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R-2018-6153 - 12/6/2018 RESOLUTION NO. R-2018-6153 WHEREAS, pursuant to Section 2256.005, Texas Government Code ("the Act") the City Council desires to adopt a written investment policy and investment strategy regarding the investment of City funds; and WHEREAS, the City Council has reviewed the attached updated policy and has determined same to be in compliance with the Act,Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the updated Investment Policy and Strategy for the investment of City funds, attached hereto as Exhibit"A" and incorporated herein, is hereby approved and adopted. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 6th day of December, 2018. CRAIG ORG , Mayor City of ound ocl Texas ATTEST: <Fql�- A�k�, SARA L. WHITE, City Clerk 0112.1804;00413730 EXHIBIT „A„ FOUND ROCK TEXAS FINANCE City of Round Rock, Texas Investment Policy & Strategy December 6, 2018 City of Round Rock, Texas Investment Policy & Strategy December 6, 2018 Section Page I. Purpose .................................................................................................................. 3 I1. Scope ..................................................................................................................... 3 III. Investment Objectives & Strategy ........................................................................ 3 Objectives Strategy IV. Standard of Care ..................................................................................................... 5 Prudence Delegation of Authority Training Ethics Limitation of Liability Internal Controls V. Authorized Investments ........................................................................................ 7 Authorized Investments Prohibited Investments Valuation Protection of Principal Diversification by Investment Type Diversification by Investment Maturity& Weighted Average Maturity VI. Relationships with Financial Institutions and Firms ............................................ 11 Primary Depositories Selection and Compliance of Investment Providers VII. Safekeeping& Collateralization .......................................................................... 12 Safekeeping & Custody Collateralization Requirements VIII. Portfolio Reporting and Review ........................................................................... 13 Reporting Annual Review External Audit Addendum A—List of Authorized Broker/Dealers ....................................................... 15 2 City of Round Rock, Texas Investment Policy December 6, 2018 I. PURPOSE The Investment Policy of the City of Round Rock, Texas, is adopted in accordance with Chapter 2256,Texas Government Code,the Public Funds Investment Act(the"Act"). This Policy establishes guidelines for the Investment Officers with regard to how City funds will be invested. This Policy also establishes guidelines for periodic review and reporting of the investments. II. SCOPE This Investment Policy applies to all aspects of investing the financial assets for the City of Round Rock,Texas. This applies to all funds reported in the City's Comprehensive Annual Financial Report and include the General Fund, Special Revenue Funds, including the Round Rock Transportation & Economic Development Corporation, Debt Service and Debt Reserve Funds, Capital Project Funds,Enterprise Funds,Internal Service Funds,Trust and Agency Funds and any new funds created by the City and any funds managed by the City of Round Rock, Texas, as trustee or agency, unless exempted by law. In addition to this Policy, bond funds established by bond ordinances shall also be managed by their governing ordinances and all applicable State and Federal Law. All funds covered by this Investment Policy shall be invested in accordance with the Public Funds Investment Act as amended from time to time. (Texas Government Code, Ch. 2256.) III. INVESTMENT OBJECTIVES & STRATEGY A. Obiective It is the policy of the City of Round Rock that,giving due regard to the safety and risk of investments, all available funds shall be invested in conformance with State and Federal Regulations, applicable bond covenants and ordinances, and this adopted Investment Policy. The primary objectives for investment activities are listed in priority order. 1. Suitability Understanding the suitability of the investment to the financial requirements of the City is important. The needs and limitations of each group of funds must be considered. Any investment eligible in the Investment Policy is suitable for all City funds. 3 2. Safety of Principal The primary objective of all investment activity is the preservation of capital and the safety of principal in the overall portfolio. Each investment transaction shall seek to ensure first that capital losses are avoided, whether they have resulted from securities defaults or erosion of market value. All investments are to be of high quality instruments with no perceived default risk. Market price fluctuations will, however, occur. With foremost emphasis on safety of principal (i.e. avoidance of capital losses), the Investment Officers will ensure that preservation of capital and protection of principal in the overall portfolio is maintained. Speculation is prohibited. 3. Maintenance of Adequate Liquidity The investment portfolio will remain sufficiently liquid to meet the cash flow requirements that might be reasonably anticipated. Liquidity shall be achieved by maintaining appropriate cash equivalent balances, matching investment maturities with anticipated cash flow requirements, investing in securities with active secondary markets, and maintaining appropriate portfolio diversification. 4. Marketability Securities with active and efficient secondary markets are necessary in the event of an unanticipated cash requirement. An efficient market is generally defined as having a bid- asked price relationship being no greater than 1/4 of 1 percent of principal value. 