, the City Manager may issue a second extension or authorize bid opening.
Retention of Mineral Rights
All mineral rights associated with the property shall be retained by the City unless expressly approved for sale by
City Council.
Final Recommendation and Council Action
The City Manager shall present a final recommendation to the City Council on whether to approve the sale or reject
all responses or offers, regardless of the method used.
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Glossary of Terms
2 CFR Part 200 (Uniform Guidance): Federal regulations for federal awards to non-federal entities.
Procurement must comply with §§ 200.317 - 200.327 when using federal funds.
Addendum (plural: Addenda): A written instrument issued by the City that modifies or clarifies a
solicitation prior to the due date.
Annual Blanket Purchase Orders: A fixed-price agreement used for routine, recurring purchases
throughout the fiscal year. These purchase orders are commonly utilized for goods or services required
by multiple departments and help streamline procurement by eliminating the need to issue multiple
individual POs for similar items (e.g., periodic purchases of sack concrete). Although typically tied to a
single fiscal year, blanket purchase orders may extend across fiscal years when supported by an active
contract that specifies a valid term beyond one year.
Best Value: A procurement method in which award is based on an evaluation of factors beyond price
alone, with consideration given to the overall value to the City over the life cycle of the good or service.
Evaluation criteria may include, but are not limited to: price, quality, vendor location, safety record, past
performance or relationship with the City, and any other relevant factors specifically identified in the
solicitation.
Bonds: Financial instruments required to protect the City's interests in the procurement and execution
of certain contracts, particularly in public works projects.
● Bid Bond: A bond submitted with a bid to ensure that the bidder, if awarded the contract, will
enter into an agreement with the City under the terms proposed.
● Payment Bond: A bond that guarantees payment to subcontractors, suppliers, and laborers
providing goods or services under the contract. Required for all public works contracts exceeding
$50,000.
● Performance Bond: A bond that ensures satisfactory completion of a contract and protects the
City in the event of contractor default or failure to perform. Required for public works contracts
exceeding $100,000. (Also referred to as a “completion bond.”)
Blanket Additional Insured Endorsement: A provision in a general liability insurance policy that
automatically includes the City of Huntsville as an additional insured under specific contract conditions.
Capital Assets: Tangible assets that, at the time of acquisition, have a value or cost of $5,000 or more
and a useful life exceeding one year. Capital assets must be recorded in the City’s asset management
system, and a City of Huntsville ‘Addition to Asset Form’ must be completed and assigned an official
asset number.
Change Order: A formal written modification to an existing contract that alters the original scope of work,
specifications, quantities, contract amount, or performance timeline. Change orders are typically issued
to address unanticipated conditions, regulatory requirements, or changes in project needs, and may
result in an increase, decrease, or no change in cost or time.
Cloud-Based Services: Software, storage, or computing services delivered via the internet and hosted on
external servers. Cloud-based vendors must meet cybersecurity and data residency requirements
specified by the City.
Component Purchases: The purchase of individual components or parts of an item that, under normal
purchasing practices, would be acquired in a single purchase. Component purchases may be considered
a violation if used to circumvent competitive bidding requirements, particularly when the complete item
has previously been competitively bid or should be treated as a single procurement.
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Debarment: The formal disqualification of a vendor from participating in future City procurements for a
specified period due to documented non-performance, unethical conduct or other violations.
Due Date: The specific date and time by which a quote, bid, proposal, or other solicitation response must
be received by the City. Submissions received after the due date are considered late and will not be
accepted or evaluated.
Emergency Purchase: A procurement made to address a critical, unforeseen situation in which the City’s
ability to protect public health, safety, or welfare would be significantly impaired if the purchase is not
made without delay. Emergency purchases must be limited to those goods or services necessary to
respond to the immediate situation.
Encumbrance: The accounting process by which the City reserves funds to cover the anticipated cost of
goods or services, thereby reducing the available budget balance for the applicable period. Encumbrances
ensure that funds are set aside when a purchase order or contract is issued, helping to maintain budgetary
control.
