Contract - Valley View Consulting - 9/9/2021CITY OF ROUND ROCK AGREEMENT
FOR PROFESSIONAL CONSULTING SERVICES
RELATED TO INVESTMENT ADVISORY SERVICES
WITH
VALLEY VIEW CONSULTING, L.L.C.
THE STATE OF TEXAS §
THE CITY OF ROUND ROCK §
COUNTY OF WILLIAMSON §
KNOW ALL BY THESE PRESENTS
THIS AGREEMENT for professional consulting services related to advisory services for
the City9s 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").
RECITALS0
:
WHERAS, City has determined that there is a need for investment advisoryserviEces;
and
WHEREAS, City desires to enter into an Agreement with Consultant for said 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 cons40
ideration 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:
1.0 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.
on,
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
00477251/ss2
(2) successive
twenty-four (24) month periods, under the same terms and conditions, only upon express written
agreement of both parties.
co 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 10.0.
2.0 SCOPE OF WORK
A. Consultant shall perform its services in accordance with this Agreement and in
accordance with the attached Exhibit "A," attached hereto and incorporated herein by reference
for all purposes. Consultant shall satisfactorily provide all services and deliverables described in
the Scope of Services within the contract term specified in Section 1.0. 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 Scope of Work set forth in
Exhibit " A. " However, either party may make written requests for changes to the Scope of
Work. To be effective, a change to the Scope of Work must be negotiated and agreed to in all
relevant details, and must be embodied in a valid Supplemental Agreement as described in
Section 4.0 hereof.
390 PAYMENT FOR SERVICES
In consideration for the consulting services to be performed by Consultant, the City
agrees to pay Consultant for the Scope of Services deliverables as delineated in Exhibit "A."
Consultant's total compensation for consulting services hereunder shall not exceed Four
Hundred Fifty Thousand and No/100 Dollars ($450,000.00) for the initial term of this
Agreement and any renewal terms. 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
4.0 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, 1*f 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
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
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relating to additional work not directly authorized by Supplemental Agreement.
5.0 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.
Be 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 9.0 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.
6eO 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
Ci*tyo
7.0 INSURANCE
Consultant shall meet all City of Round Rock Insurance Requirements set forth at:
https://www.roundrocktexas.Rov/wp-content/uploads/2014/12/corr insurance 07.20112.vdf
8.0 NON -APPROPRIATION AND FISCAL FUNDING
This Agreement is a commitment of Ci*ty'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
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determined by City's budget* for the fiscal year in question. City may affect such termination by
giving Consultant a written notice of termination at the end of its then -current fiscal year.
9.0 PROMPT PAYMENT POLICY
In accordance with Chapter 225 1 . 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, i*n accordance with V.T.C.A.ftTexas
Government Code, Section 2251.025(b). This Prompt Payment Policy does not apply to
payments made by City i*n 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 C'a
ity 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.
10.0 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.
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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.
11.0 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 i*t performs its services required by this Agreement.
(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 i*n 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.
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12.0 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.
1390 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, includingng all trademark and copyright rights, shall be the sole
property of City at the expiration of this Agreement.
14.0 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.
15.0 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.
16.0 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.
17.0 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 anon-profit corporation and not subject to State of Texas
Sales and Use Tax.
18.0 COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES
A. 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
herein, and same shall belong solely to City at the expiration of the term of this Agreement.
Be In accordance with Chapter 227 1, Texas Government Code, a governmental entity
may not enter into a contract with a company for goods and services unless that contract contains
written verification from the company that it: (1) does not boycott Israel; and (2) will not boycott
Israel during the term of this Agreement. The signatory executing this Agreement on behalf of
the Consultant verifies that Consultant does not boycott Israel and will not boycott Israel during
the term of this Agreement.
19.0 FINANCIAL INTEREST PROHIBITED
Consultant covenants and represents that Consultant, its officers, employees, agents,
consultants and subcontractors will have no financial interest, direct or indirect, n the purchase
or sale of any product, materials or equipment that will be recommended or required hereunder.
20.0 DESIGNATION OF REPRESENTATIVES
City hereby designates the following representative authorized to act i*n its behalf with
regard to this Agreement40
7
Susan Morgan, CPA
Chief Financial Officer
City of Round Rock
221 East Main Street
Round Rock, TX 78664
Consultant hereby designates the following representative authorized to act 1*n its behalf
with regard to this Agreement:
Richard Long
Valley View Consulting, L.L.C.
2428 Carters Mill Road
Huddleston, VA 24104
21.0 NOTICES
All notices and other communications in connection with this Agreement shall be 1*n
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 1*n 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
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 1*n this section shall be construed to restrict the transmission of routine
communications between representatives of City and Consultant,,
22.0 APPLICABLE LAW; ENFORCEMENT AND VENUE
A. This Agreement shall be enforceable i*n Round Rock, Texas, and i*f 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.
