Agenda 09/23/2014 Item #10B9/23/2014 10. B.
EXECUTIVE SUMMARY
Recommendation that the Board direct the County Manager review and propose revisions
to the county's investment policy given the current economic climate and changes in state
law which have occurred since 2002; that the County Attorney review County Ordinance
87 -65 and Resolution 95 -552 (as amended in 2002), and staffs recommended investment
policy modifications to ensure compliance with Fla. Stat. 218.415 and applicable local law,
such as the County's Purchasing Ordinance; and, that the County Manager and County
Attorney jointly review the Clerk's operational rules governing deposits and investments of
county funds to ensure consistency with the Board's safekeeping and investment plans and
policies, and, local and state law. That the updated investment policy be brought to the
board for approval at the first board meeting in October.
OBJECTIVE: To ensure that the County's plans, policies and laws with respect to the initial
deposit of public funds and the investment activity of public funds of the unit of local
government known as Collier County represented by the Collier County Board of County
Commissioners is consistent with current applicable state law, including but not limited to Fla.
Stat. 218.415, and current applicable local law such as the County's Purchasing Ordinance.
CONSIDERATIONS: Fla. Stat. Sec. 218.415 provides that a unit of local government's
investment activity shall be governed by an investment policy that is structured to place the
highest priority on the safety of principal and liquidity of funds; specifically that the investment
objectives shall include safety of capital, liquidity of funds, and investment income in that order.
(See Sec. 218.415(2) F.S.) The Board of County Commissioners has an affirmative duty to
ensure that the public's cash is being deposited and invested in accordance with these and the
other standards in the statute. The Clerk executes the Board's policy subject to the Board's
review and in accordance with applicable Florida statutes which provide the Clerk direction as to
his administrative, non - discretionary role. (See as an example Chpt. 280 F.S.) Further, Fla. Stat.
218.415 provides that the unit of local government may initially deposit public funds in a
qualified public depository. That qualified public depository shall be selected by the unit of local
government. (See Fla. Stat. Sec. 218.415(23)(a)). The Board of County Commissioners,
representing the unit of local government known as Collier County shall solicit and select the
qualified public depository in accordance with the County's Purchasing ordinance. Again the
Clerk's role in the selection of the depository shall be purely ministerial by, for example,
calculating the adequacy of the depository's collateral levels against quantifiable standards as
established by statute, a non - subjective analysis. (See Sec. 280.04 F.S.) Whether or not a bank is
qualified as a public depository for Collier county is based on such calculations.
Where the county's public funds are initially deposited, how they are collateralized, and how
they are invested is a matter of great public importance. Hundreds of millions of public dollars
are at risk. The Florida legislature has correctly recognized (with emphasis) that the safety of the
public's capital is of paramount importance. As the Board of County Commissioners, we have a
duty as the public's fiduciary agent to follow the State's legislative mandate.
Most recently, the Clerk let a solicitation for the County's banking depository services,
proceeding with the solicitation contrary to state and local law, and applying subjective standards
Packet Page -38-
9/23/2014 10. B.
of criteria review contrary to the State's prioritization described above. For example, the Clerk,
while not having the legal authority to solicit, select and contract for the Board's depository,
solicited such services contrary to the Board's purchasing ordinance; improperly weighted cost
as being more important than the safety /credit worthiness of the bank, accepted a compensating
balance requirement where compensating balances are not included in the county's investment
policy, and ignored the opportunity cost of a five year compensating balance in what he claims
will be a rising interest environment, to name a few but not all issues of concern.
Such acts put the public's funds under the Board of County Commissioners at risk. For this
reason, time is of the essence that the Board of County Commissioners have county staff review,
update and clarify the county's ordinances and resolutions relating to the procurement of banking
depository services and investment services so as to ensure they are consistent with state law and
review and update the Board of County Commissioner's investment policy and plan, again for
compliance with state law, and in light of the current economic climate. Staff shall review the
Clerk's operational rules to ensure they are consistent with what the Board of County
Commissioners shall adopt, and confirm that the rules are consistent with applicable local and
state law.
FISCAL IMPACT: None.
LEGAL CONSIDERATIONS: The County Attorney has reviewed this item and approved it
as to form and legality. Majority support of the Board is required for approval. -JAK
RECOMMENDATION: That the Board direct the County Manager review and propose
revisions to the county's investment policy given the current economic climate and changes in
state law which have occurred since 2002; that the County Attorney review County Ordinance
87 -65 and Resolution 95 -552 (as amended in 2002), and staff's recommended investment policy
modifications to ensure compliance with Fla. Stat. 218.415 and applicable local law, such as the
County's Purchasing Ordinance; and, that the County Manager and County Attorney jointly
review the Clerk's operational rules governing deposits and investments of county funds to
ensure consistency with the Board's safekeeping and investment plans and policies, and, local
and state law. That the updated investment policy be brought to the board for approval at the
first board meeting in October.
PREPARED BY: Commissioner Georgia A. Hiller, Esq.
Attachments - GFOA Best Practices, Fl. Stat. 218.415, Fl. Stat. 280, Collier County Purchasing
Ord., County Ord. 87 -65 and Resolution 95 -552 (as amended in 2002)
Packet Page -39-
9/23/2014 10. B.
COLLIER COUNTY
Board of County Commissioners
Item Number: 10.10.13.
Item Summary: Recommendation that the Board direct the County Manager review and
propose revisions to the county's investment policy given the current economic climate and
changes in state law which have occurred since 2002; that the County Attorney review County
Ordinance 87 -65 and Resolution 95 -552 (as amended in 2002), and staff's recommended
investment policy modifications to ensure compliance with Fla. Stat. 218.415 and applicable
local law, such as the County's Purchasing Ordinance; and, that the County Manager and
County Attorney jointly review the Clerk's operational rules governing deposits and investments
of county funds to ensure consistency with the Board's safekeeping and investment plans and
policies, and, local and state law. That the updated investment policy be brought to the board
for approval at the first board meeting in October. (Commissioner Hiller)
Meeting Date: 9/23/2014
Prepared By
Name: BrockMaryJo
Title: Executive Secretary to County Manager, County Managers Office
9/17/2014 4:49:19 PM
Submitted by
Title: Executive Secretary to County Manager, County Managers Office
Name: BrockMaryJo
9/17/2014 4:49:20 PM
Approved By
Name: OchsLeo
Title: County Manager, County Managers Office
Date: 9/18/2014 10:30:16 AM
Packet Page -40-
9/23/2014 10.B.
The 2014 Florida Statutes
Title XIV Chanter 218
TAXATION AND FINANCE FINANCIAL MATTERS PERTAINING TO POLITICAL
SUBDIVISIONS
218.415 Local government investment policies.— Investment activity by a unit of local
government must be consistent with a written investment plan adopted by the governing body, or
in the absence of the existence of a governing body, the respective principal officer of the unit of
local government and maintained by the unit of local government or, in the alternative, such
activity must be conducted in accordance with subsection (17). Any such unit of local government
shall have an investment policy for any public funds in excess of the amounts needed to meet
current expenses as provided in subsections (1) -(16), or shall meet the alternative investment
guidelines contained in subsection (17). Such policies shall be structured to place the highest
priority on the safety of principal and liquidity of funds. The optimization of investment returns
shall be secondary to the requirements for safety and liquidity. Each unit of local government
shall adopt policies that are commensurate with the nature and size of the public funds within its
custody.
(1) SCOPE. —The investment policy shall apply to funds under the control of the unit of local
government in excess of those required to meet current expenses. The investment policy shall not
apply to pension funds, including those funds in chapters 175 and 185, or funds related to the
issuance of debt where there are other existing policies or indentures in effect for such funds.
(2) INVESTMENT OBJECTIVES. —The investment policy shall describe the investment objectives
of the unit of local government. Investment objectives shall include safety of capital, liquidity of
funds, and investment income, in that order.
(3) PERFORMANCE MEASUREMENT. —The investment policy shall specify performance measures
as are appropriate for the nature and size of the public funds within the custody of the unit of
local government.
(4) PRUDENCE AND ETHICAL STANDARDS. —The investment policy shall describe the level of
prudence and ethical standards to be followed by the unit of local government in carrying out its
investment activities with respect to funds described in this section. The unit of local government
shall adopt the Prudent Person Rule, which states that: "Investments should be made with
judgment and care, under circumstances then prevailing, which persons of prudence, discretion,
and intelligence exercise in the management of their own affairs, not for speculation, but for
investment, considering the probable safety of their capital as well as the probable income to be
derived from the investment."
(5) LISTING OF AUTHORIZED INVESTMENTS. —The investment policy shall list investments
authorized by the governing body of the unit of local government, subject to the provisions of
subsection (16). Investments not listed in the investment policy are prohibited. If the policy
authorizes investments in derivative products, the policy must require that the unit of local
government's officials responsible for making investment decisions or chief financial officer have
developed sufficient understanding of the derivative products and have the expertise to manage
them. For purposes of this subsection, a "derivative" is defined as a financial instrument the value
of which depends on, or is derived from, the value of one or more underlying assets or index or
asset values. If the policy authorizes investments in reverse repurchase agreements or other
forms of leverage, the policy must limit the investments to transactions in which the proceeds are
intended to provide liquidity and for which the unit of local government has sufficient resources
and expertise.
(6) MATURITY AND LIQUIDITY REQUIREMENTS. —The investment policy shall require that the
investment portfolio is structured in such manner as to provide sufficient liquidity to pay
Packet Page -41-
9/23/2014 10.B.
obligations as they come due. To that end, the investment policy should direct that, to the extent
possible, an attempt will be made to match investment maturities with known cash needs and
anticipated cash -flow requirements.
(7) PORTFOLIO COMPOSITION. —The investment policy shall establish guidelines for investments
and limits on security issues, issuers, and maturities. Such guidelines shall be commensurate with
the nature and size of the public funds within the custody of the unit of local government.
(8) RISK AND DIVERSIFICATION. —The investment policy shall provide for appropriate
diversification of the investment portfolio. Investments held should be diversified to the extent
practicable to control the risk of loss resulting from overconcentration of assets in a specific
maturity, issuer, instrument, dealer, or bank through which financial instruments are bought and
sold. Diversification strategies within the established guidelines shall be reviewed and revised
periodically, as deemed necessary by the appropriate management staff.
(9) AUTHORIZED INVESTMENT INSTITUTIONS AND DEALERS. —The investment policy should
specify the authorized securities dealers, issuers, and banks from whom the unit of local
government may purchase securities.
(10) THIRD -PARTY CUSTODIAL AGREEMENTS. —The investment policy shall provide appropriate
arrangements for the holding of assets of the unit of local government. Securities should be held
with a third party; and all securities purchased by, and all collateral obtained by, the unit of local
government should be properly designated as an asset of the unit of local government. No
withdrawal of securities, in whole or in part, shall be made from safekeeping, except by an
authorized staff member of the unit of local government. Securities transactions between a
broker - dealer and the custodian involving purchase or sale of securities by transfer of money or
securities must be made on a "delivery vs. payment" basis, if applicable, to ensure that the
custodian will have the security or money, as appropriate, in hand at the conclusion of the
transaction.
(11) MASTER REPURCHASE AGREEMENT. —The investment policy shall require all approved
institutions and dealers transacting repurchase agreements -to execute and perform as stated in
the Master Repurchase Agreement. All repurchase agreement transactions shall adhere to the
requirements of the Master Repurchase Agreement.
(12) BID REQUIREMENT. —The investment policy shall require that the unit of local government's
staff determine the approximate maturity date based on cash -flow needs and market conditions,
analyze and select one or more optimal types of investment, and competitively bid the security in
question when feasible and appropriate. Except as otherwise required by law, the bid deemed to
best meet the investment objectives specified in subsection (2) must be selected.
(13) INTERNAL CONTROLS. —The investment policy shall provide for a system of internal
controls and operational procedures. The unit of local government's officials responsible for
making investment decisions or chief financial officer shall establish a system of internal controls
which shall be in writing and made a part of the governmental entity's operational procedures.
The investment policy shall provide for review of such controls by independent auditors as part of
any financial audit periodically required of the unit of local government. The internal controls
should be designed to prevent losses of funds which might arise from fraud, employee error,
misrepresentation by third parties, or imprudent actions by employees of the unit of local
government.
(14) CONTINUING EDUCATION. —The investment policy shall provide for the continuing
education of the unit of local government's officials responsible for making investment decisions
or chief financial officer. Such officials must annually complete 8 hours of continuing education in
subjects or courses of study related to investment practices and products.
Packet Page -42-
9/23/2014 10.B.
(15) REPORTING. —The investment policy shall provide for appropriate annual or more frequent
reporting of investment activities. To that end, the governmental entity's officials responsible for
making investment decisions or chief financial officer shall prepare periodic reports for submission
to the legislative and governing body of the unit of local government, which shall include
securities in the portfolio by class or type, book value, income earned, and market value as of the
report date. Such reports shall be available to the public.
(16) AUTHORIZED INVESTMENTS; WRITTEN INVESTMENT POLICIES. —Those units of local
government electing to adopt a written investment policy as provided in subsections (1) -(15) may
by resolution invest and reinvest any surplus public funds in their control or possession in:
(a) The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool
authorized pursuant to the Florida Interlocal Cooperation Act of 1969, as provided in s. 163.01.
(b) Securities and Exchange Commission registered money market funds with the highest credit
quality rating from a nationally recognized rating agency.
(c) Interest - bearing time deposits or savings accounts in qualified public depositories as defined
in s. 280.02.
(d) Direct obligations of the United States Treasury.
(e) Federal agencies and instrumentalities.
(f) Rated or unrated bonds, notes, or instruments backed by the full faith and credit of the
government of Israel.
(g) Securities of, or other interests in, any open -end or closed -end management -type
investment company or investment trust registered under the Investment Company Act of 1940,
15 U.S.C. ss. 80a -1 et seq., as amended from time to time, provided that the portfolio of such
investment company or investment trust is limited to obligations of the United States Government
or any agency or instrumentality thereof and to repurchase agreements fully collateralized by
such United States Government obligations, and provided that such investment company or
investment trust takes delivery of such collateral either directly or through an authorized
custodian.
(h) Other investments authorized by law or by ordinance for a county or a municipality.
(i) Other investments authorized by law or by resolution for a school district or a special district.
(17) AUTHORIZED INVESTMENTS; NO WRITTEN INVESTMENT POLICY. —Those units of local
government electing not to adopt a written investment policy in accordance with investment
policies developed as provided in subsections (1) -(15) may invest or reinvest any surplus public
funds in their control or possession in:
(a) The Local Government Surplus Funds Trust Fund, or any intergovernmental investment pool
authorized pursuant to the Florida Interlocal Cooperation Act of 1969, as provided in s. 163.01.
(b) Securities and Exchange Commission registered money market funds with the highest credit
quality rating from a nationally recognized rating agency.
(c) Interest - bearing time deposits or savings accounts in qualified public depositories, as defined
in s. 280.02.
(d) Direct obligations of the U.S. Treasury.
Packet Page -43-
9/23/2014 10. B.
The securities listed in paragraphs (c) and (d) shall be invested to provide sufficient liquidity to pay
obligations as they come due.
(18) SECURITIES; DISPOSITION.
(a) Every security purchased under this section on behalf of the governing body of a unit of local
government must be properly earmarked and:
1. If registered with the issuer or its agents, must be immediately placed for safekeeping in a
location that protects the governing body's interest in the security;
2. If in book entry form, must be held for the credit of the governing body by a depository
chartered by the Federal Government, the state, or any other state or territory of the United
States which has a branch or principal place of business in this state as defined in s. 658.12, or
by a national association organized and existing under the laws of the United States which is
authorized to accept and execute trusts and which is doing business in this state, and must be
kept by the depository in an account separate and apart from the assets of the financial
institution; or
3. If physically issued to the holder but not registered with the issuer or its agents, must be
immediately placed for safekeeping in a secured vault.
(b) The unit of local government's governing body may also receive bank trust receipts in return
for investment of surplus funds in securities. Any trust receipts received must enumerate the
various securities held, together with the specific number of each security held. The actual
securities on which the trust receipts are issued may be held by any bank depository chartered by
the Federal Government, this state, or any other state or territory of the United States which has
a branch or principal place of business in this state as defined in s. 658.12, or by a national
association organized and existing under the laws of the United States which is authorized to
accept and execute trusts and which is doing business in this state.
(19) SALE OF SECURITIES. —When the invested funds are needed in whole or in part for the
purposes originally intended or for more optimal investments, the unit of local government's
governing body may sell such investments at the then- prevailing market price and place the
proceeds into the proper account or fund of the unit of local government.
(20) PREEXISTING CONTRACT. —Any public funds subject to a contractor agreement existing on
October 1, 2000, may not be invested contrary to such contract or agreement.
(21) PREEMPTION. —Any provision of any special act, municipal charter, or other law which
prohibits or restricts a local governmental entity from complying with this section or any rules
adopted under this section is void to the extent of the conflict.
(22) AUDITS.— Certified public accountants conducting audits of units of local government
pursuant to s. 218.39 shall report, as part of the audit, whether or not the unit of local
government has complied with this section.
(23) AUTHORIZED DEPOSITS. —In addition to the investments authorized for local governments
in subsections (16) and (17) and notwithstanding any other provisions of law, a unit of local
government may deposit any portion of surplus public funds in its control or possession in
accordance with the following conditions:
(a) The funds are initially deposited in a qualified public depository, as defined in s. 280.02,
selected by the unit of local government.
Packet Page -44-
9/23/2014 10. B.
(b) The selected depository arranges for depositing the funds in financial deposit instruments
insured by the Federal Deposit Insurance Corporation in one or more federally insured banks or
savings and loan associations, wherever located, for the account of the unit of local government.
(c) The full amount of the principal and accrued interest of each financial deposit instrument is
insured by the Federal Deposit Insurance Corporation.
(d) The selected depository acts as custodian for the unit of local government with respect to
each financial deposit instrument issued for its account.
History. —s. 1, ch. 95 -194; s. 2, ch. 97 -9; s. 3, ch. 2000 -264; ss. 66, 141, ch. 2001 -266; s. 2, ch. 2005 -126; s. 1, ch.
2007 -89; s. 42, ch. 2008 -4; s. 2, ch. 2009 -140.
Packet Page -45-
9/23/2014 10. B.
The 2014 Florida Statutes
Title XIX Chapter 280
PUBLIC BUSINESS SECURITY FOR PUBLIC DEPOSITS
CHAPTER 280
SECURITY FOR PUBLIC DEPOSITS
280.01 Short title.
280.02 Definitions.
280.03 Public deposits to be secured; prohibitions; exemptions.
280.04 Collateral for public deposits; general provisions.
280.041 Collateral arrangements; agreements, provisions, and triggering events.
280.05 Powers and duties of the Chief Financial Officer.
280.051 Grounds for suspension or disqualification of a qualified public depository.
280.052 Order of suspension or disqualification; procedure.
280.053 Period of suspension or disqualification; obligations during period; reinstatement.
280.054 Administrative penalty in lieu of suspension or disqualification.
280.055 Cease and desist order; corrective order; administrative penalty.
280.06 Penalty for violation of law, rule, or order to cease and desist or other lawful order.
280.07 Mutual responsibility and contingent liability.
280.08 Procedure for payment of losses.
280.085 Notice to claimants.
280.09 Public Deposits Trust Fund.
280.10 Effect of merger, acquisition, or consolidation; change of name or address.
280.11 Withdrawal from public deposits program; return of pledged collateral.
280.13 Eligible collateral.
280.16 Requirements of qualified public depositories; confidentiality.
280.17 Requirements for public depositors; notice to public depositors and governmental units;
loss of protection.
1
Packet Page -46-
9/23/2014 10.B.
280.18 Protection of public depositors; liability of the state.
280.19 Rules.
280.01 Short title. —This chapter may be cited as the "Florida Security for Public Deposits Act."
History. —s. 3, ch. 81 -285.
280.02 Definitions. —As used in this chapter, the term:
(1) "Affiliate" means an entity that is related through a parent corporation's controlling interest.
The term also includes a financial institution holding company or a subsidiary or service
corporation of such holding company.
(2) "Alternative participation agreement" means an agreement of restrictions that a qualified
public depository completes as an alternative to withdrawing from the public deposits program
due to financial condition.
(3) "Average daily balance" means the average daily balance of public deposits held during the
reported month. The average daily balance shall be determined by totaling, by account, the daily
balances held by the depositor and dividing the total by the number of calendar days in the
month. Deposit insurance is then deducted from each account balance and the resulting amounts
are totaled to obtain the average daily balance.
(4) "Average monthly balance" means the average monthly balance of public deposits held by
the depository during any 12 calendar months. The average monthly balance of the previous 12
calendar months shall be determined by adding the average daily balance for the reported month
and the average daily balances for the 11 months preceding that month and dividing the total by
12.
(5) "Book -entry form" means that securities are not represented by a paper certificate but
represented by an account entry on the records of a depository trust clearing system or, in the
case of United States Government securities, a Federal Reserve Bank.
(6) "Capital account" or "tangible equity capital" means total equity capital, as defined on the
balance -sheet portion of the Consolidated-Reports of Condition and Income (call report), less
intangible assets, as submitted to the regulatory banking authority.
(7) "Chief Financial Officer's custody" is a collateral arrangement governed by a contract
between a designated Chief Financial Officer's custodian and the Chief Financial Officer. This
arrangement requires that collateral be in the Chief Financial Officer's name in order to perfect
the security interest.
(8) "Collateral- pledging level" means the percentage of collateral required to be pledged by a
qualified public depository as provided under s. 280.04.
(9) "Current month" means the month immediately following the month for which the monthly
report is due from qualified public depositories.
(10) "Custodian" means the Chief Financial Officer or a bank, savings association, or trust
company that:
(a) Is organized and existing under the laws of this state, any other state, or the United States;
(b) Has executed all forms required under this chapter or any rule adopted hereunder;
PA
Packet Page -47-
9/23/2014 10.B.
(c) Agrees to be subject to the jurisdiction of the courts of this state, or of the courts of the
United States which are located within this state, for the purpose of any litigation arising out of
this chapter; and
(d) Has been approved by the Chief Financial Officer to act as a custodian.
(11) "Default or insolvency" includes, without limitation, the failure or refusal of a qualified
public depository to pay a check or warrant drawn upon sufficient and collected funds by a public
depositor or to return a deposit on demand or at maturity together with interest as agreed; the
issuance of an order by a supervisory authority restraining such depository from making
payments of deposit liabilities; or the appointment of a receiver for such depository.
(12) "Effective date of notice of withdrawal or order of discontinuance" pursuant to s. 280.11(3)
means that date which is set out as such in any notice of withdrawal or order of discontinuance
from the Chief Financial Officer.
(13) "Eligible collateral" means securities, Federal Home Loan Bank letters of credit, and cash,
as designated in s. 280.13.
(14) "Financial institution" means, including, but not limited to, an association, bank, brokerage
firm, credit union, industrial savings bank, savings and loan association, trust company, or other
type of financial institution organized under the laws of this state or any other state of the United
States and doing business in this state or any other state, in the general nature of the business
conducted by banks and savings associations.
(15) "Governmental unit" means the state or any county, school district, community college
district, state university, special district, metropolitan government, or municipality, including any
agency, board, bureau, commission, and institution of any of such entities, or any court.
(16) "Loss to public depositors" means loss of all principal and all interest or other earnings on
the principal accrued or accruing as of the date the qualified public depository was declared in
default or Insolvent.
(17) "Market value" means the value of collateral calculated pursuant to s. 280.04.
(18) "Operating subsidiary" means the qualified public depository's 100 - percent owned
corporation that has ownership of pledged collateral. The operating subsidiary may not have
powers beyond those that its parent qualified public depository may itself exercise. The use of an
operating subsidiary is at the discretion of the qualified public depository and must meet the Chief
Financial Officer's requirements.
(19) "Pledged collateral" means securities or cash held separately and distinctly by an eligible
custodian for the benefit of the Chief Financial Officer to be used as security for Florida public
deposits. This includes maturity and call proceeds.
(20) "Pledgor" means the qualified public depository and, if one is used, operating subsidiary.
(21) "Pool figure" means the total average monthly balances of public deposits held by all
qualified public depositories during the immediately preceding 12 -month period.
(22) "Previous month" means the month or months immediately preceding the month for which
a monthly report is due from qualified public depositories.
3
Packet Page -48-
9/23/2014 10.B.
(23) "Public deposit" means the moneys of the state or of any state university, county, school
district, community college district, special district, metropolitan government, or municipality,
including agencies, boards, bureaus, commissions, and institutions of any of the foregoing, or of
any court, and includes the moneys of all county officers, including constitutional officers, which
are placed on deposit in a bank, savings bank, or savings association. This includes, but is not
limited to, time deposit accounts, demand deposit accounts, and nonnegotiable certificates of
deposit. Moneys in deposit notes and in other nondeposit accounts such as repurchase or reverse
repurchase operations are not public deposits. Securities, mutual funds, and similar types of
investments are not public deposits and are not subject to this chapter.
(24) "Public depositor" means the official custodian of funds for a governmental unit who is
responsible for handling public deposits.
(25) "Public deposits program" means the Florida Security for Public Deposits Act contained in
this chapter and any rule adopted under this chapter.
(26) "Qualified public depository" means a bank, savings bank, or savings association that:
(a) Is organized and exists under the laws of the United States or the laws of this state or any
other state or territory of the United States.
(b) Has its principal place of business in this state or has a branch office in this state which is
authorized under the laws of this state or of the United States to receive deposits in this state.
(c) Has deposit insurance pursuant to the Federal Deposit Insurance Act, as amended, 12 U.S.C.
ss. 1811 et seq.
(d) Has procedures and practices for accurate identification, classification, reporting, and
collateralization of public deposits.
(e) Meets all the requirements of this chapter.
(f) Has been designated by the Chief Financial Officer as a qualified public depository.
(27) "Reported month" means the month for which a monthly report is due from qualified public
depositories.
(28) "Required collateral" of a qualified public depository means eligible collateral having a
market value equal to or in excess of the amount required under s. 280.04.
