Contract - Valley View Consulting, LLC - 9/10/2015 CITY OF ROUND ROCK AGREEMENT
FOR PROFESSIONAL CONSULTING SERVICES WITH
VALLEY VIEW CONSULTING,L.L.C.
THE STATE OF TEXAS §
THE CITY OF ROUND ROCK § KNOW ALL BY THESE PRESENTS
COUNTY OF WILLIAMSON §
THIS AGREEMENT for professional consulting services related to advisory services for
the City's investment portfolio (hereinafter referred to as the "Agreement") is made by and
between the CITY OF ROUND ROCK; a Texas home-rule municipal corporation with offices
located at.221 East Main Street, Round Rock, Texas 78664-5299 (the "City"), and VALLEY
VIEW CONSULTING, L.L.C. located at 2428 Carters Mill Road, Huddleston, VA 24104
(hereinafter the"Consultant").
RECITALS:
WHEREAS, City previously determined that there is a need for the delineated services;
and
WHEREAS, City desires to enter into an Agreement with Consultant for investment
advisory services as set forth herein; and
WHEREAS, the parties desire to enter into this Agreement to set forth in writing their
respective rights, duties and obligations hereunder;
NOW, THEREFORE,WITNESSETH:
That for and in consideration of the mutual promises contained herein and other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, it is
mutually agreed between the parties as follows:
1.01 EFFECTIVE DATE,DURATION,AND TERM
A. This Agreement shall be effective on the date this Agreement has been signed by
each party hereto, and shall remain in full force and effect unless and until it expires by operation
of the term indicated herein, or is terminated or extended as provided herein.
B. The term of this Agreement shall be for twenty-four (24) months from the
effective date hereof. After that term, this Agreement may be renewed for two (2) successive
twenty-four (24) month periods, under the same terms and conditions, only upon the express
written agreement of both parties, and only provided that the Consultant has performed each and
every contractual obligation specified in this Agreement.
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C. City reserves the right to review the Agreement at any time, and may elect to
terminate the Agreement with or without cause pursuant to Section 1.10.
1.02 SCOPE OF WORK
A. For purposes of this Agreement Consultant has issued its Response to City's
Request for Proposal ("RFP") No. 15-020, said Response being dated July 9, 2015, attached as
Exhibit "A," and incorporated herein for all purposes. Consultant shall perform its services in
accordance with this Agreement and in accordance with Exhibit "A." Consultant shall
satisfactorily provide all services and deliverables described in the Proposed Services (pages 15-
22 of Exhibit"A") within the contract term specified in Section 1.01. Consultant's undertakings
shall be limited to performing services for City and/or advising City concerning those matters on
which Consultant has been specifically engaged. Consultant shall perform its services in a
professional and workmanlike manner.
B. Consultant shall not undertake work that is beyond the Proposed Services set forth
in Exhibit "A." However, either party may make written requests for changes to the Proposed
Services. To be effective, a change to the Proposed Services must be negotiated and agreed to in
all relevant details, and must be embodied in a valid Supplemental Agreement as described in
Section 1.04 hereof.
1.03 PAYMENT FOR SERVICES; REIMBURSABLE EXPENSES
A. Not-to-Exceed Total Payment for Services: Consultant's total compensation
for consulting services hereunder shall not exceed Seventy-Five Thousand Dollars and no/100
($75,000.00) per year. This amount represents the absolute limit of City's liability to
Consultant hereunder unless same shall be changed by Supplemental Agreement, and City shall
pay, strictly within the not-to-exceed sum recited herein, Consultant's professional fees for work
done on behalf of City. This amount includes all reimbursable expenses, including travel costs.
B. Payment for Reimbursable Expenses: There shall be no payments for
reimbursable expenses included in this Agreement.
C. Deductions: No deductions shall be made for Consultant's compensation on
account of penalty, liquidated damages or other sums withheld from payments to Consultant.
D. Additions: No additions shall be made to Consultant's compensation based upon
project claims,whether paid by City or denied.
1.04 SUPPLEMENTAL AGREEMENT
The terms of this Agreement may be modified by written Supplemental Agreement
hereto, duly authorized by City Council or by the City Manager, if City determines that there has
been a significant change in (1) the scope, complexity, or character of the services to be
performed; or (2) the duration of the work. Any such Supplemental Agreement must be
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executed by both parties within the period specified as the term of this Agreement. Consultant
shall not perform any work or incur any additional costs prior to the execution, by both parties,
of such Supplemental Agreement. Consultant shall make no claim for extra work done or
materials furnished unless and until there is full execution of any Supplemental Agreement, and
City shall not be responsible for actions by Consultant nor for any costs incurred by Consultant
relating to additional work not directly authorized by Supplemental Agreement.
1.05 INVOICE REQUIREMENTS; TERMS OF PAYMENT
A. Invoices: To receive payment, Consultant shall prepare and submit a series of
quarterly detailed invoices to City for services rendered. Each invoice for professional services
shall detail the service performed, along with documentation. All payments to Consultant shall
be made on the basis of the invoices submitted by Consultant and approved by City.
Should additional backup material be requested by City, Consultant shall- comply
promptly. In this regard, should City determine it necessary, Consultant shall make all records
and books relating to this Agreement available to City for inspecting and auditing.
If City has any dispute with work performed, then then City shall notify Consultant
within thirty (30) days after receipt of invoice. In the event of any dispute regarding the work
performed,then and in that event Consultant shall either(a) satisfactorily re-perform the disputed
services or(b)provide City with an appropriate credit.
B. Payment of Invoices: City reserves the right to correct any error that may be
discovered in any invoice that may have been paid to Consultant and to adjust same to meet the
requirements of this Agreement. Following approval of an invoice, City shall endeavor to pay
Consultant promptly, but no later than the time period required under the Texas Prompt Payment
Act described in Section 1.09 herein. Under no circumstances shall Consultant be entitled to
receive interest on payments which are late because of a good faith dispute between Consultant
and City or because of amounts which City has a right to withhold under this Agreement or state
law. City shall be responsible for any sales, gross receipts or similar taxes applicable to the
services, but not for taxes based upon Consultant's net income.
C. Offsets: City may, at its own option, offset any amounts due and payable
hereunder against any debt (including taxes) lawfully due to City from Consultant, regardless of
whether the amount due arises pursuant to the terms of this Agreement or otherwise and
regardless of whether or not the debt due to City has been reduced to judgment by a court.
1.06 REQUIRED REPORTS
Consultant agrees to provide City with any necessary detailed interim and final written
reports, together with all information gathered and materials developed during the course of the
project. Additionally, Consultant agrees to provide City with any necessary oral presentations or
such detailed interim and final written reports, at City's designation and at no additional cost to
City.
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1.07 LIMITATION TO PROPOSED SERVICES
Consultant and City agree that the Proposed Services to be performed is enumerated in
Exhibit "A," and may not be changed without the express written agreement of the parties.
Notwithstanding anything herein to the contrary, the parties agree that City retains absolute
discretion and authority for all funding decisions, such to be based solely on criteria accepted by
City which may be influenced by but not be dependent on Consultant's work.
1.08 NON-APPROPRIATION AND FISCAL FUNDING
This Agreement is a commitment of City's current revenues only. It is understood and
agreed that City shall have the right to terminate this Agreement at the end of any City fiscal year
if the governing body of City does not appropriate funds sufficient to purchase the services as
determined by City's budget for the fiscal year in question. City may effect such termination by
giving Consultant a written notice of termination at the end of its then-current fiscal year.
1.09 PROMPT PAYMENT POLICY
In accordance with Chapter 2251, V.T.C.A., Texas Government Code, any payment to be
made by City to Consultant will be made within thirty (30) days of the date City receives goods
under this Agreement, the date the performance of the services under this Agreement are
completed, or the date City receives a correct invoice for the goods or services, whichever is
later. Consultant may charge interest on an overdue payment at the"rate in effect"on September
1 of the fiscal year in which the payment becomes overdue, in accordance with V.T.C.A.,Texas
Government Code, Section 2251.025(b). This Prompt Payment Policy does not apply to
payments made by City in the event:
(a) There is a bona fide dispute between City and Consultant, a contractor,
subcontractor, or supplier about the goods delivered or the service performed
that cause the payment to be late; or
(b) There is a bona fide dispute between Consultant and a subcontractor or
between a subcontractor and its supplier about the goods delivered or the
service performed that causes the payment to be late; or
(c) The terms of a federal contract, grant, regulation, or statute prevent City from
making a timely payment with federal funds; or
(d) The invoice is not mailed to City in strict accordance with any instruction on
the purchase order relating to the payment.
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1.10 TERMINATION
This Agreement may be terminated for any of the following conditions:
(1) By City for reasons of its own, with or without cause, and not subject to the
mutual consent of any other party, provided a written termination notice is given
to Consultant not less than thirty(30) days prior to termination.
