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98-22801 RESO RESOLUTION NO. 98-22801 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A CONTRACT WITH FIDUCIARY TRUST INTERNATIONAL OF THE SOUTH FOR CUSTODIAL SERVICES FOR THE CITY OF MIAMI BEACH INVESTMENT ACCOUNT. WHEREAS, the City's long term investments are currently maintained in a custodial account with Barnett Bank of South Florida, N.A. ("Barnett Bank"); and WHEREAS, Barnett Bank has advised the City that it will discontinue institutional trust and custody services in July 1998, and will transfer all such accounts to NationsBank in Dallas, Texas; and WHEREAS, since there is not enough time to issue a Request for Proposals (RFP) before Barnett Bank transfers the custodial account for the City's investments to NationsBank; and WHEREAS, there is currently a contract in place with Fiduciary Trust International ofthe South for custodial services for Pension Fund assets, which was awarded pursuant to RFP No. 93-94/97; and WHEREAS, it appears to be in the City's best interest to utilize this existing contract until such time as a new RFP is issued and a new contract is executed; and WHEREAS, the Fiduciary Trust International of the South has proposed a favorable rate of 2.5 basis points on the market value of all assets in the account for providing the required servIces; NOW THEREFORE BE IT DUL Y RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and the City Clerk are authorized to execute the attached contract with Fiduciary Trust International ofthe South for Custodial Services for the City of Miami Beach Investment Account. PASSED AND ADOPTED this ~ day of July, l~~ MAYOR / oil J ,{ , (, i ,t/ CtTY CLERK / . c { (I{' .. APPROVED AS TO FORM & LANGUAGE & FOR EXECUT.ON ATTEST: jf 1t~ Citv Attt)mey ~:Z-J--~r Date ;ITY OF MIAMI BEACH ITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 tp:\\ci. miam i-beach. fl. us COMMISSION MEMORANDUM NO. 4 ~d j1 >1 TO: Mayor Neisen O. Kasdin and DATE: July 1, 1998 Members of the City Commission S~,gio Rod,igooz '~_.. CIty Manager ~ fJ:-'-' A ResolutioJl'Adhorizing the Mayor and the City Clerk to Execute a Contract with Fiduciary Trust International of the South for Custodial Services for the City of Miami Beach Investment Account. FROM: SUBJECT: ADMINISTRATION RECOMMENDATION: Adopt the Resolution. ~. BACKGROUND: In accordance with the City of Miami Beach Investment Policy and Procedure, long term city investments, whose terms are five or more years, are maintained in a depository (custodial account) which is selected through the Request for Proposals (RFP) process. The City's current account, which averages $100 million of invested funds at any given time, is currently maintained by Barnett Bank of South Florida, N.A. ("Barnett Bank"). Barnett Bank has advised the City that it will discontinue institutional trust and custody services in July 1998, and will transfer all such accounts to NationsBank in Dallas, Texas. Those accounts will remain in a custodial account, but will not be assigned an administrator, and the City does not know the fees to be charged for these services. On December 20, 1995, Commission Memorandum 904-95, the Mayor and City Commission authorized the execution of a contract with Fiduciary Trust International for custodial services for Pension Fund assets. RFP No. 93-94/97 was issued in May 1995, and responses were received from eleven proposers on July 10, 1995. The minimum requirements for eligibility were: 1. A Trust Banking Facility with the ability to provide a Demand Account for payments 2. An ability to provide Errors and Omissions insurance coverage of a minimum of $9 Million 3. A member of the Federal Reserve System 4. An originating Depository Financial Institution authorized by the Federal Reserve to originate direct deposit Additionally, the evaluation criteria included completeness of proposal, proposed prices per unit, and willingness and capability to meet required services. Proposers were requested to submit audited financial statements for the previous two years, names and titles of personnel to be assigned to service the City's accounts, and a sample of a monthly trust statement showing transaction details. AGENDA ITEM C- 'l fS '7-1-98 DATE Trust Banking Services Page Two July 1, 1998 BACKGROUND: (Continued) The Evaluation Committee reviewed all proposals and recommended to the City Manager that authorization be granted for negotiations with Fiduciary Trust International for a three-year contract for this service. That contract will expire on December 19, 1998. Since there is not enough time to issue an RFP for these services before Barnett Bank transfers the custodial account for the City's investments to NationsBank, the