5. Diversification Diversified investment maturities shall provide monthly cash flow based on the anticipated operating needs of the City. Short term financial institution deposits,investment pools,money market mutual funds and staggered maturities of securities shall provide timely liquidity and may be utilized. 6. Yield Attaining a competitive market yield for comparable security-types and portfolio restrictions is the desired objective. The comparative yield of a like-term treasury security shall be the minimum yield objective. B. Strategy The investment objectives above apply to all funds covered by this Policy. Investment strategies and guidelines by fund-type are as follows: 4 1. Pooled Funds Pooled Funds comprise the majority of the City's portfolio and include all operating funds and long-term reserves. Investment strategies for pooled funds have as their primary objective to assure that anticipated cash flows are matched with adequate investment liquidity. The secondary objective is to create a portfolio structure which will minimize volatility while providing competitive yields on City funds. Daily liquidity for operations is required first. Reserves established in accordance with the City's cash reserves policy or designated for specific purposes and time frames may be invested for longer terms. 2. Debt Service Funds Investment strategies for Debt Service Funds have as their primary objective the assurance of investment liquidity to cover the debt service obligations on the required dates. Surplus funds outside the debt service dates will be invested according to investment targets and strategies for Pooled Funds. 3. Debt Service Reserve Funds Debt Service Reserve Funds are reserves required by bond covenant or other contractual requirement to be maintained through the life of the debt issue. These funds generally do not have a need for liquidity and may be invested in longer term maturities within the overall guidelines of this Policy. 4. Capital Project and Special Purpose Funds These funds include both bond proceeds and operating funds set aside for identified Capital Projects or Special Purposes. The funds should be invested to match projected cash flow requirements of projects with sufficient liquidity to meet unanticipated project outlays. In general, the final maturity dates of securities should not exceed the expected project completion date(s)and meet all underlying bond covenants,where applicable. IV. STANDARD OF CARE A. Prudence Investments shall be made with 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. The standard of care shall be applied to the context of managing the overall portfolio. 5 B. Delegation of Authority The Chief Financial Officer, Deputy Chief Financial Officer, the Accounting Manager, and the Treasury Accountant are hereby designated as the Investment Officers of the City of Round Rock, Texas, and are responsible for investment decisions and activities consistent with this Investment Policy. The Investment Officers shall be responsible for all transactions and compliance with the internal controls, ensuring all safekeeping, custodial, and collateral duties remain consistent with this Investment Policy, as well as establishing and maintaining written procedures for cash management. The Investment Officers shall maintain timely, accurate and systematic records of all investments, maturities and earnings. Bonding of all staff with financial signatory authority is required and such bonding requirements will also apply to those individuals authorized to place, purchase or sell investment instruments. Bonding will protect the public against loss from possible embezzlement and malfeasance. C. Training It is the City's policy to provide training required by the Public Funds Investment Act Section 2256.008(a) through courses and seminars offered in compliance with the Act to ensure the quality and capability of the Investment Officers in making investment decisions. In accordance with State Law, Investment Officers must accumulate ten hours of investment training within twelve months of attaining the position of Investment Officer. Thereafter,eight hours of training must be accumulated every two-years within period that begins on the first day of the City's fiscal year and ends on the last day of the next fiscal year. All investment training shall be from an independent source approved by the City Council. The following sponsors are hereby approved: 1) Government Finance Officers Association (GFOA and GFOAT); 2) Texas Society of Certified Public Accountants (TSCPA); 3) Texas Municipal League (TML); 4) Government Treasurers' Organization of Texas (GTOT); 5) Sponsors approved by the TSCPA and GFOA,GFOAT,GTOT,to provide CPE credits; 6) Center for Public Management at the University of North Texas; or 7) Alliance of Texas Treasury Associations (ATTA) D. Ethics The Investment Officers involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Furthermore, in accordance with the Public Funds Investment Act,an Investment Officer who has a personal business relationship with a firm or is related within the second degree by consanguinity or affinity to individuals seeking to sell to the Investment Officer must disclose such relationships in accordance with Section 2256.005(1) of the 6 Public Funds Investment Act. Such disclosure should be made to the Texas State Ethics Commission and to the City Council. E. Limitation of Liability The Investment Officers acting in accordance with this Policy and the City's Investment Strategy and exercising due diligence shall be relieved of personal liability for an individual investment's performance provided that deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse development. F. Internal Controls The Investment Officers shall establish a system of internal controls, which shall be documented in writing and reviewed periodically by the City's independent auditors. The controls shall be designed to prevent and control losses of public funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions. Dual controls of all investment activities will consistently be maintained by the Investment Officers. The Investment