(29) "Triggering events" are events set out in s. 280.041 which give the Chief Financial Officer
the right to:
(a) Instruct the custodian to transfer securities pledged, interest payments, and other proceeds
of pledged collateral not previously credited to the pledgor.
(b) Demand payment under letters of credit.
History. —s. 3, ch. 81 -285; s. 7, ch. 83 -122; s. 1, ch. 84 -216; s. 1, ch. 85 -259; s. 1, ch. 86 -84; s. 1, ch. 87 -409; s. 1, ch.
88 -185; s. 5, ch. 90 -357; s. 10, ch. 91 -244; s. 4, ch. 96 -216; s. 1, ch. 97 -30; s. 11, ch. 98 -409; s. 1, ch. 2000 -352; s. 1,
ch. 2001 -230; s. 286, ch. 2003 -261; s. 33, ch. 2007 -217; s. 1, ch. 2014 -145.
280.03 Public deposits to be secured; prohibitions; exemptions. —
(1)(a) All public deposits shall be secured as provided in this chapter when public depositors
comply with the requirements of this chapter.
n
Packet Page -49-
9/23/2014 10.B.
(b) Public deposits shall be made in a qualified public depository unless exempted by law.
(2) Public funds shall not be deposited directly or indirectly in negotiable certificates of deposit.
(3) The following are exempt from the requirements of, and protection under, this chapter:
(a) Public deposits deposited in a bank or savings association by a trust department or trust
company which are fully secured under trust business laws.
(b) Moneys of the System Trust Fund, as defined in s. 121.021(36).
(c) Public deposits held outside the country.
(d) Wire transfers and transfers of funds solely for the purpose of paying registrars and paying
agents.
(e) Public deposits that are fully secured by a collateral requirement under federal regulations.
(f) Public deposits made in accordance with s. 17.57(7) or s. 218.415(23).
History. —s. 3, ch. 81 =285; s. 8, ch. 83 -122; s. 2, ch. 85 -259; s. 55, ch. 86 -152; s. 4, ch. 86 -236; s. 2, ch. 87 -409; s. 6,
ch. 90 -357; s. 2, ch. 93 -75; s. 5, ch. 96 -216; s. 17, ch. 97 -30; s. 12, ch. 98 -409; s. 3, ch. 2005 -126; s. 2, ch. 2014 -145.
280.04 Collateral for public deposits; general provisions. —
(1) The Chief Financial Officer shall determine the collateral requirements and collateral - pledging
level for each qualified public depository following procedures established by rule. These
procedures must include numerical parameters for 25- percent, 50- percent, 110 - percent, and
150 - percent pledge levels based on nationally recognized financial rating services information and
established financial performance guidelines.
(2) A qualified public depository may not accept or retain any public deposit required to be
secured unless it deposits with the Chief Financial Officer eligible collateral at least equal to the
greater of:
(a) The average daily balance of public deposits that does not exceed the lesser of its tangible
equity capital or 20 percent of the pool figure multiplied by the depository's collateral - pledging
level, plus the greater of:
1. One hundred ten percent of the average daily balance of public deposits in excess of its
tangible equity capital; or
2. One hundred ten percent of the average daily balance of public deposits in excess of 20
percent of the pool figure.
(b) Twenty -five percent of the average monthly balance of public deposits.
(c) One hundred ten percent of the average daily balance of public deposits if the qualified public
depository:
1. Has been established for less than 3 years;
2. Has experienced material decreases in its tangible equity capital; or
3. Has an overall financial condition that is materially deteriorating.
5
Packet Page -50-
9/23/2014 10.B.
(d) One hundred fifty percent of an established maximum amount of public deposits which has
been mutually agreed upon by and between the Chief Financial Officer and the qualified public
depository.
(e) Minimum required collateral of $100,000.
(f) An amount as required in special instructions from the Chief Financial Officer to protect the
integrity of the public deposits program,
(3) Each qualified public depository shall report its required collateral on the monthly report
required in s. 280.16 and simultaneously pledge, deposit, or issue eligible collateral needed.
(4) Additional collateral is required within 2 business days if public deposits are accepted that
would increase the qualified public depository's average daily balance for the current month by 25
percent over the average daily balance of the previously reported month.
(5) Additional collateral of 20 percent of required collateral is necessary if a valuation date other
than the close of business as described below has been approved for the qualified public
depository and the required collateral is found to be insufficient based on the Chief Financial
Officer's valuation.
(6) Each qualified public depository shall value its collateral in the following manner; it must:
(a) Use a nationally recognized source.
(b) Use market price, quality ratings, and pay -down factors as of the close of business on the
last banking day in the reported month, or as of a date approved by the Chief Financial Officer.
(c) Report any material decline in value that occurs before the date of mailing the monthly
report, required in s. 280.16, to the Chief Financial Officer.
(d) Use 100 percent of the maximum amount available under Federal Home Loan Bank letters of
credit as market value.
(7) A qualified public depository shall pledge, deposit, or issue additional eligible collateral
between filing periods of the monthly report required in s. 280.16 when notified by the Chief
Financial Officer that current market value of collateral does not meet required collateral. The
pledge, deposit, or issuance of such additional collateral shall be made within 2 business days
after the Chief Financial Officer's notification.
(8) A qualified public depository may be required to return public deposits to governmental units
and be suspended or disqualified or subjected to administrative penalty as provided in s. 280.051
or s. 280.054 for failure to meet required collateral.
(9) The Chief Financial Officer shall adopt rules for the establishment of collateral requirements,
collateral pledging levels, required collateral calculations, and market value and clarifying terms.
History. —s. 3, ch. 81 -285; s. 9, ch. 83 -122; s. 132, ch. 83 -217; s. 3, ch. 85 -259; s. 2, ch. 86 -84; s. 3, ch. 87 -409; s. 4,
ch. 88 -185; s. 7, ch. 90 -357; s. 11, ch. 91 -244; s. 188, ch. 95 -148; s. 6, ch. 96 -216; s. 13, ch. 98 -409; s. 2, ch. 2000-
352; s. 2, ch. 2001 -230; s. 287, ch. 2003 -261; s. 3, ch. 2014 -145.
280.041 Collateral arrangements; agreements, provisions, and triggering events. —
(1) Eligible collateral listed in s. 280.13 may be pledged, deposited, or issued using the following
collateral arrangements as approved by the Chief Financial Officer for a qualified public depository
or operating subsidiary, if one is used, to meet required collateral:
C.
Packet Page -51-
9/23/2014 10.B.
(a) Regular custody arrangement for collateral pledged to the Chief Financial Officer pursuant to
subsection (2).
(b) Federal Reserve Bank custody arrangement for collateral pledged to the Chief Financial
Officer pursuant to subsection (3).
(c) Chief Financial Officer's custody arrangement for collateral deposited in the Chief Financial
Officer's name pursuant to subsection (4).
(d) Federal Home Loan Bank letter of credit arrangement for collateral issued with the Chief
Financial Officer as beneficiary pursuant to subsection (5).
(e) Cash arrangement for collateral held by the Chief Financial Officer or a custodian
(2) With the approval of the Chief Financial Officer, a qualified public depository or operating
subsidiary, as pledgor, may deposit eligible collateral with a custodian. A qualified public
depository shall not act as its own custodian. Except in the case of using a Federal Reserve Bank
as custodian, the following are necessary for the Chief Financial Officer's approval:
(a) A completed collateral agreement in a form prescribed by the Chief Financial Officer in which
the pledgor agrees to the following provisions:
1. The pledgor shall own the pledged collateral and acknowledge that the Chief Financial Officer
has a perfected security interest. The pledged collateral shall be eligible collateral and shall be at
least equal to the amount of required collateral.
2. The pledgor shall grant to the Chief Financial Officer an interest in pledged collateral for the
purposes of this section. The pledgor shall not enter into or execute any other agreement related
to the pledged collateral that would create an interest in or lien on that collateral in any manner
in favor of any third party without the written consent of the Chief Financial Officer.
3. The pledgor shall not grant the custodian any lien that attaches to the collateral in favor of
the custodian that is superior or equal to the security interest of the Chief Financial Officer.
4. The pledgor shall agree that the Chief Financial Officer may, without notice to or consent by
the pledgor, require the custodian to comply with and perform any and all requests and orders
directly from the Chief Financial Officer. These include, but are not limited to, liquidating all .
collateral and submitting the proceeds directly to the Chief Financial Officer in the name of the
Chief Financial Officer only or transferring all collateral into an account designated solely by the
Chief Financial Officer.
5. The pledgor shall acknowledge that the Chief Financial Officer may, without notice to or
consent by the pledgor, require the custodian to hold principal payments and income for the
benefit of the Chief Financial Officer.
6. The pledgor shall initiate collateral transactions on forms prescribed by the Chief Financial
Officer in the following manner:
a. A deposit transaction of eligible collateral may be made without prior approval from the Chief
Financial Officer provided: security types that have restrictions have been approved in advance of
the transaction by the Chief Financial Officer and simultaneous notification is given to the Chief
Financial Officer; and the custodian has not received notice from the Chief Financial Officer
prohibiting deposits without prior approval.
7
Packet Page -52-
9/23/2014 10.B.
b. A substitution transaction of eligible collateral may be made without prior approval from the
Chief Financial Officer provided: security types that have restrictions have been approved in
advance of the transaction by the Chief Financial Officer; the market value of the securities to be
substituted is at least equal to the amount withdrawn; simultaneous notification is given to the
Chief Financial Officer; and the custodian has not received notice from the Chief Financial Officer
prohibiting substitution.
c. A transfer of collateral between accounts at a custodian requires the Chief Financial Officer's
prior approval. The collateral shall be released subject to redeposit in the new account with a
pledge to the Chief Financial Officer intact.
d. A transfer of collateral from a custodian to another custodian requires the Chief Financial
Officer's prior approval and a valid collateral agreement with the new custodian. The collateral
shall be released subject to redeposit at the new custodian with a pledge to the Chief Financial
Officer intact.
e. A withdrawal transaction requires the Chief Financial Officer's prior approval. The market
value of eligible collateral remaining after the withdrawal shall be at least equal to the amount of
required collateral. A withdrawal transaction shall be executed for any release of collateral
including maturity or call proceeds.
f. Written notice shall be sent to the Chief Financial Officer to remove from the inventory of
pledged collateral a pay -down security that has paid out with zero principal remaining.
7. If pledged collateral includes definitive (physical) securities in registered form which are in the
name of the pledgor or a nominee, the pledgor shall deliver the following documents when
requested by the Chief Financial Officer:
a. A separate certified power of attorney in a form prescribed by the Chief Financial Officer for
each issue of securities.
b. Separate bond assignment forms as required by the bond agent or trustee.
c. Certified copies of resolutions adopted by the pledgor's governing body authorizing execution
of these documents.
8. The pledgor shall be responsible for all costs necessary to the functioning of the collateral
agreement or associated with confirmation of pledged collateral to the Chief Financial Officer and
acknowledges that these costs shall not be a charge against the Chief Financial Officer or his or
her interests in the pledged collateral.
9. The pledgor, if notified by the Chief Financial Officer, shall not be allowed to use a custodian if
that custodian fails to complete the collateral agreement, releases pledged collateral without the
Chief Financial Officer's approval, fails to properly complete confirmations of pledged collateral,
fails to honor a request for examination of definitive pledged collateral and records of book -entry
securities, or fails to provide requested documents on definitive securities. The period for
disallowing the use of a custodian shall be 1 year.
10. The pledgor shall be subject to the jurisdiction of the courts of the State of Florida, or of
courts of the United States located within the State of Florida, for the purpose of any litigation
arising out of the act.
11. The pledgor is responsible and liable to the Chief Financial Officer for any action of agents
the pledgor uses to execute collateral transactions or submit reports to the Chief Financial Officer.
E:3
Packet Page -53-
9/23/2014 10.B.
12. The pledgor shall agree that any information, forms, or reports electronically transmitted to
the Chief Financial Officer shall have the same enforceability as a signed writing.
13. The pledgor shall submit proof that authorized individuals executed the collateral agreement
on behalf of the pledgor.
14. The pledgor shall agree by resolution of the board of directors that collateral agreements
entered into for purposes of this section have been formally accepted and constitute official
records of the pledgor.
15. The pledgor shall be bound by any other provisions found necessary for a perfected security
interest in collateral under the Uniform Commercial Code.
(b) A completed collateral agreement in a form prescribed by the Chief Financial Officer in which
the custodian agrees to the following provisions:
1. The custodian shall have no responsibility to ascertain whether the pledged securities are at
least equal to the amount of required collateral nor whether the pledged securities are eligible
collateral.
2. The custodian shall hold pledged collateral in a custody account for the Chief Financial Officer
for purposes of this section. The custodian shall not enter into or execute any other agreement
related to the collateral that would create an interest in or lien on that collateral in any manner in
favor of any third party without the written consent of the Chief Financial Officer.
3. The custodian shall agree that any lien that attaches to the collateral in favor of the custodian
shall not be superior or equal to the security interest of the Chief Financial Officer.
4. The custodian shall, without notice to or consent by the pledgor, comply with and perform any
and all requests and orders directly from the Chief Financial Officer. These include, but are not
limited to, liquidating all collateral and submitting the proceeds directly to the Chief Financial
Officer in the name of the Chief Financial Officer only or transferring all collateral into an account
designated solely by the Chief Financial Officer.
S. The custodian shall consider principal payments on pay -down securities and income paid on
pledged collateral as the property of the pledgor and shall pay thereto provided the custodian has
not received written notice from the Chief Financial Officer to hold such principal payments and
income for the benefit of the Chief Financial Officer.
6. The custodian shall process collateral transactions on forms prescribed by the Chief Financial
Officer in the following manner:
a. A deposit transaction of eligible collateral may be made without prior approval from the Chief
Financial Officer unless the custodian has received notice from the Chief Financial Officer requiring
the Chief Financial Officer's prior approval.
b. A substitution transaction of eligible collateral may be made without prior approval from the
Chief Financial Officer provided the pledgor certifies the market value of the securities to be
substituted is at least equal to the market value amount of the securities to be withdrawn and the
custodian has not received notice from the Chief Financial Officer prohibiting substitution.
c. A transfer of collateral between accounts at a custodian requires the Chief Financial Officer's
prior approval. The collateral shall be released subject to redeposit in the new account with a
0
Packet Page -54-
9/23/2014 10.B.
pledge to the Chief Financial Officer intact. Confirmation from the custodian to the Chief Financial
Officer must be received within 5 business days of the redeposit.
d. A transfer of collateral from a custodian to another custodian requires the Chief Financial
Officer's prior approval. The collateral shall be released subject to redeposit at the new custodian
with a pledge to the Chief Financial Officer intact. Confirmation from the new custodian to the
Chief Financial Officer must be received within 5 business days of the redeposit.
e. A withdrawal transaction requires the Chief Financial Officer's prior approval. A withdrawal
transaction shall be executed for the release of any pledged collateral including maturity or call
proceeds.
7. If pledged collateral includes definitive (physical) securities in registered form, which are in
the name of the custodian or a nominee, the custodian shall deliver the following documents
when requested by the Chief Financial Officer:
a. A separate certified power of attorney in a form prescribed by the Chief Financial Officer for
each issue of securities.
b. Separate bond assignment forms as required by the bond agent or trustee.
c. Certified copies of resolutions adopted by the custodian's governing body authorizing
execution of these documents.
8. The custodian shall acknowledge that the pledgor is responsible for all costs necessary to the
functioning of the collateral agreement or associated with confirmation of securities pledged to
the Chief Financial Officer and that these costs shall not be a charge against the Chief Financial
Officer or his or her interests in the pledged collateral.
9. The custodian shall agree to provide confirmation of pledged collateral upon request from the
Chief Financial Officer. This confirmation shall be provided within 15 working days after the
request, in a format prescribed by the Chief Financial Officer, and shall require no identification
other than the pledgor name and location, unless the special identification is provided in the
collateral agreement.
10. The custodian shall be subject to the jurisdiction of the courts of the State of Florida, or of
courts of the United States located within the State of Florida, for the purpose of any litigation
arising out of the act.
11. The custodian shall be responsible and liable to the Chief Financial Officer for any action of
agents the custodian uses to hold and service collateral pledged to the Chief Financial Officer.
12. The custodian shall agree that any information, forms, or reports electronically transmitted
to the Chief Financial Officer shall have the same enforceability as a signed writing.
13. The Chief Financial Officer shall have the right to examine definitive pledged collateral and
records of book -entry securities during the regular business hours of the custodian without cost to
the Chief Financial Officer.
14. The responsibilities of the custodian for the safekeeping of the pledged collateral shall be
limited to the diligence and care usually exercised by a banking or trust institution toward its own
property.
10
Packet Page -55-
9/23/2014 10. B.
15. If there is any change in the Uniform Commercial Code, as adopted by law in this state,
which affects the requirements for a perfected security interest in collateral, the Chief Financial
Officer shall notify the custodian of such change. The custodian shall have a period of 180
calendar days after such notice to withdraw as custodian if the custodian cannot provide the
required custodial services.
(3) With the approval of the Chief Financial Officer, a pledgor may deposit eligible collateral
pursuant to an agreement with a Federal Reserve Bank. The Federal Reserve Bank agreement
may require terms not consistent with subsection (2) but may not subject the Chief Financial
Officer to any costs or indemnification requirements.
(4) The Chief Financial Officer may require deposit or transfer of collateral into a custodial
account established in the Chief Financial Officer's name at a designated custodian. This
requirement for Chief Financial Officer's custody shall have the following characteristics:
(a) One or more triggering events must have occurred.
(b) The custodian used must be a Chief Financial Officer's approved custodian that must:
1. Meet the definition of custodian.
2. Not be an affiliate of the qualified public depository.
3. Be bound under a distinct Chief Financial Officer's custodial contract.
(c) All deposit transactions require the approval of the Chief Financial Officer.
(d) All collateral must be in book -entry form.
(e) The qualified public depository shall be responsible for all costs necessary to the functioning
of the contract or associated with the confirmation of securities in the name of.the Chief Financial
Officer and acknowledges that these costs shall not be a charge against the Chief Financial Officer
and may be deducted from the collateral or income earned if unpaid.
(5) With the approval of the Chief Financial Officer, a qualified public depository may use Federal
Home Loan Bank letters of credit to meet collateral requirements. A completed agreement that
includes the following provisions is necessary for the Chief Financial Officer's approval:
(a) The letter of credit shall meet the definition of eligible collateral.
(b) The qualified public depository shall agree that the Chief Financial Officer, as beneficiary,
may, without notice to or consent by the qualified public depository, demand payment under the
letter of credit if any of the triggering events listed in this section occur.
(c) The qualified public depository shall agree that funds received by the Chief Financial Officer
due to the occurrence of one or more triggering events may be deposited in the Treasury Cash
Deposit Trust Fund for purposes of eligible collateral.
(d) The qualified public depository shall arrange for the issue of letters of credit which meet the
requirements of s. 280.13 and delivery to the Chief Financial Officer. All transactions involving
letters of credit require the Chief Financial Officer's approval.
11
Packet Page -56-
9/23/2014 10.B.
(e) The qualified public depository shall be responsible for all costs necessary in the use or
confirmation of letters of credit issued on behalf of the Chief Financial Officer and acknowledges
that these costs shall not be a charge against the Chief Financial Officer.
(f) The qualified public depository shall be subject to the jurisdiction of the courts of this state,
or of courts of the United States which are located within this state, for the purpose of any
litigation arising out of the act.
(g) The qualified public depository shall agree that any information, form, or report electronically
transmitted to the Chief Financial Officer shall have the same enforceability as a signed writing.
(h) The qualified public depository shall submit proof that authorized individuals executed the
letters of credit agreement on its behalf.
(i) The qualified public depository shall agree by resolution of the board of directors that the
letters of credit agreements entered into for purposes of this section have been formally accepted
and constitute official records of the qualified public depository.
(6) The Chief Financial Officer may demand payment under a letter of credit or direct a
custodian to deposit or transfer collateral and proceeds of securities not previously credited upon
the occurrence of one or more triggering events provided that, to the extent not incompatible
with the protection of public deposits, as determined in the Chief Financial Officer's sole and
absolute discretion, the Chief Financial Officer shall provide a custodian and the qualified public
depository with 48 hours' advance notice before directing such deposit or transfer. These events
include:
(a) The Chief Financial Officer determines that an immediate danger to the public health, safety,
or welfare exists.
(b) The qualified public depository fails to have adequate procedures and practices for the
accurate identification, classification, reporting, and collateralization of public deposits.
(c) The custodian fails to provide or allow inspection and verification of documents, reports,
records, or other information dealing with the pledged collateral or financial information.
(d) The qualified public depository or its operating subsidiary fails to provide or allow inspection
and verification of documents, reports, records, or other information dealing with Florida public
deposits, pledged collateral, or financial information.
(e) The custodian fails to hold income and principal payments made on securities held as
collateral or fails to deposit or transfer such payments pursuant to the Chief Financial Officer's
instructions.
(f) The qualified public depository defaults or becomes insolvent.
(g) The qualified public depository fails to pay an assessment.
(h) The qualified public depository fails to pay an administrative penalty.
(i) The qualified public depository fails to meet financial condition standards.
(j) The qualified public depository charges a withdrawal penalty to public depositors when the
qualified public depository is suspended, disqualified, or withdrawn from the public deposits
program.
12
Packet Page -57-
9/23/2014 10. B.
(k) The qualified public depository does not provide, as required, the public depositor with
annual confirmation information on all open Florida public deposit accounts.
(1) The qualified public depository pledges, deposits, or has issued insufficient or unacceptable
collateral to meet required collateral within the required time.
(m) Collateral, other than a proper substitution, is released without the prior approval of the
Chief Financial Officer.
(n) The qualified public depository, custodian, operating subsidiary, or agent violates any
provision of the act and the Chief Financial Officer determines that such violation may be
remedied by a move of collateral.
(o) The qualified public depository, custodian, operating subsidiary, or agent fails to timely
cooperate in resolving problems by the date established in written communication from the Chief
Financial Officer.
(p) The custodian fails to provide sufficient confirmation information.
(q) The Federal Home Loan Bank or the qualified public depository gives notification that a letter
of credit will not be extended or renewed and other eligible collateral equal to required collateral
has not been deposited within 30 days after the notice or 30 days before expiration of the letter
of credit.
(r) The qualified public depository, if involved in a merger, acquisition, consolidation, or other
organizational change, fails to notify the Chief Financial Officer or ensure that required collateral
is properly maintained by the depository holding the Florida public deposits.
(s) Events that would bring about an administrative or legal action by the Chief Financial Officer.
(7) The Chief Financial Officer shall adopt rules to identify forms and establish procedures for
collateral agreements and transactions, furnish confirmation requirements, establish procedures
for using an operating subsidiary and agents, and clarify terms.
History. —s. 3, ch. 2000 -352; s. 3, ch. 2001 -230; s. 288, ch. 2003 -261.
280.05 Powers and duties of the Chief Financial Officer. —In fulfilling the requirements of
this act, the Chief Financial Officer has the power to take the following actions he or she deems
necessary to protect the integrity of the public deposits program:
(1) Perform financial analysis of any qualified public depositories.
(2) Require collateral, or increase the collateral - pledging level, of any qualified public depository.
(3) Decline to accept, or reduce the reported value of, collateral in order to ensure the pledging
or depositing of sufficient marketable collateral and acceptable letters of credit.
(4) Maintain perpetual inventory of collateral and perform monthly market valuations and quality
ratings.
(5) Monitor and confirm collateral with custodians and letter of credit issuers.
(6) Move collateral into an account established in the Chief Financial Officer's name upon the
occurrence of one or more triggering events.
13
Packet Page -58-
9/23/2014 10.B.
(7) Issue notice to a qualified public depository that use of a custodian will be disallowed when
the custodian has failed to follow collateral agreement terms.
(8) Furnish written notice to custodians of collateral to hold interest and principal payments
made on securities held as collateral and to deposit or transfer such payments pursuant to the
Chief Financial Officer's instructions.
(9) Release collateral held in the Chief Financial Officer's name, subject to sale and transfer of
funds directly from the custodian to public depositors of a withdrawing depository.
(10) Demand payment under letters of credit for any of the triggering events listed in s. 280.041
and deposit the funds in:
(a) The Public Deposits Trust Fund for purposes of paying losses to public depositors.
(b) The Treasury Administrative and Investment Trust Fund for receiving payment of
administrative penalties.
(c) The Treasury Cash Deposit Trust Fund for purposes of eligible collateral.
(11) Sell securities for the purpose of paying losses to public depositors not covered by deposit
insurance.
(12) Transfer funds directly from the custodian to public depositors or the receiver in order to
facilitate prompt payment of claims.
(13) Require the filing of the following reports, which the Chief Financial Officer shall process as
provided:
(a) Qualified public depository monthly reports and schedules. The Chief Financial Officer shall
review the reports of each qualified public depository for material changes in tangible equity
capital or changes in name, address, or type of institution; record the average daily balances of
public deposits held; and monitor the collateral - pledging levels and required collateral.
(b) Quarterly regulatory reports from qualified public depositories. The Chief Financial Officer
shall analyze qualified public depositories ranked in the lowest category based on established
financial condition criteria.
(c) Qualified public depository annual reports and public depositor annual reports. The Chief
Financial Officer shall compare public deposit information reported by qualified public depositories
and public depositors. Such comparison shall be conducted for qualified public depositories that
are ranked in the lowest category based on established financial condition criteria of record on
September 30. Additional comparison processes may be performed as public deposits program
resources permit.
(d) Any related documents, reports, records, or other information deemed necessary by the
Chief Financial Officer in order to ascertain compliance with this chapter.
(14) Verify the reports of any qualified public depository relating to public deposits it holds when
necessary to protect the integrity of the public deposits program.
(15) Confirm public deposits, to the extent possible under current law, when needed.
14
Packet Page -59-
9/23/2014 10.B.
(16) Require at his or her discretion the filing of any information or forms required under this
chapter to be by electronic data transmission. Such filings of information or forms shall have the
same enforceability as a signed writing.