Formal Procedure: A competitive solicitation process in which responses must be submitted in a sealed
envelope to the City Secretary’s Office by the specified due date and time. Responses are publicly opened
in the presence of representatives from the requesting department and the Purchasing Division. Formal
procedures are required for City purchases exceeding $100,000, in accordance with applicable state and
local procurement regulations.
Historically Underutilized Businesses HUBs: Businesses that are at least 51% owned by one or more
individuals who are socially and economically disadvantaged, including minority- and women-owned
businesses, as certified by the State of Texas. For purchases of $53,000 or more but less than
$100,000, departments must, when applicable, contact at least two HUBs using a rotational system based
on the State Comptroller’s HUB directory. If no HUBs are identified in Walker County, the City is exempt
from this requirement.
Informal Procedure: Solicitation process used for purchases below the formal bidding threshold, in which
responses are submitted directly to the requesting department. Responses may be received by electronic
means (e.g., email), facsimile, or physical delivery. Informal procedures are typically used to expedite
procurement while maintaining fairness and competition.
Individual One-Time Purchase: A purchase made at the department level for a specific good or service
that is typically required only once during a fiscal year. These purchases are non-recurring in nature and
do not warrant a blanket or contract purchase. Individual one-time purchases remain subject to all
applicable City purchasing thresholds, approval requirements, and competitive purchasing procedures
based on the total dollar value of the purchase. A purchase made at the department level for a specific
good or service that is typically required only once during a fiscal year. These purchases are not recurring
and do not warrant a blanket or contract-based procurement.
Invitation for Bids (IFB): A formal solicitation method used when the City is seeking competitive bids for
goods, equipment, or services that are clearly defined and for which an award can be based on the lowest
responsive and responsible bidder. An IFB includes detailed specifications, contract terms, and
submission requirements. Price is the primary factor in the award and negotiations are not conducted.
Piggyback Cooperative: A form of intergovernmental cooperative purchasing in which one governmental
entity leverages the pricing, terms, and conditions of a contract awarded by another governmental entity.
The original contract must include language that permits such usage by other public agencies.
Professional Services: Services provided by individuals or firms that require specialized knowledge,
formal education, and professional licensing or certification. These services involve a high degree of skill,
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judgment, and expertise, and are generally exempt from competitive bidding under Texas Government
Code Chapter 2254. Examples include, but are not limited to: accounting, architecture, engineering,
medicine, real estate, and surveying.
Purchase Order: The City’s official written document issued to a vendor that authorizes a purchase and
formalizes the terms and conditions of the transaction. A purchase order serves as a legal agreement
between the City and the vendor for the delivery of specified goods or services at agreed-upon prices.
Real Estate: Land and any buildings, structures, or improvements that are permanently affixed to it.
Request for Proposal (RFP): A formal solicitation method used when the City seeks solutions based on
defined criteria that extend beyond price alone. Respondents are invited to submit proposals offering
the best value to the City, considering factors such as qualifications, methodology, experience, and cost.
The RFP process allows for negotiation of terms and conditions between the City and the selected
proposer prior to contract award.
Request for Qualifications (RFQ): A solicitation method used to procure services that fall under the
definition of Professional Services, as defined by Texas Government Code Chapter 2254. Responses are
evaluated based solely on qualifications, and an award is made to the firm deemed most qualified. Price
is not considered until after the most qualified firm is selected.
Responsible Responder: A respondent who has the capability in all respects to fully meet the
requirements of a solicitation and successfully fulfill the terms of any resulting contract. This includes, but
is not limited to, possessing the necessary skill, experience, integrity, financial and technical resources,
and compliance with all applicable standards and specifications outlined in the solicitation.