Officers shall develop and maintain written administrative procedures for the operation of the investment and cash management program, consistent with this Investment Policy. It is the policy of the City to provide a competitive environment for all individual investment purchases and sales, and financial institution, money market mutual fund, and local government investment pool selections. The investment officer is authorized to solicit bids for investments orally, in writing, electronically, or in any combination of these methods. At least three providers must be contacted in all transactions involving individual securities. For those situations where it may be impractical or unreasonable to receive three quotes for a transaction due to a rapidly changing market environment or to secondary market availability,documentation of a competitive market survey of comparable securities or an explanation of the specific circumstance must be included with the transaction quote/bid sheet. All quotes received must be documented and filed for auditing purposes. V. AUTHORIZED INVESTMENTS A. Authorized Investments The following is a list of authorized and legal investment options: 1) Obligations, including letters of credit, of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks, but excluding mortgage backed securities; 2) Direct obligations of the State of Texas or its agencies and instrumentalities; 3) Other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of,the State of Texas or the United States or 7 their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation (FDIC) or by the explicit full faith and credit of the United States; 4) Obligations of states agencies,counties,cities and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than "A"or its equivalent; 5) Certificates of Deposit(CD)as authorized under the Act; 6) Repurchase Agreements which are fully collateralized as authorized by the Act. Flexible repurchase agreements may be used for capital project funds but will not extend past the anticipated expenditure schedule; 7) Commercial Paper rated Al/P1 or better as authorized by the Act; 8) AAA-Rated no-load government money market mutual funds as authorized by and compliant with the Act, 9) Local government investment pools as authorized by and compliant with the Act, 10) FDIC insured Brokered Certificate of Deposit securities purchased from a broker or a bank with a main or branch office in Texas, settled delivery versus payment to the City's safekeeping agent. 11) Fully insured or collateralized interest-bearing accounts as authorized under the Act, including those accounts utilizing an FDIC insurance spreading program acceptable to the City. B. Prohibited Investments This Policy bestows the authority upon the Investment Officers to determine certain investment instruments as unsuitable for the City even though those investments may be authorized by this Policy and/or the Public Funds Investment Act. Additionally, certain investments are expressly prohibited by the Public Funds Investment Act. Those prohibited investments are: 1) Obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; 2) Obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security collateral and bears no interest; 3) Collateralized mortgage obligations (CMO) that have a stated final maturity date of greater than 10 years; and 8 4) Collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. C. Valuation The Investment Officers shall monitor, on no less than a quarterly basis, the credit rating on all authorized investments in the portfolio based upon independent information from a nationally recognized rating agency. An investment that requires a minimum rating under this Policy and/or the Public Funds Investment Act does not qualify as an authorized investment during the period the investment does not have the minimum rating required by the Act. 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. The City is not required to liquidate investments that were authorized investments at the time of purchase. The Investment Officers shall monitor, on no less than a quarterly basis, the status and ownership of all banks issuing brokered CDs owned by the City based upon information from the FDIC. If any bank has been acquired or merged with another bank in which brokered CDs are owned, an Investment Officer shall take steps to ensure that full FDIC insurance is in place as soon as the lapse in FDIC coverage is detected. D. Protection of Principal The City shall seek to control the risk of loss due to the failure of an issuer or grantor. Such risk shall be controlled by investing only in the safest types of investments as defined in this Policy; by qualifying the broker, dealer and financial institution with whom the City will transact; by collateralization as required by law; and through portfolio diversification by maturity and type. The purchase of individual securities shall be executed"delivery versus payment"through the City's safekeeping agent. By so doing, City funds are not released until the City has received,through the safekeeping agent,the securities purchased. E. Diversification by Investment Type Diversification by investment type is primarily intended to reduce the credit risk inherent to a particular issuer or investment type. The City will diversify its investments by security type and institution. Investment Type Portfolio Limitation 1) U.S. Government and its Agencies and Instrumentalities 75% 2) States and their Agencies, Counties, Cities and Other 35% Political Subdivisions of any State %of any one(1) issuer 5% 3) Commercial Paper 10% %of any one(1) issuer 5% 4) Money market bank accounts 75% 9 5)Local government investment pools 100% 6)Government money market mutual funds 100% 7) Certificates of Deposit(Depository&Brokered) 75% Bond proceeds may be invested in a single security or investment if the Investment Officers determine that such an investment is necessary to comply with Federal arbitrage restrictions or to facilitate arbitrage recordkeeping and calculation. F. Diversification by Investment Maturity and Weighted Average Maturity To minimize risk of loss due to interest rate fluctuations, investment maturities will not exceed the anticipated cash flow requirements of the funds. The weighted average maturity will be determined on a total portfolio basis with a maximum of 540 days and maximum maturity for an individual security or CD shall not exceed three (3)years. Maturity guidelines by fund are as follows: 1) Pooled Funds Pooled Funds are a pooling of operating funds needed for day to day operations along with special revenue funds, internal service funds, and any other funds that do not fall into one of the three(3)categories listed below. Maturity Limitation: The maximum allowable maturity for an individual investment shall be three(3)years. 