(17) Suspend or disqualify or disqualify after suspension any qualified public depository that has
violated any of the provisions of this chapter or of rules adopted hereunder.
(a) Any qualified public depository that is suspended or disqualified pursuant to this subsection
is subject to the provisions of s. 280.11(2) governing withdrawal from the public deposits
program and return of pledged collateral. Any suspension shall not exceed a period of 6 months.
Any qualified public depository which has been disqualified may not reapply for qualification until
after the expiration of 1 year from the date of the final order of disqualification or the final
disposition of any appeal taken therefrom.
(b) In lieu of suspension or disqualification, impose an administrative penalty upon the qualified
public depository as provided in s. 280.054.
(c) If the Chief Financial Officer has reason to believe that any qualified public depository or any
other financial institution holding public deposits is or has been violating any of the provisions of
this chapter or of rules adopted hereunder, he or she may issue to the qualified public depository
or other financial institution an order to cease and desist from the violation or to correct the
condition giving rise to or resulting from the violation. If any qualified public depository or other
financial institution violates a cease - and - desist or corrective order, the Chief Financial Officer may
impose an administrative penalty upon the qualified public depository or other financial institution
as provided in s. 280.054 or s. 280.055. In addition to the administrative penalty, the Chief
Financial Officer may suspend or disqualify any qualified public depository for violation of any
order issued pursuant to this paragraph.
History. —s. 3, ch. 81 -285; s. 10, ch. 83 -122; s. 4, ch. 85 -259; s. 5, ch. 87 -409; ss. 5, 14, ch. 88 -185; s. 8, ch. 90 -357;
s. 12, ch. 91 -244; s. 5, ch. 91 -429; s. 189, ch. 95 -148; s. 7, ch. 96 -216; s. 14, ch. 98 -409; s. 4, ch. 2001 -230; s. 289,
ch. 2003 -261; s. 4, ch. 2014 -145.
280.051 Grounds for suspension or disqualification of a qualified public depository. —A
qualified public depository may be suspended or disqualified or both if the Chief Financial Officer
determines that the qualified public depository has: .
(1) Violated any of the provisions of this chapter or any rule adopted by the Chief Financial
Officer pursuant to this chapter.
(2) Submitted reports containing inaccurate or incomplete information regarding public deposits
or collateral for such deposits, tangible equity capital, or the calculation of required collateral.
(3) Failed to maintain required collateral.
(4) Grossly misstated the market value of the securities pledged as collateral.
(5) Failed to pay any administrative penalty.
(6) Failed to furnish the Chief Financial Officer with prompt and accurate information, or failed to
allow inspection and verification of any information, dealing with public deposits or dealing with
the exact status of its tangible equity capital, or other financial information that the Chief
Financial Officer determines necessary to verify compliance with this chapter or any rule adopted
pursuant to this chapter.
15
Packet Page -60-
9/23/2014 10. B.
(7) Failed to furnish the Chief Financial Officer, when the Chief Financial Officer requested, with
a power of attorney or bond power or other bond assignment form required by the bond agent,
bond trustee, or other transferor for each issue of registered certificated securities pledged.
(8) Failed to furnish any agreement, report, form, or other information required to be filed
pursuant to s. 280.16, or when requested by the Chief Financial Officer.
(9) Submitted reports signed by an unauthorized individual.
(10) Submitted reports without a certified or verified signature, or both, if required by law.
(11) Released a security without notice or approval.
(12) Failed to execute or have the custodian execute a collateral control agreement before using
a custodian.
(13) Failed to give notification as required by s. 280.10.
History. —s. 6, ch. 87 -409; s. 6, ch. 88 -185; s. 13, ch. 91 -244; s. 8, ch. 96 -216; s. 5, ch. 2001 -230; s. 290, ch. 2003-
261; s. 5, ch. 2014 -145.
280.052 Order of suspension or disqualification; procedure. —
(1) The suspension or disqualification of a bank or savings association as a qualified public
depository must be by order of the Chief Financial Officer and must be mailed to the qualified
public depository by registered or certified mail.
(2) The Chief Financial Officer shall notify, by first -class mail, all public depositors that have
complied with s. 280.17 of any such disqualification or suspension.
(3) The procedures for suspension or disqualification shall be as set forth in chapter 120 and in
the rules of the Chief Financial Officer adopted pursuant to this section.
(4) Whenever the Chief Financial Officer determines that an immediate danger to the public
health, safety, or welfare exists, the Chief Financial Officer may take any appropriate action
available to her or him under the provisions of chapter 120.
History. —s. 7, ch. 87 -409; s. 14, ch. 91 -244; s. 190, ch. 95 -148; s. 9, ch. 96 -216; s. 291, ch. 2003 -261.
280.053 Period of suspension or disqualification; obligations during period;
reinstatement. —
(1)(a) The Chief Financial Officer may suspend a qualified public depository for any period that is
fixed in the order of suspension, not exceeding 6 months. For the purposes of this section and ss.
280.051 and 280.052, the effective date of suspension or disqualification is that date which is set
out as such in any order of suspension or disqualification.
(b) During the period of suspension, the contingent liability, required collateral, and reporting
requirements of the suspended public depository remain in force under the same conditions as if
the suspended depository had remained qualified.
(c) Upon expiration of the suspension period, the bank or savings association may, by order of
the Chief Financial Officer, be reinstated as a qualified public depository, unless the cause of the
suspension has not been corrected or the bank or savings association is otherwise not in
compliance with this chapter or any rule adopted pursuant to this chapter.
(2)(a) A qualified public depository may be disqualified for a period of time not less than 1 year
to be fixed in the order of disqualification.
16
Packet Page -61-
9/23/2014 10.B.
(b) During the period of disqualification, the contingent liability, required collateral, and
reporting requirements of the disqualified public depository remain in force under the same
conditions as if the disqualified depository had remained qualified.
(c) Upon expiration of the disqualification period, the bank or savings association may reapply
for qualification as a qualified public depository. If a disqualified bank or savings association is
purchased or otherwise acquired by new owners; it may reapply to the Chief Financial Officer to
be a qualified public depository prior to the expiration date of the disqualification period.
Redesignation as a qualified public depository may occur only after the Chief Financial Officer has
determined that all requirements for holding public deposits under the law have been met.
History. —s. 8, ch. 87 -409; s. 15, ch. 91 -244; s. 292, ch. 2003 -261.
280.054 Administrative penalty in lieu of suspension or disqualification. —
(1) If the Chief Financial Officer finds that one or more grounds exist for the suspension or
disqualification of a qualified public depository, the Chief Financial Officer may, in lieu of
suspension or disqualification, impose an administrative penalty upon the qualified public
depository.
(a) With respect to any nonwillful violation, such penalty may not exceed $250 for each
violation, exclusive of any restitution found to be due. If a qualified public depository discovers a
nonwillful violation, the qualified public depository shall correct the violation; and, if restitution is
due, the qualified public depository shall make restitution upon the order of the Chief Financial
Officer and shall pay interest on such amount at the legal rate from the date of the violation. Each
day a violation continues constitutes a separate violation.
(b) With respect to any knowing and willful violation of a lawful order or rule, the Chief Financial
Officer may impose a penalty upon the qualified public depository in an amount not exceeding
$1,000 for each violation. If restitution is due, the qualified public depository shall make
restitution upon the order of the Chief Financial Officer and shall pay interest on such amount at
the legal rate. Each day a violation continues constitutes a separate violation.
(2) The failure of a qualified public depository to make restitution when due as required under
this section constitutes a willful violation of this chapter. However, if a qualified public depository
in good faith is uncertain whether any restitution is due or as to the amount of restitution due, it
shall promptly notify the Chief Financial Officer of the circumstances. The failure to make
restitution pending a determination of whether restitution is due or the amount of restitution due
does not constitute a violation of this chapter.
(3) A qualified public depository is subject to an administrative penalty in an amount not
exceeding the greater of $1,000 or 10 percent of the amount of withdrawal, not exceeding
$10,000, if the depository fails to provide required collateral using eligible collateral and
prescribed collateral agreements or withdraws collateral without the Chief Financial Officer's
approval.
History. —s. 9, ch. 87 -409; s. 6, ch. 2001 -230; s. 293, ch. 2003 -261.
280.055 Cease and desist order; corrective order; administrative penalty. —
(1) The Chief Financial Officer may issue a cease and desist order and a corrective order upon
determining that:
(a) A qualified public depository has requested and obtained a release of pledged collateral
without approval of the Chief Financial Officer;
(b) A bank, savings association, or other financial institution is holding public deposits without a
certificate of qualification issued by the Chief Financial Officer;
17
Packet Page -62-
9/23/2014 10.B.
(c) A qualified public depository pledges, deposits, or arranges for the issuance of unacceptable
collateral;
(d) A custodian has released pledged collateral without approval of the Chief Financial Officer;
(e) A qualified public depository or a custodian has not furnished to the Chief Financial Officer,
when the Chief Financial Officer requested, a power of attorney or bond power or bond
assignment form required by the bond agent or bond trustee for each issue of registered
certificated securities pledged and registered in the name, or nominee name, of the qualified
public depository or custodian; or
(f) A qualified public depository; a bank, savings association, or other financial institution; or a
custodian has committed any other violation of this chapter or any rule adopted pursuant to this
chapter that the Chief Financial Officer determines may be remedied by a cease and desist order
or corrective order.
(2) Any qualified public depository or other bank, savings association, or financial institution or
custodian that violates a cease and desist order or corrective order of the Chief Financial Officer is
subject to an administrative penalty not exceeding $1,000 for each violation of the order. Each
day the violation of the order continues constitutes a separate violation.
History. —s. 10, ch. 87 -409; s. 7, ch. 88 -185; s. 7, ch. 2001 -230; s. 294, ch. 2003 -261.
280.06 Penalty for violation of law, rule, or order to cease and desist or other lawful
order. —
(1) The violation of any provision of this chapter, or any order or rule of the Chief Financial
Officer, or any order to cease and desist or other lawful order is a misdemeanor of the second
degree, punishable as provided in s. 775.082 or s. 775.083.
(2) It is a felony of the third degree, punishable as provided in s. 775.082 or s. 775.083, to
knowingly and willfully give false information on any form made under oath and filed pursuant to
this chapter with the intent to mislead the Chief Financial Officer in the administration or
enforcement of this chapter.
(3) No action lies against the state, any state .agency or instrumentality, or the Public Deposits
Trust Fund for the submission of any false or fraudulent information, or for any misrepresentation
made or given, by any qualified public depository or other financial institution or any officer,
employee, or agent thereof, nor shall the same constitute any defense in law or in equity to
payment of any assessment under this chapter.
History. —s. 11, ch. 87 -409; s. 16, ch. 91 -244; s. 295, ch. 2003 -261.
280.07 Mutual responsibility and contingent liability. —Any bank or savings association
that is designated as a qualified public depository and that is not insolvent shall guarantee public
depositors against loss caused by the default or insolvency of other qualified public depositories.
Each qualified public depository shall execute a form prescribed by the Chief Financial Officer for
such guarantee which shall be approved by the board of directors and shall become an official
record of the institution.
History. —s. 3, ch. 81 -285; s. 12, ch. 87 -409; s. 15, ch. 98 -409; s. 8, ch. 2001 -230; s. 296, ch. 2003 -261.
280.08 Procedure for payment of losses. —When the Chief Financial Officer determines that
a default or insolvency has occurred, he or she shall provide notice as required in s. 280.085 and
implement the following procedures:
(1) The Division of Treasury, in cooperation with the Office of Financial Regulation of the
Financial Services Commission or the receiver of the qualified public depository in default, shall
Et:3
Packet Page -63-
9/23/2014 10.B.
ascertain the amount of funds of each public depositor on deposit at such depository and the
amount of deposit insurance applicable to such deposits.
(2) The potential loss to public depositors shall be calculated by compiling claims received from
such depositors. The Chief Financial Officer shall validate claims on public deposit accounts which
meet the requirements of s. 280.17 and are confirmed as provided in subsection (1).
(3)(a) The loss to public depositors shall be satisfied, insofar as possible, first through any
applicable deposit insurance and then through demanding payment under letters of credit or the
sale of collateral pledged or deposited by the defaulting depository. The Chief Financial Officer
may assess qualified public depositories as provided in paragraph (b) for the total loss if the
demand for payment or sale of collateral cannot be accomplished within 7 business days.
(b) The Chief Financial Officer shall provide coverage of any remaining loss by assessment
against the other qualified public depositories. The Chief Financial Officer shall determine such
assessment for each qualified public depository by multiplying the total amount of any remaining
loss to all public depositors by a percentage which represents the average monthly balance of
public deposits held by each qualified public depository during the previous 12 months divided by
the total average monthly balances of public deposits held by all qualified public depositories,
excluding the defaulting depository, during the same period. The assessment calculation shall be
computed to six decimal places.
(4) Each qualified public depository shall pay its assessment to the Chief Financial Officer within
7 business days after it receives notice of the assessment. If a depository fails to pay its
assessment when due, the Chief Financial Officer shall satisfy the assessment by demanding
payment under letters of credit or selling collateral pledged or deposited by that depository.
(5) The Chief Financial Officer shall distribute the funds to the public depositors of the qualified
public depository in default according to their validated claims. The Chief Financial Officer, at his
or her discretion, may make partial payments to public depositors that have experienced a loss of
public funds which payments are critical to the immediate operations of the public entity. The
public depositor requesting partial payment of a claim shall provide the Chief Financial Officer
with written documentation justifying the need for partial payment.
(6) Public depositors receiving payment under the provisions of this section shall assign to the
Chief Financial Officer any interest they may have in funds that may subsequently be made
available to the qualified public depository in default. If the qualified public depository in default
or its receiver provides the funds to the Chief Financial Officer, the Chief Financial Officer shall
distribute the funds, plus all accrued interest which has accumulated from the investment of the
funds, if any, to the depositories which paid assessments on the same pro rata basis as the
assessments were paid.
(7) Expenses incurred by the Chief Financial Officer in connection with a default or insolvency
which are not normally incurred by the Chief Financial Officer in the administration of this act
must be paid out of the amount paid under letters of credit or proceeds from the sale of
collateral.
History. —s. 3, ch. 81 -285; s. 5, ch. 85 -259; s. 13, ch. 87 -409; s. 8, ch. 88 -185; s. 191, ch. 95 -148; s. 10, ch. 96 -216; s.
16, ch. 98 -409; s. 18, ch. 99 -155; s. 10, ch. 2001 -230; s. 298, ch. 2003 -261.
280.085 Notice to claimants. —
(1) Upon determining the default or insolvency of a qualified public depository, the Chief
Financial Officer shall notify, by first -class mail, all public depositors that have complied with s.
280.17 of such default or insolvency. The notice must direct all public depositors having claims or
demands against the Public Deposits Trust Fund occasioned by the default or insolvency to file
their claims with the Chief Financial Officer within 30 days after the date of the notice.
19
Packet Page -64-
9/23/2014 10.B.
(2) A claim against the Public Deposits Trust Fund is binding on the fund only if presented within
30 days after the date of the notice.
(3) This section does not affect any proceeding to:
(a) Enforce any real property mortgage, chattel mortgage, security interest, or other lien on
property of a qualified public depository that is in default or insolvency; or
(b) Establish liability of a qualified public depository that is in default or insolvency to the limits
of any federal or other casualty insurance protection.
(4) The notice required in subsection (1) is not required if the default or insolvency of a qualified
public depository is resolved in a manner in which all Florida public deposits are acquired by
another insured bank, savings bank, or savings association.
History. —s. 14, ch. 87 -409; s. 17, ch. 91 -244; s. 299, ch. 2003 -261; s. 7, ch. 2014 -145.
280.09 Public Deposits Trust Fund. —
(1) In order to facilitate the administration of this chapter, there is created the Public Deposits
Trust Fund, hereafter in this section designated "the fund." The proceeds from the sale of
securities or draw on letters of credit held as collateral or from any assessment pursuant to s.
280.08 shall be deposited into the fund. Any administrative penalty collected pursuant to this
chapter shall be deposited into the Treasury Administrative and Investment Trust Fund.
(2) The Chief Financial Officer is authorized to pay any losses to public depositors from the fund,
and there are hereby appropriated from the fund such sums as may be necessary from time to
time to pay the losses. The term "losses," for purposes of this chapter, shall also include losses of
interest or other accumulations to the public depositor as a result of penalties for early withdrawal
required by Depository Institution Deregulatory Commission Regulations or applicable successor
federal laws or regulations because of suspension or disqualification of a qualified public
depository by the Chief Financial Officer pursuant to s. 280.05 or because of withdrawal from the
public deposits program pursuant to s. 280.11. In that event, the Chief Financial Officer is
authorized to assess against the suspended, disqualified, or withdrawing public depository, in
addition to any amount authorized by any other provision of this chapter, an administrative
penalty equal to the amount of the early withdrawal penalty and to pay that amount over to the
public depositor as reimbursement for such loss. Any money in the fund estimated not to be
needed for immediate cash requirements shall be invested pursuant to s. 17.61.
History. —s. 11, ch. 83-122; s. 6, ch. 85 -259; s. 4, ch. 86 -84; s. 17, ch. 87 -331; s. 15, ch. 87 -409; s. 9, ch. 88 -185; s.
18, ch. 91 -244; s. 11, ch. 96 -216; s. 39, ch. 99 -13; s. 11, ch. 2001 -230; s. 300, ch. 2003 -261.
280.10 Effect of merger, acquisition, or consolidation; change of name or address. —
(1) When a qualified public depository is merged into, acquired by, or consolidated with a bank,
savings bank, or savings association that is not a qualified public depository:
(a) The resulting institution shall automatically become a qualified public depository subject to
the requirements of the public deposits program.
(b) The contingent liability of the former institution shall be a liability of the resulting institution.
(c) The public deposits and associated collateral of the former institution shall be public deposits
and collateral of the resulting institution.
(d) The resulting institution shall, within 90 calendar days after the effective date of the merger,
acquisition, or consolidation, deliver to the Chief Financial Officer:
20
Packet Page -65-
9/23/2014 10.B.
1. Documentation in its name as required for participation in the public deposits program; or
2. Written notice of intent to withdraw from the program as provided in s. 280.11 and a
proposed effective date of withdrawal which shall be within 180 days after the effective date of
the acquisition, merger, or consolidation of the former institution.
(e) If the resulting institution does not meet qualifications to become a qualified public
depository or does not submit required documentation within 90 calendar days after the effective
date of the merger, acquisition, or consolidation, the Chief Financial Officer shall initiate
mandatory withdrawal actions as provided in s. 280.11 and shall set an effective date of
withdrawal that is within 180 days after the effective date of the acquisition, merger, or
consolidation of the former institution.
(2) When a qualified public depository disposes of any of its Florida public deposits or collateral
securing such deposits in a manner not covered by subsection (1), the qualified public depository
originally holding the public deposits shall be responsible for:
(a) Ensuring the institution receiving such public deposits becomes a qualified public depository
and meets collateral requirements with the Chief Financial Officer as part of the transaction.
(b) Notifying the Chief Financial Officer within 30 calendar days after the final approval by the
appropriate regulator.
A qualified public depository that fails to meet such responsibilities shall continue to collateralize and report
such public deposits until the receiving institution becomes a qualified public depository and collateralizes
the deposits or the deposits are returned to the governmental unit.
(3) If the default or insolvency of a qualified public depository results in acquisition of all or part
of its Florida public deposits by a bank, savings bank, or savings association that is not a qualified
public depository, the bank, savings bank, or savings association acquiring the Florida public
deposits is subject to subsection (1).
(4) The qualified public depository shall notify the Chief Financial Officer of any acquisition or
merger within 30 calendar days after the final approval of the acquisition or merger by its
appropriate regulator.
(5) Collateral subject to a collateral agreement may not be released by the Chief Financial
Officer or the custodian until the assumed liability is evidenced by the deposit of collateral
pursuant to the collateral agreement of the successor entity. The reporting requirement and
pledge of collateral will remain in force until the Chief Financial Officer determines that the liability
no longer exists. The surviving or new qualified public depository shall be responsible and liable
for all of the liabilities and obligations of each qualified public depository merged with or acquired
by it.
(6) Each qualified public depository shall report any change of name and address to the Chief
Financial Officer on a form provided by the Chief Financial Officer regardless of whether the name
change is a result of an acquisition, merger, or consolidation. Notification of such change must be
made within 30 calendar days after the effective date of the change.
(7) The Chief Financial Officer shall adopt rules establishing procedures for mergers,
acquisitions, consolidations, and changes in name and address, providing forms, and clarifying
terms.
History. —s. 12, ch. 83 -122; s. 16, ch. 87 -409; s. 9, ch. 90 -357; s. 19, ch. 91 -244; s. 12, ch. 96 -216; s. 12, ch. 2001-
230; s. 301, ch. 2003 -261; s. 8, ch. 2014 -145.
21
Packet Page -66-
9/23/2014 10. B.
280.11 Withdrawal from public deposits program; return of pledged collateral. —
(1) A qualified public depository may withdraw from the public deposits program by giving
written notice to the Chief Financial Officer. The contingent liability, required collateral, and
reporting requirements of the depository withdrawing from the program shall continue for a
period of 12 months after the effective date of the withdrawal, except that the filing of reports
may no longer be required when the average monthly balance of public deposits is equal to zero.
Notice of withdrawal shall be mailed or delivered in sufficient time to be received by the Chief
Financial Officer at least 30 days before the effective date of withdrawal. The Chief Financial
Officer shall timely publish the withdrawal notice in the Florida Administrative Register which shall
constitute notice to all depositors. The withdrawing depository shall not receive or retain public
deposits after the effective date of the withdrawal until such time as it again becomes a qualified
public depository. The Chief Financial Officer shall, upon request, return to the depository that
portion of the collateral pledged that is in excess of the required collateral as reported on the
current public depository monthly report. Losses of interest or other accumulations, if any,
because of withdrawal under this section shall be assessed and paid as provided in s. 280.09.
(2) A qualified public depository which has been disqualified pursuant to s. 280.051 shall not
receive or retain public deposits after the effective date of the disqualification. Notice of and
procedures for disqualification shall be made in accordance with ss. 280.052 and 280.053. The
Chief Financial Officer shall, upon request, return to the depository that portion of the collateral
pledged that is in excess of the required collateral as reported on the current public depository
monthly report. Losses of interest or other accumulation, if any, because of disqualification shall
be paid as provided in s. 280.09(2).
(3) A qualified public depository which is required to withdraw from the public deposits program
pursuant to s. 280.05(17) shall not receive or retain public deposits after the effective date of
withdrawal. The contingent liability, required collateral, and reporting requirements of the
withdrawing depository shall continue until the effective date of withdrawal. Notice of withdrawal
(order of discontinuance) from the Chief Financial Officer shall be mailed to the qualified public
depository by registered or certified mail. Penalties incurred because of withdrawal from the
public deposits program shall be the responsibility of the withdrawing depository.
History. —s. 3, ch. 81 -285; s. 13, ch. 83 -122; s. 5, ch. 86 -84; s. 17, ch. 87 -409; s. 10, ch. 88 -185; s. 10, ch. 90 -357; s.
20, ch. 91 -244; s. 13, ch. 96 -216; s. 40, ch. 99 -13; s. 13, ch. 2001 -230; s. 302, ch. 2003 -261; s. 22, ch. 2013 -14; s. 9,
ch. 2014 -145.
280.13 Eligible collateral. —
(1) Securities eligible to be pledged as collateral by banks and savings associations shall be
limited to:
(a) Direct obligations of the United States Government.
(b) Obligations of any federal agency that are fully guaranteed as to payment of principal and
interest by the United States Government.
(c) Obligations of the following federal agencies:
1. Farm credit banks.
2. Federal land banks.
3. The Federal Home Loan Bank and its district banks.
4. Federal intermediate credit banks.
5. The Federal Home Loan Mortgage Corporation.
22
Packet Page -67-
9/23/2014 10. B.
6. The Federal National Mortgage Association.
7. Obligations guaranteed by the Government National Mortgage Association.
(d) General obligations of a state of the United States, or of Puerto Rico, or of a political
subdivision or municipality thereof.
(e) Obligations issued by the Florida State Board of Education under authority of the State
Constitution or applicable statutes.
(f) Tax anticipation certificates or warrants of counties or municipalities having maturities not
exceeding 1 year.
(g) Public housing authority obligations.
(h) Revenue bonds or certificates of a state of the United States or of a political subdivision or
municipality thereof.
(i) Corporate bonds of any corporation that is not an affiliate or subsidiary of the qualified public
depository.
(2) In addition to the securities listed in subsection (1), the Chief Financial Officer may, in his or
her discretion, allow the pledge of the following types of securities. The Chief Financial Officer
shall, by rule, define any restrictions, specific criteria, or circumstances for which these
instruments will be acceptable.
(a) Securities of, or other interests in, any open -end management investment company
registered under the Investment Company Act of 1940, 15 U.S.C. ss. 80a -1 et seq., as amended
from time to time, provided the portfolio of such investment company is limited to direct
obligations of the United States Government and to repurchase agreements fully collateralized by
such direct obligations of the United States Government and provided such investment company
takes delivery of such collateral either directly or through an authorized custodian.
(b) Collateralized Mortgage Obligations.
(c) Real Estate Mortgage Investment Conduits.
(3) Except as to obligations issued by or with respect to which payment of interest and principal
is guaranteed by the United States Government or obligations of federal agencies listed in
subsection (1), the debt obligations mentioned in this section shall be rated in one of the four
highest classifications by an established, nationally recognized investment rating service.
(4) To be eligible as collateral under this section, all debt obligations shall be interest bearing or
accruing.
(5) Letters of credit issued by a Federal Home Loan Bank are eligible as collateral under this
section provided that:
(a) The letter of credit has been delivered to the Chief Financial Officer in the standard format
approved by the Chief Financial Officer.
(b) The letter of credit meets required conditions of:
1. Being irrevocable.
Packet Page -68-
23
9/23/2014 10.B.