(2) By mutual agreement and consent of the parties, provided such agreement is in
writing.
(3) By either party for failure by the other to perform the services set forth herein in a
satisfactory manner, provided such notice is given to the other party in writing.
(4) By either party for failure by the other party to fulfill its obligations herein.
(5) By satisfactory completion of all services and obligations described herein.
Should City terminate this Agreement as herein provided, no fees other than fees due and
payable at the time of termination shall thereafter be paid to Consultant. City shall pay
Consultant for all uncontested services performed to date of notice of termination.
If City terminates this Agreement for default on the part of the Consultant,then City shall
give consideration to the actual costs incurred by Consultant in performing the work to the date
of default. The cost of the work that is useable to City, the cost to City of employing another
firm to complete the useable work, and other factors will affect the value to City of the work
performed at the time of default.
The termination of this Agreement and payment of an amount in settlement as set forth
above shall extinguish all rights, duties, and obligations of City and the Consultant to fulfill
contractual obligations. Termination under this section shall not relieve the terminated party of
any obligations or liabilities which occurred prior to cancellation.
1.11 INDEPENDENT CONTRACTOR STATUS
Consultant is an independent contractor, and is not City's employee. Consultant's
employees or subcontractors are not City's employees. This Agreement does not create a
partnership, employer-employee, or joint venture relationship. No party has authority to enter.
into contracts as agent for the other party. Consultant and City agree to the following rights
consistent with an independent contractor relationship:
(1) Consultant has the right to perform services for others during the term hereof.
(2) Consultant has the sole right to control and direct the means, manner and method
by which it performs its services required by this Agreement.
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(3) Consultant has the right'to hire assistants as subcontractors, or to use employees
to provide the services required by this Agreement.
(4) Consultant or its employees or subcontractors shall perform services required
hereunder, and City shall not hire, supervise, or pay assistants to help Consultant.
(5) Neither Consultant nor its employees or subcontractors shall receive training from
City in skills necessary to perform services required by this Agreement.
(6) City shall not require Consultant or its employees or subcontractors to devote full
time to performing the services required by this Agreement.
(7) Neither Consultant nor its employees or subcontractors are eligible to participate
in any employee pension, health, vacation pay, sick pay, or other fringe benefit
plan of City.
1.12 NON-SOLICITATION
All parties agree that they shall not directly or indirectly solicit for employment, employ,
or otherwise retain staff of the other during the term of this Agreement.
1.13 CONFIDENTIALITY; AND MATERIALS OWNERSHIP
Any and all programs, data, or other materials furnished by City for use by Consultant in
connection with services to be performed under this Agreement, and any and all data and
information gathered by Consultant, shall be held in confidence by Consultant as set forth
hereunder. Each party agrees to hold all confidential information in the strictest confidence and
not make any use thereof other than for the performance of this Agreement. Notwithstanding the
foregoing, the parties recognize and understand that City is subject to the Texas Public
Information Act and its duties run in accordance therewith.
Any and all materials created and developed by Consultant in connection with services
performed under this Agreement, including all trademark and copyright rights, shall be the sole
property of City at the expiration of this Agreement.
1.14 WARRANTIES
Consultant warrants that all services performed shall be performed consistent with
generally prevailing professional or industry standards, and be performed in a professional and
workmanlike manner. Consultant shall re-perform any work no in compliance with this
warranty.
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1.15 INDEMNIFICATION
Consultant agrees to hold .harmless, exempt, and indemnify City, its officers, agents,
directors, servants, representatives and employees, from and against any and all suits, actions,
legal proceedings, demands, costs, expenses, losses, damages, fines, penalties, liabilities and
claims of any character, type, or description, including but not limited to any and all expenses of
litigation, court costs, attorneys' fees'and all other costs and fees incident to any work done as a
result hereof.
To the extent allowable by. law, City agrees to hold harmless, exempt, and indemnify
Consultant, its officers, agents, directors, servants, representatives and employees, from and
against any and all suits, actions, legal proceedings, demands, costs, expenses, losses, damages,
fines, penalties, liabilities and claims of any character, type, or description, including but not
limited to any and all expenses of litigation, court costs, attorneys' fees and all other costs and
fees incident to any work done as a result hereof.
1.16 ASSIGNMENT AND DELEGATION
The parties each hereby bind themselves, their successors, assigns and legal
representatives to each other with respect to the terms of this Agreement. Neither party may
assign any rights or delegate any duties under this Agreement without the other party's prior
written approval, which approval shall not be unreasonably withheld.
1.17 LOCAL, STATE AND FEDERAL TAXES
Consultant shall pay all income taxes, and FICA (Social Security and Medicare taxes)
incurred while performing services under this Agreement. City will not do the following:
(1) Withhold FICA from Consultant's payments or make FICA payments on its
behalf;
(2) Make state and/or federal unemployment compensation contributions on
Consultant's behalf, or
(3) Withhold state or federal income tax from any of Consultant's payments.
If requested, City shall provide Consultant with a certificate from the Texas State
Comptroller indicating that City is a non-profit corporation and not subject to State of Texas
Sales and Use Tax.
1.18 COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES
Consultant, its consultants, agents, employees and subcontractors shall use best efforts to
comply with all applicable federal and state laws, the Charter and Ordinances of the City of
Round Rock, as amended, and with all applicable rules and regulations promulgated by local,
state and national boards, bureaus and agencies. Consultant shall further obtain all permits,
licenses, trademarks, or copyrights required in the performance of the services contracted for
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herein, and same shall belong solely to City at the expiration of the term of this Agreement.
1.19 FINANCIAL INTEREST PROHIBITED
Consultant covenants and represents that Consultant, its officers, employees, agents,
consultants and subcontractors will have no financial interest, direct or indirect, in the purchase
or sale of any product, materials or equipment that will be recommended or required hereunder.
1.20 DESIGNATION OF REPRESENTATIVES
City hereby designates the following representative authorized to act in its behalf with
regard to this Agreement:
Susan L. Morgan, CPA, CFO
City of Round Rock
221 East Main Street
Round Rock, TX 78664
Consultant hereby designates the following representative authorized to act in its behalf
with regard to this Agreement:
Richard Long
Valley View Consulting, L.L.C.
2428 Carters Mill Road
Huddleston, VA 24104
1.21 NOTICES
All notices and other communications in connection with this Agreement shall be in
writing and shall be considered given as follows:
(1) When delivered personally to recipient's address as stated herein; or
(2) Three (3) days after being deposited in the United States mail, with postage
prepaid to the recipient's address as stated in this Agreement.
Notice to Consultant:
Richard Long
Valley View Consulting, L.L.C.
2428 Carters Mill Road
Huddleston, VA 24104
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Notice to City:
City Manager, City of Round Rock
221 East Main Street
Round Rock, TX 78664
AND TO:
Stephan L. Sheets, City Attorney
309 East Main Street
Round Rock, TX. 78664
Nothing contained in this section shall be construed to restrict the transmission of routine
communications between representatives of City and Consultant.
1.22 APPLICABLE LAW; ENFORCEMENT AND VENUE
This Agreement shall be enforceable in Round Rock, Texas, and if legal action is
necessary by either party with respect to the enforcement of any or all of the terms or conditions
herein, exclusive venue for same shall lie in Williamson County, Texas. This Agreement shall
be governed by and construed in accordance with the laws and court decisions of Texas.
1.23 EXCLUSIVE AGREEMENT
The terms and conditions of this Agreement, including exhibits, constitute the entire
agreement between the parties and supersede all previous communications, representations, and
agreements, either written or oral, with respect to the subject matter hereof. The parties
expressly agree that, in the event of any conflict between the terms of this Agreement and any
other writing, this Agreement shall prevail. No modifications of this Agreement will be binding
on any of the parties unless acknowledged in writing by the duly authorized governing body or
representative for each party.
1.24 DISPUTE RESOLUTION
City and Consultant hereby expressly agree that no claims or disputes between the parties
arising out of or relating to this Agreement or a breach thereof shall be decided by any arbitration
proceeding, including without limitation, any proceeding under the Federal Arbitration Act (9
USC Section 1-14) or any applicable state arbitration statute.
1.25 ATTORNEYS FEES
In the event that any lawsuit is brought by one party against any of the other parties in
connection with this Agreement, the prevailing party shall be entitled to seek to recover its
reasonable costs and reasonable attorney fees.
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1.26 FORCE MAJEURE
Notwithstanding any other provisions hereof to the contrary, no failure, delay or default
in performance of any obligation hereunder shall constitute an event of default or breach of this
Agreement, only to the extent that such failure to perform, delay or default arises out of causes
beyond control and without the fault or negligence of the party otherwise chargeable with failure,
delay or default; including but not limited to acts of God, acts of public enemy, civil war,
insurrection, riots, fires, floods, explosion, theft, earthquakes, natural disasters or other
casualties, strikes or other labor troubles, which in any way restrict the performance under this
Agreement by the parties.