2) Debt Service Funds Debt Service Funds shall be invested to ensure adequate funding for each consecutive debt service payment. Maturity Limitation: The Investment Officers shall invest in such a manner as not to exceed an "unfunded" debt service date with the maturity of any investment. An unfunded debt service date is defined as a coupon or principal payment date that does not have cash or investments available to satisfy said payment. 3) Debt Service Reserve Funds Market conditions, Bond Ordinance constraints and Arbitrage regulation compliance will be considered when formulating Reserve Fund strategy. Maturity Limitation: Maturities shall generally not exceed the call provisions of the Bond Ordinance and shall not exceed the final maturity of the bond issue or three years,whichever is less. 10 City funds that are considered"bond proceeds"for arbitrage purposes will be invested using a more conservative approach than the standard investment strategy when arbitrage rebate rules require refunding excess earnings. All earnings in excess of the allowable arbitrage earnings will be made available for any necessary payments to the U.S. Treasury. 4) Capital Project and Special Purpose Funds Maturity Limitation: Funds used for construction programs have reasonably predictable draw down schedules. Therefore, investment maturities shall generally follow the anticipated cash flow requirements. Bond proceeds(excluding reserve and debt service funds)shall generally be limited to the cash flow requirements or the"temporary period"as defined by Federal tax law. During the temporary period bond proceeds may be invested at an unrestricted yield. After the expiration of the temporary period, bond proceeds subject to yield restriction shall be invested considering the anticipated cash flow requirements of the funds and market conditions to achieve compliance with the applicable regulations. VI. RELATIONSHIPS WITH FINANCIAL INSTITUTIONS AND FIRMS A. Primary Depositories Primary Depositories shall be selected through the banking service procurement process,which shall include a formal request for applications no less than every five (5) years. In selecting the primary depository, the creditworthiness of institutions shall be considered and the Investment Officers shall conduct a comprehensive review of prospective depositories' credit characteristics and financial history. The City's primary depository contract and other financial relationships for banking services are outside the scope of this Investment Policy; however, all deposits and collateral are subject to compliance with the Act. B. Selection and Compliance of Investment Providers An investment provider offering to engage in an investment transaction with the City shall be presented with the Investment Policy of the City. The qualified representative of a local government investment pool or discretionary investment management firm must execute a written instrument to acknowledge that the business organization has implemented reasonable procedures and controls to preclude transactions conducted between the City and the business 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 City's entire portfolio, or requires an interpretation of subjective investment standards. Broker/Dealer institutions or firms may qualify under this section: 1) Security Dealers which are the approved and designated Dealers of the Federal Reserve Bank of New York"Primary Dealers" and approved by City Council. 2) Security Dealers and Brokers which are not designated as "Primary Dealers" but which are approved individually by the City Council. 11 Addendum A is the list of brokers/dealers who have qualified and are hereby approved to conduct business with the City as required by the Act. The qualified broker/dealer list must be reviewed and approved by City Council at least annually. VII. SAFEKEEPING AND COLLATERALIZATION To protect against potential fraud and embezzlement, investments shall be secured through third party custody and safekeeping procedures. A. Safekeeping& Custody All security purchases and trades conducted for the City of Round Rock, Texas will be settled and protected by the City's contracted third-party safekeeping agent. The use of the Delivery Versus Payment(DVP)procedure will be continually used for investment securities transactions, purchases and sales. The City shall authorize the release of funds only after its safekeeping agent has received securities or receipt for the same amount into the City's safekeeping account. Securities owned by the City under repurchase agreements shall be secured by written Master Repurchase Agreement, or similar agreement,and all securities will be moved on a DVP basis. The City shall approve all third-party custodial agents for the custody of securities pledged to the City as collateral to secure demand or time deposits. All securities and collateral shall be held in an account in the City's name as evidenced by safekeeping receipts of the institutions with which the securities are placed. Safekeeping and custody procedures shall be reviewed annually by the independent auditor. B. Collateralization Requirements The City, in accordance with state statute, requires all City funds held by financial institutions above the FDIC insurable limit to be