2. Being clean and unconditional and containing a statement that it is not subject to any
agreement, condition, or qualification outside of the letter of credit and providing that a
beneficiary need only present the original letter of credit with any amendments and the demand
form to promptly obtain funds, and that no other document need be presented.
3. Being issued, presentable, and payable at a Federal Home Loan Bank in United States dollars.
Presentation may be made by the beneficiary submitting the original letter of credit, including any
amendments, and the demand in writing, by overnight delivery.
4. Containing a statement that identifies and defines the Chief Financial Officer as beneficiary.
5. Containing an issue date and a date of expiration.
6. Containing a term of at least 1 year and an evergreen clause that provides at least 60 days'
written notice to the beneficiary prior to expiration date for nonrenewal.
7. Containing a statement that it is subject to and governed by the laws of the State of Florida
and that, in the event of any conflict with other laws, the laws of the State of Florida will control.
8. Containing a statement that the letter of credit is an obligation of the Federal Home Loan
Bank and is in no way contingent upon reimbursement.
9. Any other provision found necessary under the Uniform Commercial Code — Letters of Credit.
(c) Obligations issued by the Federal Home Loan Bank remain triple -A rated by a nationally
recognized source or, if no longer triple -A rated, rated by a nationally recognized source at not
lower than its rating of the long -term sovereign credit of the United States.
(d) The Federal Home Loan Bank issuing the letter of credit agrees to provide confirmation upon
request from the Chief Financial Officer. Such confirmation shall be provided within 15 working
days after the request, in a format prescribed by the Chief Financial Officer, and shall require no
identification other than the qualified public depository's name and location.
(e) The qualified public depository completes an agreement covering the use of the letters of
credit as eligible collateral, as described in s. 280.041(5).
(f) The qualified public depository, if notified by the Chief Financial Officer, shall not be allowed
to use letters of credit if the Federal Home Loan Bank fails to pay a draw request as provided for
in the letters of credit or fails to properly complete a confirmation of such letters of credit.
(6) Cash held by the Chief Financial Officer in the Treasury Cash Deposit Trust Fund or by a
custodian is eligible as collateral under this section. Interest earned on cash deposits that is in
excess of required collateral shall be paid to the qualified public depository upon request.
(7) The Chief Financial Officer may disapprove any security or letter of credit that does not meet
the requirements of this section or any rule adopted pursuant to this section or any security for
which no current market price can be obtained from a nationally recognized source deemed
acceptable to the Chief Financial Officer or cannot be converted to cash.
(8) The Chief Financial Officer shall adopt rules defining restrictions and special requirements for
eligible collateral and clarifying terms.
History. —s. 3, ch. 81 -285; s. 14, ch. 83 -122; s. 133, ch. 83 -217; s. 18, ch. 87 -409; s. 7, ch. 88 -171; s. 11, ch. 90 -357;
s. 21, ch. 91 -244; s. 192, ch. 95 -148; s. 14, ch. 96 -216; s. 4, ch. 2000 -352; s. 14, ch. 2001 -230; s. 303, ch. 2003 -261;
s. 1, ch. 2013 -129.
24
Packet Page -69-
9/23/2014 10.B.
280.16 Requirements of qualified public depositories; confidentiality. —
(1) In addition to any other requirements specified in this chapter, qualified public depositories
shall:
(a) Take the following actions for each public deposit account:
1. Identify the account as a "Florida public deposit" on the deposit account record with the name
of the public depositor or provide a unique code for the account for such designation.
2. When the form prescribed by the Chief Financial Officer for acknowledgment of receipt of each
public deposit account is presented to the qualified public depository by the public depositor
opening an account, the qualified public depository shall execute and return the completed form
to the public depositor.
3. When the acknowledgment of receipt form is presented to the qualified public depository by
the public depositor due to a change of account name, account number, or qualified public
depository name on an existing public deposit account, the qualified public depository shall
execute and return the completed form to the public depositor within 45 calendar days after such
presentation.
4. When the acknowledgment of receipt form is presented to the qualified public depository by
the public depositor on an account existing before July 1, 1998, the qualified public depository
shall execute and return the completed form to the public depositor within 45 calendar days after
such presentation.
(b) Within 15 days after the end of each calendar month, or when requested by the Chief
Financial Officer, submit to the Chief Financial Officer a written report, under oath, indicating the
average daily balance of all public deposits held by it during the reported month, required
collateral, a detailed schedule of all securities pledged as collateral, selected financial information,
and any other information the Chief Financial Officer deems necessary to administer this chapter.
(c) Provide to each public depositor annually by October 30 the following information on all open
accounts identified as a "Florida public deposit" for that public depositor as of September 30, to
be used for confirmation purposes: the federal employer identification number of -the qualified
public depository, the name on the deposit account record, the federal employer identification
number on the deposit account record, and the account number, account type, and actual
account balance on deposit. Any discrepancy found in the confirmation process must be
reconciled before November 30.
(d) Submit to the Chief Financial Officer annually by November 30 a report of all public deposits
held for the credit of all public depositors at the close of business on September 30. Such annual
report must consist of public deposit information in a report format prescribed by the Chief
Financial Officer. The manner of required filing may be as a signed writing or electronic data
transmission, at the discretion of the Chief Financial Officer.
(2) The following forms must be made under oath:
(a) The agreement of contingent liability.
(b) Collateral control agreements and letter of credit agreements.
(3) Any information contained in a report of a qualified public depository required under this
chapter or any rule adopted under this chapter, together with any information required of a
financial institution that is not a qualified public depository, is, if made confidential by any law of
Packet Page -70-
9/23/2014 10.B.
the United States or of this state, confidential and exempt from s. 119.07(1) and not subject to
dissemination to anyone other than the Chief Financial Officer under this chapter. However, each
qualified public depository and each financial institution from which information is required shall
inform the Chief Financial Officer of information that is confidential and the law providing for the
confidentiality of that information, and the Chief Financial Officer does not have a duty to inquire
into whether information is confidential.
History. —s. 3, ch. 81 -285; s. 16, ch. 83 -122; s. 7, ch. 85 -259; s. 6, ch. 86 -84; s. 20, ch. 87 -409; s. 11, ch. 88 -185; s. 1,
ch. 89 -265; s. 23, ch. 91 -244; s. 15, ch. 96 -216; s. 129, ch. 96 -406; s. 17, ch. 98 -409; s. 15, ch. 2001 -230; s. 304, ch.
2003 -261; s. 22, ch. 2005 -2; s. 10, ch. 2014 -145.
280.17 Requirements for public depositors; notice to public depositors and
governmental units; loss of protection. —In addition to any other requirement specified in this
chapter, public depositors shall comply with the following:
(1)(a) Each official custodian of moneys that meet the definition of a public deposit under s.
280.02 shall ensure such moneys are placed in a qualified public depository unless the moneys
are exempt under the laws of this state.
(b) Each depositor, asserting that moneys meet the definition of a public deposit and are not
exempt under the laws of this state, is responsible for any research or defense required to
support such assertion.
(2) Each public depositor shall take the following actions for each public deposit account:
(a) Ensure that the name of the public depositor is on the account or certificate or other form
provided to the public depositor by the qualified public depository in a manner sufficient to
identify that the account is a Florida public deposit.
(b) Execute a form prescribed by the Chief Financial Officer for identification of each public
deposit account and obtain acknowledgment of receipt on the form from the qualified public
depository at the time of opening the account. Such public deposit identification and
acknowledgment form shall be replaced with a current form as required in subsection (3). A
public deposit account existing before July 1, 1998, must have a form completed before
September 30, 1998.
(c) Maintain the current public deposit identification and acknowledgment form as a valuable
record. Such form is mandatory for filing a claim with the Chief Financial Officer upon default or
insolvency of a qualified public depository.
(3) Each public depositor shall review the Chief Financial Officer's published list of qualified
public depositories and ascertain the status of depositories used. For status changes of
depositories, a public depositor shall:
(a) Execute a replacement public deposit identification and acknowledgment form, as described
in subsection (2), for each public deposit account when there is a merger, acquisition, name
change, or other event which changes the account name, account number, or name of the
qualified public depository.
(b) Move and close public deposit accounts when an institution is not included in the authorized
list of qualified public depositories or is shown as withdrawing.
(4) If public deposits are in a qualified public depository that has been declared to be in default
or insolvent, each public depositor shall:
26
Packet Page -71-
9/23/2014 10.B.
(a) Notify the Chief Financial Officer immediately by telecommunication after receiving notice of
the default or insolvency from the receiver of the depository with subsequent written confirmation
and a copy of the notice.
(b) Submit to the Chief Financial Officer for each public deposit, within 30 days after the date of
official notification from the Chief Financial Officer, the following:
1. A claim form and agreement, as prescribed by the Chief Financial Officer, executed under
oath, accompanied by proof of authority to execute the form on behalf of the public depositor.
2. A completed public deposit identification and acknowledgment form, as described in
subsection (2).
3. Evidence of the insurance afforded the deposit pursuant to the Federal Deposit Insurance Act.
(5) Each public depositor shall confirm annually that public deposit information as of the close of
business on September 30 has been provided by each qualified public depository and is in
agreement with public depositor records. Such confirmation must include the federal employer
identification number of the qualified public depository, the name on the deposit account record,
the federal employer identification number on the deposit account record, and the account
number, account type, and actual account balance on deposit. Any discrepancy found in the
confirmation process must be resolved before November 30.
(6) Each public depositor shall submit by November 30 an annual report to the Chief Financial
Officer which includes:
(a) The official name, mailing address, and federal employer identification number of the public
depositor.
(b) Verification that confirmation of public deposit information as of September 30, as described
in subsection (5), has been completed.
(c) Public deposit information in a report format prescribed by the Chief Financial Officer. The
manner of required filing may be as a signed writing or electronic data transmission, at the
discretion of the Chief Financial Officer.
(d) Confirmation that a current public deposit identification and acknowledgment form, as
described in subsection (2), has been completed for each public deposit account and is in the
possession of the public depositor.
(7) Notices relating to the public deposits program shall be mailed to public depositors and
governmental units from a list developed annually from:
(a) Public depositors that filed an annual report under subsection (6).
(b) A governmental unit existing on September 30 which had no public deposits but filed an
annual report stating "no public deposits."
(c) A governmental unit established during the year that filed an annual report as a new
governmental unit or otherwise furnished in writing to the Chief Financial Officer its official name,
address, and federal employer identification number.
(8) If a public depositor does not comply with this section on each public deposit account, the
protection from loss provided in s. 280.18 is not effective as to that public deposit account.
27
Packet Page -72-
9/23/2014 10.B.
However, the protection from loss provided in s. 280.18 remains effective if a public depositor
fails to present the form prescribed by the Chief Financial Officer for identification of public
deposit accounts and the Chief Financial Officer determines that the defaulting or insolvent
depository had classified, reported, and collateralized the account as a public deposit account.
History. —s. 21, ch. 87 -409; s. 12, ch. 88 -185; s. 24, ch. 91 -244; s. 16, ch. 96 -216; s. 18, ch. 98 -409; s. 305, ch. 2003-
261; s. 11, ch. 2014 -145.
280.18 Protection of public depositors; liability of the state. —
(1) When public deposits are made in accordance with this chapter, there shall be protection
from loss to public depositors, as defined in s. 280.02, in the absence of negligence, malfeasance,
misfeasance, or nonfeasance on the part of the public depositor or on the part of his or her
agents or employees.
(2) The liability of the state, the Chief Financial Officer, or any state agency, or any employee or
agent of the state, the Chief Financial Officer, or a state agency, for any action taken in the
performance of their powers and duties under this chapter shall be limited to that as a public
depositor.
History. —s. 3, ch. 81 -285; s. 22, ch. 87 -409; s. 194, ch. 95 -148; s. 19, ch. 98 -409; s. 306, ch. 2003 -261.
280.19 Rules. —The Chief Financial Officer shall adopt rules pursuant to ss. 120.536(1) and
120.54 to administer the provisions of this chapter.
History. —s. 3, ch. 81 -285; s. 55, ch. 98 -200; s. 307, ch. 2003 -261.
28
Packet Page -73-
Due Diligence on Bank and Treasury Management Providers I Government Finance Offic 9/23/2014 10. B.
Join GFOA Staff Directory Contact Us E -Store
When monitoring regulated and non - regulated bank partners, and non -bank companies that process, validate, transfer,
disburse and 'hold on deposit' cash and near cash assets and apply prudent, the following should be considered:
1. Maintain a current knowledge of the products, services and exposures that the government maintains with the bank or
non -bank;
2. Create policies and procedures for all of the activities and interactions involving the bank or non -bank, including
techniques to control misuse of government assets and plans to respond to any variance from policy.
3. Be aware of the competitors and their ability to replace the bank or non -bank in the event of a temporary or
permanent interruption of service or change of bank or non -bank;
4. Particularly for sensitive products Like payroll, make certain that an emergency back -up plan is available in the event
that the bank is unable to process for the government;
5. Develop an action plan in the event of a confidential information breach internally or at the bank or non -bank.
http: / /www- gfoa.org/due- diligence - bank -and - -- -Went- providers 9/17/2014
Packet Page -74-
Search Q
About GFOA Products and Services Annual Conference Award Programs Topics
Home / Products and Services / Resources
/ Best Practices / Due Diligence on Bank and Treasury Management Providers
Resources
Due Diligence on Bank and Treasury Management Providers
Best Practices
Type: Best Practice
Public Policy Statements
Approved by GFOA's Executive Board: May 2014
E -Books
Background:
Governments have fiduciary duties to protect and safeguard the public funds entrusted to them, one of which is the proper
Publications
selection of and ongoing oversight of bank and non -bank depositories and treasury management service providers.
Government Finance Review
Government cash and near -cash assets are processed and held by banks, their third -party partners and, in some cases, non -
banks; therefore, it is important to carefully choose bank and non -bank vendors and to perform on -going supervision and
Research Reports
evaluation of each bank and non -bank that processes and/or holds government assets. The banking industry is highly
CIPFA GFOA FM Model
regulated by both Federal and State oversight agencies and certain balances on deposit with those banks are protected by
insurance made available by the Federal Deposit Insurance Corporation ('FDIC'.
Yield Advantage
As part of a due diligence program, government officials should review the quarterly and annual financial reports of key
Federal Government Relations
counterparty banks as well as summary reports retrieved from each bank's regulator. These quarterly summary reports are
Canadian Finance
known as Call Reports and can be viewed at https✓ /cdr.ffiec.gov /public/. Regulators establish certain key publicly
reported financial standards for banks, such as the Total Risk Based Capital Ratio, the Tier 1 Risk Based Capital Ratio or the
News and Annoucements
leverage Ratio. Banks must maintain sufficient book equity capital to meet the regulatory minimums otherwise the
Consulting
regulator will require that the bank raise new capital.
Consulting Services
Credit Rating Agencies publish a rating in alpha and /or numeric form, and may rank bank debt instruments as indicators of
Custom Research
a bank's ability to satisfy its obligations. It is a best practice for government officials to track and trend Private Rating
Agency scores for key banks and establish a minimum threshold which primary counterparty banks must maintain in order
Training
to retain the government's depository relationship.
Search for Training
Other methods of determining the credit and soundness of a counterparty, are the CAMELS (Capital, Asset Quality,
CPE Guide
Management Quality, Assets, Liquidity, Sensitivity to Marker Risk) ratings and the Probability of Default. The regulatory
Guide for Instructors
CAMELS ratings are not public information, however IDC publishes a unique rating (www.idcfp.com) based on CAMELS. The
Advanced Government Finance
Probability of Default is an indication of the Likelihood of a default over a particular time horizon, typically one and five
years and is measured Through The Cycle (TTC) or as a Point in Time (PIT).
Institute
Training Policies
Recommendation:
The Govemment Finance Officers Association (GFOA) recommends that government treasury practitioners review the
regulated banks, regulated and non - regulated bank partners, and non -bank companies that process, validate, transfer,
disburse and 'hold on deposit' cash and near cash assets and apply prudent due diligence throughout the life of the
relationship.
As part of the ongoing due diligence and prudent management of relationships, the GFOA further recommends that
governments evaluate their key bank(s) and issue an internal Bank Review Summary on a quarterly basis.
In addition to monitoring and reporting, the government's operating relationship with a bank or non -bank processor of
cash and near cash assets needs to be managed pro- actively.
A. Reaationship Management
When monitoring regulated and non - regulated bank partners, and non -bank companies that process, validate, transfer,
disburse and 'hold on deposit' cash and near cash assets and apply prudent, the following should be considered:
1. Maintain a current knowledge of the products, services and exposures that the government maintains with the bank or
non -bank;
2. Create policies and procedures for all of the activities and interactions involving the bank or non -bank, including
techniques to control misuse of government assets and plans to respond to any variance from policy.
3. Be aware of the competitors and their ability to replace the bank or non -bank in the event of a temporary or
permanent interruption of service or change of bank or non -bank;
4. Particularly for sensitive products Like payroll, make certain that an emergency back -up plan is available in the event
that the bank is unable to process for the government;
5. Develop an action plan in the event of a confidential information breach internally or at the bank or non -bank.
http: / /www- gfoa.org/due- diligence - bank -and - -- -Went- providers 9/17/2014
Packet Page -74-
Due Diligence on Bank and Treasury Management Providers I Government Finance Offic., 9/23/2014 103.
6. Prepare a comprehensive business resumption plan for all of the services used from the bank or non -bank to respond
to any emergency disruption of service, whether internal to the government or caused by the bank or non -bank, and to
assure the on -going availability of disaster recovery and that those plans are tested frequently, both internally and
against the bank or non - bank's business continuity plans.
B. Bank Review Summary
The Government's Bank Review Summary should:
1. Identify the government's product usage at the bank;
2. Describe the government's exposure at the bank (balance levels, exposure to product issues, etc);
3. Evaluate changes in the bank's financial condition;
4. Report whether the bank's Credit Rating Agency scores meet or exceed established minimum thresholds;
5. Review any recent news including management changes, legal and regulatory actions, key product changes, changes in
market capitalization, mergers or acquisitions, and any other meaningful financial events that may change the bank's
condition, status or abilities;
6. Consider the actions required of the government in the event that the bank no Longer qualifies as an approved
depository/counterparty for the government.
C. Monitoring Financial Conditions
Monitoring the financial conditions of a bank or non -bank relationships should consist of the following.
L A Review of the monthly account analysis statement or invoice to determine if volume counts are appropriate and
consistent and to be sure that contract pricing is properly applied to the account analysis or invoice. Use the account
analysis/invoice as well as internal knowledge to determine if product usage is appropriate from month to month. For
example:
a. Should new products available in the marketplace replace existing product choices?
b. Are there less expensive ways available to process the transactions without giving up important value?
C. Can transactions be processed more safely?
2. A review of the financial condition of the banks or non -banks as well as a continual scan of news reports that may
indicate changes in bank or non -bank financial performance or strategies.
Conduct quarterly relationship review meetings with representatives of the bank or non -bank to maintain open
communications, exchange ideas for improvement and stay informed of developments at the bank or non -bank.
a. Large banks and non -bank relationships should be reviewed quarterly.
b. Small banks and non -bank relationships should be reviewed annually.
Committee: Treasury and Investment Management
References
Adler, J. (2031, August 12). Bank Exam Ratings May Not Be as Secret as You Think. American Banker.
EvangeListi, CJ. and Lockhart, KC. (2009, October). Banking Due Diligence in the New Financial World. Government Finance
Review.
GFOA Best Practice Using Safekeeping and Third -Party Custodian Services (2010).
Download
® 2014 Government Finance officers Association of the United States and Canada
203 N. LaSalle Street - Suite 2700 1 Chicago, IL 60601 -1210 1 Phone: (312) 977 -9700 - Fax: (312) 977 -4806
http: / /www.gfoa.org/due- diligence -bank- and ---- ----- -rent- providers 9/17/2014
Packet Page -75-
Government Relationships with Securities Dealers I Government Finance Officers Associ. 9/23/2014 10.B.
Join GFOA Staff Directory Contact Us E -Store
CPE Guide Communication with broker /dealers for the purposes of discussing market conditions, reviewing investment strategies and
transacting a trade often occurs by phone, a -mail, or fax. Regardless of the method of communicating with a broker, a
Guide for Instructors government investor needs to perform due diligence on all securities dealers prior to adding them to their list of approved
Advanced Government Finance brokers /dealers for transacting trades.
Institute Recommendation:
Training Policies GFOA makes the following specific recommendations to government investors in selecting securities dealers for their
approved vendor list, managing the relationships with the broker /dealers, and conducting investment transactions with
them:
I. All securities are held in a third party bank separate from the broker /dealer that is transacting business,
2. Use a defined internal process to select, qualify, renew, or terminate brokers and dealers.
a. Use a questionnaire, conduct an interview, and /or conduct peer references to help determine that the broker
understands the public entity's needs /objectives.
b. Determine that the broker is actively involved in the market sectors utilized by the government entity.
c. Select a number of brokers suitable to the entity, allowing for appropriate competition /service on all transactions,
while limiting it to a manageable number.
d. Require security brokers and dealers to comply with the Federal Reserve Bank of New York's capital adequacy
guidelines or SEC Net Capital Rule as a condition of doing business. Obtain annual financial reports of the securities
firm.
e. Require that brokers provide written acknowledgement or certification of their review and understanding of the
government entity's investment policy to assure compliance with its objectives, portfolio risk constraints, and
investment trading requirements.
f. Record and retain pertinent information on the firm and the individual broker including an annual review of the
Central Registration Depository (CRD®) information for both maintained by the Financial Industry Regulation
Authority (FINRA). Violations or sanctions imposed by a regulatory agency or government should be carefully
reviewed for termination of relationship.
g. Establish parameters that guide periodic review and potential termination of a broker dealer relationship.
h. Do not select or approve more broker /dealers than will be reasonably used. It is better to develop good
relationships with a small number of approved dealers than to have a long list of firms who transact little or no
business with the investing entity.
http: / /www.gfoa.org /government - relationship- A—t ^rs
Packet Page -76-
9/17/2014
Search iO
About GFOA Products and Services Annual Conference Award Programs Topics
Home / Products and Services / Resources
/ Best Practices / Government Relationships with Securities Dealers
Resources
Government Relationships with Securities Dealers
Best Practices
Type: Best Practice
Public Policy Statements
Approved by GFOA's Executive Board: October 2012
E -Books
Background:
Finance officers, treasurers and investment officers (hereafter referred to as government investors) who manage and invest
Publications
public funds place billions of dollars in the fixed - income and money markets on a daily basis. They have a fiduciary
Government Finance Review
responsibility to protect public funds, to always act in the best interest of their entity, to maintain safety and an
appropriate level of liquidity and to attain a competitive return on their portfolio.
Research Reports
CIPFA GFOA FM Model
Generally, access to the securities markets is made through securities dealers who are registered broker /dealers and
through financial institutions (banks) with broker /dealer subsidiaries. The fiduciary responsibilities of a government
Yield Advantage
investor include ensuring that
Federal Government Relations
a reasonable comparisons are made to judge the appropriateness of all investments;
Canadian Finance
a securities meet the criteria established in the investment policy, including liquidity, diversity and risk of investments;
> security transactions are made on a best execution basis through a competitive process;
News and Annoucements
a the counterparty to the transaction will fulfill all of its obligations; and,
Consulting
a the securities are properly safe -kept at a qualified custodial agent in a segregated account.
Consulting Services
It is important to note that brokers /firms may have unique strengths that may provide exceptional value within a specific
Custom Research
category of investments, provided that you understand the security that you are purchasing, it dovetails with your
Training
investment policy, and you are aware of the risks associated with the transaction. A unique strength may compliment the
skills and abilities of other approved brokers /firms.
Search for Training
CPE Guide Communication with broker /dealers for the purposes of discussing market conditions, reviewing investment strategies and
transacting a trade often occurs by phone, a -mail, or fax. Regardless of the method of communicating with a broker, a
Guide for Instructors government investor needs to perform due diligence on all securities dealers prior to adding them to their list of approved
Advanced Government Finance brokers /dealers for transacting trades.
Institute Recommendation:
Training Policies GFOA makes the following specific recommendations to government investors in selecting securities dealers for their
approved vendor list, managing the relationships with the broker /dealers, and conducting investment transactions with
them:
I. All securities are held in a third party bank separate from the broker /dealer that is transacting business,
2. Use a defined internal process to select, qualify, renew, or terminate brokers and dealers.
a. Use a questionnaire, conduct an interview, and /or conduct peer references to help determine that the broker
understands the public entity's needs /objectives.
b. Determine that the broker is actively involved in the market sectors utilized by the government entity.
c. Select a number of brokers suitable to the entity, allowing for appropriate competition /service on all transactions,
while limiting it to a manageable number.
d. Require security brokers and dealers to comply with the Federal Reserve Bank of New York's capital adequacy
guidelines or SEC Net Capital Rule as a condition of doing business. Obtain annual financial reports of the securities
firm.
e. Require that brokers provide written acknowledgement or certification of their review and understanding of the
government entity's investment policy to assure compliance with its objectives, portfolio risk constraints, and
investment trading requirements.
f. Record and retain pertinent information on the firm and the individual broker including an annual review of the
Central Registration Depository (CRD®) information for both maintained by the Financial Industry Regulation
Authority (FINRA). Violations or sanctions imposed by a regulatory agency or government should be carefully
reviewed for termination of relationship.
g. Establish parameters that guide periodic review and potential termination of a broker dealer relationship.
h. Do not select or approve more broker /dealers than will be reasonably used. It is better to develop good
relationships with a small number of approved dealers than to have a long list of firms who transact little or no
business with the investing entity.
http: / /www.gfoa.org /government - relationship- A—t ^rs
Packet Page -76-
9/17/2014
Government Relationships with Securities Dealers I Government Finance Officers Associ.. "_~/
9/23/2014 10.B.