Consultant shall not be deemed to be in default of its obligations to City if its failure to
perform or its substantial delay in performance is due to City's failure to timely provide
requested information, data, documentation, or other material necessary for Consultant to
perform its obligations hereunder.
1.27 SEVERABILITY
The invalidity, illegality, or unenforceability of any provision of this Agreement or the
occurrence of any event rendering any portion of provision of this Agreement void shall in no
way affect the validity or enforceability of any other portion or provision of this Agreement.Any
void provision shall be deemed severed from this Agreement, and the balance of this Agreement
shall be construed and enforced as if this Agreement did not contain the particular portion of
provision held to be void.The parties further agree to amend this Agreement to replace any
stricken provision with a valid provision that comes as close as possible to the intent of the
stricken provision. The provisions of this Article shall not prevent this entire Agreement from
being void should a provision which is of the essence of this Agreement be determined void.
1.28 STANDARD OF CARE
Consultant represents that it is specially trained, experienced and competent to perform
all of the services, responsibilities and duties specified herein and that such services,
responsibilities and duties shall be performed, whether by Consultant or designated
subconsultants, in a manner acceptable to City and according to generally accepted business
practices.
1.29 GENERAL AND MISCELLANEOUS
The section numbers and headings contained herein are provided for convenience only
and shall have no substantive effect on construction of this Agreement.
No delay or omission by either party in exercising any right or power shall impair such
right or power or be construed to be a waiver. A waiver by either party of any of the covenants
to be performed by the other or.any breach thereof shall not be construed to be a waiver of any
succeeding breach or of any other covenant. No waiver of discharge shall be valid unless in
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writing and signed by an authorized representative of the party against whom such waiver or
discharge is sought to be enforced.
This Agreement may be executed in multiple counterparts, which taken together shall be
considered one original. City agrees to provide Consultant with one fully executed original.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
hereafter indicated.
City.of Round Rock,Texas Valley View Consulting,L.L.C.
By: By:
/
Printed Name: Printed Name: Rcut rind G. NG,sir,
Title: Wv WF Title: 14-1A-1r,6G'EiT
Date Signed: Date Signed:
For City,Attest:
C�jjR,�v
By:
Sara L. White, City Jerk `
For City, proved as to rm:
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Stephan Sheets, City Attorney
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ROUND ROCK TEXAS
PURCHASING DIVISION
Request for Proposal No. 15-020
Investment Advisory Services
Submittal Deadline:
July 9, 2015, 3:00 p.m.
Proposal By:
Valle View Consulting, L.L.C.
Address of Record: Round Rock-area Representative:
Richard G. Long, Manager Susan K. Anderson
2428 Carters Mill Rd. 130 Pecan Creek Drive
Huddleston, VA 24104-4003 Horseshoe Bay, TX 78657
rglong@valleyviewconsultingllc.com skanderson@valleyviewconsultingllc.com
888.853.3778 (Office) 830.637.7755 (Office)
817.296.9860 (Cell) 512.658.6237 (Cell)
Exhibit "A"
Valletl View Consulting,L.L.C.
Page 1.
A �PB7
ROUND ROCK TEXAS
PURCHASING DIVISION
Investment Advisory Services
Request for Proposal No. 15-020
Table of Contents
Tab 1:Title Page,Letter of Transmittal and Table of Contents------------------------------------Page 2
Tab 2: Company Information -------------Page 4
Tab 3:Experience and Qualifications............................................ __--...-----_--......__..Page 7
Tab 4:Personnel ------------------------------------•----------•-----------------------------Page 9
Tab 5:Proposed Services and Investment Approach.....................................................Page 15
Tab 6:References ------•----••----------------------•-----------•-•------•-•---•------•---•---Page 23
Tab 7:Proposal Submittal and Execution Form............................ ._--__-_...--._.._.....-_Page 24
Tab8: Cost Proposal-----------------------------------------------•--------------•--•---------------------------•------- Page 25
ATTACHMENTS:
Addendum Acknowledgement Form
Form ADV Part 1
Form ADV Part 2
Market Outlook
Monthly Reports-Example
Quarterly Report-Example
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Valley Mew Consulting,L.L.C.
Page 2.
July 9, 2015
City of Round Rock
Attn: Deborah Knutson,CPPB
221 East Main Street
Round Rock,TX 78664-5299
Dear Ms. Knutson:
Thank you for this opportunity to present Valley View's credentials for investment advisor services
for the City of Round Rock (the "City"). Attached is our response to the RFP addressing Valley
View's experiences, philosophies, and capabilities related to the objectives and work to be performed
under this contract.
In a nutshell, we believe an investment advisor should function as an extension of the City's finance
staff. Managing the portfolio the way the City would, if staff had the time to dedicate. We monitor
markets on the City's behalf, and develop and execute investment strategies to safely optimize the
returns of the City's portfolio. Our strategy and selection considerations are fully discussed prior to
execution so that the City can be comfortable that appropriate decisions are made.
This RFP response discusses our overall strategy in determining allocation of financial assets,
analysis of the stable fund balances through cash flow modeling, and risk-appropriate yield curve
positioning to enhance long-range returns. Over time, this strategy optimizes risk/return through
targeted yield curve position and patiently allowing the markets to add value. Speculation is
prohibited by the Texas Public Funds Investment Act(the"PFIA")and is not part of this plan.
That said, today's shifting yield curve mandates careful implementation. There is still strategic
advantage in developing a long-range plan, but the approach needs extra patience.
If the City chose to contract with Valley View, the investment management services you would
receive include:
• Strategic portfolio advice to achieve the City's investment objectives,
• Investment policy and bond covenant review,
• Development of historical cash flow model for all non-bond funds,
• Project management assistance to develop a cash flow model for bond proceeds,
• Complete analysis of investment types,pools, and money market funds,
• Thorough communication,reporting,and training,
• Effective investment provider management,
• Integration of bond proceeds investment, and
• Long range portfolio strategy development.
These services would be performed as non-discretionary functions, working to assist the City
through:
➢ Personal Commitment Valley View's business objectives create dedicated focus.
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
wmv.valleyviewconsultingllc.com
Exhibit "A"
vaned View Consulting,L.L.C.
Page 3.
➢ Education—Full discussion of portfolio decisions, development of beneficial investment
provider relationships,and continuing education increases the City's abilities.
➢ Independence—Valley View independently analyzes each investment option. There is no
promotional advantage to any choice,nor hidden agendas or back door marketing efforts to
jeopardize recommendations.
Providing value added services for a reasonable and appropriate fee is Valley View's objective.
With that in mind, and based upon the current portfolio balances, we propose a sliding scale annual
fee based on the estimated $365 million portfolio average book value. Standard invoicing would be
quarterly, in arrears. Please consider services provided and level of fees to be negotiable.
Valley View is admittedly a small firm with a relatively few clients that have been carefully
cultivated due to their compatibility with our business plan. This discretion is the cornerstone of our
commitment to customer service, to ensure that each client feels as if they are our only client. And,
even though our business address is in Virginia, Valley View is essentially a Texas-public.funds
investment advisor. Ahnost all of our clients are Texas public entities subject to the PFIA,therefore
most of our client portfolios will be similar to that of the City.
Valley View practices a team approach to client service. The team members listed below are
authorized to act on behalf of Valley View.
Dick Long RIAICIO Huddleston, 540.297.3419 . rglong_a.vallevviewconsultinQllc.com
/CCO VA
Susan RIA Horseshoe 512.658.6237 skanderson n,vallevviewconsultingllc.com
Anderson Bay,TX
Bill Koch RIA Dallas,TX 972.682.6900 wikoclin.vallevviewconsultinQllc.com
Tom Ross RIA Bedford,TX 817.494.8019 throsscvallevviewconsultinQllc.com
(RIA=Registered Investment Advisor,CIO=Chief Investment Officer,CCO=Chief Compliance Officer)
The Valley View team has been providing cash and investment services to public funds for many
years. We hope that our experience and proven successes ease your decision to select Valley View
as investment advisor. Please call me at (888) 853-3778 if there are any questions or to discuss
moving forward.
Sincerely,
Richard G. Long, Jr.
Manager, Valley View Consulting,L.L.C.
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
www.valleyviewconsu ltingl lc.com
Exhibit "A"
77
Vallecl Vew Consulting,L.L.C.
Page 4.
4.2.2. TAB 2: Company Information
Proposal shall include the legal definition of the Respondent's business organization (if a
corporation), the state in which incorporated, the types of business ventures in which the
organization is involved, and a chart of the organizational structure. If the organization
includes more than one product division, the division responsible for the development and
marketing of the proposed products and services shall be identified and described in detail.