Responsive Responder: A respondent who has submitted a bid or proposal that complies in all material
respects with the requirements, specifications, terms, and conditions set forth in the solicitation. This
includes proper completion and submission of all required forms, signatures, and documentation as
outlined in the solicitation package.
Separate Purchases: The procurement of individual items or services in multiple transactions that, under
normal purchasing practices, would be combined into a single purchase. This practice may be considered
a violation if used to circumvent competitive bidding requirements.
SOC 2 Type II: A cybersecurity compliance standard for service organizations that describes controls
relevant to security, availability, processing integrity, confidentiality, and privacy. Required for vendors
handling sensitive or hosted City data.
Sole Source: A procurement method used when goods or services are available from only one known
source, and no reasonable alternative or substitute exists. Sole source purchases must be justified and
documented in accordance with applicable laws and City policy and are typically exempt from competitive
bidding requirements.
Subcontractor: Any individual or business entity engaged by a vendor to provide goods, labor, equipment,
or services that are used in fulfilling the vendor’s obligations under a contract with the City.
Subcontractors operate under the direction of the primary contractor and are not in direct contractual
agreement with the City.
Suspension: A temporary exclusion from the procurement process pending investigation or resolution of
a performance or compliance issue. Suspended vendors may not receive awards during the suspension
period.
Term Purchase Order: A purchase order established for a defined period of time to allow for the recurring
procurement of specified goods or services under agreed-upon terms and pricing. Term purchase orders
facilitate efficient ordering and are typically used when needs are anticipated throughout the duration of
the specified term.
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Value Engineering: A systematic technique used to improve the value of a project by identifying
cost-saving alternatives without compromising quality, performance, or functionality. Under this
approach, a contractor may:
● Voluntarily propose more economical methods or materials and share in any resulting cost
savings; or
● Be contractually required to establish a value engineering program and submit proposals aimed
at reducing costs while maintaining project objectives.
Vendor/Contractor: An individual or business entity that provides goods, equipment, labor, and/or
services to the City in fulfillment of the terms and conditions outlined in an agreement, contract, or
purchase order. The vendor or contractor is responsible for delivering the specified deliverables in
accordance with the City’s requirements.
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APPENDIX A – FLOWCHARTS & DIAGRAMS
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APPENDIX B – Procurement Policies and Procedures for Federal Grant
Funds
Appendix B – Procurement Policies and Procedures for Federal Grant Awards
The City of Huntsville follows the procurement standards outlined in 2 CFR §§200.317 –
200.327 and Appendix II to Part 200 for all procurement actions funded in whole or in part with
Federal grant funds. The City makes every effort to adhere to these requirements and updates its
internal policies and procedures as Federal regulations change.
Because federal programs vary in scope and applicability, the entirety of 2 CFR §§200.317 –
200.327 may not apply to every procurement situation or funding source. This appendix reflects
the current regulatory language and requirements in effect at the time of adoption of these policies
and procedures. Where Federal guidance is revised or superseded, the City will follow the most
current applicable regulations.
Note on §200.317
Section 200.317 applies specifically to States. As a municipal government, the City of Huntsville
is considered a non-federal entity under 2 CFR Part 200 and is therefore required to follow the
procurement standards in §§200.318-200.327 for all procurements funded in whole or in part with
Federal grant funds. The State-specific provisions in §200.317 do not apply to the City.
2 CFR §200.318 – General Procurement Standards
The City of Huntsville follows the general procurement standards established in 2 CFR §200.318
for all procurements funded as a whole or in part with Federal grant funds. The City maintains
documented procurement procedures that are consistent with State and local laws, the City’s
Purchasing Policy, and the federal requirements found in 2 CFR §200.317 through 200.327. These
procedures must be followed by all departments when acquiring goods and services using Federal
funds.