23.0 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, i*n 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.
24.0 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 I -14) or any applicable state arbitration statute,,
25.0 ATTORNEYS'FEES
In the event that any lawsuit is brought by one party against any of the other parties in
connection with this A9eva1"nareementthe prilparty shall be entitled to seek to recover its
reasonable costs and reasonable attorney fees.
26.0 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 i*f 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.
E
27.0 SEVERABILITY
The invalidity, illegality, or unenforceability of any provision of this Agreement o r' 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 1*f 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.
28.0 STANDARD OF CARE
Consultant represents that it i'Ps 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.
29.0 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
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.
[Signatures on the following page.]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
hereafter indicated.
City of Round Rock, Texas
By : ,, " .1
Printed Name:�, ��� !f:T 1.
Date Signed:
For City, Attest:
Sara L. White, City Clerk
For City, Approved as to Form:
By: Lw
J4,
Stephan f.
Sheets, City Attorney
1 1.
Valley View Consulting, L.L.C.
By; Aea
Printed Name: let��t� V 1-o1+/GC]TZ
Title: /11,4il!46�c_
Date Signed: . ' / LC;D�./
Exhibit "A"
Scope of Services
00"
0100
- - - ----------
Valley view Consul-btinery L.L.C.
June 8, 2021
City of Round Rock
Attn: Susan Morgan
221 East Main Street
Round Rock, TX 78664-5299
Thank you for this opportunity to present Valley View's credentials to continue investment advisor
services for the City of Round Rock (the "City"). The following highlights Valley View's experiences,
philosophies, and capabilities related to the objectives and work to be performed under this contract.
As the City has experienced, we believe an investment advisor should function as an extension of the
City's finance staff. Managing the portfolio the way the City would, i*f 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 fllu y
discussed prior to execution so that the City can be comfortable that appropriate decisions are made.
If the City continues 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.
Providing value added services for a reasonable and appropriate fee 1*s Valley View's objective. With
that in mind, and based upon the current portfolio balances, we re -propose the same tiered annual fee
based on portfolio average book value with annual $75 000 fee cap. Standard invoicing would be
quarterly, in arrears.
The Valley View team has been providing cash and investment services to the City 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 (540) 297-3419 if there are any questions or to discuss moving
forward.
Sincerely,
115>
Richard G. Long, Jr.
Manager, Valley View Consulting, L.L.C.
2428 Carters Mill Road, Huddleston, VA 24104-4003
540.297.3419
www.valleyviewconsultingllc.com
Exhibit "A"
Scope of Services
Valley View Consulting, L.L.C.
Paize 1.
Public funds require a different investment approach and fiduciary responsibility to adequately
40
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 Ci*ty's funds. We believe
in the principles stressed by the PFIA and the City's Investment Policy:
• Safety of Principal
• 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
0
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 port10 -0
ion of the portfolio, Valley View will:
• Review and recommend modifications to the CI*ty's Investment Policy,
• Assist in cash flow forecasting,
• Analyze available products (individual products and pool/fund options) andi*nstituti"ons,
• Interpret market conditions and trends,
• Determine appropriate asset allocations,,
• 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,
• 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:
2428 Carters Mill Road, Huddleston, VA 24104-4003
540.297.3419
www.valleyviewconsultingllc.com
Exhibit "A"
Scope of Services
Valley View C.onsulting, L.L.C.
Page 2.
• Developing and analyzing projected expenditure patterns,
• Estimating expenditure period interest earnings,
• Determining any appropriate Investment Policy changes,
• Analyzing the effects of various investment strategies on the potential arbitrage liability,
• Developing the optimum strategy,
• 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.
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 i*n 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 annual Investment Policy reviews.
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
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
2428 Carters Mill Road, Huddleston, VA 24104-4003
540.297,3419
www.valleyviewconsultingllc.com
Exhibit "A"
Scope of Services
Valley View Consulting, L.L.C.
Page 3.
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 governmenti*nvestment 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.
Mana�in� Market Risk bv Li*miting 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.
AOjustin� to Market Movements —Current yields have remained dramatically low over the
recent past. Those investors that had practiced a disciplined ladderi*ng 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 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
i40
ssuers 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
2428 Carters Mill Road, Huddleston, VA 24104-4003
540.297.3419
www.valleyviewconsultingllc.com
Exhibit "A"
Scope of Services
FORM
Valley View Consulting, L.L.C.
Page 4.
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
16
covered and that a laddered approach to investing is diligently practiced. Sector selection, while
important, becomes a secondary consideration as long as the portfolios invest in the types allowed
by the PFIA and individual client investment policies.
Asa "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 Cl*ty'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 Cl*ty'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,
• Specificinvestment opportunities,
• Market information,
• Appropriate transaction execution levels,
• Transaction settlement status, and
• Investment reporting.