3. Due diligence on broker /dealers should include obtaining information on:
a. a security dealer's experience and knowledge of public funds investing;
b. all contact information for the primary contact, backup and operations staff;
c. a broker's manager and supervisor;
d. the financial strength of the firm;
e. areas of expertise and trading activity;
f. registration with FINRA and any citations;
g, the names and contact information for references similar to the entity, and
h. potential conflicts of interest
4. Establish a competitive procedure for attaining reasonable market rates on investment transactions:
a. Require that all security sales be made through a competitive bid process. If possible, use a competitive offer
process on purchases as well.
b. Securities sold through a selling group at a set price (usually par) or available for specific bidding should be
compared to comparable maturity securities as part of the competitive process to determine the best relative value.
5. Require that all security transactions be settled on a delivery versus payment basis at the entity's custodian bank to
perfect ownership under a written custodial agreement.
6. Retain complete transaction documentation for audit trail purposes including trade tickets, confirmations and
safekeeping receipts.
7. Electronic trading platforms, such as Bloomberg and Tradeweb, are becoming another alternative to competitive
pricing. These platforms can provide improved transparency over competitive bids and should be considered if cost
effective for the government It is still important to have a broker assigned to the account on the electronic platforms
so that contact can be made if necessary. The same due diligence should be completed with all broker dealers on the
electronic platforms.
8. Follow all state and entity ethics policies when dealing with all broker /dealers and investment vendors.
Committee: Treasury and Investment Management
References
> Introduction to Broker - Dealers for State and Local Governments, Second Edition, Sofia Anastopoulos, GFOA, 2008.
> Investing Public Funds, Second Edition, Girard Miller with M. Corinne Larson and W. Paul Zorn, GFOA,1998.
> Federal Reserve Bank of New York, www.frb.ny.gov, httpJ /www.newyorkfed.org / markets /prideaLers_Listing.htmL
> WWW.FINRA.GOV; http: / /www.nasd.com/ web/ idcplg ?ldcService =SS_GET_PAGEEinodeld =370.
Securities and Exchange Commission, www.sec.gov, VI. Financial Responsibility of Broker Dealers, A- Net Capital Rule
15c3 -1 (17 CFR 240.15c3 -1) http: / /www.sec-gov/ divisions /marketreg/bdguide.htm *Vl.
Down load
® 2014 Government Finance Officers Association of the United States and Canada
203 N. LaSalle Street - Suite 2700 i Chicago, IL 60601 -1210 i Phone: (312) 977 -9700 - Fax: (312) 9774606
http : / /www.gfoa.org/ government- relationshins- securities- dealers 9/17/2014
Packet Page -77-
Procurement of Banking Services I Government Finance Officers Association ^
9/23/2014 10.B.
Join GFOA Staff Directory Contact Us E -Store
Search rfl
About GFOA Products and Services Annual Conference Award Programs Topics
Home / Products and Services / Resources / Best Practices / Procurement of Banking Services
Resources
Procurement of Banking Services
Best Practices
Type Best Practice
Public Policy Statements
Approved by GFORs Executive Board: March 2010
E -Books
Background:
State and local governments use a wide variety of banking services for the deposits, disbursement, and safekeeping of
Publications
public funds. Prudent procurement practices require the reevaluation of banking services on a periodic basis. In addition,
Government Finance Review
continual changes in technology, treasury management practices, and banking industry structure offer public funds
managers opportunities to reevaluate banking services and costs.
Research Reports
Recommendation:
CIPFA GFOA FM Model
GFOA recommends that state and local governments establish a procurement process and assure periodic reviews of
Yield Advantage
banking services. Adhering to a defined due diligence in selecting banking services and establishing proper controls will
help a government achieve its objectives of appropriate and cost - effective banking services while protecting its funds and
Federal Government Relations
reducing risk to its reputation. Governments should consider including the following practices in their procurement of
Canadian Finance
banking services:
News and Annoucements
1. Periodically initiate a process of competitive procurement in accordance with the state and local laws and regulations,
for major banking services. The process should use a request for proposals (RFP) that should include services, fees,
Consulting
earnings credit rates, and availability schedules for deposited funds. In addition, it is important to utilize independent bank
Consulting Services
evaluation services to verify creditworthiness of the financial institution prior to award of a contract and throughout the
Custom Research
contract period.
Training
2. Have contracts for banking services that specify services, fees, and other components of compensation. If applicable, this
Search for Training
should include tri -party depository contracts that require that the custodian complies with collateral requirements.
CPE Guide
3. Identify a primary relationship manager who will serve as a central point of contact, understand the needs of the entity
Guide for Instructors
and be able to offer recommendations for service improvements.
Advanced Government Finance
4. Evaluate the relative benefits and costs of paying for services through direct fees, compensating balances, or a
Institute
combination of the two (blended). Factors to consider in this evaluation are the earnings credit rate, reserve requirements
and insurance fees on deposits.
Training Policies
5. Evaluate the government's needs in comparison to the costs and benefits of specific banking services, including:
> Electronic
> balance and transaction- reporting services (image access and usage)
> stop payments
> payment capabilities
> deposit capabilities
> transmitted analysis and statements
> digitized storage of paid checks and statements
► stale date check management
> access to safekeeping/custodial information
> access to investment performance reporting
3, Accounts
► controlled disbursement
3- collection account
> zero- balance
> interest - bearing
► investment sweep account
3� Security features
1 positive pay services including payee positive pay service (which is payee matching)
> reconciliation services
► Automated Clearing House (ACH) blocking/filtering services
► check to ACH conversion
► Non - sufficient funds (NSF) /ACH conversion for representment of NSF check (Represented Check Entries, FICK)
http://www.gfoa.org/procurement-banking-s--,;---
9/17/2014
Packet Page -78-
Procurement of Banking Services I Government Finance Officers Association
> collateral requirements (reporting by the custodian required)
> Treasury management services
> lock -box services
> credit card receipt merchant services
> safekeeping or custody arrangements (delivery versus payment, DVP)
> procurement cards
> stored value (payroll) cards
> Web links for Internet payment for services
9/23/2014 10.B.
6. A treasury management review and comprehensive evaluation should be performed prior to the issuance of an RFP to
ensure that the treasury manager asked for all required and optional banking services. Consider using a Request for
Information (RFI) or meeting with several banks in advance of the RFP process to determine if there are any
products/services available that your jurisdiction would be interested in adding. This preliminary work is necessary
periodically to take advantage of changes in banking services and technology as new services become available. In the
event that these services are procured through the use of a request for proposal the request for proposal and the vendor
response should be included as part of the contract.
Committee: Treasury and Investment Management
References:), An introduction to Treasury Agreements, Linda Sheimo, GFOA,1993.
> An Introduction to Treasury Management Practices, GFOA, 1998.
> Banking Relations: A Guide for Governments, Nicholas Greifer, GFOA, 2004.
> GFOA Best Practice, Collateralization of Public Deposits, 2007.
Download
® 2014 Government Finance Officers Association of the United states and Canada
203 N. LaSalle Street - Suite 27001 Chicago, IL 60601 -12101 Phone: (312) 977 -9700 - Fax: (312) 977 -4806
http : / /www.gfoa.org/t)rocurement- banking- se--4 - -- 9/17/2014
Packet Page -79-
Creating an Investment Policy ( Government Finance Officers Association
9/23/2014 10.B.
Join GFOA Staff Directory Contact Us E -Store
Search Q
About GFOA Products and Services Annual Conference Award Programs Topics
Home / Products and Services / Resources/ Best Practices / Creating an Investment Policy
Resources
Creating an Investment Policy
Best Practices
Type: Best Practice
Public Polity Statements
Approved by GFOA's Executive Board: October 2010
E -Books
Background:
A written investment policy is the single most important element in a public funds investment program. An investment
Publications
policy should describe the most prudent primary objectives for a sound policy: safety, liquidity, and yield. It should also
Government Finance Review
indicate the type of instruments eligible for purchase by a govemment entity, the investment process, and the
management of a portfolio. Such a policy improves the quality of decisions and demonstrates a commitment to the
Research Reports
fiduciary care of public funds, with emphasis on balancing safety of principal and liquidity with yield. Adherence to an
CIPFA GFOA FM Model
investment policy signals to rating agencies, the capital markets and the public that a government entity is well managed
and is earning interest income suitable to its situation and economic environment.
Yield Advantage
Recommendation:
Federal Government Relations
GFOA recommends that all governing bodies adopt a comprehensive written investment policy and review and update its
Canadian Finance
policies, if necessary on an annual basis.
News and Annoucements
The process of creating an investment policy should include:
Consulting
> Examination of state public funds investment statutes Most states have some form of public funds investment statutes. A
Consulting Services
state's public funds statute defines the parameters of what a government entity may do and serves as a guideline to
Custom Research
begin drafting an investment policy. A government entity's policy may be more restrictive than a statute (eg., limiting the
amount (usually a percentage) or prohibiting the purchase of commercial paper, even though state law allows it) but it
Training
may not be more expansive.
Search for Training
> Examination of state public funds collateral statutes. State collateral laws correlate with public funds investment
CPE Guide
statutes and define how the government entity's public funds must be protected against depository failure. Government
entities should adopt a public funds collateral oli
p cyjust as they do an investment policy or incorporate such language
Guide for Instructors
within its investment policy. Many times a collateral law or policy will reference state investment statutes in establishing
Advanced Government Finance
what instruments or techniques are eligible for use as collateral
Institute
> Review of sample investment policies. Rather than starting an investment policy from scratch, government entities
should consider reviewing existing investment policies. The GFOA's sample investment policy provides a format and
Training Policies
content that can be modified for an entity's needs. Policies from other jurisdictions or state associations can be similarly
useful
> Drafting of an investment policy. The most prudent primary objectives for drafting a sound investment policy should be:
safety, liquidity, and yield, in that order. The investment policy should address certain key questions, including:
> Who are the authorized investment officers?
> What standard of care will be established?
a What instruments will be eligible for investment?
> How will diversification be ensured?
> How will safekeeping be handled?
> What is the maximum term for anygiven investment?
> What type of internal controls should be in place?
> Who will comprise the investment committee (internal/external members), if any?
> What type of investment reports/performance reports will be produced?
)o What types of benchmarks will be used?
> Wilt an investment advisor be used (and to what capacity)?
> What are the criteria for beginning or ending an investment relationship?
> Review by appropriate parties. Once a draft policy is formulated, seek input from the government entitys proposed
investment officer(s), its leadership, including the government entitys legal department or counsel and the proposed
investment committee. Colleagues in other jurisdictions might also be willing to review and comment
> Adoption by formal action of governing body. Many states require a government investment policy to be approved by
the entity's governing body. The approval process can be by resolution or other official action in a public meeting. By
presenting the polity for formal approval, the policy becomes an established part of the government entity's operations,
rather than simply serving as an internal guideline.
> Establishment of written investment procedures. Just as the investment policy defines the boundaries of an entity's
investing program, written procedures document who wilt do what on a day to day basis. Topics should include:
http: / /www.gfoa.org /creating - investment- pol, -�, 9/17/2014
Packet Page -80-
Creating an Investment Policy I Government Finance Officers Association
9/23/2014 10.B.
procedures for taking competitive bids, delivering and paying for purchases, recording transactions, and obtaining
approval before buying or selling decisions.
31 Annual review of investment policy. The written investment policy should be a living document that is reviewed each
year by a government entity's investment officials and modified as needed. The policy should be presented each year to
the governing body for formal review and approval
Committee: Treasury and Investment Management
References
> Sample Investment Policy (GFOA) (2011)
t+ Investing Public Funds by Girard Miller with M. Corinne Larson and W. Paul Zorn. 2nd edition. Chicago: GFOA,1998.
Download
m 2014 Government Finance Officers Association of the United States and Canada
203 N. LaSalle Street - Suite 2700 1 Chicago, IL 60601 -1210 1 Phone: (312) 977 -9700 - Fax: (312) 977.4806
http: / /www.gfoa.org /creating - investment- pol, ^° 9/17/2014
Packet Page -81-
ORDINANCE NO. 87- 65 9/23/2014 10.B.'
, AN ORDINANCE AUTHORIZING THE INVESTMENT AND
`J REINVESTMENT OF SURPLUS PUBLIC FUNDS BY THE
- CLERK TO THE BOARD ON BEHALF OF AND IN THE
NAME OF THE BOARD OF COUNTY COMMISSIONERS;
_> AUTHORIZING THE INVESTMENT AND REINVESTMENT
=OF SUCH SURPLUS FUNDS IN INVESTMENT SECURI-
U 1--= TIES; REQUIRING THAT A CASH MANAGEMENT AND
�'
- ''' INVESTMENT POLICY BE ADOPTED PURSUANT TO
H UJ J
�,J RESOLUTION OF THE BOARD; PROVIDING FOR
';'CONFLICT AND SEVERABILITY; PROVIDING AN
EFFECTIVE DATE.
WHEREAS, in 1981, the Board of County Commissioners
authorized the Clerk to the Board to invest surplus public funds
in the Local Government Surplus Funds Trust Fund pursuant to
Section 125.31(1)(a), Florida Statutes; and
WHEREAS, Section 125.31, Florida Statutes, provides that the
Board of County Commissioners may adopt an ordinance to authorize
investment opportunities in addition to those set forth in
Section 125.31(1)(a) -(e); and
WHEREAS, it is the desire and intent of the Board of County
Commissioners to authorize additional investments for surplus
public funds in order to seek a higher rate of return on such
funds; and
WHEREAS, the Board also wishes to establish a policy for the
cash management and investment alternatives applicable to said
surplus funds;
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COUNTY
COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that:
SECTION ONE.
In accordance with,a Cash Management and Investment Policy
established by the Board of County Commissioners by Resolution,
the Clerk to the Board is hereby authorized to purchase and sell
investment securities at prevailing market prices /rates on behalf
of and in the name of the Board of County Commissioners when, in
the judgment of the Clerk to the Board,
(a) sufficient surplus funds have accumulated in the
accounts of the Board of County Commissioners, or
bC "" M pi_.t n?
Packet Page -82-
�0.
9/23/2014 10.B.
(b) The Board of County Commissioners has on hand or nas
accumulated monies by reason of the sale of its own
securities.
The Clerk to the Board, in accordance with the Cash
Management and Investment Policy adopted by the Board, shall pay
the proceeds of such security sales into the proper accounts or
funds of the Board of County Commissioners.
SECTION TWO.
Upon adoption of this Ordinance, the Clerk to the Board
shall prepare and propose to the Board of County Commissioners a
Cash Management and Investment Policy which shall address, at a
minimum, the issues of general investment objectives, types of
instruments to be selected, maturity, risk and diversification of
investments, and investment institutions, issuers and dealers to
be selected. Upon review of the Clerk's proposed policy and such
other matters as the Board may deem appropriate, the Board shall
establish a Cash Management and Investiment Policy by resolution.
In addition, the Clerk to the Board shall establish
appropriate written internal control and investment procedures
which shall address, at a minimum, master accounts, separation of
functions, investment delivery and payment procedure, custodial
arrangements, trust receipts and confirmation, performance
evaluations and operations auditing and reporting, both interim
and annual. Such procedures shall be reviewed periodically as
may be determined by the Clerk to the Board to assure optimum
fiscr 1 control.
SECTION THREE.
Thi3 Ordinance is not intended to and shall not be
interpreted to abrogate an}'- provision contained in any bond
resolution or ordinance of the Board of County Commissioners
relating to the investment of bond proceeds temporarily available
in specific funds or accounts.
SECTION FOUR: Conflict and Severability.
In the event this Ordinance conflicts with any other
ordinance of Collier County or other applicable law, the more
restrictive shall apply. If any phrase or portion of this
Packet Page -83-
9/23/2014 10. B.
Ordinance is held invalid or unconstitutional by any court of It-,:
competent jurisdiction, such portion shall be deemed a separate,
distinct and independent provision and such holding shall not
affect the validity of the remaining portion.
SECTION FIVE: Effective Date.
This Ordinance shall become effective upon receipt of notice
from the Secretary of State that this Ordinance has been filed
with the Secretary of State.
PASSED AND DULY ADOPTED by the Board of County Commissioners
of Collier County, Florida, this42�day of GG 87.
ATTEST:
JAMES C. GILES, Clerk
�' Approved..as to form and
,i ,lrigat ;.sufficiency:
t•..
Kenneth B. Cuy ler
County Attorney
BOARD OF COUNTY COMMISSIONERS
OF COLLIER COUNTY, FLORIDA
By -.,00
MAX A. HASSE, R , Chad—ofian
tooK 0z8 nr-i 04
Packet Page -84-
This ordinance flied with tow
Seery of State's Office the
-Z =-day of IY
and acknowledgement of that
flit received this day
oi6 .LiLZ
cwa
9/23/2014 10. 6.
STATE OF FLORIDA )
COUNTY OF COLLIER )
I, JAMES C. GILES, Clerk of Courts in and for the Twentieth
Judicial Circuit, Collier County, Florida, do hereby certify that the
foregoing is a true copy of:
ORDINANCE 87 -65
which was adopted by the Board of County Commissioners on the 25th
day of August, 1987 during Regular Session.
WITNESS my hand and the official seal of the Board of County
Commissioners of Collier County, Florida, this 25th day.of
August, 1987,
JAMES C. GILES " "�1"%f
i% f•
Clerk of Courts ana('Clerk
Ex- officio to Board of - �>
C:,��ommissicLherq ,.• y
By: Virginia Magj�
Deputy Clerk •/� ....• 4��
tou 02-8 05
Packet Page -85-
9/23/2014 10.B.
ORDINANCE NO. 2013 - 6 9
AN ORDINANCE REPEALING ORDINANCE 87 -25 AS AMENDED, WHICH
ORDINANCE ESTABLISHED THE COLLIER COUNTY PURCHASING
DEPARTMENT AND ADOPTED A PURCHASING POLICY, AND
REPLACING IT WITH THIS NEW ORDINANCE, TO BE KNOWN AS THE
COLLIER COUNTY PURCHASING ORDINANCE, WHICH ORDINANCE
SETS FORTH ITS PURPOSE AND APPLICABILITY; PROVIDES FOR
DEFINITIONS; ESTABLISHES AND SETS FORTH THE DUTIES OF A
PURCHASING DEPARTMENT AND PURCHASING DIRECTOR;
PROVIDES FOR A PURCHASING MANUAL; PROVIDES FOR
PURCHASES UNDER $50,000, AND FOR PURCHASES OVER $50,000;
PROVIDES FOR A COMPETITIVE BID PROCESS, THE PROCUREMENT
OF PROFESSIONAL SERVICES, COMPETITIVE PROPOSALS, AND
PROCUREMENT OF DESIGN -BUILD CONTRACTS; ESTABLISHES
POLICIES FOR SMALL. AND DISADVANTAGED MINORITY AND
WOMEN BUSINESS ENTERPRISES AND FOR PREFERENCE TO LOCAL
BUSINESSES; PROVIDES FOR PAYMENT OF INVOICES AND ADVANCE
PAYMENTS FOR GOODS AND SERVICES; PROVIDES FOR
PROCUREMENTS BASED ON STANDARDIZATION, COOPERATIVE
PURCHASING ORGANIZATIONS AND GOVERNMENT CONTRACTS;
SETS FORTH A PROCEDURE FOR CONTRACT ADMINISTRATION AND
FOR BONDS; PROHIBITS UNAUTHORIZED PURCHASES INCLUDING
SUBDIVIDING PURCHASES; SETS FORTH A PROCEDURE FOR BID
PROTESTS AND CONTRACT CLAIMS; PROVIDES FOR PURCHASES
DURING EXIGENT CIRCUMSTANCES, EMERGENCIES AND BOARD
RECESS PERIODS; PROVIDES FOR INSPECTING AND TESTING;
PROVIDES FOR SURPLUS PROPERTY; PROVIDES FOR A PURCHASING
CARD PROGRAM; PROHIBITS CONFLICT OF INTERESTS; SETS FORTH
A PROCEDURE FOR THE DEBARMENT AND SUSPENSION OF
VENDORS; AUTHORIZES THE BOARD TO WAIVE THESE PROVISIONS
WHEN APPROPRIATE; AND LASTLY PROVIDES FOR CONFLICT AND
SEVERABILITY, INCLUSION INTO THE CODE OF LAWS AND
ORDINANCES, AND AN EFFECTIVE DATE.
WHEREAS, the Board of County Commissioners (the Board) desires to seek the maximum
value for the County by procuring the best value in obtaining commodities and contractual services;
and
WHEREAS, the Board must approve all purchases for valid public purpose and approve all
expenditures; and
WHEREAS, obtaining as full and open competition as possible on all purchases and
contracts and maximizing volume discounts by consolidating purchases and buying "in bulk" when
practical serves to further the County's goals and is in the best interest of the taxpayers of Collier
County; and
Packet Page -86-
9/23/2014 10.B.
WHEREAS, the Board of County Commissioners desires to ensure the County receives all
tax exemptions to which it is entitled; and
WHEREAS, it is in the best interests of the County for all its agencies and departments to
cooperate so as to secure maximum efficiency.
NOW THEREFORE, BE IT ORDAINED BY THE BOARD OF COUNTY
COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that:
SECTION ONE: Title and Citation.
This Ordinance shall be known and may be cited as the "Collier County Purchasing
Ordinance" or "Purchasing Ordinance."
SECTION TWO: Purpose.
The purpose of this Purchasing Ordinance is to codify and formalize Collier County's
Purchasing Policy, to provide for the fair and equitable treatment of all persons involved in public
purchasing by the County, to maximize the purchasing value of public funds in procurement, and to
provide safeguards for maintaining a procurement system of quality and integrity. Any provision of
this Ordinance in conflict with statute is null and void as to the conflict.
SECTION THREE: Applicability.
(a) This Purchasing Ordinance applies to the procurement of goods and services by the
County after the effective date of this Purchasing Ordinance. This Purchasing Ordinance shall apply
to all expenditures of public funds by the Board of County Commissioners for public purchasing,
irrespective of the source of the funds. Nothing in this section shall prevent the County from
complying with the terms and conditions of any grant, gift or bequest that is otherwise consistent
with law.
(b) Nothing contained herein shall be construed as requiring Collier County's Constitutional
Officers (Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections, and Tax
Collector), Court Administration, State Attorney, Public Defender or the Collier County
Metropolitan Planning Organization non - county funds to be covered by the provisions of this
Purchasing Ordinance. However, the services of the Collier County Purchasing Department and
Purchasing Director may be made available for consultation.
SECTION FOUR: Definitions.
Agency shall mean all departments, divisions, units and offices under the Board of County
Commissioners, including the Collier County Redevelopment Agencies, the Collier County Airport
2
Packet Page -87-
9/23/2014 10.B.
Authority, Collier County Water Sewer District and all departments under the auspices of the
County Manager.
Change Order shall mean a written order by a project manager, approved by the Purchasing
Director and the Board of County Commissioners, directing the contractor to change a contract's
amount, requirements, or time. All changes must be within the original scope of the contract and in
accordance with the Board approved contract's changes clause or, if no such clause is set forth within
the agreement, in accordance with this Purchasing Ordinance.
Consultant / Contractor /Supplier / Vendor shall mean a provider of goods or services to the
County agency. These terms may be used interchangeably.
Continuing Contract shall mean a contract for professional services with no time limitation
except that the contract must include a termination clause. Continuing contracts must contain
sufficient details of goods and services to be procured for proper audit.
County shall mean Collier County.
County Manager shall mean the County Manager or County Administrator of Collier
County, or designee, as defined in the County Administration Law of 1974, Ch. 125, Part III, Florida
Statutes.
Disadvantaged Business Enterprise shall mean a small business concern certified by the
Department of Transportation to be owned and controlled by socially and economically
disadvantaged individuals as defined by the Surface Transportation and Uniform Relocation Act of
1987.
Extension shall mean an increase in the time allowed for the contract period due to
circumstances which make performance impracticable or impossible, or which prevent a new
contract from being executed. An extension must be in writing, and may not change the contract's
amount or requirements unless provided for in the original solicitation, contract, or as otherwise
stated in this Ordinance.
Fixed Term Contract is one in which the purchase of commodities or services are available
for use Countywide by all agencies as deemed necessary in instances where it is impracticable to
establish definitive quantities, ordering schedules, or the details of the specific work to be performed
in advance of establishing the contracts(s). Typically, the term and fee schedules are fixed for a
period of time. These contracts are often implemented by purchase orders or work orders and may
be awarded to multiple firms.
Invitation to Bid shall mean a written or electronic solicitation for sealed competitive bids
with the title, date, and hour of the public bid opening designated and specifically defining the
commodity, group of commodities, or services for which bids are sought. It includes instructions
prescribing all conditions for bidding and will be distributed to registered bidders simultaneously.
The invitation to bid shall be used when the agency is capable of specifically defining the scope of
work for which a contractual service is required or when the agency is capable of establishing
precise specifications defining the actual commodity or group of commodities required.
Packet Page -88-
9/23/2014 10.B.
Invitation to Negotiate shall mean a written or electronically posted solicitation for
competitive sealed replies to select one or more vendors with which to continence negotiations
before the procurement of commodities or contractual services. The invitation to negotiate is a
solicitation used by an agency which is intended to determine the best method for achieving a
specific goal or solving a particular problem and identifies one or more responsive vendors with
which the agency may negotiate in order to receive the best value.
Lowest responsive bid shall mean a bid submitted by the apparent lowest, qualified and
responsive bidder whose bid response meets the needs of the County, as set forth in the invitation to
bid.
Minority business enterprise shall have the same definition as set forth in Florida Statutes
Sec. 288.703, as amended from time -to -time, which presently means any small business concern as
defined below which is organized to engage in commercial transactions, which is domiciled in
Florida, and which is at least 51- percent -owned by minority persons who are members of an insular
group that is of a particular racial, ethnic, or gender makeup or national origin, which has been
subjected historically to disparate treatment due to identification in and with that group resulting in
an underrepresentation of commercial enterprises under the group's control, and whose management
and daily operations are controlled by such persons. For purposes of this definition, "small
business" means an independently owned and operated business concern that employs 200 or fewer
permanent full -time employees and that, together with its affiliates, has a net worth of not more than
$5 million or any firm based in this state which has a Small Business Administration 8(a)
certification. As applicable to sole proprietorships, the $5 million net worth requirement shall
include both personal and business investments.
