THE ENVIRONMENTAL PROTECTION AND GROWTH MANAGEMENT DEPARTMENT AND THE HOUSING FINANCE AND COMMUNITY REDEVELOPMENT DIVISION RECOMMEND APPROVAL OF THE ABOVE MOTION.
At the March 15, 2017 meeting, the Housing Finance Authority of Broward County (the “HFA”) Board directed staff to contact Local Housing Finance Authorities throughout the State of Florida (Local HFAs) to review their investment policy and compare their fees with Karpus Investment Management (Karpus”) fees. Five Local HFAs and the Broward County Finance and Administration Services Department (“Broward County”) were contacted; the HFA reviewed investment policies and compared the: a) rate of return on investments, b) management fees, and c) investments securities. Based on the results of the comparison, it was determined that the Local HFAs, Broward County and HFA investment policies were similar. The primary differences were individuals with authority to make investment policy decisions and fees.
At its April 19, 2017 meeting, the HFA Board approved a motion directing staff to send a Notice of Termination to Karpus effective as of May 31, 2017 and create an investment committee to include the HFA Chair, an HFA Board Member, the HFA Executive Director, the HFA Financial Advisor and a Designee from the Broward County Department of Finance and Administrative Services (the “Investment Portfolio Committee”).
On April 26, 2017, the HFA sent correspondence terminating the Karpus Investment Management Agreement effective May 31, 2017. On April 27, 2017, correspondence was sent to U.S. Bank, N.A., advising that effective May 31, 2017, the Investment Portfolio Committee will replace Karpus as the execution agent for the account.
At its May 17, 2017 meeting, the HFA Board approved and adopted an Investment Policy pertaining to the surplus funds of the HFA. The Investment Policy provided direction regarding numerous investment matters including the establishment of the Investment Portfolio Committee. HFA Resolution 2017-003 (Exhibit 2) approved an investment policy pursuant to Section 218.415, Florida Statutes, to establish policies and procedures for investments of public funds in excess of the amounts needed to meet current expenses, as provided in Section 218.415, Florida Statutes. Resolution 2017-003 was prepared and approved as to form by the Office of the County Attorney.
At the June 21, 2017 HFA Board meeting, the Investment Portfolio Committee recommended the selection of Wells Fargo as the institution to provide custodial/safekeeping services for the HFA’s investment portfolio. At the same meeting, the HFA Board accepted the Investment Portfolio Committee’s recommendation and approved the execution of custodial safekeeping and other agreements with Wells Fargo as required to establish accounts relating to the HFA’s Investment Policy.
At its August 16, 2017 Board meeting, the HFA approved Resolution 2017-004 (Exhibit 3) authorizing the appointment of Wells Fargo Bank, N.A. (i) as Safekeeping Agent for the HFA investments funds and securities, (ii) the appointment of Wells Fargo Securities, LLC as broker for the HFA funds, (iii) the Safekeeping Agency Agreement (iv) the Governmental Client Agreement, and (v) the Commercial Electronic Office portal inline Assess Agreement. These services would include asset safekeeping, online access, monthly account statements and the ability to invest. Resolution 2017-004 was prepared and approved as to form by the Office of the County Attorney.
Adoption of this Resolution approves Wells Fargo Bank, N.A. as the Safekeeping Agent, appoints Wells Fargo Securities, LLC as broker for the HFA investments assets, and authorizes the HFA to execute agreements to established safeguards to protect its investment assets. |