collateralized with securities or letters of credit issued to the City by the Federal Home Loan Bank. Money Market Accounts and Certificates of Deposits require collateral or FDIC coverage for all principal and accrued interest. Securities held as collateral shall have a market value equaling at least 102%of the total value of City funds held in excess of FDIC insurance levels, and all securities shall be placed with a third-party custodial agent. Collateral may be substituted or released only with the written authorization of an Investment Officer. Allowable collateral may consist only of the following securities as permitted under the Public Funds Collateral Act(Texas Government Code,Ch.2257). - Obligations of the U.S. Government, its agencies and instrumentalities including mortgage backed securities and CMOs which do not constitute a high-risk mortgage security as defined by the Public Funds Collateral Act. - Obligations of any U.S. state, agencies, counties, cities and other political subdivisions rated as to investment quality by at least one nationally recognized rating agency. A monthly report listing the collateral must be provided directly from the Custodian to the City. 12 Financial institutions serving as City Depositories will be required to sign a Depository Agreement with the City. The"Security for Deposits"portion of the Agreement shall define the City's rights to the collateral in case of default, bankruptcy or closing and shall establish a perfected security interest in compliance with Federal and State regulations, including: 1) the Agreement must be in writing; 2) the Agreement has to be executed by the Depository and the City contemporaneously with the acquisition of the asset; 3) the Agreement must be approved by the Board of Directors or the Bank Loan Committee of the Depository and a copy of the meeting minutes must be delivered to the City; and 4) the Agreement must be part of the Depository's "official record" continuously since its execution. VIII. PORTFOLIO REPORTING AND REVIEW A. Reporting As required by law, the Investment Officers shall submit a written investment report, prepared in accordance with the Act,signed by each Investment Officer of the City within a reasonable time after the end of each fiscal quarter to the City Council detailing the investment position for the previous quarter. Monthly market values will be obtained from the City's investment advisor,or other source believed to be reliable, to monitor the portfolio's position. "Weighted Average Yield to Maturity" shall be the standard for calculating portfolio rate of return. 1) For pooled investments—the report must: a. state the beginning book value and market value of the pool portfolio for the reporting period, b. state changes to the book value and market value during the reporting period, c. state the ending book value and market value of the portfolio,and d. state the fully accrued interest for the reporting period. 2) For separately invested assets—the report must: a. state the book value and market value for each investment at the beginning and end of the reporting period, b. disclose the stated maturity date for each separate investment, and c. show the specific fund from which moneys were received to purchase the investment. 3) The report must state compliance of the investment portfolio with the City's Investment Policy& Strategy and relevant provisions of the Public Funds Investment Act. B. Annual Review This Policy shall be reviewed and adopted annually by the City Council. 13 C. External Audit In accordance with the Public Funds Investment Act, in conjunction with the City's annual financial audit, a compliance audit of management controls on investments and adherence to the City's established investment policies shall be performed. An annual review of the City's quarterly reports will also be performed by an independent auditor with the results being presented to the City Council. 14 CITY OF ROUND ROCK, TEXAS LIST OF AUTHORIZED BROKER/DEALERS Cantor Fitzgerald& Co. Duncan Williams, Inc. Frost Capital Markets FTN Financial Hilltop Securities Co. Multi-Bank Securities, Inc. Mutual Securities Oppenheimer& Co., Inc. Piper Jaffray& Co. RBC Capital Markets, LLC Raymond James Rice Financial Wells Fargo Securities 15 EXHIBIT "A» REAL ESTATE. CONTRACT Kenney Fort Boulevard Right of Way THIS REAL ESTATE CONTRACT ("Contract") is made by and between FARID AGA II, (referred to in this Contract as"Seller',whether one or more) and the CITY OF ROUND ROCK, TEXAS (referred to in this Contract as *'Purchaser"), upon the terms and conditions set forth in this Contract. ARTICLE I PURCHASE AND SALE By this Contract, Seller sells and agrees to convey, and Purchaser purchases and agrees to pay for,the tract(s)of land described as follows: All of that certain 5.17 acre tract of land out of and situated in the A. Thomas Survey, Abstract No. 609 in Williamson County, Texas; being a portion of a called 5.19 acre tract of land as described in a deed to Farid Agahi and recorded in document No. 2013003398 of the Official Public Records of said County; more fully described in Exhibit "A'", attached hereto and incorporated herein Parcel LO); together with all and singular the rights and appurtenances pertaining to the property, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-o-way (all of such real property, rights, and appurtenances being.referred to in this Contract as the "Property"), and any improvements and fixtures situated on and attached to the Property described in Exhibit "A" not otherwise retained by Seller, for the consideration and upon and subject to the terms, provisions, and conditions set forth below. ARTICLE,II PURCHASE PRICE Purchase Price 2.01. The Purchase Price for the Property, compensation for any improvements on the Property, and for any damage or cost of cure for the reconfiguration of the remaining property of Seller shall be the sum. of ONE MILIJON THREE HUNDRED FIFTY THOUSAND and 0011.00 Dollars($1,350,000.00). Payment of Purchase.Price 2.02. The Purchase Price shall be payable in cash at the Closing. 