Finance Department contacted Fiduciary Trust International to discuss compensation for custodial services of the City's investment account. Piggybacking on the existing contract for pension funds appears to be in the City's best interest, until such time as a new RFP is issued and a new contract is executed. Fiduciary Trust has offered favorable terms to the City, and has provided a draft custody agreement which has been reviewed by the City Attorney's Office and the Finance Director. Barnett Bacl< is currently charging the City 5 basis points on the first $10,000,000 and 2.5 basis points on the remaining balance, based on the fair market value of the assets in the account. Fiduciary Trust has proposed a fee of2.5 basis points on the market value of all assets in the account. This would represent an annual savings to the City of approximately $2,500. Additionally, Fiduciary Trust would provide on-line access at no extra charge. CONCLUSION: The Resolution authorizing the execution of the contract with Fiduciary Trust International of the South should be approved. This contract shall remain in place until such time as a new Request for Proposals is issued and a new contract is executed. (' \ SR;;P,W:RD:jf F\FlrJA,\ACC1\$MAN\RAMON\A_ WPFlLE\R VD\COMMTRST,WPD .\ CUSTODY AGREEMENT THIS AGREEMENT, entered into and effective this J JT day of ,1998, by and between: The City of Miami Beach. Florida (hereinafter the" ty") a d Fiduciary Trust International of the South (hereinafter the "Custodian"), wherein the City and the Custodian agree to perform such duties and functions on the terms and conditions hereinafter set forth. WHEREAS, the City of Miami Beach has established an investment account known as the City of Miami Beach Investment Account (the "Account"); and WHEREAS, the City desires to appoint and designate the Custodian as custodian for the assets from time to time held in the account, including additions and changes therein; and WHEREAS, the Custodian has agreed to serve as custodian for the assets pursuant to the terms of this Agreement. NOW, THEREFORE, in consideration of the foregoing and the promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1 . Delivery of assets. The City will deliver to the Custodian, at locations to be mutually agreed, certain securities, property and funds owned by the City as of this date (the "Assets") all as listed on Exhibit "A", which is attached hereto and made a part hereof. The Custodian shall accept the Assets under the terms of this Agreement from time of receipt, such receipt to be given by a properly authorized officer(s) of the Custodian. In addition, the City will deliver, or cause to be delivered, such other Assets from time to time coming into possession of the City, and such Assets shall be held by the Custodian pursuant to the terms of this Agreement. 2. Safekeeping. The Custodian will hold, on behalf of the City, the Assets delivered to it. The Custodian will" not deliver any part of the Assets to any person except in accordance with the provisions of this Agreement and only pursuant to Proper Instructions. The Custodian may deliver all or any part of the Assets, including registerable securities, to an agent of the Custodian appointed by the Custodian for such purpose, provided that the Custodian's agent is a financial institution. 3. Purchases. Upon receipt of Proper Instructions, and only insofar as immediately available funds are in possession of the Custodian for the purpose, the Custodian will pay for and receive all additional Assets subsequently purchased or acquired by the City, payment being made to the bank, securities dealer or broker representing the seller only upon receipt by the Custodian of the securities in form of transfer satisfactory to the Custodian. 1 4. Exchanges. Upon receipt of Proper Instructions, the Custodian will exchange any securities comprising part of the Assets held on behalf of the City in connection with any reorganization, merger, consolidation, stock split, change in par value, conversion or otherwise. The Custodian will deposit any Assets when required by the terms of any reorganization or protective plan. Without the need for further instructions, the Custodian is authorized to exchange securities comprising part of the Assets in temporary form for securities in definitive form, to effect an exchange of shares when a par value of stock has changed, and upon receiving payment in current funds therefore, to surrender bonds or other securities at maturity or when advised of earlier call for redemption. 5. Sales. Upon receipt of Proper Instructions, the Custodian or its agent will deliver securities comprising part of the Assets sold for the account of the City, such delivery to be made only upon payment therefor in lawful money of the United States paid to the Custodian. 