Proposal should include information regarding all of the respondent's facilities and
resources offered that shall contribute to the successful implementation of the proposed
program. At a minimum,but not limited to, provide:
4.2.2.1. A description of your firm, including date founded, ownership as well as any
subsidiaries or affiliates that are relevant to the City;
Valley View Consulting L.L.C. is a Virginia Limited Liability Corporation.
Valley View Consulting, L.L.C. is a Securities and Exchange Commission ("SEC") registered
investment advisory firm serving public entities in a variety of cash and investment management
and consulting roles. Valley View provides completely independent advice and consultation and
is not affiliated with any investment pool, mutual fund, broker/dealer, financial institution, or
investment provider.
Valley View was founded in the fall of 1998 and registered with the SEC as an investment
advisor firm effective January 1999. Richard G. Long, Jr. wholly owns the firm. To more fully
address the complete spectrum of client needs, Mr. Long has teamed with Susan K. Anderson,
Benjamin F. Day, Julie S. Gerhardt, William J. Koch, Johnny L. Phifer, and Thomas H. Ross.
These affiliations assure that our clients will receive more comprehensive and individually
designed services related to the financial programs of government investors. The requested chart
of the organizational structure is below.
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The combined experience of the individuals involved in this proposal exceeds 130 years,
primarily developed and built working with Texas local governments. The team is fully capable
of assessing the needs of the City, examining the current cash management policies and
practices, reviewing and managing bank relationships, and developing effective and
comprehensive investment strategies.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
w%v%v.valleyviewconsultingl la.com
Exhibit "A"
Valley View Consulting,L.L.C.
Page 5.
Although Valley View's office of registration is in Virginia, it is fully registered with the State of
Texas and has personnel located in the Austin, Dallas and Fort Worth areas. All services
provided will be seamless from any physical address.
Valley View is not affiliated with any brokerage firms, financial institutions, investment
providers, or money management firms.
Valley View does not generate any additional revenue, income, soft dollar, or other form of
compensation, either disclosed or undisclosed, related to performing investment advisor services
for the City. No transactions will flow through an affiliated trading desk or be subject to
additional price mark-up. No pool management or referral fees will be generated. No deposit
broker or placement fees will be received. Every strategy recommendation and transaction will
be based solely on fulfilling the City's objectives.
It is important to understand the benefit of our independence from trading or product-related
revenues. Some advisors derive revenues beyond those that are paid in hard dollars by their
client. As an example, firms that offer investment products derive a fee from them based upon
the dollars that are invested in that product. By recommending their product, these managers
subsidize their contracted fees from that client. Other firms require that securities be traded
through their own trading desks, which may generate additional compensation. Both of these
techniques are not noticeable to the client, but ultimately reduce their returns. Valley View's
independence means that we derive revenues as hard dollar payments from our clients and from
no other sources.
4.2.2.2. Ownership information (if partnership, identify each partner);
As stated above, Richard G. Long, Jr. wholly owns the firm.
4.2.2.3. Physical address (if partnership, include address of each partner) and mailing
address if different;
2428 Carters Mill Road, Huddleston, Virginia,24104
4.2.2.4. Other company locations if applicable;
As stated earlier, Valley has personnel located in the Austin,Dallas and Fort Worth areas.
4.2.2.5.Audited financial statements for the last three (3)years.
As per the Security and Exchange Commission ("SEC") regulations, Valley View does not
provide custody of client assets, nor advance bill for services in excess of six months, therefore
audited financial statements are not required or available.
As a practical statement, Valley View is'a single investor limited liability company with minimal.
assets. Valley View has been quite successful in fulfilling its clients' cash and investment
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Valley Utew Consulting,L.L.C.
Page 6.
objectives. The contracted client base and revenues are growing and are on track with the
business plan. Valley View is confident it has the ability, commitment and financial resources to
provide the services that the City desires.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyvic%veonsultingllc.com
Exhibit "A"
Valley View Consulting,,L.L.C.
Page 7.
4.2.3. TAB 3: Experience and Qualifications
Pursuant with Part II, Statement of Work, the proposal shall describe the services your
organization has provided demonstrating your organization's capability to carry out the
proposed services. Include a narrative overview of the nature of the services provided,
scope of activities, and the organization for which the service was provided. Included in
your descriptions:
4.2.3.1. The types of accounts primarily sought by your firm and any experience in
providing similar services to public entities. Your firm's experience as investment advisors
for municipalities and other public fund entities;
Valley View exclusively manages public sector portfolios and focuses all our efforts on the types
of securities and strategies that are appropriate for government entities. Our team members have
extensive experience in managing portfolio assets in conformance with the PFIA. Both Ms.
Anderson and Mr. Long provide PFIA-required investment training to public sector investment
officers through the University of North Texas Center for Public Management. Additionally,
Ms. Anderson, Mr. Phifer and Mr. Ross have served significant portions of their careers working
for Texas governmental entities and have an intimate knowledge of the inner workings of
government finance departments.
4.2.3.2. Any SEC or regulatory censure or litigation involving your firm or its employees
within the past five (5) years. If there has not been any censure or litigation, please provide
a statement attesting to this;
Ms. Anderson, Mr. Day, Ms. Gerhardt, Mr. Koch, Mr. Long, Mr. Phifer, Mr. Ross, nor Valley
View has ever been subject to any SEC or regulatory censure or litigation.
4.2.3.3. Contact name and telephone number for any client, if any, who have terminated
your contracts in the last three (3)years;
Valley View's individual client focus has proven to develop long-term client relationships. In
the past three years, Valley View has had three clients that have not renewed their contracts at
expiration.
From time to time, local governments contract to invest a specific bond issue's proceeds. When
those proceeds are expended, the contract naturally expires. Additionally, non-advisory
consulting clients ebb and flow as projects are developed and completed.
City of Beaumont, Texas
Laura Clark, CFO
409.880.3789
The City opted to not renew the Valley View contract due to system-wide reduction of out-
sourcing contracts and was not related to performance of Valley View.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyvie%vconsultingllc.com
Exhibit "A"
Valley View Consulting,L.L.C.
Page 8.
Lone Star College System
Tammy Cortes,Assistant Vice Chancellor,Administration and Finance
832.813.6820
The College recently opted to not renew at expiration due to a system-wide reduction of out-
sourcing contracts and was not related to performance of Valley View.
JPS Health Network
Christine Putz, Interim VP of Finance
817.920.6835
JPS opted to consolidate investment and financial advisory services.
4.2.3.4. Current copies of your firm's Form ADV Parts I and II as on file with the SEC and
proof of your registration with the Texas State Securities Board.
ADV Parts 1 and 2 are attached.
Valley View qualifies for national registration — SEC registration file number 801-56181. The
SEC registration includes a Notice Filing to the State of Texas.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyvie%vconsultingllc.com
Exhibit "A"
Valley View Con5ultinrJ,L.L.C.
Page 9.
4.2.4. TAB 4: Personnel
Respondents shall,but not be limited to, provide:
4.2.4.1. Resumes for all personnel who shall be responsible for the management and day-to-
day operations of the products/services solicited in this RFP;
The following resumes highlight each team member's experience:
Richard G. Long, Jr.
Mr. Long's background includes extensive public entity investment management (he is
responsible for approximately $2.5 billion). He has been actively involved in the public funds
investment legislation; investment policies and strategies; cash flow-based investment portfolios;
eligible investment options; appropriate asset allocations; investment transaction settlement and
safekeeping procedures; bank service agreements; and arbitrage rebate regulation.
Mr. Long founded Valley View Consulting, L.L.C., in the fall of 1998 and became registered
with the SEC as an investment advisor firm effective January 1999. At his previous employers
(First Southwest Company and Ambac Investment Management, Inc.) he established and/or
managed their investment management efforts. In other previous capacities,Mr. Long originated
corporate, asset backed and tax-exempt securities, managed a government trading operation, and
distributed both public and private securities.
Mr. Long earned a Bachelor of Science, Business Administration degree in Finance from
Colorado State University and a Masters of Business Administration degree from the University
of Dallas. Mr. Long has presented information to multiple public funds investment management
organizations and is on the University of North Texas Center For Public Management staff
providing PFIA-required continuing education.
Mr. Long is a registered investment adviser representative.
Susan K.Anderson
Ms. Anderson has extensive public fund experience, beginning in 1971 with her first government
position at the City of Austin, Texas. Ms. Anderson served the City in the Financial Services
Division for over twenty-five years. The vast majority of time was specifically dedicated to the
management of the investment, debt and cash resources of the City. As Treasurer, she was
responsible for the $1.5 billion investment portfolio,-the $3.3 billion debt portfolio and all cash
management programs, including collections and bank relations. Additional relevant
responsibilities included: serving as liaison to all three of the City's pension programs, as Trustee
on the Firemen's Relief and Retirement Fund, and as Board Member of the Deferred
Compensation Fund. Investment strategies developed for City funds,pension funds and deferred
compensation funds spanned the entire spectrum of eligible investment products, including fixed
income, equity and international funds.