Departments are responsible for providing adequate oversight of contractors to ensure performance
in accordance with terms, conditions, and specifications of their contracts or purchase orders. This
oversight requirement applies through the life of the contract and is a core component of federal
grant compliance.2 CFR §200.318(b) To support this responsibility, the Purchasing Department and the
Grant Management Office are available to provide guidance and assistance to departments on
contract monitoring, documentation, and compliance requirements whenever needed.
This policy establishes the City’s standards of conduct for individuals involved in federally funded
procurement activities. These standards apply to City Council Members, the City Manager,
Assistant City Managers, Department Directors, managers, supervisors, employees, and any agents
or representatives acting on behalf of the City in the selection, award, or administration of federally
funded contracts. Individuals subject to these standards may not participate in a procurement if
they have a real or apparent conflict of interest. A conflict exists
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when an individual, a member of their immediate family, their partner, or an organization
employing or seeking to employ any of these parties has a financial or personal interest in a firm
competing for a contract.2 CFR §200.318(c) (1) & (c) (2)
These individuals may not solicit or accept gifts, gratuities, or favors from contractors or
subcontractors, except for unsolicited items of nominal value, defined for these purposes as $25 or
less. Violations of these standards may result tin disciplinary action consistent with City personnel
policies. Because the City does not have parent, subsidiary, or affiliated entities, organizational
conflicts of interest are not anticipated; however, if such situation were ever to arise, the City will
develop appropriate written standards to ensure impartiality in the procurement process. 2 CFR
§200.318(c)(2)
Departments must avoid acquiring unnecessary or duplicative items and should evaluate
opportunities to consolidate or separate procurements when doing so may result in more economic
outcomes. When appropriate, departments should conduct lease-versus-purchase analysis or other
cost-effectiveness evaluations to determine the most economical approach.2 CFR
§200.318(d)
To promote efficiency and cost savings, the City is encouraged to use intergovernmental
agreements, cooperative purchasing contracts, and other shared-service arrangements when
appropriate. These practices must still comply with all applicable federal competition
requirements. Departments are also encouraged to use Federal excess or surplus property when
feasible and cost-effective instead of purchasing new equipment. .2 CFR §200.318(e) & (f)
For construction projects of sufficient size or complexity, the City may include value engineering
provisions designed to identify opportunities for cost reductions while maintaining essential
functionality. 2 CFR §200.318(g) Contracts funded with Federal grant dollars will be awarded only to
responsible contractors that demonstrate integrity, compliance with public policy, satisfactory
performance history, and adequate financial and technical resources. The City will also comply
with federal suspension and debarment requirements found in 2 CFR §200.214. 2 CFR §200.318(h)and
§200.214
The City will maintain procurement records that document the history of each procurement action.
These records must identify the method of procurement used, the rationale for selecting that
method, the basis for contractor selection or rejection, the contract type chosen, and the basis for
the contract price. Records must be sufficient to meet federal audit and monitoring standards.2
CFR §200.318(i)
Time-and-materials contracts may be used only when no other contract type is suitable and only
when the contract contains a not-to-exceed price that the contractor may not exceed at its own risk.
Departments using this type of contract must exercise a higher degree of oversight to ensure
efficient performance and appropriate cost controls. 2 CFR §200.318(j) Before execution, any time-
and-materials contract to be charged to a Federal award must be reviewed and approved by the
City Attorney’s Office and, when required by the terms of the Federal program, by the Federal
awarding agency or pass-through entity.
§200.319 Competition
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All procurements conducted by the City of Huntsville using Federal grant funds must be carried
out in a manner that provides full and open competition, consistent with the requirements of 2 CFR
§200.319 and §200.320. Ensuring open competition is not only a federal requirement – it also helps
the City obtain the vest value and maintain public trust in the integrity of its purchasing process.
To support objective contractor performance and avoid unfair competitive advantage, the City will
not allow a contractor, consultant, or firm that prepares or assists in preparing specifications,
statements of work, requirements, or solicitation documents to compete for the same procurement.