2428 Carters Mill Road, Huddleston, VA 24104-4003
540.297.3419
www.valleyviewconsultingllc.com
Exhibit "A"
Scope of Services
INI 1 111111 1 -0mmal 0N"ftftft
Valley View Consulting, L.L.C.
Page 5.
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 I*f additional meetings are necessary, we will
be available.
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
websi*te.
Valley View provides a brief market overview as a component of the quarterly report and prepares a
monthly commentary article to review economic updates.
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.ed.
• 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.
• Analyzing responses for conformance to the RFA requirements and to deteH *ne the best
9
relative value based on the evaluation criteria.
• Meeting to review the results of the proposal analysis.
2428 Carters Mill Road, Huddleston, VA 24104-4003
540.297.3419
www.valleyviewconsultingllc.com
Exhibit "A"
Scope of Services
11 1,
Valley View Consulting, L.L.C.
Page 6.
• Assisting with the presentation to the Committee/Council for selection of a primary depository
bank for the new contract period.
ReviewiReviewingCustodial 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 i*n client service without some reward). The optimum number is enti*ty-
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 i*n 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
540.297.3419
www.valleyviewconsultingllacom
Exhibit "A"
Scope of Services
MEMO
Valleg View Consultiniz, L.L.C.
Page T
...:.... .:.
Zil
r
4
To provide the total service package described above, we propose a tiered 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 $250,000,000
0.010% over $250,000,000
With an annual maximum fee of $75,000. 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 maybe 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.
2428 Carters Mill Road, Huddleston, VA 24104-4003
540.297.3419
www.valleyviewconsultingllc.com
CERTIFICATE OF* INTERESTED AR S FORM 295
1 of i
-- - ------- -- -- - - --------------- ------- ------------------------------------------- --------
--------------- ---------------------
- -- - -- --- ------- ------- ---- -- ---- ---------------
--------------- - - ------------
-------------- - - --------------- - - -------------
- - --------- --------------- - ------------- ----------
Complete Nos.�1- 4 and 6 ff-there are Interested parties. OFFICE USE ONLY
Complete N'oSq.1:w 213, 5, an6. f-thve are no interested:pafim.
CERMFICA ON 0-F RLING
- --------------- - ---------------------------------------------------------
1 Name of bustness entity filing form, and tb.e*ci'y,. state and country of the'...usiness entity's place.cortificataNumber.-
t
of bus'Thest.'. 2021-781646
Valley View ConsuiGng, L,LC.
Huddleston, VA United States Date Filed-&
2 Nye o governmental on tity► or stat------
e agency that is a party to the contract Eor w ich t e form is 47/22/2021
wing filed-*
City of Round Flock Date Aaknowisdged:------------- ------ --------- -----------------------------------------
---------- ------------------------
5 Check aniy fflhere is NO Interested Party..
------------ ------------------------- ---------
---------- -------------------------------- "I
--------------- ----- - - ---------- ------------ --------------------------
1 de d-areunder penalty of perjury that the foregoing-lis,Vue and correct.
Exec uted in LjtflChbUf- - ----------g (Cl�t) - ------ co fty, State of VIfZ�ltlir3 , on the:2� day of `�u�� , 20 � �
(month)------
----------------
(year- ------- Now
.......................
--------------------------------
Hato Pthotized agent of contracting business entityty
(Declarant)
- - ------------------------------- ---------------- - ------------------ -----------
----------------- - ------------------- ------ - ------- ------
--------------
Forms provided by
Texas Ethics -Commission, e cs..stat. e V us. Version Vl,,,I,.ceffdgBa
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
10fl
Complete Nos, 1 4 and 6 if there are interested parties. OFFICE USE ONLY
Complete Nos. i, 21 31 5, and 6 if there are no interested parties. CERTIFICATION DF FILING
1
Name of business entity filing form, and the city, state and country of the business entity's place Certificate Number:
of business. 2021-781848
Valley View Consulting, L.L.C.
Huddleston, VA United States Date Filed:
2
Name of governmental entity or state agency that is a party to the contract for which the form is 07/22/2021
being filed.
City of Round Rock Date Acknowledged:
07/28/2021
g
Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
R-2015-2798
Investment Advisory Services
Nature of interest
4
Name of Interested PartyCity,State,
Country of business)
a licable applicable)
Controlling
Intermediary
Long, Jr. ,Richard
Huddleston, TX United States
X
5
Check only if there is NO Interested Party. ❑
6
UNSWORN DECLARATION
My name is ,and my date of birth is
My address is I - �1
(street) (city) (state) (zip code) (country)
declare under penalty of perjury that the foregoing is true and correct.
Executed in County, State of , on the day of , 20
(month) (year)
Signature of authorized agent of contracting business entity
(Declarant)
Forms provided by Texas Ethics Commission www. ethics, state Ax. us version via.cenaqua