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 HFA's") to review their investment policies and compare their fees with Karpus Investment Management ("Karpus”) fees. Five (5) 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 the creation of an investment committee to include the HFA Chair, a HFA Board Member, HFA Executive Director, HFA Financial Advisor and a Designee from the Broward County Department of Finance and Administrative Services (the “HFA Investment 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 HFA Investment Committee will replace Karpus as the Designated 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 HFA Investment 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.
This item was presented to the Board at the September 14, 2017 meeting (Item No. 23), where questions were asked by the Board regarding the proposed custodian/safekeeping bank, and staff withdrew the item for further review.
At the October 11, 2017 special meeting, the HFA Investment Committee reviewed and ranked several additional financial institutions, to secure and hold HFA funds and securities that will be managed by the HFA Investment Committee. There were seven banks contacted and two were non-responsive. The HFA Investment Committee then selected the top three banks for further evaluation.
At its October 18, 2017 Board meeting, the HFA Investment Committee recommended the three ranked banks to provide custodial/safekeeping services for the HFA’s investment portfolio. At the same meeting, the HFA reviewed the three banks that were ranked by the HFA Investment Committee and selected the Bank of New York Mellon Trust Company, N.A. ("BNYM”). Based upon selection of the BNYM, the the HFA has determined that it is in the best interest of the HFA to utilize safekeeping and brokerage arrangements through the BNYM. The HFA adopted Resolution 2017-011 (Exhibit 3) authorizing the appointment of the BNYM as safekeeping agent and broker for the HFA investment funds and approving the Custody Agreement. Resolution 2017-011 was prepared and approved as to form by the Office of the County Attorney.
Adoption of this Resolution approves BNYM to provide custodial/safekeeping services for the HFA’s investment portfolio and approves Custodial Agreement to protect its investment assets. |