Purchase or procurement shall mean the acquisition of goods or services.
Purchasing Card shall mean a credit card officially assigned to specific employees under the
purview of the Board of County Commissioners for the purpose of transacting small and/or strategic
purchases.
Purchase Order shall mean a contract which encumbers appropriated funds and which is
directed to a single vendor to furnish or deliver commodities or services to the County.
Purchasing Director is the Purchasing Director of Collier County.
Purchasing Manual shall mean the Board of County Commissioners' adopted administrative
procedures for implementing this Purchasing Ordinance.
Purchasing Policy or Policies shall mean the purchasing practices and procedures outlined in
this Purchasing Ordinance.
Qualified proposer shall mean a proposer who has the capability to perform the services
outlined in the request for proposal, and has the integrity and reliability which will assure good faith
performance.
4
Packet Page -89-
9/23/2014 103.
Renewal shall mean contracting with the same contractor for an additional contract term,
only if pursuant to contract terms specifically providing for such renewal and prior to the expiration
of the prior term.
Request for Proposal shall mean a written or electronic solicitation for sealed proposals with
the title, date, and hour of the submission deadline designated. A request for proposal includes, but is
not limited to, general information, applicable laws and rules, functional or general specifications,
statement of work, proposals instructions, and evaluation criteria. An agency shall use a request for
proposals when the purposes and uses for which the commodity, group of commodities, or
contractual service being sought can be specifically defined and the agency is capable of identifying
necessary deliverables. Various combinations or versions of commodities or contractual services
may be proposed by a responsive vendor to meet the specifications of the solicitation document.
Responsive bidder or proposer shall mean a person or entity that has submitted a bid or
proposal which conforms in all material respects to the invitation to bid, request for proposals, or
other methods of formal solicitation.
Single source refers to situations in which only one vendor is chosen to provide the goods or
services because of its specialized or unique characteristics.
Sole source is when there is only one vendor capable of providing a good or service.
Standardization shall mean the adoption or selection of a common commodity
(commodities), service(s), or a system(s) to be used by one or more County agencies to promote the
cost - effective delivery of services.
Woman Business Enterprise shall have the same definition as Minority business enterprise,
excepting that the. small business concern is at least 51- percent -owned by a woman or women.
Work Order is a contract instrument issued under the terms and conditions of an approved
continuing or fixed term agreement, which authorizes a contractor or consultant to perform a specific
task within the broader scope of the master agreement. Nothing in the work order shall conflict with
the terms and conditions of the fixed term contract, and all work done must fall within the scope and
term of the underlying agreement.
SECTION FIVE: Establishment of Purchasing Department and Purchasing Director.
1. There is hereby established the Collier County Purchasing Department, which shall be a
distinct administrative department under the direction of the County Manager.
2. The Purchasing Director of the Purchasing Department shall have the authority to negotiate
all purchases for all Agencies except as required by State, Federal or Local Law. In keeping with
Chapter 125, Florida Statutes, this Purchasing Ordinance grants to the Purchasing Director only
those powers and duties which are ministerial in nature and does not delegate any governmental
power imbued in the Board of County Commissioners as the governing body of the County
pursuant to Fla. Const. Art. VIII, § 1(e). To this end, the below specifically enumerated powers are
5
Packet Page -90-
9/23/2014 10.B.
to be construed as ministerial in nature, for the purpose of carrying out the Board's directives and
policies.
SECTION SIX: Duties of Purchasing Department.
Within the constructs of this Ordinance, the Purchasing Department shall be responsible for:
Seeking Maximum Value: Acting to procure for the County the highest quality
commodities and contractual services at least expense to the County.
2. Encouraging competition: Endeavoring to obtain as full and open competition as possible
on all purchases, services and sales.
3. Purchasing Analysis: Keeping informed of current developments in the field of purchasing,
prices, market conditions and new products, and securing for the County the benefits of
research conducted in the field of purchasing by other governmental jurisdictions, national
technical societies, trade associations having national recognition, and by private business
and organizations.
4. Purchasing Manual: Preparing and recommending for adoption by the Board of County
Commissioners administrative procedures for the Agency known as a Purchasing Manual
for the implementation of this Purchasing Ordinance. In keeping with Ord. No. 2004 -66,
such procedures shall be made part of the Collier County Administrative Code, with all
adoptions, amendments, additions, revisions, or modifications made by resolution of the
Board. The Purchasing Manual shall be maintained and published on -line for the benefit of
the public.
Forms: Prescribing and maintaining such forms to implement this Purchasing Ordinance
and Purchasing Manual.
6. Non - Contract Purchases: Reviewing non - contract purchases under $50,000 to determine if
an aggregated contract approach may provide value and offer pricing advantages to the
County.
7. Tax Exemption: Procuring items for the County to exercise its tax exemption status when
eligible.
8. Suspension and Debarment of Vendors: Overseeing and facilitating the suspension and/or
debarment of vendors as set forth below.
9. Inquiry and Control: Full authority to:
a. Question the quality, quantity, and kinds of items requisitioned in order that the best
interests of the County are served;
b. Ensure the timely, proper and orderly acquisition of services to the various operating
departments;
c. Ensure purchases are consistent with the Purchasing Ordinance;
Packet Page -91-
9/23/2014 10.B.
d. Determine if specific purchases should be approved by the Board prior to the
purchase; and,
e. Delegate Purchasing Director authority granted by this Purchasing Ordinance in
whole or in part to Purchasing Department staff members.
SECTION SEVEN: Purchases in General.
The Board shall, prior to payment, approve all expenditures with a finding that such
expenditures serve a valid public purpose.
SECTION EIGHT: Purchases under $50,000
The process for making purchases under $50,000 shall be set forth in detail in the Purchasing
Manual. At a minimum:
1. A purchase shall not be artificially divided or split so as to qualify under this or any other
section of this Purchasing Ordinance. Purchases under $1,000 will generally be processed using a
regular purchase order, or, a purchasing card in accordance with Section 27 of this Purchasing
Ordinance,
2. Operating department staff should make all reasonable efforts to purchase goods and
services under Board approved contracts. In the event a contract is not available, staff will procure
the highest quality items or services at the least expense to the County after approval by the
Purchasing Director. Only the Board's Purchasing staff may issue a qualification based solicitation.
SECTION NINE: Formal Competitive Threshold (Purchases in Excess of $50,000).
A It is the intent of the Board of County Commissioners to establish an amount of fifty
thousand dollars ($50,000) as the County's threshold for formal competitive purchases. All such
purchases shall be accomplished by competitive sealed bid, by competitive selection and negotiation
(per Section 11) or by competitive proposals (per Section 12). Award of contracts shall be made by
the Board to the lowest, qualified responsive bidder except where otherwise provided for in this
Purchasing Ordinance or unless an exception is granted by the Board. Bid limits for requirements
utilizing federal or state funds will be those required by said agency granting the funds or the
County's requirements, whichever is more restrictive.
All formal competition shall be procured under the supervision of the Purchasing Director.
B. The requirement for formal competition may be waived by the Board of County
Commissioners where permitted by law, under the following circumstances:
Purchase of library books, education and/or personnel tests, similar audio visual
materials, periodicals, printed library cards, or other statutorily authorized exceptions.
7
Packet Page -92-
9/23/2014 10.B.
2. Sole source purchases or single source purchases (pursuant to subsection D).
3. Valid public emergencies (pursuant to Section 25).
4. Where it is determined to be in the best interests of the County to do so.
C. All purchases subject to formal competition shall be awarded by the Board of County
Commissioners.
D. Exemption For Single Source Commodities: Purchases of commodities and services from a
single source may be exempted by the Board of County Commissioners from formal competition
upon certification by the Purchasing Director of one the following conditions:
1. The item(s) is the only one available that can properly perform the intended
function(s);
2. The recommended vendor /contractor is the only one ready, willing and able to meet
the County's requirements; or
3. The requested exemption is in the County's best interest.
E. Use of Past Performance Data: In order to promote the quality delivery of commodities and
services, County departments shall record and consider the past performance of vendors in the award
of contracts exceeding the competitive threshold. This objective shall be accomplished as follows:
The Purchasing Department shall be responsible for each of the following:
a. Developing, implementing and maintaining administrative procedures,
instructions and technologies necessary to collect past vendor performance
data.
b. Ensuring that relevant past performance data is properly gathered and
considered prior to award of subsequent contracts.
2. Operating departments shall be responsible for each of the following:
a. Conducting periodic performance evaluations of vendors under contract with
the County pursuant to the procedures established in subsection 9.E.Ia.
b. Considering the past performance of vendors during the evaluation of bids and
proposals pursuant to the procedures established in subsection 9.E.Ib.
F. Bidders and proposers competing for a prospective award (and their agents /representatives)
will not be permitted to publicly or privately address the Board or individual Board members
regarding a prospective purchase prior to the time of award unless requested to do so by the
Purchasing Director or by a majority vote of the Board.
8
Packet Page -93-
9/23/2014 10.B.
SECTION TEN: Competitive Bid Process.
A. Notice Invitin Bids:
1. Announcement: Notice inviting bids shall be publicly posted by the Purchasing
Department in a consistent public location at least ten (10) days preceding the last day
established for the receipt of bid proposals. Specific projects or grants may require
longer posting periods, in those instances the specific requirements would be used.
Bids may be solicited and/or received in one or more steps as permitted by law and
deemed appropriate by the Purchasing Director.
2. Scope of Notice: The public notice required shall include a general description of the
commodities /services to be purchased or sold, the bid instructions and specifications,
and the time and place for opening bids.
3. Bidders' List: The Purchasing Director shall also solicit sealed bids from qualified
prospective vendors /contractors who have registered their names on the Collier
County Purchasing Department vendor database, which will electronically send them
a notice of the proposed purchase or sale. Notices sent to the vendors /contractors on
the Collier County Purchasing Department vendor database shall be limited to
commodities or services that are similar in character and ordinarily handled by the
trade group to which the notices are sent. Vendors /contractors are responsible for
maintaining their company information profiles in the database to ensure proper
notifications are received. Vendors /contractors may be suspended from the database
by the Purchasing Director for continual non - response to formal solicitations and
violations of the Purchasing Ordinance. The Purchasing Director may continue to
issue formal solicitations and accept formal bids, proposals and other tenders using
paper where appropriate.
4. Bid Deposits: When deemed necessary by the Purchasing Director, bid deposits shall
be prescribed in the public bid notices. Said deposits shall be in the amount equal to
five percent of the bid offer submitted unless a greater amount is required. The
Purchasing Director shall have the authority to return the deposits of all bidders upon
award and approval of the contract by the Board of County Commissioners. A
successful bidder shall forfeit any deposit required by the Purchasing Director upon
failure on the vendor's part to enter into a contract within ten (10) working days after
written notice of award.
Bid Addenda: An addendum to a specification shall be defined as an addition or
change in the already prepared specifications for which an invitation has been issued
for formal quotations or an announcement has been posted for a formal sealed bid.
Any addendum to a request for formal sealed bids shall be approved by the
Department Purchasing Director. The addendum shall clearly point out any addition
or change to the invitation for bids. The Purchasing Department shall be responsible
for assuring that addenda are available on the on -line bidding website and that all
prospective bidders who have downloaded specifications are notified of the
addendum prior to opening of bids.
9
Packet Page -94-
9/23/2014 10. B.
B. Procedure for Bids:
1. Sealed Bids: Sealed bids shall be submitted manually or electronically to the
Purchasing Director.
2. Opening: Bids shall be opened publicly at the time and place stated in the public
notices and shall be opened and witnessed by the Purchasing Department.
3. Tabulation: A tabulation of all bids received shall be made either electronically or
manually by the Purchasing Department and shall be available for public inspection
pursuant to Fla. Stat. Sec. 119.07.
C. Tie Bids: Where there are low tie bids, the award process shall first be subject to Fla. Stat.
Sec. 287.087. In the event that all of the tied bidders comply with Fla. Stat. Sec. 287.087, the
Purchasing Department shall determine if any of the bidders would be considered a local business as
defined under Section 15 of this Purchasing Ordinance. If one (and only one) of the bidders is
determined to be a local business, then award of contract shall be made to that bidder. In the event
that two or more local bidders are tied thereafter, award of contract shall be made in accordance with
Section 15 (2)(b) of this Purchasing Ordinance.
D. Rejection of Bids and Negotiation:
The Board of County Commissioners shall have the authority to reject any and all
bids.
2. Subsequent to applying the procedures set forth under Section 15(2) (b) (where
applicable), if the lowest, responsive bid exceeds the budgeted amount and, if the
purchase is not funded in whole or in part with interagency grant dollars, the
Purchasing Director may negotiate changes with the apparent lowest qualified and
responsive bidder that will bring prices into budgeted limits subject to the final
approval and acceptance of the Board. If the budgeted amount includes grant funds,
the Purchasing Director shall be authorized to conduct such negotiations provided
said actions are not prohibited by law or the grant conditions.
3. If no bid is received, the Board of County Commissioners may authorize the
Purchasing Director to purchase by negotiation under conditions most favorable to
the public interest and when said purchase will result in the lowest ultimate cost of
the commodities or services obtained.
E. Waiver of Irregularities: The Board of County Commissioners shall have the authority to
waive any and all irregularities in any and all formal bids within lawful guidelines.
F. Award of Contract: The Chair or Vice Chair in the Chair's absence, when authorized by
majority vote of the Board, shall execute formal contracts having a binding effect upon the County.
A formal contract shall be awarded by the Board of County Commissioners to the lowest, qualified
responsive bidder. In addition to price the following may be considered:
10
Packet Page -95-
9/23/2014 103.
1. The ability, capacity and skill of the bidder to perform the contract.
2. The ability of the bidder to perform the contract within the time required or the least
time, if appropriate, without delay or interference.
3. The experience and efficiency of the bidder.
4. The quality and performance of previous contracts awarded to the bidder.
5. The previous and existing compliance by the bidder with laws and ordinances relating
to the proposed contract.
6. The quality, availability and adaptability of the commodities or contractual services to
the particular use required.
7. The ability of the bidder to provide future maintenance and service (where
applicable).
8. Prior litigation or administrative proceedings against the County where the bidder or
the bidder's principal was a party.
9. Prior litigation or administrative proceedings involving the bidder or bidder's
principal.
All recommendations for award for contracts will be reviewed and approved by the
Purchasing Director prior to presentation to the Board of County Commissioners.
SECTION ELEVEN: Procurement of Professional Services.
A. Consultants' Competitive Negotiation Act.
1. Contracts for professional architectural, engineering, landscape architectural or
surveying and mapping services shall be procured in accordance with Fla. Stat. §287.055,
referred to as the Consultants' Competitive Negotiation Act (CCNA).
2. Continuing contract. The County is authorized to enter into a continuing contract for
CCNA services in accordance with the CCNA, whereby the firm provides professional
services to the County for projects in which construction costs do not exceed $2,000,000, for
study activity if the fee for each individual study under the contract does not exceed
$200,000; or for work of a specified nature as outlined in the contract required by the
County, with the contract being for a fixed term or with no time limitation, except that the
contract must provide a termination clause.
3. Ranking of firms. The County, through the competitive proposal process, shall make a
finding that the firm or individual to be employed is duly qualified to render the required
11
Packet Page -96-
9/23/2014 10.B.
service. The evaluation committee shall review statements of qualifications and performance
data submitted in response to the public solicitation and shall select, in order of preference,
no fewer than three firms deemed to be the most highly qualified, if at least three firms
respond to the solicitation. If less than three firms respond, and after meeting due diligence, it
is decided by the Purchasing Director that every effort was made to comply with CCNA
requirements, the County will conduct discussions with, and may require public presentations
by, the responding firms regarding their qualifications, approach to the project and ability to
furnish the required services.
4. Evaluation criteria. Pursuant to the CCNA, the evaluation criteria for ranking shall
include factors such as: ability of firm and its professional personnel; firm experience with
projects of a similar size and type; firm's willingness and ability to meet the schedule and
budget requirements; volume of work previously awarded by the county; effect of the firms
recent/current and projected workload; minority business status; location; past performance
and when required, the public presentation. For continuing contracts, ranking and award shall
be based on the criteria identified in the RFP document. For non - continuing contracts or
project specific contracts, public presentation may be required.
5. Public presentation. The evaluation criteria for public presentation shall include
factors such as the firm's understanding of the project, ability to provide required services
within the schedule and budget, qualifications and approach to the project.
6. Contract negotiations. The ranking of firms for all CCNA contracts shall be
presented to the Board of County Commissioners for consideration and approval. Upon
Board approval of firm rankings, staff shall negotiate a contract with the most qualified firm
(number one ranked firm) for professional services for compensation which is deemed to be
fair and reasonable. Detailed discussions must be held by the firm and the County to establish
the scope of the project and the exact services to be performed by the firm. Should the
County and the firm fail to agree upon the terms of an acceptable contract, negotiations with
the top firm shall be terminated and negotiations with the second ranked firm shall
commence. If again unsuccessful, the process is repeated with the next ranked firm. This
process is continued until a mutually agreeable contract is concluded or the project is
abandoned, or the procurement process is otherwise terminated.
B. Other Professional Services. Because differences in price may only be a minor concern
compared to qualitative considerations, professional services that fall outside the scope of the CCNA
except as otherwise provided by law and outlined below, may be exempted by the Purchasing
Director from the competitive bidding process. Instead, professional services will be typically
acquired through one of the following methods:
1. Competitive Selection and Negotiation as set forth immediately above; or
2. Competitive Proposals (pursuant to Section 12).
3. In addition to the definition set forth in the CCNA, a professional service shall be
defined as assistance obtained in support of County operations from an independent
contractor in one or more of the following professional fields:
12
Packet Page -97-
9/23/2014 10.B.
a. Appraisal Services - real and personal property appraisers.
b. Audit and Accounting Services - auditors and accountants (excepting the
selection of the annual auditor which shall be conducted as per Section 11.45,
F.S.).
C. Consultants - planning, management, technological or scientific advisors.
d. Financial Services - bond counsel, rating and underwriting, financial advisor,
and investment services.
e. Legal Services - attorneys and legal professionals.
f. Medical Services - medicine, psychiatry, dental, hospital, and other health
professionals.
4. Final selection of the professional service provider (award of contract) shall be made
by the Board of County Commissioners.
5. Requests for outside legal services will be consistent with both this Purchasing
Ordinance and the County Attorney's Ordinance (Ord. No. 2013 -34). The retention of
services from experts or consultants for purposes of preparing for or defending
against imminent or pending litigation or administrative proceedings shall be exempt
from all competitive requirements of this Purchasing Ordinance, and must first be
approved by the Board.
SECTION TWELVE: Competitive Proposals.
A. The Competitive Proposals process is a method of contract selection that may be utilized by
the Purchasing Director under circumstances where one or more of the following conditions exist:
1. Where qualitative considerations are of equal or greater concern than pricing
considerations.
2. Where the conditions of the purchase do not lend themselves to the formal sealed bid
process or the award of a firm, fixed fee contract.
3. Where the County is incapable of specifically defining the scope of work for which
the commodity(s) or service(s) is required and where the vendor is asked to propose a
commodity(s) or service(s) to meet the needs of the County.
4. Where the County desires to enter into a single contract for the design and
construction of a public construction project(s).
13
Packet Page -98-
9/23/2014 10. B.
B. For purchases in excess of the formal competitive threshold and where appropriate or
required by law, the competitive solicitation process will be utilized. The process will be conducted
in a manner similar to the sealed bid process as set forth under Section 10 except where otherwise
stated in this section. The competitive proposals process shall proceed as follows:
A Request for Proposals (RFP) will be prepared and distributed. Notice of said
request(s) shall be publicly posted by the Purchasing Department at least 21 calendar
days preceding the last day established for the receipt of proposals.
2. Each Request for Proposals shall identify the evaluation procedures and criteria to be
applied to the selection of the best proposal among the respondents. Each RFP
pertaining to the award of a design/build contract(s) shall be subject to the
requirements of Fla. Stat. Sec. 287.055 and section thirteen below.
Prior to the announcement and distribution of the RFP, a selection committee shall be
appointed by the County Manager to evaluate the proposals received.
4. Proposals may be solicited and/or received in one or more steps as permitted by law
and deemed appropriate by the Purchasing Director. Unless otherwise prohibited by
law, the Purchasing Director shall have the discretion to solicit and conduct
simultaneous or concurrent negotiations with one or more firms.
SECTION THIRTEEN: Procurement of Design -Build Contracts.
A. Procurements for the design and construction of public construction projects may be obtained
through a single contract with a design -build furn selected in a manner permitted under Fla. Stat.
Sec. 287.055 and the procedures set forth in this section.
B. Upon completion of the Design Criteria Package, procurements of Design/Build services
shall be processed in a manner consistent with Section 12 hereof entitled "Competitive Proposals."
C. The Board of County Commissioners may declare a public emergency, where appropriate
and authorize the using Agency to negotiate an agreement for Board approval with the best qualified
design -build firm available at that time.
SECTION FOURTEEN: Small and Disadvantaged Minority and Women Business
Enterprises.
A. Policy Statement: Collier County stands committed to providing equal opportunities to small
businesses and disadvantaged business enterprises (DBE), minority business enterprises (MBEs) and
women business enterprises (WBEs) as well as to all vendors, consultants, contractors and
subcontractors who seek to do business with the County.
Pursuant to this policy, Collier County encourages its vendors, consultants, contractors and
subcontractors to provide qualified small businesses and DBE's with an equal opportunity to
14
Packet Page -99-
9/23/2014 10.B.
participate in the formal competitive processes for the procurement of commodities and services by
the County.
The Policy is not intended to require or to allow partiality toward or discrimination against any small
business or DBE, MBE, WBE, or any other vendor, consultant, contractor or subcontractor on the
basis of gender, race or national origin, or other such factors, but rather to create an opportunity for
small businesses and DBEs, MBEs, WBEs, and all qualified vendors, consultants, contractors and
subcontractors to participate in the County's formal competitive processes. Nothing in this Policy
shall be construed to provide for or require any preference or set -aside based on gender, race,
national origin or any other such factor.
B. Implementing Measures: In an effort to implement this policy, the County may undertake
the following measures:
1. Designate the Purchasing Director to administer this policy.
2. Utilize outreach programs to identify, register and educate small businesses and
DBEs, MBEs and WBEs to participate in the procurement/contract process which
may include:
a. Attending trade fairs which include representatives from these enterprises.
b. Attending meetings and social events wherein these enterprises are present.
C. Utilizing publications aimed at reaching these enterprises.
d. Utilizing Purchasing Directories and other reference sources that list these
enterprises.
e. Publicizing this Policy to encourage these enterprises to participate in the
County's procurement process.
f. Other actions designed to identify opportunities for these enterprises who seek
to provide commodities and services to the County.
3. Maintain a list of these enterprises.
4. Disseminate information regarding competitive opportunities with the County in
order to allow qualified small businesses and DBEs, MBEs and WBEs to participate
in the County's procurement process.
C. Conformity with Applicable Law: The provisions of this section shall be construed in
conformity with applicable state and federal law. To the extent that state law conflicts with federal
law, federal law shall supersede such state law.
1s
Packet Page -100-
may: _
9/23/2014 10.B.
SECTION FIFTEEN: Procedure to Provide Preference to Local Businesses in County
Contracts.
Except where otherwise provided by federal or state law or other funding source restrictions or as
otherwise set forth in this Purchasing Ordinance, purchases of commodities and services shall
give preference to local businesses in the following manner:
(1) "Local Business " defined
Local business means the vendor has a current Business Tax Receipt issued by the Collier
County Tax Collector for at least one year prior to bid or proposal submission to do business
within Collier County, and that identifies the business with a permanent physical business
address located within the limits of Collier County from which the vendor's staff operates
and performs business in an area zoned for the conduct of such business. A Post Office Box
or a facility that receives mail, or a non - permanent structure such as a construction trailer,
storage shed, or other non - permanent structure shall not be used for the purpose of
establishing said physical address. In addition to the foregoing, a vendor shall not be
considered a "local business" unless it contributes to the economic development and well-
being of Collier County in a verifiable and measurable way. This may include, but not be
limited to, the retention and expansion of employment opportunities, support and increase to
the County's tax base, and residency of employees and principals of the business within
Collier County. Vendors shall affirm in writing their compliance with the foregoing at the
time of submitting their bid or proposal to be eligible for consideration as a "local business"
under this section. A vendor who misrepresents the Local Preference status of its firm in a
proposal or bid submitted to the County will lose the privilege to claim Local Preference
status for a period of up to one year.
(2) Preference in purchase of commodities and services by means of competitive bid, request
for proposals, qualifications or other submittals and competitive negotiation and
selection. Under any such applicable solicitation, bidders /proposers desiring to receive
local preference will be invited and required to affirmatively state and provide
documentation as set forth in the solicitation in support of their status as a local business.
Any bidder /proposer who fails to submit sufficient documentation with their bid/proposal
offer shall not be granted local preference consideration for the purposes of that specific
contract award. Except where federal or state law, or any other funding source, mandates to
the contrary, Collier County and its agencies and instrumentalities, will give preference to
local businesses in the following manner:
(a) Competitive bid (local price match option). Each formal competitive bid solicitation
shall clearly identify how the price order of the bids received will be evaluated and
determined. When a qualified and responsive, non -local business submits the lowest
price bid, and the bid submitted by one or more qualified and responsive local
businesses is within ten percent of the price submitted by the non -local business, then
the local business with the apparent lowest bid offer (i.e., the lowest local bidder) shall
have the opportunity to submit an offer to match the price(s), less one (1) dollar, offered
by the overall lowest, qualified and responsive bidder. In such instances, staff shall first
verify if the lowest non -local bidder and the lowest local bidder are in fact qualified
16
Packet Page -101-
9/23/2014 10.B.
and responsive bidders. Next, the Purchasing Department shall determine if the lowest
local bidder meets the requirements of Fla. Stat. Sec.287.087 (Preferences to
businesses with drug -free workplace programs). If the lowest local bidder meets the
requirements of Fla. Stat. Sec. 287.087, the Purchasing Department shall invite the
lowest local bidder to submit a matching offer, less one (1) dollar, within five (5)
business days thereafter. If the lowest local bidder submits an offer that fully matches
the lowest bid, less one (1) dollar, from the lowest non -local bidder tendered
previously, then award shall be made to the local bidder. If the lowest local bidder
declines or is unable to match the lowest non -local bid price(s), then award will be
made to the lowest overall qualified and responsive bidder. If the lowest local bidder
does not meet the requirement of Fla. Stat. Sec 287.087, and the lowest non -local
bidder does, award will be made to the bidder that meets the requirements of the
reference state law.