2 CFR §200.319 (b) In practice, this means that anyone who helps shape the scope of work may not later
submit a proposal for it. This separation protects both the City and the fairness of the process.
The City must also avoid procurement practices that may restrict competition. Federal guidance
provides several examples of what this looks like in the real world, including setting unreasonable
qualification requirements; demanding unnecessary experience or excessive bonding; allowing
noncompetitive pricing practices amount firms; awarding noncompetitive contracts to on-on
retainer consultants; permitting organizational conflicts of interest; specifying a single brand name
without allowing an equivalent product; or taking arbitrary action that affects the competitive
process. 2 CFR §200.319 (b) These types of situations can limit competition and must be avoided.
The City must conduct all federally funded procurements in a manner that does not impose state,
local or geographical preferences in evaluating bids or proposals, unless a specific Federal statute
requires or encourages such a preference.2 CFR §200.319(C) This requirement does not prevent the City
from requiring vendors to hold the licenses required under Texas law. This distinction is important
because licensing requirements are legal qualifications – not geographic preferences. When
procuring architectural or engineering services the City may consider a firm’s geographic location
as one of many selection factors, as long as doing so does not reduce the number of qualified firms
able to compete, given the nature and size of the project.
The City maintains written procurement procedures to guide the development and issuance of
competitive solicitations. 2 CFR §200.319 (d) Each solicitation must include a clear and accurate
description of the materials, products, or services being purchased. The description should be
detailed enough to communicate what the City needs but not so restrictive that it narrows
competition unnecessarily. IN some cases, this may include descriptions of the qualitative features
or essential characteristics needed for the intended use. Detailed product specifications should be
avoided, as they can unintentionally limit competition. When it is impractical to develop a
complete technical description, the City may use a “brand name or equivalent” approach, provided
the key performance of functional characterizes are clearly identified. Solicitations must also
identify all requirements that bidders or proposers must meet, as well as all evaluation factors that
will be applied during the selection process.
If the City uses pre-qualified lists of vendors, firms, or products for federally funded procurements,
these lists must be kept current and include enough qualified sources to support
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full and open completion. Additionally, the City may not prevent new vendors from qualifying
during the solicitation period or structure the list in a way that limits compitition.2 CFR §200.319(e)
Finally, the City may award a non-competitive (sole source) procurement only when one of the
limited circumstances permitted under 2 CFR §200.320(c) applies.2 CFR §200.319(f) referencing §200.320(c)
When a department believes that a non-competitive procurement is justified, the rational must be
documented and clearly meet federal standards. All sole-source justifications must be submitted
to the Purchasing Department for review and approval before the procurement method is used or
any contact executed.
§200.320 – Methods of Procurement
The City of Huntsville follows the procurement methods established in 2 CFR §200.320 for all
acquisitions made with Federal grant funds. These methods must be applied together with the
requirements in §§200.317-200.319 and all applicable State and City purchasing rules. When
determining which procurement threshold applies, the City will always use the most restrictive
requirement, whether it is the Federal, State or City threshold.
The City maintains document procurement procedures, as required by 2 CFR §200.318(a), that
describe how each method of procurement must be carried out. These procedures provide a
consistent framework for departments and help ensure compliance with federal and local resources.
Before initiating any purchase using Federal grant funds, whether through micro-purchase, small
purchase, or formal procurement methods, departments are strongly encouraged to consult with
the Purchasing Department or the Grant Management office. Early coordination helps ensure that
the correct thresholds, documentation requirements, and procurement methods are applied and that
the purchase complies with the applicable sections of 2 CFR Part 200.
● Informal Procurement Methods
Informal procurement methods may be sued for purchases that do not exceed the
Simplified Acquisition Threshold defined in the most current version of 2 CFR §200.1,
unless the City has adopted a lower threshold. Informal methods allow the City to
purchase needed goods and services efficiently while still maintaining appropriate
safeguards.