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
www.valleyvie%vconsultingllc.com
Exhibit "A"
a�
Vallecq View Consulting,L.L.C.
Page 10.
Following her retirement from the City of Austin, she served as Chief Investment Officer for the
State of Texas where she was responsible for the management of $35 billion of combined
operating, endowment and trust funds. After her public service, she joined the national financial
and investment advisory firm, The PFM Group, where she continued to develop her knowledge
of public fund investment. The stint at PFM allowed Ms. Anderson to be exposed to a myriad of
government clients with unique needs and requirements and to hone her skills to identify
problems and find the appropriate solutions for her clients.
Throughout her career, Ms. Anderson has been involved in professional organizations for public
sector officials. She has been a member of the Government Finance Officers' Association
(Texas and national), the Government Treasurers' Organization of Texas (held multiple officer
positions and chaired the Legislative Committee), and the Texas Association of School Business
Officials. Ms. Anderson is also on the University of North Texas Center For Public
Management staff providing PFIA-required continuing education.
Ms. Anderson earned a Bachelor of Science, Business Administration degree in Finance from St.
Edward's University. She is a Certified Cash Manager and a registered investment adviser
representative.
Ms. Anderson founded Anderson Financial Management, L.L.C. in 2008 and has partnered with
Valley View since then to bring her expertise to the investment advisory team.
William J. Koch
Mr. Koch is a capable and versatile financial professional with extensive management and
operational credentials that include a strong background in accounting, cash management,
treasury, and information systems. He has broad industry experience with both publicly traded
and privately held firms, including international market activities, and public sector
organizations. His career has included management positions with Fortune magazine ranked
firms in which he was responsible for accounting and financial reporting, treasury, and
information services.
Since 1990, Mr. Koch has been a management consultant providing specialized financial
services primarily to public sector organizations, including municipalities, school districts,
colleges, hospital districts, and regional transportation authorities. With proven financial
expertise, solidly versed in statutes and legal requirements, and extensive knowledge of banking
systems and services,he has a unique blend of capabilities to offer his clients.
Mr. Koch is a registered investment adviser representative.
Formerly a partner with a regional consulting group, Mr. Koch founded Avalon Financial
Services in 1996, serves as its president, and has been a Valley View team member since 1999.
Mr. Koch is a graduate of Texas A&M University.
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Valleq View Consulting,L.L.C.
Page 11.
Thomas H. Ross
Mr. Ross has an outstanding background in financial operations and information technology
management, including seventeen years in the public sector, and most recently completed
fourteen years of service with the City of Bedford, Texas, retiring as Director of Administrative
Services. Joining the team in February 2010, Mr. Ross brings a broad and unique client
operations perspective to the Valley View practice in the areas of cash management,
governmental accounting, banking relations, management reporting, portfolio management, and
general financial analysis, all of which impact the successful execution of a client's investment
program.
Mr. Ross is a member of the Government Finance Officers Association of Texas (GFOAT),
where he earned the designation of Certified Government Finance Officer (CGFO), and the
Government Treasurer's Organization of Texas (GTOT).
Mr.Ross is a registered investment adviser representative.
Mr. Ross is a graduate of Texas A&M University with a Bachelor of Business Administration
degree in Management.
Johnny L. Phifer
Mr. Phifer is the newest team member to Valley View,joining in January 2015. Having recently
retired as Director of Finance for the City of Keller, Mr. Phifer brings with him a wealth of
knowledge and experience attained during a career of over thirty years of public-sector
experience. Mr. Phifer also brings a comprehensive and distinctive client operations perspective
to the Valley View practice in the areas of cash management, governmental accounting and
financial reporting, banking relations, management reporting, portfolio/treasury management,
financial analysis and financial and budget administration.
Mr. Phifer is a member of the Government Finance Officers Association of Texas (GFOAT),
where he earned the designation of Certified Government Finance Officer (CGFO), and the
Government Treasurer's Organization of Texas (GTOT).
Mr. Phifer is a graduate of The University of North Alabama with a Bachelor of Science in
Accounting.
Benjamin F. Day
Mr. Day is primarily responsible for general client support and developing relationships in the
Mid-Atlantic States. He first entered the securities industry in 1984 and has sales and trading
desk experience in equity, matched book and fixed income investments. From offices in the east
and west coasts, he has seen most of the major rallies and melt downs of the last thirty years.
This background gives him an educated eye concerning portfolio risk/reward and client
expectation. He has over fifteen years' experience in developing and delivering investment
portfolio management seminars.
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
www.valleyvie%vconsultingllc.com
Exhibit "A"
Valley View Consulting,L.L.C.
Page 12.
Mr. Day joined the Valley View team in 2012 and is a registered investment adviser
representative.
Julie S. Gerhardt
Ms. Gerhardt is primarily responsible for administrative, marketing, and organizational issues.
She began her career in the financial industry in 1993 with Legg Mason Wood Walker, and then
subsequently with Smith Barney. Ms. Gerhardt joined the Valley View.team in 2013.
4.2.4.2. The name(s) of top management and key employees and each person's duties,
including the background and experience of these employees;
Valley View utilizes a team approach involving all of the team members. Mr. Long and Ms.
Anderson will primarily provide strategy development and implementation. Mr. Koch and Mr.
Ross will support bank relationship selection and documentation. Mr. Phifer and Mr. Ross will
provide monthly accounting and quarterly investment reporting. Ms. Gerhardt and Mr. Day will
assist as needed. Even though areas of focus are provided, at any time another team member
may provide any or all services to the City,as needed.
Because Valley View practices a team approach to client coverage, each member of the firm is
aware of client initiatives and portfolio status. Each week, the firm reviews every client with
updates on all portfolio activities and strategies. It is, therefore, our policy that our clients will
be able to have their needs met by any team member.
The following lists the credentials of key personnel:
Richard G. Long,Jr.
• Investment industry since 1981
• Started First Southwest Company's public funds investment efforts in 1988
• Registered Valley View Consulting, L.L.C. with the Securities and Exchange Commission
in 1999
Susan K.Anderson
• Investing Public Funds since 1981
• Former City of Austin Treasurer&Investment Officer
• Served as Chief Investment Officer for State of Texas
• Associated with Valley View since 2008
William J. Koch
• Public-sector consulting since 1990
• Over forty years financial management experience
• Associated with Valley View since 1999
Thomas H. Ross
• Retired City of Bedford,Texas Director of Administrative Services
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Valley View Consulting,L.L.C.
Page 13.
• Twenty years public-sector experience.
• Lengthy corporate finance and accounting career
• Associated with Valley View since 2010
Johnny L. Phifer
• Retired City of Keller Director of Finance
• Over thirty years public-sector experience
• Investing public funds since 1985
• Prior experience includes financial and budget administration, financial reporting, and
debt and treasury management
• Associated with Valley View since 2015
Benjamin F.Day
• Investment industry since 1984
• Diversified background in sales and trading
• Extensive client-based risk/return analysis experience
• Associated with Valley View since 2.012
Julie S. Gerhardt
• Investment industry since 1993
• Responsible for administration, marketing, and organizational issues
• Experienced in customer support and reporting
• Associated with Valley View since 2013
4.2.4.3. The size of your firm's staff commitment to the public sector and the credentials of
the key personnel;
Valley View has five Registered Investment Advisor Representatives on staff. The credentials of
our staff are listed above in section 4.2.4.1 and in section 4.2.4.2.
Valley View's business plan offers a variety of advisory and consulting services exclusively to
public entities similar to the City. Managing extremely large client portfolios or investment
pools are not part of that business plan. Providing client-specific service will not be jeopardized
by the whims of the "800 pound gorilla"that demands attention.
Valley View's business plan will provide service to a limited number of entities with portfolios
roughly sized from $10,000,000 to over $400,000,000. True .value-added advice and
consultation requires a consistent and dedicated focus. The City is a prime candidate to receive
value from such a relationship.
Almost all of our clients are Texas public entities subject to the PFIA. Our diverse mix
includes:, City of Georgetown, Edwards Aquifer Authority, Fort Worth Transportation
Authority, Mental Health Mental Retardation of Tarrant County, South Texas College, and
Texas Assess to Justice Foundation.
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
www.valleyviewconsultingl Ic.com
Exhibit "A"
a
Valletl View Consulting,L.L.C.
Page 14.
4.2.4.4. A listing of the personnel assigned to service the City account. Describe their
relationship to your firm, their responsibilities, and their experience in the investment
business, and specifically with public sector investment management, and the number of
years they have been associated with your firm;
As stated above, Valley View employs a team approach to service fulfillment. Mr. Long and
Ms. Anderson will primarily provide strategy development and implementation. Mr. Koch and
Mr. Ross will support bank relationship selection and documentation. Mr. Phifer and Mr. Ross
will provide monthly accounting and quarterly investment reporting. Ms. Gerhardt and Mr. Day
will assist as needed.
