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HomeMy WebLinkAbout16630 • 1 RESOLUTION NO. 16,630 2 3 A RESOLUTION TO ADOPT REVISIONS TO THE INVESTMENT 4 POLICY FOR THE CITY OF LITTLE ROCK, ARKANSAS; REPEALING 5 LITTLE ROCK, ARK., RESOLUTION NO. 14,890 (NOVEMBER 5, 2018); 6 AND FOR OTHER PURPOSES. 7 8 WHEREAS, the Board of Directors of the City of Little Rock, Arkansas last adopted a revised 9 Investment Policy,pursuant to Little Rock,Ark.,Resolution No. 14,890(November 5,2018);and, 10 WHEREAS,changes to position titles of authorized personnel,names of custodial organizations,and 11 investment processes occur,periodical updates to the investment policy are necessary. 12 NOW,'THEREFORE,BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY 13 OF LITTLE ROCK,ARKANSAS: 14 Section 1.The revised Investment Policy makes technical corrections to job titles as they have changed 15 over time. 16 Section 2.The third-party collateral agreement between the City of Little Rock,the Federal Reserve or 17 the First National Banker Bankshares,Inc., attached as Exhibit A, is updated in accordance with state law 18 as to the municipal investment of public funds. 19 Section 3. This Resolution removes the requirement that broker/dealers are required to have a physical 20 presence in the city limits of Little Rock, which broadens competition and increases the yield on 21 investments. 22 Section 5. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 23 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or 24 adjudication shall not affect the remaining portions of the ordinance,which shall remain in full force and 25 effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of the 26 ordinance. 27 Section 6. Repealer. All ordinances, resolutions, bylaws, and other matters inconsistent with this 28 resolution are hereby repealed to the extent of such inconsistency. 29 // 30 // 31 // 32 // 33 // 34 // [Page 1 of 9] 1 ADOPTED: March 18,2025 2 ATTEST: APPROVED: 3 4 POLLOPA 41111 5 Allison Segars,Ci Clerk Frank Scott.Jr., or 6 APPROVED AS TO LEGAL FORM: 7 8 9 Thomas M. Carpenter,City Atto ey 10 /I 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 29 // 30 // 31 // 32 // 33 // 34 // [Page 2 of 9] Exhibit A First Security Bank Collateral Agreement This Collateral Agreement("Agreement")is entered into as of this I°'day of January, 2023 by and between the City of Little Rock("Depositor"), a public entity with its principal office at 500 West Markham, Little Rock, Arkansas and First Security Bank, ("Institution"). with its principal office at 314 N. Spring, Searcy, Arkansas 72145-1409 and First National Bankers Bank("Custodian"),with its Arkansas office at 325 W. Capitol Ave.,Suite 300,Little Rock,Arkansas 72201. The undersigned Institution enters into this Agreement with the Depositor and Custodian to set forth the understanding of the parties with regard to certificated and non- certificated securities held in a joint safekeeping account at the Custodian for the Depositor as collateral for Depositor monies,including,but not limited to deposits and investment accounts, held by Institution. Institution agrees to hold such deposits and investment accounts in accordance with the policies and procedures set out below. Whereas,the Depositor maintains substantial deposits of its funds,including funds held in the name of the Little Rock Police Pension and Relief Fund and Little Rock Firemen's Relief and Pension Fund,with Institution;and Whereas,the Depositor is a public entity,and Whereas, the Institution may upon deposit with it of any funds by such a political subdivision,give security for the safekeeping and prompt payment of such funds pursuant to 12 U.S.C.90,Arkansas law and City of Little Rock Ordinance; Whereas,the Depositor has agreed to deposit funds with the Institution pursuant to the terms and provisions of this Agreement for funds held in deposit by and between the Depositor and the Institution;and Whereas,pursuant to the terms and provisions of this Agreement, the Institution has agreed to assign, pledge and convey to the Depositor a perfected security interest in certain eligible securities owned by the Institution(the"Collateral");and Whereas, in order to perfect the Depositor's security interest in the Collateral, the Custodian,as agent for the Depositor,will accept from the Institution,take possession of and hold such Collateral solely for the benefit of the Depositor. Now,therefore,in consideration of the mutual covenants and premises herein contained, the parties do hereby agree as follows: ARTICLE I DEPOSIT OF COLLATERAL 141 The Custodian hereby accepts employment as the Depositor's custodian and depositary pursuant to the terms of this Agreement. [Page 3 of 9] 1.02 The Custodian shall accept and retain as Custodian solely for the benefit of the Depositor all securities tendered by the Institution as Collateral for its obligations under this Agreement. Upon receipt of Collateral from the Institution for the benefit of the Depositor, the Custodian shall: a) Immediately notify the Depositor, by telephone or otherwise, of the Collateral pledged; b) Issue a written receipt to the Institution evidencing Custodian's receipt of the Collateral;and c) Within three business days issue and provide Delivery to Depositor written confirmation evidencing Institution has pledged and Custodian has received Collateral. 