00413410.DOC ARTICLE III PURCHASER'S OBLIGATIONS Conditions to Purchaser's Obligations 3.01. The obligations of. Purchaser hereunder to consummate the transactions contemplated hereby are subject to the satisfaction of each of the following conditions (any of which may be waived in whole or in part by Purchaser at or prior to the Closing). Miscellaneous Conditions 3.02. Seller shall have performed, observed, and complied with all of the covenants, agreements, and conditions required by this Contract to be performed, observed, and complied with by Seller prior to or as of the Closing. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER 4.01. Seller hereby represents and warrants to Purchaser as follows, which representations and warranties shall be deemed made by Seller to Purchaser also as of the Closing Date, to the best of Seller's knowledge: (a) There are no parties in possession of any portion of the Property as lessees, tenants at sufferance, or trespassers, other than previously disclosed to Purchaser; (b) Seller has complied with all applicable laws, ordinances, regulations, statutes, rules and restrictions relating to the Property,or any part thereof; 4.02.The Pro,petty herein is being conveyed to Purchaser under threat of condemnation. ARTICLE V CLOSING Closing Date 5.01. The Closing shall be held at the office of Independence Title Company on or before January 31, 2019, or at such time, date, and place as Seller and Purchaser may agree upon, or within 10 days after the completion of any title curative matters if necessary for items as shown on the Title Commitment or in the contract(which date is herein reterred to as the"Closing Date"). 23 Seller's Obligations at Closing 5.02.At the Closing Seller shall: (1) Deliver to the City of Round Rock, Texas a duly executed and acknowledged Deed conveying good and indefeasible title in fee simple to all of the Property described in Exhibit"A", free and clear of any and all liens and restrictions, except for the following: (a) General real. estate taxes for the year of closing and subsequent years not yet due and payable; (b) Any exceptions approved by Purchaser pursuant to Article III hereof,and (c) Any exceptions approved by Purchaser in writing. (2)The Deed shall be in the form as shown in Exhibit".B"attached hereto. (3) Deliver to Purchaser a Texas Owner's Title Policy at Purchaser's sole expense, issued by Title Company, in Purchaser's favor in the full amount of the Purchase Price, insuring Grantee's fee simple and/or easement interests in and to the Property subject only to those title exceptions listed herein, such other exceptions as may be approved in writing by Purchaser, and the standard. printed exceptions contained in the usual form of Texas Owner's Title Policy, provided,however: (a) The boundary and survey exceptions shall be deleted; (b) The exception as to restrictive covenants shall be endorsed "None of Record", if applicable; and (c) The exception as to the lien for taxes shall be limited to the year of closing and shall be endorsed "Not Yet Due and Payable". (4) Deliver to.Purchaser possession of the Property. Purchaser's Obligations at Closing 5.43.At the Closing, Purchaser shall.: (a) Pay the cash portion of the.Purchase.Price. 3 / Prorations 5.04. General .real estate taxes for the then current year relating to the :Property shall be prorated as of the Closing Date and shall be adjusted in cash at the closing. If the Closing shall occur before the tax rate is fixed for the then. current year, the apportionment of taxes shall be upon the basis of the tax rate for the next preceding year applied to the latest assessed valuation. Agricultural roll-back taxes, if any, shall be paid by Purchaser. Closing Costs 5.05. All costs and expenses of closing in consummating the sale and purchase of the Property shall be borne and paid as follows: (1) Owner's Title Policy and survey to be paid by Purchaser. (?) Deed,tax certificates, and title curative matters, if any, paid by Purchaser. (3) All other closing costs shall be paid by Purchaser. (4) Attorney's fees paid by each respectively. ARTICLE VI BREACH BY SELLER In the event Seller shall :fail to fully and timely perform any of its obligations hereunder or shall fail to consummate the sale of the Property for any reason, except Purchaser's default, Purchaser may: (1) enforce specific performance of this Contract; or (2) request that the Escrow Deposit, if any, shall be forthwith returned by the title company to Purchaser. ARTICLE VII BREACH 113Y PURCHASER In the event Purchaser should fail. to consummate the purchase of the Property, the conditions to Purchaser's obligations set fo.t..-th in Article IF[ having been satisfied and Purchaser being in default and Seller not being in default hereunder; Seller shall have the right to receive the Escrow Deposit, if any, fi•om the title company, the sum being agreed on as liquidated damages for the failure of Purchaser to perform the duties, liabilities, and obligations imposed upon it by the terms and provisions of this Contract, and Seller agrees to accept and take this cash payment as its total damages and relief and as Seller's sole remedy hereunder in such event. If no Escrow Deposit has been made then Seller shall receive the amount of$500 as liquidated damages for any failure by Purchaser. 4 1 J M ARTICLE VIII NHSCELLANEOUS Notice 8.01.Any notice required or permitted to be delivered hereunder shall be deemed received when sent by United States mail., postage prepaid, certified mail, return receipt requested, addressed to ;Seller or Purchaser, as the case may be,at the address set forth opposite the signature of the party. Texas Law to Applv 8.02. This Contract shall be construed under and in accordance with the laws of the State of Texas, and all obligations of the parties created hereunder are performable in Williamson County, Texas. Parties Bound 8.03. This Contract shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, successors and assigns where permitted by this Contract. Legal Construction 8.04. to case any one or more of the provisions contained in this Contract shall for any reason be held to be invalid, illegal, or unenforceable in any respect, this invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Contract shall be construed as if the invalid, illegal, or unenforceable provision had never been contained herein. Prior Ao eements Superseded 8.05. This Contract constitutes the sole and only agreement of the parties and supersedes any prior understandings or written or oral agreements between the parties respecting the within subject matter. Time of.Essence 8.06. Time is of the essence in this Contract. 