● Micro-Purchases
Micro-purchases are purchases at or below the applicable micro-purchase thresholds
established under the current version of 2 CFR §200.1, unless the City has adopted a
lower internal threshold. These purchases may be made without soliciting competitive
quotations when the prices are reasonable and properly documented. Whenever
practical, micro-purchases should be distributed equitably among qualified suppliers.
The City will follow all requirements in 2 CFR §200.320(a)(1) when determining or
applying the appropriate micro-purchase threshold.
● Small Purchases
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Small purchases are those that exceed the micro-purchase threshold but do not exceed
the Simplified Acquisition Threshold defined in 2 CFR §200.1, unless the City has a
more restrictive internal threshold. For these procurements, the City must obtain price
or rate quotations from an adequate number of qualified sources, consistent with 2 CFR
§200.320(a)(2).
● Formal Procurement Methods
When a purchase is above the level allowed for small purchase procedures, the City must
use one of the formal procurement methods as outlined in 2 CFR §200.320(b). Formal
methods involve public notice, a structured solicitation process and sufficient
documentation to show that the procurement was conducted fairly and in full compliance
with all requirements. As with other thresholds – the City will always apply the most
restrictive requirement – Federal, State, or City – when determining whether formal
methods must be used.
● Sealed Bids
Sealed bids, also known as Invitation for Bids (IFB), are appropriate when complete
and adequate specifications are available, two or more responsible bidders are willing
and able to compete, and the purchase can be awarded primarily on price. Bids must be
publicly advertised, opened at the designated time and place, and evaluated based on
responsiveness and responsibility. The contract is awarded to the lowest responsive
and responsible bidder unless all bids are rejected for clearly documented reasons.
● Competitive Proposals
Competitive proposals are used when sealed bids/IFBs are not suitable. Under this
method the City issues a Request for Proposals (RFP) that identifies all evaluation
factors and their relative importance. Proposals are solicited from an adequate number
of qualified offerors and are evaluated using a written method for scoring and
selection.2 CFR §200.320(b)(2) The contract is awarded to the responsible offeror whose
proposal is most advantageous to the City, considering price and other relevant factors.
For architectural and engineering services, the City must use a qualifications-based
selection method consistent with the Brooks Act and 2 CFR §200.320(b)(2)(iv), in
which firms are evaluated on qualifications first and price is negotiated with the most
qualified firm. This method is required for A/E procurements using federal funds.
● Noncompetitive Procurement (Sole Source)
A noncompetitive procurement may be used only when one or more of the circumstances
in 2 CFR §200.320(c) apply.
● The purchase does not exceed the micro-purchase threshold;
● Only one source is available;
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● A public emergency or exigency will not permit delay
● The Federal awarding agency or pass through entity authorizes the request in
writing; or
● Competition is inadequate after soliciting multiple sources.
Departments requesting a noncompetitive procurement must prepare a written justification
explaining the basis for the request. All sole-source justifications must be reviewed and
approved by the Purchasing Department before a contract is executed. When required by
the Federal award, the justification must also be approved by the Federal awarding agency
or pass through entity.
§200.321 – Contracting with Small and Minority Businesses, Women-Owned Businesses and
Labor Surplus Area Firms
The City of Huntsville is committed to providing fair and inclusive opportunities in all federally
funded procurements. IN accordance with 2 CFR §200.321, the City will take meaningful steps to
encourage the participation of small businesses, minority-owned businesses, women-owned
businesses, and firms located in labor surplus areas whenever feasible. The City will also follow
any additional State-required supplier diversity or HUB requirements, applying the must restrictive
applicable standard when Federal, State, or City requirements differ.
To support this commitment, departments must make reasonable efforts to identify and include
qualified small, minority, women-owned firms in the solicitation process. This may include adding
such firms to vendor lists, reaching out to them when they are potential sources, breaking larger
procurements into smaller components when practical, or setting delivery schedules in a way that
does not necessarily limit their ability to participate. Departments are also encouraged to use
available resources such as the U.S. Small Business administration or the Minority Business
Development Agency when those services can help broaden competition.2 CFR §200.321(b)
The Purchasing Department and the Grant Management office are available to assist departments
with these efforts and can help ensure that all required steps are properly documented in the
procurement file.