Mr. Long oversees all operations and services. He also serves as the Chief Compliance Officer
to ensure that activities are compliant with all laws, rules and regulations pertaining to
investment advisory firms.
Resumes and credentials of our staff are listed above in section 4.2.4.1 and in section 4.2.4.2.
4.2.4.5. Identification and details of any of the above personnel who have ever been
investigated for alleged improper, fraudulent, or unfair activities related to the sale of
securities;
Ms. Anderson, Mr. Day, Ms. Gerhardt, Mr. Koch, Mr. Long, Mr. Phifer, Mr. Ross, nor Valley
View has ever been investigated for alleged improper, fraudulent, or unfair activities related to
the sale of securities.
4.2.4.6. Description of the efforts your firm makes to keep its investment professionals
informed of developments relevant to government investment managers.
Valley View actively pursues relevant forms of continuing education, and our professionals are
members of multiple finance and investment-related government entity service groups, including
the Government Finance Officers' Association of Texas and Government Treasurers'
Organization of Texas. We participate in many educational seminars and professional schools,
and are frequently asked to speak or present specific material for many organizations. We
routinely monitor proposed and enacted changes to the PFIA to ensure that our clients implement
any amendment that is required and any optional change that would be beneficial to their
portfolio.
As an integral part of attaining and maintaining its SEC registration, Valley View holds an
annual meeting that discusses current regulatory changes that would impact our management of
public funds.
Ms. Anderson and Mr. Long are also staff members with the University of North Texas—Center
for Public Management providing PFIA continuing education, and gaining additional exposure to
relevant public funds topics and solutions.
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
www.valleyvie%vconsultingllc.com
Exhibit "A"
Valley View Consulting,L.L.C.
Pae 15.
4.2.5. TAS 5: Proposed Services and Investment Approach
Respondents shall describe in detail how they plan to meet the investment advisory services
described herein. The proposal shall include detailed information to demonstrate how the
Respondent shall provide each of the service requirements specified in Part II, Statement of
Work. Respondent's proposal shall discuss:
4.2.5.1. Outlined steps to ensure the City's objectives of safety, liquidity, and yield;
Public funds require a different investment approach and fiduciary responsibility to adequately
judge appropriate risk/return opportunities. The City has many essential functions to effectively
serve its constituents. Investing is usually considered a secondary activity. Our service objective
ensures the level of attention and commitment to effectively manage the City's funds. We
believe in the principles stressed by the PFIA and the City's Investment Policy:
• Safety of Principal
0 Maintenance of Adequate Liquidity
Whether the City invests operating or bond funds, these fundamental considerations and
principles will be the same. The management of public funds are scrutinized more than any
other organizations, therefore Valley View takes great care in assessing and addressing risks on
multiple levels to ensure due diligence in minimizing risk exposure.
Portfolio strategy development will be suggested only after thorough analysis and conclusive
evidence that the adjustment provides long-term benefit to the City. Interest rate cycle timing
and appropriate yield curve positioning provide the most effective and consistent yield
enhancement. Valley View's services will include the research and analysis necessary for the
City to formulate strategy recommendations and Valley View will participate in any presentation
(formal or informal)designed to gain approval to implement the desired strategy.
Operating-For the operating portion of the portfolio, Valley View will:
• Review and recommend modifications to the City's Investment Policy,
• Assist in cash flow forecasting,
• Analyze available products (individual products and pool/fund options) and institutions,
• Interpret market conditions and trends,
• Determine appropriate asset allocations,
0 Advise on long-range strategy selection,
• Implement strategy within a competitive pricing environment,
• Prepare appropriate calculations, accruals and reports,
• Provide independent sources for investment market valuations,
• Comply with Investment Policy and state and federal regulations,
2428 Carters Mill Road,Huddleston,VA 241044003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Vallee Vew Consulting,L.L.C.
Page 16.
• Review procedures and documentation for management procedures and investment
alternatives,
• Monitor broker/dealer and safekeeping relationships,
• Attend occasional meetings, and
• Educate City staff on pertinent investment topics.
Bond Proceeds—For bond proceeds investment, our guidance will include:
• Developing and analyzing projected expenditure patterns,
• Estimating expenditure period interest earnings,
0 Determining any appropriate Investment Policy changes,
• Analyzing the effects of various investment strategies on the potential arbitrage liability,
• Developing the optimum strategy,
0 Reviewing the draw schedule and portfolio performance as the projects progress,
• Identifying potential arbitrage concerns, and
• Implementing any debt service fund investment strategies.
Combining all of these concepts into active portfolio management will enhance portfolio return
over the long run.
Whether the City invests operating or other funds, the fundamental considerations and principles
stressed above will be the same.
4.2.5.2. The process in developing investment policies and portfolio strategies for
governmental operating funds and the primary strategies for adding value to portfolios
(These options may include considerations for allowing discretionary investment services
for a portion of the portfolio.);
With a primary focus on managing Texas public funds, Valley View regularly assists in the
development, modification and implementation of investment policies, portfolio strategies and
other investment-related services. We consider those functions as essential to the effective
fulfillment of our contracts and will work with the City annually in addressing its policy
development needs. Members of the Valley View team have written scores of investment
policies for Texas entities since the PFIA mandated the document in 1987 and regularly provide
instruction through the University of North Texas on the effective and state law-compliant
development of investment policies.
Valley View is intimately familiar with the PFIA and extensively reviews each new investment
option to ensure compliance. Our services will include an initial Investment Policy review and
annual reviews thereafter. Additionally, the Valley View team's personal Texas-government
experience with spending and other internal polices will augment our interaction.
Although market and economic considerations are involved in making the investment decisions,
we believe a more important consideration revolves around the client's cash flow needs. As a
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyviewconsultingllc.coiri
Exhibit "A"
Valley View Consulting,L.L.C.
Page 17.
PFIA-oriented investment advisor, we believe providing a dependable and stable investment
structure is a key objective. Market speculation does not factor into this strategy. Of course,we
consider where interest rates might be headed in the short term, but our main focus is on
maintaining a discipline to protect and preserve assets over the long term without taking
inordinate amounts of risk. This discipline begins with the cash flows of the client.
Maturity Distribution —To demonstrate the value that can be added by strategic allocation of
assets along the yield curve, Valley View has collected data going back for over three decades.
This data provides compelling evidence of the value that can be added by such allocations.
Before maturity extensions can be executed however, an analysis of the City's cash flows must
be instituted to ensure that adequate safety and liquidity remain'at the forefront of the strategy
and objectives.
For example, one strategy model compares a rolling portfolio of two year investments to a
government security-based local government investment pool. The rolling two-year portfolio
has experienced significant average yield advantage over the pool yield. Analyzing the City's
cash flows and identifying potential longer-term balances could generate similar benefit for that
portion of the portfolio that could be prudently laddered.
Building an appropriate ladder can be handled several ways. The current steepness of the yield,
and potential for interest rate increases, encourages investing in shorter ladder rungs building
towards the strategic goal. The City's cash flow analysis and market conditions at decision time
will influence the selected implementation plan and timing.
Managing Market Risk by Limiting Investment Maturities — Selecting appropriate yield
curve positions for fixed income securities must include an analysis.of the potential valuation
risk of that particular maturity. Market value of security positions will vary from the date of
purchase until maturity. Longer-term maturities will be much more volatile than shorter-term
positions and an assessment must be made prior to purchase as to whether the potential variance
is worth the incremental yield of the longer maturities.
One strategy to mitigate the impact of changing market environments is to maintain a disciplined
approach of regular security purchases through a variety of market conditions. This discipline
generally allows the portfolio to offset unrealized losses with unrealized gains with the strategy
objective to reach a net mark-to-market spread that is lower than that of any individual security.
Adiusting to Market Movements — Current yields have remained dramatically low over the
recent past. Those investors that had practiced a disciplined laddering approach for their fixed
income portfolios fairly successfully weathered the storm. Moving forward, investing too short
reduces current portfolio interest earnings as yields remain historically low. Too long of
maturity, when rates rise rapidly, restricts future interest income and impairs market valuation.
Therefore, gradual targeted implementation of portfolio strategy hedges the portfolio against the
uncertainty and allows the portfolio to build towards its optimum long-term yield curve position.
At the same time, however, the portfolio's weighted average maturity can be strategically
adjusted to anticipate and accommodate economic market movements. Valley View will work
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.vall eyviewconsultingllc.com
Exhibit "A"
Valley View Consulting,L.L.C.
Page 18.
with the City to identify the appropriate maturity allocation during any given market
environment.
Adding Potential Returns Through Investment Selection — Valley View generally prefers
diversified investment portfolios, and works with each client to establish the optimal mix.