1.03 The Custodian shall identify on its books and records as being pledged to the Depositor specific securities or a quantity of specific securities received by it for,or for the account of,the Depositor. The Custodian shall have no power or authority to transfer, assign, hypothecate, pledge or otherwise dispose of any such securities, except pursuant to instructions from the Depositor and pursuant to the terms of this Agreement. 1.04 Any pledge hereunder shall be a continuing pledge and shall secure not only such deposits that are held by the Institution at the time of the transfer of the Collateral to the Depositor hereunder, but also any and all subsequent deposits of funds with the Institution by the Depositor, notwithstanding the account or accounts in which such funds may be held or identified by the Institution. 1.05 The Custodian agrees to provide to the Depositor, a monthly statement of holdings reflecting the securities pledged by the Institution. In addition,the Custodian agrees to provide to the Depositor current market price valuations of the securities constituting the Collateral,as may be requested by the Depositor. 1.06 This Agreement may be amended at any time by written agreement between the Depositor and the Custodian,with prior written notice to the Institution 1.07 The Institution represents and warrants that it is the legal and actual owner, free and clear of all liens and claims,of the Collateral. ARTICLE II THE SECURITY INTEREST 2.01 The Institution hereby grants to the Depositor a security interest in and hereby pledges solely to the Depositor, the Collateral as security for repayment of the total daily deposits of public funds plus accrued interest. 2.02 The total fair value of the Collateral shall be at least equal to the following percentages of the total amount of cash funds on deposit with Institution. (a) United States government bonds,notes and bills with maturities of less than five years—104%. [Page 4 of 9] (b) United States government bonds,notes and bills with maturities of more than five years—1 10% (c) Agencies backed by the full faith and credit of the United States government with maturities of less than five years—104% (d) Agencies backed by the full faith and credit of the United States government with maturities of more than five years—1 1 0%. (e) Arkansas school district bonds— l20% (t) Bonds of other Arkansas political subdivisions— 120% (g) Arkansas industrial development revenue bonds— 120% (h) Arkansas general obligation bonds—120% (i) Arkansas municipal bonds— 120% 2.03 If any political subdivision, school district, improvement district, or other issuer has defaulted on any bonds or other obligations within the preceding period of ten(10)years, bonds or other obligations of the defaulting political subdivision,school district,improvement district, or other issuer shall not be eligible Collateral or as security required to be deposited in connection with public funds. 2.04. Any deposit of Collateral of the description contained in Section 2.02(e)through(i)shall be subject to the prior approval of Depositor. ARTICLE III VALUATION OF AND CHANGES IN COLLATERAL 3.01. Institution shall recalculate the market value of the individual securities comprising the Collateral at least monthly. 3.02. If at any time the ratio of market value of the Collateral to the deposits of Depositor, plus accrued interest, is less than required by this Agreement, Institution shall immediately, within 24 hours,make such additions to the Collateral such that the ratio of market value of the Collateral to the deposits of Depositor is in an amount required by this Agreement. If at any time the ratio of market value of the Collateral to the deposits, plus accrued interest, is greater than required by this Agreement, Institution may withdraw excess Collateral, subject to the prior written approval of the Depositor as to the specific Collateral to be withdrawn. 3.03. For so long as Custodian has not received written notice of default hereunder from Depositor,and with the Depositor's prior written approval,Custodian may permit Institution to substitute securities comprising the Collateral. [Page 5 of 9] ARTICLE IV AUTHORITY OF CUSTODIAN 4.01 Designation.The First National Bankers Bank is hereby designated as Custodian for the purpose of holding the Collateral pursuant to the terms of this Agreement. 