§200.3322 Domestic Preferences for Procurement
The City of Huntsville will give preference to goods, products, and materials produced in the
United States whenever doing so is allowed by federal rules and is compatible with project needs
and budget. Federal domestic preference requirements apply to all federally funded contracts,
purchase orders, and subawards, and departments must ensure that any required domestic-origin
language is included in the procurement documents.
Under this requirement, certain materials such as iron, steel, manufactured products and specific
construction materials must meet federal definitions for U.S. production or manufacturing.
Departments should review the applicable federal award terms and consult with the Purchasing
Department and/or the Grant Management office when determining whether a domestic preference
applies to a particular procurement.
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The purchasing Department will assist departments in including the required clauses in bid
documents and contracts, documentation showing how domestic preference requirements were
addressed must be maintained in the procurement file.
§200.323 Procurement of Recovered Materials
The City must follow the requirements of Section 6002 of the Solid Waste Disposal Act and 2
CFR §200.323 when purchasing any products made from recovered materials. These rules apply
whenever the City buys an item that appears on the Environmental Protection Agency’s (EPA) list
of designated products regardless of whether the purchase is funded with federal grant funds or
local City funds. 40 CFR Part 247
Because the EPA updates this list over time, departments should contact the Purchasing
Department before acquiring any product that may fall into a designated recovered materials
category. Purchasing will help determine whether the item is covered, what documentation is
required, and how to ensure compliance with federal standards.
§200.324 Contract Cost and Price Requirements
For any procurement action that exceeds the Simplified Acquisition Threshold, including contract
modifications, the City must complete a cost or price analysis as required by 2 CFR
§200.324. This begins with preparing an independent cost estimate, also know as an ‘ICE’, before
bids or proposals are received.
If competition is limited or unavailable, the City must negotiate profit as a separate element of the
contract price. When negotiating profit, departments should consider the complexity of the work,
the level of risk to the contractor, the contractor’s investment, the amount of subcontracting
anticipated, the contractor’s past performance, and typical industry profit rates for similar work. 2
CFR §200.324(b)
Any contract that includes estimated or reimbursable costs must rely on cost principles allowable
under 2 CFR Part 200, Subpart E, and cost-plus-percentage-of-cost contracts are strictly prohibited
as per 2 CFR §200.324(d).
§200.325 Federal Awarding Agency or Pass-Through Entity Review
Under 2 CFR §200.325, the City must make procurement records available to the Federal awarding
agency or pass-through entity whenever requested. This includes technical specifications,
solicitation documents, independent cost estimates, and any other records needed by the agency to
confirm that the procurement complies with federal requirements.
A Federal agency may request these records before a solicitation is issued or at any point during
the procurement process. The City must all provide documents for pre-procurement review
whenever required by the terms of the federal award or when the circumstances outlined in 2 CFR
§200.325(b) apply.
§200.326 Bonding Requirements
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For construction or facility improvements contracts that exceed the Simplified Acquisition
Threshold, the City will follow the bonding requirements of 2 CFR §200.326. In most cases, the
Federal awarding agency or pass-through entity may allow the City to use its own bonding policies,
provided they determine that the federal interest is adequately protected. If such a determination
is not made, the minimum federal bonding requirements apply.
Under the federal standards, bidders must submit a bid guarantee equal to five percent of the bid
price to ensure that the contractor will execute the contract if awarded. Contractors must also
provide a performance bond for 100 percent of the contract price to guarantee completion of the
work, and a payment bond for 100 percent of the contract price to ensure that subcontractors and
suppliers are paid as required by law.