5 Gender 8.07. Words of any gender used in this Contract shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. Memorandum of Contract 8.08. Upon request of either party, the parties shall promptly execute a memorandtun of this Contract suitable for fining of record. Compliance 8.09 In accordance with the requirements of Section 20 of the Texas Real Estate License Act, Purchaser is hereby advised that it should be furnished with or obtain a policy of title insurance or Purchaser should have the abstract covering the Property examined by an attorney of Purchaser's own selection. Effective Date 8.10 This Contract shall be effective as of the date it is approved by the Round Rock city council or city manager, which date is indicated beneath the Mayor's or City Manager's signature below. Counterparts 8.11 This Contract may be executed in any number of counterparts, which may together constitute the Contract. Signatures transmitted by facsimile or electronic mail. may be considered effective as originals for purposes of this Contract. [signature page follows] 6 SELLER: 41, Address: J00OZ4 CL/ Farid Agahi Tx Date: C) PURCHASER: CITY OF ROUND ROCK., TEXAS By: Address: 221 East Main St. Craicy Moran, .Mayor R.owid Rock, Texas 78664 Date: 7 < | / EXHIBIT"A" / PARCELIU ' Variable Width RUQh Aoqu|ahOom ! METES AND BOUNDS DESCRIPTION OFA 5.17ACRE TRACT OFLAND OUT DFTHE FAR|OAGAH| TRACT | LOCATED |NTHE CITY OFROUND ROCK,VY|LLi/\M8DNCOUNTY, TEXAS BEING 5.17 ACRE TRACT OF LAND SITUATED IN THEA. THOMAS 8URyEY, ABSTRACT NO. GOQ, VV/LL|AN?8ON COUNTY' TEXAS; BEING PORTION OFA CALLED 5.18ACRE TRACT OFLAND A8DESCRIBED |NADEED TOFAR|D /\GAH( AND RECORDED IN DOCUMENT NO. 2013003398 OF THE OFFICIAL PUBLIC ! ' RECORDS OFSAID COUNTY AND DESCRIBED |NDOCUMENT NO. 2O11OO818BOF ' THE OFFICIAL PUBLIC RECORDS OF SAID COUNTY; SAID 5,17 ACRE TRACT BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS: BEGINNING at a 1/2-inch iron rod with yellow cap stomped ^B&G Surveying" found for the common northeast corner of said 5.19 acre tract and the northwest corner of a called 5.27 acre tract of land as described in a deed to Lloyd RodanbaokJr. and wife, Angela Rodenbech and ) recorded in Document No. 188Q752O3ofthe Official Public Records ofsaid County, being on � the south right-of-way line of Gattis School Road (variable width right-of-way), for the northeast corner and POINT OF BEGINNING hereof; | ) THENCE with the common east line of said 5.18 acre tract and the vveg( line of said 5.27 ocna tract. South 10" 44` 08" East, poma a 1/2-inch rod with aluminum cap stamped ^C.O.R.R. | R.D.VV." sed at a distance of 61.25 feet, continuing for e total distance of 791.48 feet to a i / 318-inch iron nod found for the common southeast corner of said 5.18 acre tract and the . southwest corner of said 5.27 acre tract, being on the north line of called 5.53 acre tract of land as described in a deed to Richard G, Nord and wife, Joy Nord and recorded in VOILIme 906, ' Page 289 of the Deed Records of said County, for the southeast corner hereof; THENCE with the common south line of said 5.19 acre tract and the north line of said 5.53 8C[8 tract, South 87" 55' 48^^ Wast, a distance of 2G4.44feet to a 5/8-|noh iron rod found for the | common southwest corner of said 5.19 acre tract and northwest corner of said 5.53 acre tract, Page of " / being on the east line of a called 41.153 acre tract of land as described in.a deed to the State of Texas and recorded as Parcel No.2, Part 6 in Volume 1970, Page 5"15 of the Official Records of said County, for thesouthwest corner hereof, THENCE with the common west line of said 5.19 acre tract and the east line of said 41.153 acre tract, North 23" 38' 69"West, a distance.of 796.44 feet to a calculated point for the northwest corner of said 6.19 acre tract, being on the south right-of-way line of said Gattis School Road, for the northwest corner hereof; THENCE with the common north line of said 5.19 acre tract and the south right-ofway line. of Gattis School Road, North 84* 52' 58" East, a distance of 330.87 feet to the POINT OF BEGINNING and containing 5,17 acres of land and based an the survey and exhibit drawing made by CP&Y, Inc. This metes and bounds description is accompanied by an exhibit drawing. Basis of Bearings, Bearings are based an the Texas Central State Plane Coordinate System NAD '83 (HARN '83), which is based on Leis Central Texas GPS Coopemfive CORS RTK Network, 3 u rveyed in the f January and February, 2018. W r96re-fA, Nolen, R. .S, No. 5589 MARGAM-TA CP&Y, lnc. � One Chisholm Trail, Suite 130 N4it Round Rock, Texas 78681 Ph-. (512) 248-0065 Sul% TSPLS Firm No. 10194125 Project No.. 1500603 (-3:1PR0JECT5\1500603R-Kenney Fort Blvd.ExtensionWETES AND BOUNDS\15006WR PARCEL io.doc Pagre 2 of 3 PARCEL 10 (V.4_RIABJ,2 WIDTH RIGHT 0-F WAS' ACQUISITION) DRAWING TO ACCOMPANY METES ,ANI? BOUNDS DESCRIPTION Cir ..A 547 ACRE TRACT OF LAND IN THE CITY OF ROUND ROCK, WI LIAhfSON COUNM TEXAS LOCAT1014 MAPFIELD NOTE GATTI,' SCHOOL �,aA� POINT OF ' n Ir USE (N. N 84`52 5I3 E. `'- 61.. 4x GA171S SCHOOL REI. ' f SITEA;. . CALLED 5,27 ACRES ROOND ROCK VARIABLE WIDTH LLM RQDEN8ECK dR. RIGHT-0 --4YAY ACQUION AND WIFE, 5.1.7 ACRES- ANGELA RoDENBEm DOC. NO. 1998752673 .✓`� O.P.R.W.C.T. 0 �: CALLED 5AO ACRES �' .4__ W N1 i-- 1/2° ]RON R6 F ND ScA. FARID AQAHI uQC. N4 2013003398 . n UNLESS QTHER\M'SE NO.