(b) Request for proposals, qualifications or other submittals and competitive negotiation
and selection. For all purchases of commodities and services procured through the
Competitive Proposals (Section 12) or Competitive Selection and Negotiation (Section
1 1) methods not otherwise exempt from this local preference section, the RFP
solicitation shall include a weighted criterion for local preference that equals 10 percent
of the total points in the evaluation criteria published in the solicitation. Purchases of
professional services as defined and identified under subsection 11B.2 (which are
subject to Section 287.055, F.S.) and subsection 1113.3 (which are subject to Section
11.45, F.S.) shall not be subject to this local preference section.
(3) Waiver of the application of local preference. The application of Local Preference to a
particular purchase or contract may be waived upon approval of the Board of County
Commissioners.
(4) Comparison of qualifications. The preferences established herein in no way prohibit the right of
the Board of County Commissioners to compare quality of materials proposed for purchase
and compare qualifications, character, responsibility and fitness of all persons, firms or
corporations submitting bids or proposals. Further, the preferences established herein in no way
prohibit the right of the County Commission from giving any other preference permitted by
law instead of the preferences granted herein.
(5) Reciprocity. In the event Lee County, or any other Florida county or municipality ( "local
government ") deemed appropriate by the Collier County Board of Commissioners, extends
preferences to local businesses, Collier County may enter into an interlocal agreement with
such local government wherein the preferences of this section may be extended and made
available to vendors that have a valid occupational license issued by that specific local
government to do business in that local government that authorizes the vendor to provide the
commodities and services to be purchased, and a physical business address located within the
limits of that local government. Post Office Boxes are not verifiable and shall not be used for
the purpose of establishing said physical address. In addition to the foregoing, a vendor shall
not be considered a "local business" unless it contributes to the economic development and
well -being of the. said local government whichever is applicable, in a verifiable and measurable
way. This may include, but not be limited to, the retention and expansion of employment
17
Packet Page -102-
9/23/2014 103.
opportunities, the support and increase to that local government's tax base, and residency of
employees and principals of the business located within the limits of that local government.
Vendors shall affirm in writing their compliance with the foregoing at the time of submitting
their bid or proposal to be eligible for consideration as a "local business" under this section. In
no event shall the amount of the preference accorded other local government firms exceed the
amount of preference that such local government extends to Collier County firms competing
for its contracts.
(6) Purview and administration of this Local Preference Policy. This policy shall apply to all
departments and units under the direct purview of the Board of County Commissioners. For
purchases of $50,000 or less, the Purchasing Department shall systematically encourage
departments to include local vendors when soliciting quotations in accordance with this policy.
SECTION SIXTEEN: Payment of Invoices.
A. Agencies under the purview of the Board of County Commissioners shall be in compliance
with Fla. Stat. Sec. 218.70, otherwise known as the "Local Government Prompt Payment Act."
Pursuant to this, the requirements of this section shall apply to the following transactions:
The purchase of commodities and services;
2. The purchase or lease of personal property;
3. The lease of real property.
B. The County Manager shall establish and maintain a process that authorizes the payment of
freight and delivery charges that are not specifically identified on the purchase order of less than
$500.
C. It shall be the responsibility of the County Manager, in consultation with the Clerk's Finance
Director and operating departments, to establish procedures for the timely payment of all
transactions as defined under subsection 16.A hereof. Such procedures shall include, but are not
limited to the following:
1. Formally defining the County's requirements for the content and submission of a
proper invoice, codifying the County's payment requirements and notifying each
vendor of their availability.
2. Steps required for the receipt of all invoices and the prompt return of improper
invoices.
3. Steps required for the resolution of payment disputes between the County and a
vendor.
18
Packet Page -103-
9/23/2014 10.B.
D. Each December, the Purchasing Director and the Clerk of the Courts Finance Director shall
submit a report to the Board listing the number and total dollar amount of interest penalty payments
made during the preceding fiscal year pursuant to Florida Statute 218.
SECTION SEVENTEEN: Advanced Payments for Goods and Services.
Procedures for the pre - payment of goods and services with County funds including, but not
limited to, dues and membership, insurance, maintenance agreements, subscriptions, travel
arrangements, postage, and other purchases as prescribed by the Department of Financial Services
through their Administrative Rules. As provided for in Fla. Stat. Sec. 28.235, the Clerk of the
Circuit Court is authorized to make advanced payments on behalf of the County for goods and
services based on those established procedures.
SECTION EIGHTEEN: Standardization, Cooperative Purchasing Organizations and
Governmental Contracts
A. Where standardization is determined to be desirable by the Board of County Commissioners
or included in the Purchasing Manual, the purchase of commodities may be made by negotiation
with the approval of the purchase by the Board.
B. Annually, the Board of County Commissioners will approve a list of authorized purchasing
cooperative organizations and governmental schedules and contracts. The Purchasing Director may
approve purchases using these approved cooperative organizations, agreements and contracts with
no further action required by the Board providing. that funds have been budgeted for these specific
purposes.
Additionally, the Purchasing Director may join other public agencies in cooperative purchasing
organizations and/or agreements if is determined to be in the County's best interest, and if the
consortium agreement has not had prior Board approval. The use of any new cooperative agreement
must be approved by the Board prior to the use of the agreement.
SECTION NINETEEN: Contract Administration.
A. Contract Document: Every procurement of contractual services or commodities shall be
evidenced by a written document containing all provisions and conditions of the procurement. Said
document shall include, but not be limited to:
A listing of the scope of services to be performed or commodities to be purchased.
2. A provision specifying the criteria and the final date, or number of days, by which
such criteria must be met for completion of the work.
3. A provision specifying the terms of cancellation by the County and where applicable,
a provision specifying the terms of renewal.
19
Packet Page -104-
9/23/2014 10.B.
4. Where applicable, a provision establishing the appropriate types and levels of
insurance to be carried by the vendor. Said provision shall be employed in a manner
consistent with minimum insurance standards approved by the Board of County
Commissioners.
A provision requiring the contractor /vendor to inform the County if he /she has been
convicted of a public entity crime subsequent to July 1, 1989.
A purchase order that embodies these provisions shall be sufficient documentation of the
procurement. Except as otherwise provided in this Purchasing Ordinance, the Purchasing Director
shall determine the circumstances under which a Board approved purchase order (and all documents
included by reference) shall serve as the contract document.
B. Contract Manager: Every procurement of services shall be administered by the requesting
Agency /Department.
C. Contract Changes: Notices issued under a purchase order or contract may be authorized and
executed by the Purchasing Director, except notices that terminate a Board- approved purchase or
contract in its. entirety. Modifications to a Board approved purchase or contract, including but not
limited to change orders, direct material purchases, notices to proceed or non - compliance, stop work
notices, use of approved allowances between line items, supplemental agreements, amendments and
changes by letter may be authorized and executed by the Purchasing Director provided that the
change is not more than ten (10) percent of the current Board approved dollar amount. Such changes
shall be reported monthly to the Board for approval by ratification. All material changes in scope of
agreements must be approved by the Board in advance.
The proviso at the end of the previous paragraph shall not be applicable to term contracts or blanket
purchase orders where the County desires to procure commodities and/or services on an as needed
basis without having to obligate itself to a total contract amount. Rather, such purchases shall be
based on fixed unit prices or other predetermined pricing methods and shall be limited in quantity by
the amount of funds appropriated in the budget -of the operating department(s). Such purchases shall
be subject to all other provisions of this Purchasing Ordinance.
Notices that terminate an entire purchase or contract that was Board approved and contract
modifications that increase the total contract amount beyond the limits set forth above as applicable,
shall require the approval of the Board of County Commissioners. The Board shall have broad
authority, within the limits of the law, to evaluate and approve any recommended contract
modification without requiring further competition.
D. Contract Extension: Extension(s) of a Board- approved contract for commodities or non-
construction services may be requested by the contract manager to the Purchasing Director in writing
for a period not to exceed six (6) months (cumulatively) and shall be subject to the same terms and
conditions set forth in the contract, if the extension period is provided for in the Board approved
contract. The Purchasing Director shall have the authority to authorize and execute all such
extensions, which must be issued prior to the expiration of the contract. Any extension(s) that
exceed six months (cumulatively) shall be approved by the Board of County Commissioners.
20
Packet Page -105-
9/23/2014 10.B.
E. Contract Renewal: The Purchasing Director shall authorize and execute renewals of
contracts for commodities and/or services subject to the following conditions:
1. That the Contractor has performed in a satisfactory manner and that the Purchasing
Director has received a request to renew from the Contract or Project Manager
verifying the Contractor's satisfactory performance.
2. That the Board approved agreement provided for a renewal and is renewed subject to
the terms and conditions set forth in the initial contract. Cost and term modifications
are addressed in the original solicitation document and/or resultant contract.
3. That the renewal is done for a set period of time identified in the solicitation
document and/or contract, commencing at the end of the contract period.
Proposed renewals that fail to meet one or more of the conditions set forth herein will require
the approval of the Board of County Commissioners.
F. Contract Approval: All contracts for commodities and services shall be authorized by the
Board of County Commissioners.
G. Work Orders: The Purchasing Director may execute any work order if the work order is
equal to or below such Board approval parameters for work orders as are set forth in the Board
approved term contract for services under which the work order is generated.
Work orders must be in sufficient detail to audit according to the approved contract.
H. Consent to Assignments of Contract: For all contracts, the Board of County Commissioners
shall approve all assignments of contracts requested by the predecessor contracting party.
1. Authority Limitation and Delegation, Promulgation of Procedures:
The Purchasing Director may delegate to one or more Purchasing Department employees any or all
aspects of the authority vested in the Purchasing Director.
All authority to execute documents that is vested pursuant to this. Section 19 in the Purchasing
Director or any other person shall be subject to the limits of any applicable federal, state or other
law.
J. Payments to Contractors, Vendors and Consultants
Prior to the execution of a formal contract subject to this Purchasing Ordinance, the Purchasing
Director shall establish a formal payment schedule and payment terms within the agreement. Such
terms and conditions shall be consistent with the requirements of all applicable laws and the formal
solicitation documents.
21
Packet Page -106-
9/23/2014 10.B.
In accordance with Fla. Stat. Sec. 218.735(8), the Purchasing Director may establish, subject to
Board approval, procedures to reduce to 5% the amount of retainage withheld from each subsequent
progress payment issued to a contractor where applicable. The Purchasing Director may establish, in
writing, a schedule(s) to further reduce the percentage of cumulative retainage held throughout the
course of the project schedule where warranted and according to law. Recommendation to reduce
the percentage of cumulative retainage shall be subject to the following:
That the term "cumulative retainage" is defined to mean "the dollar total of the funds
retained from all payments issued under the contract divided by the gross dollar total
of all monthly pay requests (or the total of all payment amounts deemed allowable by
the project manager, whichever is less) ".
2. That any decision to reduce retainage shall be formally communicated in a letter to
the Contractor's representative and that the letter affirmatively states that the
Contractor has performed the contract work in a satisfactory manner.
3. That the cumulative retainage not be adjusted until at least 50% of the work has been
completed and payment has been issued.
4. That the Purchasing Director's letter expressly sets forth the percentage of cumulative
retainage to be held for the remaining pay requests.
The Purchasing Director may authorize the partial release or payment of contract retainage to
the contractor prior to final completion of all project work provided that:
The contractor has performed in a satisfactory manner to date as verified in writing by
the Project Manager.
2. The total aggregate work under the agreement is at least 50% completed and accepted
(i.e.; payments equaling at least 50% of the contract amount less retainage have been
issued).
The retainage dollar amount to be released is based upon and consistent with the
prevailing percentage of cumulative retainage being held at the time that the retainage
is released.
SECTION TWENTY: Performance and Payment Bonds.
A contractor or vendor shall provide a surety bond from a surety company to guarantee full
and faithful performance of a contract obligation and the payment of labor and material expended
pursuant to a contract whenever, and in such amounts, as required by statute or otherwise as deemed
necessary by the Purchasing Director. An irrevocable letter of credit from a financial institution
operating within the State of Florida (or other alternative forms of surety as permitted under Florida
law) may be sufficient in place of the performance bond if so provided for in the bid and contract
documents. All such bonds or letters of credit shall be approved as to form by the County Attorney,
and held by the Clerk's Board Minutes and Records Department.
22
Packet Page -107-
9/23/2014 10.B.
SECTION TWENTY -ONE: Unauthorized Purchases.
All purchases made shall be consistent and in compliance with the Purchasing Ordinance.
Any purchase or contract made contrary to the provisions hereof and contrary to Florida law shall
not be approved and the County shall not be bound thereby.
SECTION TWENTY -TWO: Prohibition against Subdivision.
No contract or purchase shall be subdivided to avoid the requirements of this Purchasing
Ordinance or of State law.
SECTION TWENTY - THREE: Protest of Bid or Proposal Award.
The purpose of this section is to accommodate legitimate protests concerning formal
competitive invitations to bid or requests for proposals and recommended contract awards above the
formal competitive bid or proposal thresholds prior to award of a contract by the Board of County
Commissioners.
A. Any actual or prospective bidder or respondent to an Invitation to Bid or a Request for
Proposal, who has a substantial interest and alleges to be aggrieved in connection with the
solicitation or award of a contract, (hereafter referred to as "the protesting party") may protest to the
Purchasing Director, who shall serve as the sole recipient of any and all notices of intent to protest
and all formal protests.
B. With respect to a protest of the terms, conditions and specifications contained in a
solicitation, including any provisions governing the methods for evaluation of bids, proposals or
replies, awarding contracts, reserving rights for further negotiation or modifying or amending any
contract, the protesting party shall file a notice of intent to protest within three (3) days, excluding
weekends and County holidays, after the first publication, whether by posting or formal
advertisement of the solicitation. The formal written protest shall be filed within five (5) days of the
date the notice of intent is filed. Formal protests of the terms, conditions and specifications shall
contain all of the information required for formal protests of recommended contract awards as set
forth under subsection C. The Purchasing Director, shall render a decision on the formal protest and
determine whether postponement of the bid opening or proposal /response closing time is
appropriate. The Purchasing Director's decision shall be considered final and conclusive unless the
protesting party files an appeal of the Purchasing Director's decision.
C. Any actual or prospective bidder or respondent to an Invitation to Bid or a Request for
Proposal who desires to protest a recommended contract award shall submit a notice of intent to
protest to the Purchasing Director within two (2) calendar days, excluding weekends and County
holidays, from the date of the initial posting of the recommended award.
D. All formal protests with respect to a recommended contract award shall be submitted in
writing to the Purchasing Director for a decision. Said protests shall be submitted within five (5)
23
Packet Page -108-
9/23/2014 10.B.
calendar days, excluding weekends and County holidays, from the date that the notice of intent to
protest is received by the Purchasing Director, and accompanied by the fee, as set forth below. The
protesting party must have standing as defined by established Florida case law to maintain a protest.
The formal protest shall contain, but not be limited to the following information:
1. Name and address of County Agency affected and the solicitation number and title.
2. The name and address of the protesting party.
A statement of disputed issues of material fact. If there are no disputed
material facts, the written letter must so indicate.
4. A concise statement of the ultimate facts alleged and of any relevant rules,
regulations, statutes, and constitutional provisions entitling the protesting party
to relief.
5. The protesting party's entitled demand for the relief.
6. Such other information as the protesting party deems to be material to the issue.
The formal protest shall contain all arguments, facts or data supporting and advancing the
protestor's position. Under no circumstances shall the protestor have the right to amend,
supplement or modify its formal protest after the filing thereof. Nothing herein shall
preclude the County's authority to request additional information from the protesting party
or other bidders or proposers in conjunction with the review and rendering of decisions on
the protest, including any subsequent appeal.
E. In the event of a timely protest of contract award consistent with the requirements of this
section, the Purchasing Director shall not proceed further with the award of the contract until all
appropriate administrative remedies as delineated under this section have been exhausted or until
the Board of County Commissioners makes a determination on the record that the award of a
contract without delay is in the best interests of the County. During this process, the protesting party
shall limit their communications with the County to the Office of the County Attorney, and neither
the protesting party, their agents or their representatives shall have any private contact or
discussions with individual County Commissioners, the County Manager, other County employees,
or any independent hearing officer (where applicable) regarding the protest except such
communications as may be required or permitted during a hearing, if applicable, or a meeting of the
County Commission wherein the solicitation or award is to be considered.
F. The Purchasing Director shall review the merits of each timely protest and in consultation
with the contract manager and other appropriate County staff, issue a decision stating the reasons for
the decision and the protesting party's rights of appeal under this section. Said decision shall be in
writing and mailed or otherwise furnished to the protesting party. The decision of the Purchasing
Director shall be final and conclusive unless the protesting party delivers a subsequent written notice
of appeal to the Purchasing Director within two (2) calendar days, excluding weekends and County
holidays from the date of receipt of the decision. In filing a written objection to the Purchasing
24
Packet Page -109-
9/23/2014 10.B.
Director's decision, the protestor shall not introduce new arguments or alter in any other way their
protest submission. An appeal of the Purchasing Director's decision shall be limited to a review of
the grounds set forth in the formal protest, and no new grounds or arguments will be introduced or
considered.
G. In the event of a subsequent appeal pursuant to subsection F, the County Manager shall
determine whether to appoint an independent Hearing Officer to review the formal protest and the
Purchasing Director's decision. The Hearing Officer's review shall be limited to the grounds set
forth in the formal protest, and shall be for the purpose of determining whether the County's
intended action is arbitrary, capricious, illegal, dishonest or fraudulent. The protesting party shall
have the burden of proof. The Hearing Officer shall consider the formal protest, the Purchasing
Director's decision, and supporting documents and evidence presented at the hearing. In any hearing,
irrelevant, immaterial or unduly repetitious evidence shall be excluded. All other evidence of a type
commonly relied upon by reasonably prudent persons in the conduct of their affairs shall be
admissible whether or not such evidence would be admissible in a trial in the courts of Florida. The
Hearing Officer may grant the motion of any person having standing under Florida law to intervene
in the proceedings. Persons or parties shall have the right to be represented by counsel in the
proceedings, to call witnesses, and present evidence; provided, however, that the Hearing Officer
shall not have the right to compel attendance of witnesses or to permit or compel any discovery.
The Hearing Officer will have a maximum of 60 days to schedule and conduct a hearing into the
matter and issue a recommended finding of fact and an opinion in writing to the County Manager or
designee for submission to the Board of County Commissioners. Should the Hearing Officer find in
favor of the County, the protesting party pay, in full, the costs of the Hearing Officer. If the Hearing
Officer's recommended decision is in favor of the protesting party, then the County will assume this
cost.
The County Manager's discretion as to whether to appoint a Hearing Officer shall in no way afford
the protestor the right to demand such an appointment or hearing. The decision of a Hearing Officer
on a protesting party's appeal shall be submitted to the Board for its consideration as part of a final
award decision. Nothing herein shall be construed as creating a right of judicial review of the
Hearing Officer's decision, nor shall such decision be binding upon the Board. Additionally, nothing
herein shall be construed as limiting the Board's right to reject any and all bids or proposals.
H. Decisions of the Purchasing Director and Hearing Officer (where applicable) will be
provided to the protestor and other interested parties prior to the award recommendation being
presented to the Board of County Commissioners. Neither the County Manager's decision nor the
Hearing Officer's recommended decision shall be construed as an award recommendation triggering
additional rights of protest pursuant to this policy. Notwithstanding anything set forth herein to the
contrary, the Board of County Commissioners shall retain the authority to make the final award
decision.
I. Failure to file a formal protest within the time and manner prescribed by this policy shall
constitute a waiver of the right to protest by any protesting party as defined by subsection "A" of this
policy.
25
Packet Page -110-
9/23/2014 10.B.
J. As a condition of filing a formal appeal to the Purchasing Director's initial finding, the
protesting party shall submit a non - refundable filing fee for the purpose of defraying the costs of
administering the protest. The filing fee shall be submitted with the formal protest. Failure to pay the
filing fee shall result in the denial of the protest. The amount of the filing fee shall be as follows:
Estimated Contract Amount
Filing Fee
$250,000 or less
$500
$250,000.01 to $500,000
$1,000
$500,000.01 to $5 million
$3,000
$5 million or more
$5,000
This fee may be modified by Resolution of the Board of County Commissioners.
SECTION TWENTY -FOUR: Contract Claims.
All actual or prospective claims arising against the County from contractors, vendors or any
other party in direct privity with the County to provide goods or services shall first be directly
addressed by the parties' administrative representatives in a manner consistent with the agreement
between the parties and in accordance with the County's procedures Manual.
For any prospective or actual claims or disputes arising under any contract entered into by
the County, the Purchasing Director must determine the facts of the dispute. All contract claims
should be reported to the County Attorney's Office and Clerk's Finance for proper documentation
and recording and to the Board for determining action.
SECTION TWENTY -FIVE: Exigent Circumstances, Emergency and Board Absence
Purchases.
In case of an exigent circumstance, which is defined as any circumstance requiring
immediate action or attention, a valid public emergency, or during the Board's extended recess
session(s) (all efforts should be made to obtain Board approval prior to anticipated recesses)
whereby a purchase is necessary, the County Manager shall authorize the Purchasing Director to
secure by open market procedure as herein set forth, any commodities or services. The County
Manager shall have the authority to take actions including, but not limited to the issuance of
contracts, change orders, and/or supplemental agreements. Any action shall be reported at the first
available meeting of the Board of County Commissioners. The County Manager under the same
consultations noted above shall further be authorized to approve payment(s) to vendors at the time of
or shortly after purchase should the circumstances warrant. These payments shall be reported at the
first available meeting of the Board.
This section in no way constrains the provisions of Collier County's Civil Emergency
ordinances or powers and authority pursuant to Fla. Stat. ch. 252, Emergency Management.
26
Packet Page -111-
9/23/2014 10. B.
SECTION TWENTY -SIX: Inspection and Testing.
The Purchasing Director shall inspect, or supervise the inspection of, or cause to be
inspected, all deliveries of commodities or services to determine their conformance with the
specifications set forth in an order or contract.
A. Inspection by Operating Department: The Purchasing Director shall authorize operating
departments to inspect all deliveries made to such operating departments under rules and regulations
which the Purchasing Director shall prescribe.
B. Testina: The Purchasing Director shall have the authority to require chemical and physical
tests of samples submitted with bids and samples of deliveries which are necessary to determine
their quality and conformance with specifications. In the performance of such tests, the Purchasing
Director shall have the authority to make use of laboratory facilities of any Agency of the County or
of any contracted outside laboratory.
SECTION TWENTY - SEVEN: Purchasing Card Program.
The Purchasing Director shall be responsible for the overall management and operation of
the County's purchasing card program. For the purpose of this Purchasing Ordinance, a purchasing
card is a credit card officially assigned to specific employees under the purview of the Board of
County Commissioners' agency for the purpose of transacting small and/or strategic, contract, travel
related, and other purchases made according to Section Eight. The Purchasing Director shall be
authorized to assign cards to employees for these purchases. The Purchasing Director shall be
responsible for establishing the following dollar limits for each assigned card:
A. Single Transaction Limit: Not to exceed $1,000 per card unless otherwise authorized by the
Purchasing Director.
B. Monthly Spending Limit: Not to exceed $10,000 per card unless otherwise authorized by the
Purchasing Director.
C. Strategic Purchases: The Purchasing Director may utilize (or delegate the authority to other
Agency staff to utilize) a purchasing card to place orders that exceed the limits set forth under this
section in instances where one or more of the following is true:
1. Where the purchase is to address a valid public emergency; or
2. Where the County will earn revenue through card program rebates; or
3. Where a vendor is requiring the County to order by purchasing card.
27
Packet Page -112-
9/23/2014 10. B.
SECTION TWENTY- EIGHT: Conflict of Interest.
When procuring commodities or services using County .funds, each entity and employee
under the purview of the Board of County Commissioners shall comply with all applicable state and
federal laws concerning ethics and conflict of interest. For state or federally funded projects, County
entities and employees shall comply with all legal requirements, including the requirements of Part
85, Section 36(b)(3) of the Housing and Urban Development Code.
SECTION TWENTY NINE: Debarment and Suspension.
The County Manager may suspend and/or debar vendors, contractors, consultants and other
interested and affected persons from active participation in obtaining County contracts upon
approval of the Board. The purpose of any such action shall be to protect the County's interests and
the integrity of the County's contracting process. The suspension and debarment processes shall be
considered to be separate from and in addition to the award evaluation and vendor performance
evaluation processes authorized elsewhere in this Purchasing Ordinance
A. Definition of Terms: For the purposes of this section, the following terms have been defined
as follows:
Affiliate refers to associated business entities or individuals that control or could
control the contractor or are controlled by the contractor or could be controlled by
the contractor.
2. Civil Judgment refers to a judgment or finding of a civil offense by any court of
competent jurisdiction.
3. Contractor means any individual or legal entity that:
a. Directly or indirectly (e.g.; through an affiliate), submits offers for or is
awarded, or reasonably may be expected to submit offers for or be awarded,
a County contract for construction or for procurement of commodities and
services, including professional services; or
b. Conducts business, or reasonably may be expected to conduct business, with
the County as an agent, surety, representative or subcontractor of another
contractor.
4. Conviction means a judgment or conviction of a criminal offense, felony or
misdemeanor, by any court of competent jurisdiction, whether entered upon a
verdict or a plea, and includes a conviction entered upon a plea of nolo contendere.
5. Debarment means action taken by the County to exclude a contractor from County
contracting and County- approved subcontracting for a reasonable, specified period as
provided herein.