§200.327 Contract Provisions
When the City enters into a contract using federal grant funds, the agreement must include all
clauses required under 2 CFR §200.327 and Appendix II to 200. The specific clauses that apply
will depend on the type of procurement, the dollar amount, and the nature of the work. These
federally required provisions cover topics such as remedies, termination, equal employment
opportunity, Davis-Bacon, contract work hours and safety standards, rights to inventions, Clean
Air and Water Act compliance, debarment and suspension, anti-lobbying requirements, recovered
materials, and any prohibitions on certain telecommunications equipment.
Purchasing and the Grant Management office will assist departments in determining when
provisions apply to a particular contract to ensure the City remains fully compliant with federal
requirements.
Protest Procedures
The City of Huntsville provides a formal process for respondents – including bidders, proposers,
or any party who has participated in a City solicitation – to raise concerns about how a solicitation
or contract award was handled. The purpose of this process is to ensure fairness, transparency, and
consistency across procurements. All protests are reviewed and decided by the City Attorney or
their designee, who will issue a final decision in writing.
A respondent wishing to file a protest must submit it in writing to the Purchasing Department at
purchasing@huntsville.gov. A pre-award protest must be received no later than five (5) business
days after the respondent becomes aware of the issue being challenged, but before the scheduled
bid opening. A post-award protest must be received no later than ten (10) business days after the
notice of intent award of notice of award is issued. Protests filed after these deadlines will not be
considered.
A protest must clearly identify the solicitation or contract, describe the specific grounds for the
protest, and provide any supporting facts or documentation. Purchasing will acknowledge receipt
and forward the protest and the procurement file to the City Attorney for review.
Upon receiving a timely protest, Purchasing will pause further action on the procurement unless
the City Attorney determines that proceeding is necessary to protect the City’s interests. The City
Attorney will review the protest, evaluate the procurement record, request additional information
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if needed, and issue a written decision. The decision will state whether the protest is granted or
denied and whether any corrective action is required. The determination of the City Attorney or
their designee is final.
All documentation related to the protest, including the protest letter, correspondence and the
written decision, must be retained in the official procurement file.
FY 26-27
City Fund
Water CIP
Camellia from West Green Briar to 1894 Camellia upsize to 12" (1900')990,000$
Veterans Memorial from FM1374 to Woodward 12" (3500')936,000$
10th Street from Old Madisonville to Ave M. 6" & 8" (2000')800,000$
University Avenue from Thomason to FM 247/Ave M 8" (1200')800,000$
Ave Q from 15th Street to 17 Street 6" (1200')800,000$
Total Water CIP 4,326,000$
Wastewater CIP
Elkins Lake #2 (EL 2) Lift Station Rehabilitation+Force Main Replacement 650,000$
Elkins Lake #3 (EL 3) Lift Station Rehabilitation and Expansion 650,000$
Bayes (BA) Lift Station Rehabilitation 74,000$
Rehabilitation and Expansion Hitching Post Lift Station (0.15 to 0.3 MGD)/Combined w/ Project #23 1,500,000$
Sewer line at end of Ross Street 200' of 6" with manhole crossing Town Creek. Manhole and pipe
eroded away. Erosion control for the bank.250,000$
Drainage/Street/Utility Impact Fee Study 750,000$
Total Wastewater CIP 3,874,000$
General Fund CIP
Aquatic Center pool decking and recreation pool replaster 190,000$
Parks improvements 72,000$
Library generators 350,000$
Fire Station Design 75,000$
Total General Fund CIP 687,000$
Multimodal
Sidewalks 100,000$
20th Street expansion from Normal Park to IH45 138,000$
Future multimodal projects 50,000$
Total Multimodal 288,000$
Projects Grand Total 9,175,000$
Total Contribution from Utility Fund 8,200,000$
Total Contribution from General Fund 975,000$
Total Contribution all Funds 9,175,000$
City of Huntsville
Proposed Capital Projects
FY 2026-27 Budget