-TED), +' c . /2 IRON POD' WITH 1 ELLCIW CAP1 DESCRIBED IN: ' STAMPED `S&G..SURVEYING" FOUND } E DOC. NO, 20110.68149 0� 1/2" IRON ROD WITH ALUMINUM :GAS' (7,P.R;W.C,T; STAMPED "C.C}R R. R.O.W." SET ��, ,� ; /' L1= CALCULATED POINT � -�' / ��f $Crf�L.F: I*' R D.W.:= RIGHT—OF—WAY ''� D.R.W.C..T. = OEEO RECORDS. WIL.LIAMSON COUNTY, .' ' TEXAS: ( ..,W.C.T.. = 6FFiCIAL RECORDS W ILLIAMSON o��-;`� COUNTY, TEXAS; ��� �.� °00 0 R. G7ar / a .p'. W_C.T. = QFFICIAL PUBLIC REtORDS, WILUAMSQN COUNTY, TEXAS ��'`�_A(11 GFlEI:#Al. i4tJI£ pts s 1. ALL PROPERTY. CES##2hIERS FO UND ARE CONTROL MONUMENTS. W 2 SUBj'E'T TQ ANY ANIS ALL COVENANTS,. R>~5 12ICTI��, EASE�IEhITS AAIB C.UNDITIONS TfiAT MAY BE APPLICABLE, 5/8" S 87'5546" W -- 2.54.44' r. 3) THIS DRAWING IS ACCOMPANIED .BYA. METES AND 13OUNDS DESCRIPTION. �' (S 89,36'19" W -- 264;47) .4)-BEARINGS:.AREBASEL? ON 1TfE TEXAS CITRAL STATE PLANE Z CALLED 5.53 ACRES COORI)INATE SYSTEM DIAD '63 {HARK '9a}; WHICH IS.E3ASED ON LEICA'S RICHARD G. NORD. AND \M E, JOY MORD. k VOL. 90.62 PAG289 D.R-J&C.T.. CENTI L TEXAS GPS COOPERA11VE CORS RTK NETWORK.. l y P I Chisholm Trail,Suite 130j-Round Rack,Texas 78681 512.248.0065 a� TEXAS kEQST>:i{E0 NGINEEk�NC rIRM E-1741 .Y BPL51cl19I z5 ,--- r - I T q. I HEREBY NATE THAT TO: THE BEST OF MY PROFESSIONAL VVL AND BELIED' THAT ups „ THIS PLAT'AND THE SURVEY U00N. WHICH IT IS SASUIREMEI�fTS FOR MARGARITA.�' 1LEN LAND SURVEYS: IN THE STATE OF TEXAS: �' SUI YED DURING JANUARY AND FEBRUARY, 2018 w AR RET A. NOLEN, R.P.L..S. NO.. 5589 a OF 3 0 150, 30G� PLAT NO.ASB o .. ,DRAFT DATE 02/01/2018 DRAWN BY MAIC ' SCALE >ri►QRtf ORDER NO.1500603 FIELDBOC)K 313: TAB # A-5120 /5006038 PkR L. 10 F 150DfiQ.�R' PARCEL 11� 211 ALL RIGHTS RES RUED DIGITAL FILE /N i rr EXHIBIT "B" Parcel 10 DEED Kenney Fort Boulevard Right of Way THE STATE OF TEXAS § COUNTY OF WILLIAMSON § NOTICE OF CONFIDENTIALITY RIGHTS; IF YOU ARE A NATURAL PERSON,YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. NOW, THEREFORE, KNOW ALI, BY THESE PRESENTS: That FARID AGAE1, a single person, hereinafter referred to as Grantor, whether one or more, for and in consideration of the sum of Ten Dollars ($1.0.00) and other good and valuable consideration to Grantor in hand paid by City of Round Rock, Texas, the receipt and sufficiency of which is hereby acknowledged, and for which no lien is retained, either expressed or implied, have this day Sold and by these presents do Grant, Bargain, Sell and Convey unto CITY OF ROUND ROCK, TEXAS, all that certain tract or parcel of land lying and being situated in the County of Williamson, State of Texas, along g with any improvements thereon, being more particularly described as follows: All of that certain. 5.17 acre -tract of land out of and situated in the A. Thomas Survey, Abstract No. 609 in Williamson County. Texas; being a portion of a called 5.19 acre tract of land as described in a deed to Farid Agahi and recorded in document No. 2013003398 of the Official Public Records of said County; more fully described in Exhibit"A",attached hereto and incorporated herein(Parcel 10) SAVE AND EXCEPT, HOWEVER, It is expressly understood and agreed that Grantor is retaining title to the following improvements located on the property described in said Exhibit "A" to wit: NONE RESERVATIONS FROM AND EXCEPTIONS TO CONVEYANCE AND WARRANTY: Visible and apparent easements not appearing of record, Any discrepancies, conflicts, or shortages in area or boundary lines or any shortages or any overlapping of improvements which a current survey would show-, Easements, restrictions, reservations, covenants, conditions, oil and gas leases, mineral severances, and encumbrances for taxes and assessments (other than liens and conveyances) presently of record in the Official Public Records of Williamson County, Texas, that affect the property, but only to the extent that said items are still valid and in force' and effect at this time. 00413413.DOC ----------- Grantor reserves all of the oil, gas and other minerals in and under the land herein conveyed but waives all rights of ingress and egress to the surface thereof for the purpose of exploring, developing, mining or drilling or pumping the same; provided., however, that operations for exploration or recovery of any such minerals shall be permissible so long as all surface operations in connection therewith are located at a point outside the acquired parcel and upon the condition that none of such operations shall be conducted so near the surface of said land as to interfere with the intended use thereof or in any way interfere with,jeopardize, or endanger the facilities of the City of R-ound Rock, Texas or create a hazard to the public users thereof; it being intended, however, that .nothing in this reservation shall affect the title and the rights of Grantee to take and use without additional compensation any, stone, earth, gravel, caliche, iron ore, gravel or any other road building material upon, in and under said land for the construction and maintenance of Kenney Fort Boulevard. TO HAVE AND TO HOLT) the property herein described and herein conveyed together with all and singular the rights and appurtenances thereto in any wise belonging unto City of Round Rock, Texas and its assigns forever; and Grantor does hereby bind itself, its heirs, executors, administrators, successors and assigns to Warrant and Forever Defend all and singular the said premises herein conveyed unto City of Round Rock, Texas and its assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof. This deed is being delivered in lieu of condemnation. IN WITNESS WHEREOF, this instrument is executed on this the _ day of 2018. GRANTOR: Farid Agahi 7 t ov ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF § This instrument was acknowledged before me on this the day of 2018. by Farid Agahi, in the capacity and for the purposes and consideration recited therein. Notary Public, State of Texas PREPARED IN THE OFFICE. OF: Sheets & Crossfield, P.C. 309 East Main Round Rock, Texas 78664 GRANTEE'S MAILING.ADDRESS: City of Round Rock Attn: City Manager 221 Main Street Round Rock, Texas 78664 AFTER RECORDING RETURN TO: 3.