6. Investment of cash balances. Any uninvested cash balance will be held in an interest-bearing sweep account (the "Cash Management Reserve Fund Sweep Account"), without any further direction from the City. 7. Non-discretionary dealings in portfolio securities. The Custodian will attend to all non-discretionary matters and make all non-discretionary decisions in connection with the sale, exchange, substitution, purchase, or other dealings with the Assets, except as may be otherwise provided in this Agreement or as may be directed from time to time by the City by the use of Proper Instructions. This includes, but is not limited to: a) Selling any fractional interest in stock received from a stock dividend or stock split, and to deposit the proceeds to the principal of the Assets. b) Selling subscription rights at then prevailing market rates in sufficient time before expiration to permit delivery and to deposit the proceeds to the principal of the Assets. 8. Collections. The Custodian will collect, receive and deposit for the account of the City all income and other payments received by the Custodian with respect to the Assets deposited under this Agreement, and will execute ownership and other certificates and affidavits for the collection of bond and note coupons, and will take all other action necessary and proper in connection with the collection, receipt and deposit of such income and other payments including, but not limited to the presentation for payment of all coupons and all other income items requiring presentation on all securities which may mature or be called, redeemed, retired or otherwise become payable, and the endorsement for collection in the name of the City of all checks, drafts and other negotiable instruments. The Custodian will receive and collect all stock dividends, rights and other similar items and will deal with the same pursuant to and upon receipt of Proper Instructions. All income received will be reinvested by the Custodian pursuant to Proper Instructions and all income received will be remitted pursuant to Proper Instructions. 2 9. Proxies. notices. etc. The Custodian will promptly deliver or mail to the City, or to such person(s) as the City shall from time to time direct pursuant to Proper Instructions, all forms or proxies, all notices of meetings, all proxy statements and all other notices, requests or announcements affecting or relating to any Assets held by the Custodian for the City and will, upon receipt of Proper Instructions, execute or deliver or cause the Custodian to execute or deliver such proxies or other authorizations as may be required. Except as provided by this Agreement, or pursuant to Proper Instructions hereafter received, the Custodian shall not exercise any power inherent in any such Assets, including any power to vote securities, or execute any proxy by power of attorney or any similar instrument or give any consent, approval or waiver with respect thereto, or take any other actions. In the event the Custodian does not receive Proper Instructions from the City, the Custodian will be under no obligation to use its own discretion in the handling of proxies received on securities or other property comprising part of the Assets and the Custodian shall likewise by under no obligation whatsoever with respect to the voting of, or the failure to vote any securities or property, or take any action whatsoever without receipt of Proper Instructions. 10. Disbursements. The Custodian will pay, or cause to be paid, only insofar as immediately available funds are in the possession of the Custodian for the purpose, such bills, statements and other obligations of the City (including but not limited to obligations in connection with the conversion, exchange or surrender of securities owned by the City, interest charges, mail or insurance expenses, dividend disbursements, taxes, management fees, and other similar expenses) that may be approved either generally or from time to time by the City through Proper Instructions. In the event the City instructs the Custodian to make a payment, and the Custodian does not have sufficient funds to effect the payment, the City shall provide the Custodian the necessary funds. 