However, most of these clients want us to be nimble and flexible enough to adjust this structure
to market opportunities or current market risks. As an example, not too long ago, we were
focusing our clients on U.S. Government securities that were offering attractive returns relative
to the other issuers in the marketplace. As their risk/return profile and attractiveness changed,
we began to research other opportunities on behalf of our clients. Our research uncovered
significant value in bank certificates of deposit and other interest bearing products, and we began
to move client monies into those fully insured or enhanced options. These investments require
much greater effort on the part of the investment advisor and have historically not been included
in the arsenal of larger investment advisors' recommendations (probably because of the
additional time to identify potential sources and ensure proper document execution). On the
other hand, we have found them to be safe (as long as they are documented.appropriately),
dependable, and attractive. Since 2008, these instruments have exceeded the returns of
comparable alternatives by 10 to 75 basis points.
In 'the current economic environment, Valley View continues to see value in bank deposit
products. We have placed deposits with a number of Texas-based financial institutions, and
continue to expand that list. Additionally, we have utilized Certificate of Deposit Account
Registry Service (CDARS), which is a PFIA-authorized deposit product. For solicitations,
Valley View generally contacts banks statewide to provide rates to various dates. We also send
solicitations to local financial institutions to allow them to offer rates to clients in their vicinity.
These direct-placed CDs are issued in the name of the client. Brokered or mass-marketed CD
programs may be considered if adequate advantage can be achieved.
As market conditions change, Valley View will again adjust our selection process. We recognize
that the economic and market conditions over the past few years have been extremely
challenging and unique. The most important strategy to keep in mind is to ensure that all cash
flow needs are covered and that a laddered approach to investing is diligently practiced. Sector
selection, while important, becomes a secondary consideration as longus the portfolios invest in
the types allowed by the PFIA and individual client investment policies.
4.2.5.3. The types of investment research utilized and the methods for making investment
decisions, including maturity and selection;
Valley View prides itself on generating independent research. As the markets and securities
evolve, understanding the potential risk/return largely determines portfolio decisions. For
example, in the early 1990s, inverse floating CMO tranches or classes provided the research
challenge. Today, callable and step-up securities are the popularly pitched "deals of the day."
Generally, securities with an issuer call option offer a greater purchase yield than non-callable
(bullet).securities. Theoretically, the investor receives this higher yield to compensate for the
2428 Carters Mill Road;Huddleston,VA 24104-4003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Valleq Vew Consulting,L.L.C.
Page 19.
risk of call. If rates go down, the security's value increases, and the issuer calls the security.
The investor is then left with investable funds when interest rates are lower. Conversely, if
yields increase, the value decreases, and the issuer will not call the security. The investor
remains locked-in at the lower yield. In market/opportunity risk terms — callable securities
increase opportunity risk (when yields fall) and increase market risk (when yields rise). The
question should be, "Is the investor adequately compensated for the extra risk?"
The theory was very obvious, but little research addressed the details. Many public funds
investors have been buying callable securities for years. They, unfortunately, never looked back
to determine if their portfolio's actually earned more than a bullet portfolio. To accurately
inform its clients, Valley View developed an analytical comparison of callable verses bullet
securities.
Our analysis compared the average portfolio yields of a rolling two-year bullet portfolio and a
rolling two-year/three month callable portfolio since 1990. The rolling bullet portfolio averaged
yields greater than the callable portfolio. Buying bullet securities (the lower risk investment)
actually gained over callable securities (the higher risk choice)!
Conclusion: Over a variety of market conditions, the extra purchase yield of a callable security
does not offset the increased risk from the call. (Unfortunately, step-up securities seem to be
exhibiting a similar disappointing holding period return.)
This callable research is just an example of Valley View's portfolio-focused capabilities. Other
research projects have been and will continue to be done as client needs and market conditions
dictate.
With the growth of the Internet, investment information and research is available from a
multitude of sources. Bloomberg Investor Services, the Federal Reserve Bank, various federal
agencies, and many other sites provide most of the market information needed to effectively
serve our clients.
4.2.5.4. Performance benchmarks your firm would suggest for the City's portfolio;
There are several philosophies on appropriate benchmarks, but for many public entities a simple
standard is the preferred measurement device. Many Texas public funds select the return of
TexPool (or another pool) as their benchmark, because it is a publicly available source and
because a local government investment pool is usually the default investment strategy. Selection
of TexPool as a benchmark would therefore provide an assessment of the incremental yield
gained by active portfolio management.
The development of a custom benchmark may be needed to effectively assess management
performance. For example, an operating fund that includes short-term obligations and some
longer-term investment capacity, a customized benchmark including a percentage of the return of
TexPool and a percentage of the return of two-year U.S. Agency Notes may be appropriate. By
designing a benchmark that more accurately depicts the City's portfolio allocation objective, the
2428 Carters Mill Road,Huddleston,VA 24104-0003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Q -
Valley View Consulting,L.L.C.
Page 20.
performance of the portfolio against a similarly allocated benchmark would be an appropriate
measurement of success.
Valley View will explore all of the options with the City to assure that the optimal and preferred
benchmark is selected.
As speculation is prohibited by the PFIA, and clients tend to hold investments full term,
weighted average yield to maturity is the most common performance standard.
4.2.5.5. Procedures for portfolio review and client contact;
As a"part-time" employee of the City, Valley View believes steady, direct interaction creates an
optimum decision environment. Frequent discussion communicates market conditions,
anticipated trends, City cash needs, available. investment options, strategy effectiveness, and
policy compliance. Effectively handled, the City's staff and Valley View should function
singularly, not as separate organizations.
The needs and desires of the City will dictate the optimum schedule for interaction. Routine
cash flow analysis, strategy development and investment provider review will require regular
interaction with the City's staff. Market cycles and the City's cash flow schedule will largely
determine appropriate ongoing interaction. Regular communication (phone, email, conference
calls, and on-site meetings) will focus on:
• Current cash requirements,
• Specific investment opportunities,
• Market information,
• Appropriate transaction execution levels,
• Transaction settlement status, and
• Investment reporting.
Overall strategic portfolio analysis will include:
• Quarterly strategy/portfolio review and
• Annual performance review.
Major market shifts or portfolio modifications may also require emergency meetings or
conference calls to review market trends and appropriately adjust strategies. Valley View is
committed to effective and timely response to the City's needs and if additional meetings are
necessary, we will be available.
4.2.5.6. Any third-party vendors that you would utilize to service the City account;
Valley View utilizes Tracker as a portfolio accounting system. Tracker information is provided
below.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
d
Valle,View Con5ultint1,L.L.C.
Page 21.
4.2.5.7. A description and samples of the reports your firm would submit to the City and
their frequency;
Valley View will prepare quarterly investment reports in compliance with the PFIA and City
Investment Policy. We will also prepare monthly accounting reports. Both reports allow some
flexibility as to content and format. We will work with the City to ensure acceptable reports are
provided.
For the monthly accounting reports, Valley View utilizes Tracker portfolio software, a web-
based investment reporting system that affords a high degree of flexibility in content and format
of reported information. This information can be produced in PDF reports as well as
downloaded into Excel worksheet form. City staff can access the data and reports on-line
through the Tracker website.
Valley View provides a brief market overview as a component of the quarterly report and prepares a
monthly commentary article to review economic updates.
Sample reports are attached.
4.2.5.8. Any additional services offered or available through affiliation that may benefit the
City. Provide a detailed description of each service.
As stated throughout this response, we believe an investment advisor should function as an
extension of the client's staff—managing the portfolio the way they would, if they had the time to
dedicate. That objective is achieved by dedicated, independent advice and consultation. Our
client/advisor ratio (and other professional staff commitments)is purposely low enough to allow the
necessary time and energy to fully service each client.
Valley View goes above and beyond the traditional investment advisory services and routinely
provides our clients with other complementary services. Additional Valley View services include:
Primary Depository Bank—Valley View's primary depository bank selection services generally
involve a Request for Application ("RFA"),and could include the following, as necessary:
• Analyzing the prior Primary Depository Bank selection process and current operations.
• Reviewing the budget,annual financial report and audit.
0 Developing a calendar of events.
• Defining the acceptable area from which prospective applicants will be considered.
• Establishing the criteria by which the applications will be evaluated.
• Preparing a list of financial institutions that will be sent the RFA.
• Preparing a draft RFA.
• Finalizing the RFA with City staff.
• Assisting with hosting a pre-proposal conference.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyviewconsultingllc.com
Exhibit "A"
Valley View Consulting,L.L.C.
Page 22.
• Analyzing responses for conformance to the RFA requirements and to determine the best
relative value based on the evaluation criteria.
• Meeting to review the results of the proposal analysis.
• Assisting with the presentation to the Committee/Council for selection of a primary
depository bank for the new contract period.
Reviewing Custodial and Safekeeping Agreements — Properly established custodial and
safekeeping agreements are essential to safely and effectively manage the portfolio. Valley
View's dedicated focus to public funds investment has involved extensive experience in opening
and maintaining acceptable custodian and safekeeping accounts. We will assist as necessary in
reviewing the current arrangements and when establishing any new relationships.