4.02 Authority.The Custodian shall be authorized to do the following: (a) Deliver receipts to the Institution upon receipt of any Collateral; (b) Hold the Collateral as security in the manner set forth herein: (c) Release Collateral to the Institution pursuant to Section 3.03; (d) Keep the Collateral separate and apart in the joint account maintained by Depositor and the Institution; (e) Collect maturing interest coupons and principal of the Collateral; (t) Surrender to the institution any of the Collateral that are maturing, have been called or redeemed, or are being substituted for by the Institution, provided that the Institution shall,either prior to or concurrently with such surrender, substitute therefore other securities meeting the requirements hereof; (g) Accept securities being substituted for Collateral in accordance with paragraph(f) above; (h) Accept and deliver, as applicable, securities representing the Collateral upon increase or decrease in deposits of Depositor as verified to the Custodian by the Institution; (i) Release Collateral to Depositor upon default of the Institution upon written notice from Depositor and the Institution to do so as proved in Article V hereof, (j) Release all Collateral to the Institution upon termination of this Collateral Agreement as provided herein. ARTICLE V PERFORMANCE BY THE INSTITUTION 5.01 Pledge. The Institution pledges to faithfully perform all duties and obligations required by law; that it will pay upon presentment all checks drawn upon any demand deposit account; and that Depositor funds will be faithfully kept and accounted for according to law. 5.02 Default. In the event Institution shall fail to pay to Depositor any funds which Depositor has on deposit therein in accordance with the terms of such deposit; or should the Institution fail or suspend active operations,the deposit in such Institution shall become due and payable immediately. Upon receipt of written notice of default by the Institution from Depositor,the Institution authorizes the release of Collateral to Depositor and no authorization from Institution shall be required by the Custodian to release the Collateral to Depositor. 5.03 Right to Sell. After default by Institution, Depositor shall also have the right to sell the said securities at any public or private sale at its option without advertising such sale, upon not less than one (1) day notice to the Institution and the Custodian. In the event of such sale, Depositor, after deducting all icgal expenses and other costs, including reasonable attomey's fees, from the proceeds of such sale, shall apply the remainder on any one or more of the liabilities of the Institution to Depositor and shall return the surplus,if any,to the Institution. [Page 6 of 9] ARTICLE VI TERM 6.01 Term. This Agreement will continue in duration until terminated by the respective parties thereto by sixty(60)days written notice delivered by any party to the others. ARTICLE VII MISCELLANEOUS 7.01 Agreement Maintained as Official Record.This Agreement and any amendments thereto will be maintained as an official record of the Institution and reflected in the minutes of the approving body. 7.02 Arkansas Law.The laws of the State of Arkansas shall govern this Agreement. 7.03 Venue,Venue shall be Little Rock,Pulaski County,Arkansas,and the Eastern District of Arkansas. 7.04 Binding on Successors and Assigns. This Agreement shall be binding upon the parties and their respective successors and assigns. 7.05 Service Charges. The Institution shall pay any service charges due Custodian in connection with this Agreement. 7.06 Authority to Enter Agreement.This Agreement is made pursuant to authorization by the bylaws of the Institution and its Board of Directors, by the bylaws of the Custodian and its Board of Directors,and by resolution of the Depositor's Board of Directors. 7.07 Agents. The parties designated as their agents for receipt of notices and correspondence the following: (a) For Depositor City of Little Rock City Hall 500 West Markham,Room 100 Little Rock,AR 72201 Attention:Scott Massanelli (b) For the Institution First Security Bank P.O.Box 17770 Little Rock,Arkansas 72223 Attention:John Rutledge [Page 7 of 91 (c) For Custodian: First National Bankers Bank 325 W.Capitol Ave.,Suite 300 Little Rock,Arkansas 72201 Attention: Mary Bryant 7.08.In the absence of bad faith on the part of Custodian,the Custodian shall be permitted to rely upon the authenticity of, and truth of the statements and accuracy of the opinions expressed in, and will be protected in acting upon, any document believed by the Custodian to be genuine and to have been signed, affixed or presented by the property party or parties. The Custodian shall not be liable with respect to any action taken or omitted to be taken by it in accordance with any instruction or request of the Depositor. In addition,the Custodian shall not be liable for any error of judgment made in good faith by an officer of Custodian unless it shall be proved that the Custodian was negligent in ascertaining pertinent facts. 7.09 On January 1,2023,this Agreement shall hereby replace and terminate the First Security Bank Collateral Agreement entered into as of February 18,2016 by and between the City of Little Rock,First Security Bank,and First National Bankers Bank. Signatures Appear on Following Page [Page 8 of 9] IN WITNESS WHEREOF, the parties hereto, each acting through its respective duly authorized representative, have caused this Agreement to be signed in their name and delivered as of the date first above written. DEPOSITOR; CITY OF LITTLE ROCK DATE: 'tka301" Bruce T. Moore,City Manager - 414' AIN DATE: 08/30/22 cUrAzi ,City Clerk APPROVED AS TO LEGAL FORM: Thomas M.Carpenter,City Attorney BY: egc --ft. Beth B.Carpenter,Deputy City Attorney CUSTODIAN: FIRST NATIONAL BANKERS BANK BY: DATE: Q 14 Z-eraD, Mary ryaVice P ident INSTITUTION: FIRST SECURITY BANK BY: DATE: q -oZ- aOaa TITLE: President S•1rjaCtiatts5FS91MISCELLANEOtIS12012 2.2 LR Collateral Agtmutocx [Page 9 of 91