11. Books. records. and accounts. The Custodian will maintain proper and complete records of all transactions in the account or accounts of the City affecting the Assets, and will render statements or copies thereof from time to time and at the reasonable request of the City. 12. Proper Instructions. The term "Proper Instructions" as used herein, shall include written instructions signed by such one or more persons as the City shall have from time to time by written direction of the Finance Director authorized to give instructions of the particular character involved. A resolution of the City may be received and accepted by the Custodian as conclusive evidence of the authority of any person or persons to act, and may be considered to be in full force and effect until receipt by the custodian of written notice to the contrary. 3 13. Compensation of the Custodian. Unless and until changed by mutual consent, the Custodian's compensation shall be 2.5 basis points on the market value of the account, computed as of the end of each quarter, and charged quarterly in arrears, subject to a minimum annual fee of $2,500. Said schedule of fees will be guaranteed for a period of three (3) years from the date of this agreement. Interest paid on funds invested in the Cash Management Reserve Fund Sweep Account will be net of the 25 basis points fee paid to the Custodian. Reasonable additional charges may be made by the Custodian for special services, provided however, that any such additional charges for special services shall have the prior approval of the City. 14. Termination. The Custodian may terminate this Agreement by notice in writing, delivered or mailed postage prepaid to the City not less than thirty (30) days prior to the date upon which such termination shall take effect. The City may terminate this Agreement at any time by notice in writing, delivered to the Custodian and providing the effective date of termination in such notice. Upon termination of this Agreement, the City shall pay to the Custodian such compensation as may be due as of the date of such termination, and pursuant to Proper Instructions from the City, the Custodian shall use its best efforts to deliver the Assets which are in its custody to a successor custodian designated by the City. The Custodian shall, upon termination of this Agreement, deliver to the successor custodian all securities being held by the Custodian hereunder after registration into correct name, and all other Assets of the City deposited with the Custodian. 15. Notices. All notices, requests, instructions and other writings shall be delivered to the following addresses: the City: City of Miami Beach 1700 Convention Center Drive Miami Beach. FL 33134 Attn: Finance Director if to Custodian: Ms. Ann Orsek. Vice President Fiduciary Trust International of the South 100 S. E. Second Street. Suite 2300 Miami. Florida 33131-1101 or such other address as either party may have designated to the other in writing. 4 16. Miscellaneous. This Agreement is executed and delivered in the State of Florida and shall be governed by the laws of such state. All terms and provisions of this Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. No agreement or provision of this Agreement may be changed except by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. The captions of this Agreement are for convenience of reference only, and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 17. Indemnification. The Custodian will not be responsible in any way for the purpose or propriety of any investment of the Assets, it being expressly understood that the Custodian has no discretion of any kind whatsoever in the management or distribution of the Assets. The Custodian shall be under no duty to take any action other than as specified in this Agreement or pursuant to Proper Instructions received by the Custodian. 18. Attorney's Fees: Applicable Law. In the event a suit or proceeding is brought by a party to this Agreement, the prevailing party shall be entitled to receive its reasonable attorney's fees and disbursements incurred in connection with such suite or proceedings. The validity, interpretation and enforcement of this Agreement and all other instruments and documents executed in connection herewith shall be governed by the laws of the State of Florida, and Miami-Dade County shall be the venue of any suit or proceeding brought hereunder. 19. Acknowledgment of Fiduciary. Custodian acknowledges that it is a Fiduciary with respect to the Fund Assets, and is a named Fiduciary within the meaning of Section 112.656, Florida Statutes. 5 20. Errors and Omissions Insurance. Custodian shall maintain errors and omissions insurance of at least $20,000,000 (with a deductible of not more than $500,000) and a Fidelity Bond of at least $5 million and shall annually provide the City with proof that such insurance is in force and effect. ATTEST: City of Miami Beach 14k~ p~ BY: ~!Ik I ATTEST: Fiduciary Trust International of the South I_L// ~:2?/t.> t/ /,/ CIA' t(_r:C/t: ~. . BY: ~FO -. APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION 1fV IfY orney ,/~qr 6