Broker/Dealer Management — If the City contracts with Valley View, broker/dealer
management services are included (if needed).
Three criteria guide Valley View's approach to managing broker/dealer relationships. They
must:
1. Understand and accept the unique objectives of investing public funds,
2. Provide competitive pricing, and
3. Respond appropriately to the needs of the client. ,
There are many broker/dealers that meet these basic requirements. A competitive environment
is difficult to achieve with too few broker/dealers. Too many are cumbersome, increase the risk
of missed trades, and restrict the City's business with any one broker/dealer (unfortunately,
broker/dealers lose interest in client service without some reward). The optimum number is
entity-specific; however, the overall objective is to establish a competitive yet workable
transaction environment.
Many times an investment advisor only transacts with its "list" of broker/dealers and the client
loses identity to the broker/dealer community. Valley View's approach clearly communicates
the client's role in broker/dealer selection, encourages complete knowledge of each participant,
and provides direct contact information to both parties. If the City re-internalized the investment
management function,the City and its broker/dealers would be prepared.
If needed, Valley View can provide recommendations of broker/dealers currently used by other
clients. Or a selection process to independently identify and recommend potentially beneficial
broker/dealers could be implemented. The City would ultimately approve any adjustments to the
list.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyvie%vconsultinglic.com
Exhibit "A"
%Iall, cq View Consulting,L.L.C.
Pae 23.
4.2.6.TAB 6: References
ATTACHMENT C:
RESPONDENT'S REFERENCE SHEET
PLEASE COMPLETE AND RETURN THIS FORM WITH THE SOLICITATION RESPONSE
SOLICITATION NUMBER: Request for Proposal No. 15-020_
RESPONDENT'S NAME: Valley View Consulting, L.L.C.
DATE: July 9, 2015
Provide the name, address, telephone number and e-mail of at least three (3) Municipal and/or
Government agencies, or firms of comparable size that have utilized similar service within the
last two (2) years. City of Round Rock references are not applicable. References may be checked
prior to award.
Any negative responses received may result in disqualification of submittal.
City of Laredo City of Georgetown
Rosario Cabello, Director of Finance Micki Rundell, CFO
1110 Houston Street 113 East 81h Street
Laredo, TX 78040 Georgetown, TX 78626
956.791.7427 512.930.3677
rcabello@ci.laredo.tx.us micki.rundell@georgetown.org
City of Killeen City of Cedar Hill
Karen Evans, Interim Exec Dir. of Finance Alan Dickerson, Director of Finance
101 North College Street P.O. Box 96
Killeen, TX 76541 Cedar Hill, TX 75104
254.501.7740 972.291.5100
kevans@killeentexas.gov alan.dickerson@cedarhilltx.com
City of Durham,NC City of Longview
Chad Cowan, Treasury Manager Angela Coen, Director of Finance
101 City Hall Plaza(Annex) 300 West Cotton Street
Durham,NC 27701 Longview, TX 75601
919.560.4511 903.239.5521
Chad.cowan@durhamne.gov acoen@longviewtexas.gov
FAILURE TO PROVIDE THE REQUIRED INFORMATION WITH THE SOLICITATION
RESPONSE MAY AUTOMATICALLY DISQUALIFY THE RESPONSE FROM
CONSIDERATION FOR AWARD.
2428 Carters Mill Road,Huddleston,VA 2410411003
888.853.3778
vnvw.valleyvie%vconsultingllc.com
Exhibit "A"
Vallee View Consulting,L.L.C.
Pae 24.
4.2.7. TAB 7: Proposal Submittal'and Execution Form (Attachment D)
PROPOSAL SUBMITTAL AND EXECUTION FORM
NOTE: RESPONDENTS SHALL COMPLETE AND RETURN THIS ATTACHMENT WITH THEIR
PROPOSAL.FAILURE TO DO SO WILL RESULT IN DISQUALIFICATION OF THE PROPOSAL.
By signature hereon,the Respondent certifies that:
All statements and information prepared and submitted in the response to this RFP are current, complete
and accurate.
He/she has not given,offered to give,nor intends to give at any time hereafter,any economic opportunity,
future employment, gift, loan gratuity, special discount, trip, favor, or service to a City employee in
connection with the submitted response. Failure to sign the Execution of Proposal or signing it with a
false statement shall void the submitted offer or any resulting contracts.
Respondent represents and warrants that the individual signing this Execution of Proposal is authorized to
sign this document on behalf of the Respondent and to bind the Respondent under any contract resulting
from this proposal.
RESPONDENT(COMPANY): Valley View Consulting,L.L.C.
SIGNATURE(IN INK):
NAME (TYPED/PRINTED): Richard G. Long,Jr.
TITLE• Manager
DATE: July 9,2015
STREET: 2428 Carters Mill Road
CITY/STATE/ZIP: Huddleston,VA 24104
TELEPHONE AND FAXSCMILE NO.: 540.297.3419 (telephone), 540.297.3758 (fax)
E-MAIL ADDRESS: rglong(a,valleyviewconsultingllc.com
FEDERAL TAX IDENTIFICATION NUMBER(FIN): 54-1915008
By submitting a response to this solicitation, the Respondent agrees that the City's standard Definitions,
Terms and Conditions, in effect at the time of release of the solicitation, shall govern unless specifically
provided otherwise in a separate Agreement or on the face of a Purchase Order.
Said Definitions, Terms and Conditions are subject to change without notice. It is the sole responsibility
of Respondents to stay apprised of changes. The City's Definitions, Terms and Conditions shall be
enforced and part of the contract and can be obtained from the City's website at:
http://www.roundrocktexas.gov/bids.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.val leyviewconsultingl Ic.com
Exhibit "A"
Valled Vew Consulting,L.L.C.
Page 25.
4.2.8. TAB 8: Cost Proposal
Respondent shall include a cost proposal to provide services as described herein.
Respondent shall at this time provide the firm's pricing structure and any details on cost to
include, but not be limited to minimum fee requirements, description of fees, additional
charges charged when there is .no activity in the account or if the portfolio is invested
entirely in a local government investment pool.
Proposal should include an estimate of the first year's cost based on the current portfolio
provided (Attachment B). Pricing shall remain firm for the initial term of the contract
(Part II, Section 3).
As with all contracts, a mutually agreed upon fee will provide the City with good value for the
cost and adequate compensation for our efforts and expertise. Valley View will work with the
City to find the optimum contract fee mechanism prior to contract approval. To provide the total
service package described in the RFP, we propose a sliding scale annual fee based on average
portfolio quarter end book value:
0.030%up to and including$85,000,000
0.025%over$85,000,000 up to and including$150,000,000
0.020%over$150,000,000 up to and including$150,000,000
0.010%over$250,000,000
With an average portfolio of$365,000,000, the annual fee calculates to $73,250. Valley View
will invoice the City in arrears each quarter.
Placement Agent fees related to bond proceeds investment in a flexible repurchase agreement or
guaranteed investment contract may be received from the selected provider. Any funds placed
under this arrangement would not be included in the contracted investment advisory fees and would
be governed by IRS regulations.
No travel, training, or other administrative fees or expenses would need City reimbursement.
The City may'incur transactional expenses in the execution of its investment strategy, such as
safekeeping or bank wire charges. We will assist the City in minimizing all such transactional
expenses or any other normal business expenses that might be incurred by the City in the
management of its funds.
When comparing Valley View's contract fees, it is important to consider that Valley View does
not generate any additional revenue, income, soft dollar, or other form of compensation, either
disclosed or undisclosed, related to performing investment advisory services for the City. No
transactions will flow through an affiliated trading desk or be subject to additional price mark-
up. No pool management or referral fees will be generated. No deposit broker or placement fees
will be received. Every strategy recommendation and transaction will be based solely on
fulfilling the City's objectives.
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.vall eyvieweonsu Itingl Ic.com
Exhibit "A"
Valley View Consulting,L.L.C.
Page 26.
ATTACHMENT E:
ADDENDUM ACKNOWLEDGMENT FORM
NOTE: If multiple addendums have been-issued, Respondents may complete and return this
attachment with their proposal in place of the individual addendums that must be submitted.
Failure to provide either this form or the individual addendums with signatures may result in
disqualification of the proposal.
Addenda Acknowledgment: The undersigned acknowledges the receipt of the following
Addenda:
Addendum #: 1 Dated: 6/25/2015
Addendum#: Dated:
Addendum #: Dated:
Addendum #: Dated:
Addendum #: Dated:
RESPONDENT (COMPANY): Valley View Consulting,L.L.C.
SIGNATURE (IN INK):
NAME (TYPED/PRINTED): Richard G.Long. Jr.
TITLE: Manager DATE: July 9,2015
2428 Carters Mill Road,Huddleston,VA 24104-4003
888.853.3778
www.valleyvie,.vconsultingllc.com
Exhibit "A"