28
Packet Page -113-
9/23/2014 10.B.
6. Preponderance of the Evidence means proof by information that, compared with that
opposing it, leads to the conclusion that the fact at issue is more probably true than
not.
7. Subcontractor: Any individual or legal entity that offers or agrees to provide
commodities or services to a party deemed to be a contractor under this section.
8. Suspension refers to action taken by the Purchasing Director to temporarily disqualify
a contractor from County contracting or County- approved subcontracting pending
action of the Board.
B. Suspension: The Purchasing Director shall have the authority to recommend to the Board the
suspension of a contractor, subcontractor or person from consideration for award of contracts if there
appears to be a reasonable basis for debarment as set forth herein. If a suspension precedes a
debarment, the suspension period shall be considered in determining the debarment period. The
suspension period shall not exceed three months without the approval of the County Manager.
C. Debarment:
Causes for Debarment: The prospective causes for debarment include one or more of
the following:
a. Conviction for commission of a criminal offense as an incident to obtaining or
attempting to obtain a public or private contract or subcontract, or in the
performance of such contract or subcontract.
b. Conviction under state or federal law of embezzlement, theft, forgery, bribery,
falsification or destruction of records, receiving stolen property, or any other
offense indicating a lack of business integrity or business honesty which
currently, seriously and directly affects responsibility as a contractor.
C. Conviction under state or federal antitrust laws arising out of the submission
of bids, proposals or other competitive offers.
d. Violation(s) of County contract(s) provisions, which is (are) deemed to be
serious and to warrant debarment, including the failure, without good cause, to
perform in accordance with the terms, conditions, specifications, scope,
schedule or any other provisions of the contract(s).
Refusal to provide bonds, insurance or other required coverage and
certifications thereof within a reasonable time period.
Refusal to accept a purchase order, agreement or contract, or perform
accordingly provided such order was issued timely and in conformance with
the solicitation and offer received.
29
Packet Page -114-
9/23/2014 10.B.
g. Presence of principals or corporate officers in the business of concern, who
were principals within another business at the time when the other business
was suspended or debarred within the last three years under the provisions of
this section.
h. Violation of the ethical standards set forth under applicable state or county
laws.
i. Debarment of the contractor by another public agency.
j. Any other cause deemed to be so serious and compelling as to materially
affect the qualifications or integrity of the contractor.
2. Procedure:
a. The county department requesting the suspension or debarment action shall
submit to the Purchasing Director a written complaint setting forth the
reason(s) for seeking debarment and shall identify a recommended debarment
period.
b. The Purchasing Director shall review the complaint, verify whether it is
compliant with the provision of this Purchasing Ordinance, direct any
appropriate changes and forward the complaint to the contractor.
The contractor shall review the complaint and shall provide a written response
(with supporting documentation) to each allegation. The response shall be
provided to the Purchasing Director within ten (10) business days of receipt of
the notice of allegations. In the event that the contractor fails to respond to the
complaint within the prescribed time period, the complaint, as forwarded to
the contractor, shall become an effective suspension or debarment decision
without further appeal.
d. In the event that the contractor files a timely and complete response to the
complaint and the suspension or debarment action is based upon a conviction,
judgment or other event(s) where there is no significant dispute over material
facts, the Purchasing Director shall determine the period of recommended
suspension or debarment on the basis of the undisputed material information
set forth or referenced in the complaint, the contractor's reply and the
parameters set forth in this section. In the event that the Contractor objects to
the Purchasing Director's recommendation, the Contractor shall have a
maximum of three business days to file an appeal of the debarment decision
with the Purchasing Director. The appeal will be forwarded to and considered
by the County Manager, who will review the record compiled by the initiating
department and the contractor. Should the County Manager overturn the
Purchasing Director's decision; the County Manager shall formally cite the
reasons for doing so.
30
Packet Page -115-
9/23/2014 10.B.
e. In the event that the contractor files a timely and complete reply to the
complaint and where the facts are in dispute, the Purchasing Director will
convene a committee (hereinafter referred to as "the committee ") consisting of
at least three individuals who will review the complaint and the contractor's
reply. The County Manager shall formally appoint the committee, which will
generally consist of county employees, none of whom shall be a member of
the department initiating the complaint. At the discretion of the County
Manager, a member from private industry with a particular area of relevant
expertise may be appointed to the committee, provided that this member is not
a direct or indirect competitor of the firm in question. The Office of the
County Attorney shall appoint a representative to attend the hearing. The
representative shall not be considered a voting member of the committee, but
shall be available to provide legal counsel to the committee as necessary. All
members appointed to serve on the debarment committee shall disclose, to the
Purchasing Director any actual or prospective conflicts of interest at the time
of appointment or at the time in which the member becomes aware of the
actual or prospective conflict.
f. The Purchasing Director shall chair the committee and serve as the Purchasing
Department's representative to the committee. The Purchasing Director shall
preside over and facilitate the deliberations of the committee as a non - voting
member and serve as the County's liaison to the Contractor. All voting
committee members are prohibited from having any communication regarding
the issue outside the committee deliberations with any of the parties involved
in the specific suspension or debarment or their representatives until after the
committee decision has been issued or, in the event of an appeal of that
decision by the contractor, until the conclusion of the appeal process. All
committee deliberations are subject to Section 286.011 Fla. Stat.
g. Where the material facts are in dispute, the committee shall evaluate the
evidence, judge the credibility of witnesses and base its decision upon the
preponderance of the evidence. Should the contractor fail to appear at the
hearing, the contractor shall be presumed to be unqualified and or non-
responsive and shall be subject to suspension or debarment. The committee
decision shall be by a majority vote of those voting members in attendance.
The committee shall be the sole trier of fact. In the event that the committee
decides to impose suspension or debarment, the decision will formally
include, but not be strictly limited to the following information:
1) The specific reasons for the action;
2) The scope of the suspension or debarment; and
3) The period of suspension or debarment, including the effective and
expiration dates.
The committee's decision shall be issued in writing within 20 business days of
the conclusion of the hearing unless the committee extends this period for
good cause.
31
Packet Page -116-
L—
9/23/2014 10.B.
h. The Purchasing Director shall forward the committee's decision to the
contractor and affiliates involved. Should the contractor object to the
committee's decision, the contractor shall have a maximum of three business
days to file an appeal of the decision with the Purchasing Director. The appeal
will be forwarded to and considered by the County Manager, who will review
the record compiled by the initiating department, the contractor and the
committee. Should the County Manager overturn the committee's decision; the
County Manager shall formally cite the reasons for doing so.
Final recommendation for debarment shall be approved by the Board.
Debarment Period:
a. The committee shall recommend the period of debarment. The debarment
period shall be commensurate with the severity of the cause(s) and approved
by the Board.
b. The committee (having the same or different composition) may recommend to
the Board a reduction in the debarment period upon a written request from the
contractor to do so, based on one or more of the following reasons:
1) Newly discovered material evidence;
2) A reversal of the conviction, civil judgment or other action upon which
the debarment was based;
3) Bona fide change in ownership or management;
4) Elimination of other causes for which the debarment was imposed; *or
5) Other reasons that the committee might deem appropriate.
The contractor's request shall be submitted to the Purchasing Director in
writing and shall be based on one or more of the aforementioned reasons.
C. The decision of the Board regarding a reduction of the debarment period is
final and not subject to appeal.
4. The Effects of Debarment:
a. Debarred contractors are excluded from receiving County contracts.
Departments shall not solicit offers from, award contracts to, or consent to
subcontractors with debarred contractors, unless the County Manager in
consultation with the Board Chair or Vice -Chair determines that emergency or
single source conditions exist and grants written approval for such actions.
Debarred contractors are excluded from conducting business with the County
as agents, representatives, subcontractors or partners of other contractors.
32
Packet Page -117-
9/23/2014 10.B.
b. The Purchasing Department shall notify all Board departments of the final
debarment decision and the effects of that decision with regard to conducting
business with the debarred entity(ies) during the debarment period.
5. Continuation of Current Contracts:
a. Departments may not renew or otherwise extend the duration of current
contracts with debarred contractors in place at the time of the debarment
unless the Board determines that it is in the best interests of the County to
allow the contractor to continue or finish the work within an additional,
limited period of time.
b. Debarment shall constitute grounds for terminating an open agreement with a
contractor. However, the contract manager may, with Board approval, permit
completion of an open contract(s) provided that the debarred contractor has
performed in a satisfactory manner to date under the open contract(s) unless
otherwise directed by the Purchasing Director.
6. Restrictions on Subcontracting:
a. When a debarred contractor is proposed as a subcontractor for any subcontract
subject to County approval, the department shall not consent to subcontracts
with such contractors unless the County Manager in consultation with the
Chair or Vice -Chair determines that emergency or single source conditions
exist, thus justifying such consent and approves such decision.
b. The County shall not be responsible for any increases in contract costs or
other expenses incurred by a contractor as a result of rejection of proposed
subcontractors pursuant to subsection 6.a provided that the subcontractor was
debarred prior to the submission of the applicable bid or proposal offer.
7. The Scope of Debarment: Debarment applies to all officers, Directors, Managers,
principals, Purchasing Directors, partners, qualifiers, divisions or other organizational
elements of the debarred contractor, unless the debarment decision is limited by its
terms to specific divisions, organizational elements or commodity /services. The
committee's decision includes any existing affiliates of the contractor if they are
specifically named and are given written notice of the proposed debarment and an
opportunity to respond. Future affiliates of the contractor are subject to the pre-
existing terms of the committee's decision.
SECTION THIRTY: Waiver of Ordinance.
The Board of County Commissioners shall have the authority to waive any and all
Purchasing Ordinance provisions within lawful guidelines and upon formal Board action.
33
Packet Page -118-
9/23/2014 103.
SECTION THIRTY -ONE: Conflict and Severability.
In the event this Purchasing Ordinance conflicts with any other ordinance of Collier County
or other applicable law, the more restrictive shall apply. If any phrase or portion of the Purchasing
Ordinance is held invalid or unconstitutional by any court of competent jurisdiction, such portion
shall be deemed a separate, distinct and independent provision and such holding shall not affect the
validity of the remaining portion.
SECTION THIRTY -TWO: Inclusion in the Code of Laws and Ordinances.
The provisions of this Purchasing Ordinance shall become and be made a part of the Code of
Laws and Ordinance of Collier County, Florida. The sections of the Purchasing Ordinance may be
renumbered or relettered to accomplish such, and the word "ordinance" may be changed to
"section," "article," or any other appropriate word.
SECTION THIRTY - THREE: Effective Date.
"Phis Purchasing Ordinance shall be effective upon filing with the Department of State.
PASSED AND DULY ADO_ PTED by the Board of County Commissioners of Collier
County. Florida. this day of � - �r— , 2013.
A .I.. 'ES7::_
DWIGHT,E. $ROCK, Clerk
Attest as t0 y Clerk
S
l a#ur o
l_
Appro� orm and legality:
Teffrev
County
BOARD OF COUNTY COMMISSIONERS
COLLIER COUNTY, FLORIDA
M.
WOMAN .
34
Packet Page -119-
ESQ.
S EP 2 6 1995
RESOLUTION NO, 95 -552
A RESOLUTION ENACTED PURSUANT TO COLLIER
COUNTY ORDI14ANCE 110. 87 -65 APPROVING AND
ADOPTING A CASH MANAGEMENT AND INVESTMENT
POLICY
WHEREAS, Collier County Ordinance 110. 87 -65 provides
that th„ Board of County Commissioners shall establish by
resolution a Cash Management and Investment Policy for the
Clerk tc the Board to purchase and sell investment securities
at prev;siling market prices /rates on behalf of and in the
name of the Board of County CommissiOtiers when sufficient
surplus funds have accumulated in the accounts of the Board
Of County Commissioners or when the Board has on hand or has
accumulated monies by reason or the sale of its own securi-
ties; arid
WHI;REAS, the Board adopted Resolution No. 87 -65 on
October 13, 1987 which provided for and approved and adopted
an Investment Policy which has been in effect since its
adoption; and
WHEREAS, the Board has de-ermined that it is appropriate
and in the best interests of Collier County to revise its
Investment Policy pursuant to the requirements of Section
218.415, Florida Statutes (1995); and
WHEREAS, the Clerk to the Board has recently prepared
and ten9ered a revised Cash Management and Investment Policy
which neets the requirements of Section 218.415, Florida
Statute; (1995); and
WHEREAS, the Clerk and the Board have together subse-
quently drafted a revised Cash Management and Investment
Policy (hereinafter "Investment Policy ") to be adopted by the
Board prior to October 1, 1995.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that:
1. The Investment Policy attached hereto as Exhibit
"A" is hereby approved and adopted.
2. Resolution No. 87 -248 and the Investment Policy
attached thereto are hereby superseded.
Packet Page -120-
23/2"' ' " " "
9/
SEP 2 6 1935
This Resolution adopted this 26th day of September, 1995
after motion, second and majority vote favoring same.
ATTEST.: BOARD OF COUNTY COMMISSIONERS
DWIGHT E. BROCK, Clerk, COLLIER COUNTY, FLORIDA
-: - By
YE TTHEWS, Chairman
Approved.as,to form and
"legal sufficiency:
avid C. We 1
Chief Assistant unty Attorney
dcvhvl14522
Packet Page -121-
9 /nn inne w w n r t
Collier County, Florida
Investment Policy
SCOPE
9/23/2014 10.B. ,
-1
Investment policy applies to all financial assets under the direct control of the Board of County
Commissic ncrs.
"WESTM ENT OBJECTIVES
Primary CRyectivcs:
I. Preservation of capital and protection of investment principal.
2. Maintain sufficient liquidity to meet reasonably anticipated operating and capital
requirements.
}. Match assets to liabilities. to the extent possible.
Secondary Qbjectives:
1. Maximize return and preserve purchasing poti<•cr as mcasnr =d by a noted market index such
as the Consumer Price Index.
2. Control risks and diversify investments through appropriate rversight and regular rcporling.
PERFOR —MANCE MEASURES
Objective is to exceed the annual yield of the Florida Ixal Government Surplus Trust Fund (SBA).
PR DEN £AND ETHICAL STANDARDS
.Invcsimcni., shall be made with judgment and care (under circumstances then prevailing) %%hick persons
of prudent%:, discretion and intelligence exercise in the management of their own affairs, not for
spccuIation, but for im- c9ment. considering the probable safety of their capital as well as the probable
income to be derived. The standard of prudence to be used by investment officials shall be the "prudent
person" standard and shall be applied in the context of managing an overall portfolio. Investment o?iccrs
acting in ac xordancc with written procedures and the investment policy and exercising due diiigence shall
be 'tlicvcd of personal responsibility for an individual security's credit risk or market price changes,
provided deviations from expectation
control advt.rse developments. s arc reported in a timely fashion and appropriate action is taken to
OfFtccrs and employees involved in the investment process shall refrain from personal business activity
that could omflict with proper execution of the investment program. or which could impair their tibility to
make impaitial investment decisions. Employees and investment officials shall disclose to the Chief
Financial O Tcer any material financial interests in financial institutions that conduct business iviihin this
jurisdiction end they shall further disclose any material personal financial /investment positions that could
be related to the performance of the portfolio. Employees and officers shall subordinate their Personal
investment transactions to those transactions made in the portfolio. particularly with regard to the time of
purchase and sales. Employees shall also disclose any gigs or enteriainincnt received as a result of their
employment in regard to the investments of Collier County.
EXHIBIT A
!3 4 C-
Packet Page -122-
I
9/23/2014 10. B.
z SEP 2 6 1995
.- Bond Maps are appropriate when undertaken in conformity with the prudent person Iest and m•eralf
Portfolio objectives in order to (a) increase yield to maturity without affecting the asset liability match; (b)
reduce maturity while maintaining or increasing the yield to maturity- or (c) increase portfolio quality
without aff,=ing the asset liability match while maintaining or increasing the yield to maturity.
The County should not. however. have a policy against selling securitics at a foss if undertaken in
connection with prudent portfolio management.
A TFIORIZED I VVESTMF:NTS
1. Florida Local Government Surplus Tntst Fund (SBA)
2. US CJM'Cmmcnt Securities - Direct Obligations
3. US Federal Agencies - Backed by Full Faith and Credit of US Government
4. US Federal Instrumentalities - US Federal Agency Securititw Not Backed by Full Faith and
Credit of US Gmernment. except for Student Loan Marketing Association
5. Certificates of Deposit - Collaleralized with US Government Securities or Federal Agencies
6. Repurchase Agreements (As defined herein)
7. Fixed Income Mutual Funds - Collateralized with US Grrccrnmcnt Securities or Federal
Agencies
8. Domestic Bankers Acceptances - Rated "AA" or higher. and inventory based
9. Prime Commercial Paper - Rated "A -1" and "P -1 ". and backed by a LOC rated "AA" or
higher
10. Tax - Exempt Obligations - FUlcd "AA" or higher and issncdt by state or local governments
11. Now Account - Fully collatemlized in accordance with Chapter IRO Florida Statutes, limited
to Dcpo;itory Bank/Conccntration Bank
Limitations on Variable Rate Securities - Acceptable only if the rate is a straight floating rate that is set in
a direct, as opposed to inverse. relationship to a single index.
Limitations on Mortgage Securities (CMOs)
1.. issued only M• US Federal Agencies or IiS Federal fnstnrmcmali6cs.
1. Pass the 'Federal Financial investm
pnrchasc. and cnt Examination Council (FFIEC) test at time of
3. Have an average life of five (5) Scars or less and have an absolute final maturih• of no more
than fificcn (I5) years at zcro PSA. Thc term "zcro PSA" means that all interest and
principal payments arc guaranteed to be made by the stntcd rival maturity assurning no
prepayments.
Specifically prohibited investments include, but are not limited to:
Interest only strips of mortgage hacked securities
1xvCragcd bonds
Structured notes or financings other than mortgage securities that meet the provisions of the
this investment policy (permit callable and step up coupons)
Variable talc securities 11IN set a rate based on an inverse rclalionship to an index
Variable rate debt that scls a rate based on more than a singic index
MAT RIT Y AND LIQUIDITY REQUIREMENTS
The objective will be to match investment cash flow and maturity will, knorun cash needs and anticipalcd
cash flow requirements (i.e.• match assets to liabilities) to the extent possiitle.
/39�
Packet Page -123-
3
9/23/2014 10.B.
SEP 2 6 1995
lnvwmcnt of funds shall have final maturities of not more than five (5) years. except for:
1. SBA - No stated final maturity.
2. Certificates of Deposit - 1 Year
3. Repurchase Agreements - 90 Days
4. Banker; Acceptances - 120 days
5. Prime Commercial Paper - 120 Days
G. Fixed Income Mutual Funds - No staled final rrtatttrity. However, undcrlving US
Government Securities and Federal Agencies have average maturity of one year.
7. Mortgage Securities - Have an average life of fivc (5) years .;r less and have an absolute final
maturity of no more than fifteen (15) years at Zero PSA.
Utilization Of Mortgage Securities:
L Mortgage securities shall not be used to match liabilities that are reasonably definable as to
amount and disbursement date.
2. Mortgage securities should only be used to invest funds asFo -ated with reserves or liabilities
that are not associated with a specifically identified cash flow schedule.
3. Mortgage securities should be used to prudently enhance the -.'turn on the portfolio.
Exception fir Refunding Bond Escrows - US Crovernment .Securities ind Federal Agencies deposited into
an escrow r..cotlnt in connection with the refunding of a County bond isnie can have a final maturity of
more than five years.
P RTF LlO COMPOSITION
lmestment T3Z
Maximum
I. Florida Local Government Surplus Trust Fund (SBA)'
'�Sr
2. US Government Securities
/Portfolio
100%
3. US Federal Agencies"
l�„�'
4. US Federal Instnimcrtalitics"
50"/„
5. Certificates of Deposit
3 3 0"x„ %
G. Repurchase Agreements
7. Fired Income Mutual Funds
0
g. Domestic Bankers Acceptances
10%
10%
9. Prime Commercial Paper
10. Tax - Exempt Obligations
10%
10%
• Does not include bond proceeds invested in constniciion funds established under a bond resolution.
Funds in the Now Account will rot be considered a part of the portfolio fOr purposes of this section
" Limitations on Mortgage Securities - Limited to 25% of the total portfolio.
RISK AND DIVERSIFICATION
Collier County will diversify its investments by security type. specific maturity, dcaler or bank through
which financial instruments are bought or sold. Subject to the limitations tinder Portfolio Composition,
the following arc the limits on individual issuers or dcaler or bank-
- No limitations on SBA- Now Account, US Government Securities, US Federal Agencies or
US Federal Instrumentalities.
- Limitations on other investmcnis are 10 %of total portfolio.
113 Fiff
Packet Page -124-
mat.... •
9/23/2014 10.B.
SEP 2 6 1995
A TII RiZED IAtVE TMENT IN TIT TIONS AND DEALERS
The Chief Financial officer will maintain a list of the financial institutions authorized to provide
invesimcnt services. These shall include "primary" dealers and regional dealers that (1) qualify under
Securities & Exchange Commission Rule 150 (Uniform Net Capital Rule), (2) have capital of at least
S50,000,000 and (3) have an institutional sales office and an institutional salts professional domiciled in
Florida. NO public deposit shall be made except in a qualified public depository as established by state
laws.
All financial institutions and broker /dealers who desire to become qualified bidders for investment
transactions must supply the Chief Financial OMcer with the following:
1. audited financial statements,
2. certification that no material adYCrsc events have occurred since the issue of their most
recent financial statements,
3. proof of National Association of Securities Demers, the registration (where applicable) or
other securities registration.
4, proof of state registration, when required.
S. certification of having read and agreeing to abide by the investment Policy and depository
contracts in piace in Collier County, and
6. a copy of the firm's established internal oversight and review guidelines controlling business
with grn•crnmcntat entities.
Each financial institution and broker /dealer must also agree to notify tic Chief Financial Officer in the
event of material adverse events affecting their capital adequacy. Each institution and brokcr /dealer shall
provide their written markup schedule and guidelines to the Chief Financial Officer. Each institution and
broker /dealer sha1I disclose to the Chief Financial Officer any proposed trade that would exceed the
guidelines Frior to executing the trade.
The Chief Financial Officer shall do a background check on each broker with whom the Count,.- does
business which shall, at a minimum, consist of contact ing the State or NASD for regulatory & disciplinary
dates which arc maintained on brokers.
An annual review of the financial condition and registration of qualified bidders will be conducted by the
Chief Financial Officer. A current audited financial statement is rcquiTCd to be on file for each financial
institution and brokcr /dealer authorized to provide investment services. Criteria for addition to or deletion
from the lists will be based on the following: (1) state late. Board of County Commissioners Ordinance
Code;, or lr;vcstmcnt Policy requirements where applicable, (2) perzeivcd financial difficulties. (3)
consistent lick of competitiveness, (4) lack of experience or familiarity of the account representative in
providing service to large institutional accounts, (S) request of the institution or brokcr /dealer, and (6)
when deemcl in the best interest of the Board of County Commissioners.
If there a at bast 10 trades executed in a single year through other than a competitive bid process . no
more than 3 r/. of the total dollar amount of sales and trades executed through other than a competitivc
bid process can be conducted with a single dealer.
THIRD- PA 12TY CUSTODIIAL AGREEMENTS
All security transactions, including collateral for repurchase agreements, entered into by Collier County
shall be concuete d on a delivery- versus - payment (D VP) basis.
All seeuritia; shill be properly designated as an a:sct of the Board of Count}• Commissioners, Securities
will be held by a third party custodian authorized by the Chief Financial Officer and n•idcnccd by
/39 F
Packet Page -125-
9/23/2014 10. B. r
SEP 1 61995
safekeeping; receipts or advice of the transaction. The third piny custodian shall be a third part
custodian tank or other third party custodial institution with certified fiduciary powers, chancred by the
United Stares Government or the State of Florida and have combined capital and surplus of at least
S100,000,0y).
The Chief Financial Officer will execute third party custodial agreements approved by the Board of
County Commissioners with the banks and depository institutions. Such ;rgrccmcnt will include letters of
authority from the Chief Financial Officer %%ilh details as to responsibilities of each party, notification of
security purchases, sales, delivery, repurchase agreements and wire transfers. safekeeping and transaction
costs, procedures in case of wire failure or other unforeseen mishaps including liability of each pang,
MASTF,R 'REPURCHASE AGREEMENTS
I. Each firm involved inn repurchase agreement must execute the County's Master Repurchase
Agreement which will be based on the Public Sccuritics Association (PSA) Master
Repurchase Agreement.
2. A third party custodian shall hold collateral for all repurchase agreements with a term of
more than one business day.
3. Collateral requirements will be based on economic and finn;tcial conditions existing at the
time of execution. as well as the credit risk of the institution v. -hich enters into the repurchase
agreement with the County. The market value of the co'latcral shall not be Icss than the
following:
Matti.-ity of US Go%-crnmcnt US Federal Agencies Mortgage Backed
secunl?cs Sccu_ ntic and Intstntmcmali)ics'
- Securities
Under 1 Year 101n /, 102 /n °
1 to 5 Years 102% 103%
Over 5 Years 103% °
I(11 /n IOS °/n
' Ecetuding mortgage backed securities.
a. Collateral shall be marked to market at least weekly.
5. Substitution of collateral is permitted.
BID RE U."REMENT
The Chief Financial Officer shall utilize the competitive bid process to sell and purchase sect,ritics,
subject only to the exceptions noted in the Investment Policy. Afler the Chief Financial Orricer has
determined the approximate maturity date based on cash flow needs and market conditions and has
analyacd and selected one or more optimal t}pcs of investment, a minimum of three (3) banks or dealers
must be contacted to ask for offerings of securities that fit the investment crilcria. Documentation must be
collected to Hsure that the securities meet Inestment Policy guidelines and that price levels cxcaned arc
consistent with market Icvcis at the time. When selling securities, a minimum of three (3) dealer bids will
be sought. Documentation of all transactions must be maintained
Examples of lvhen the iampetitivcly bid process can be passed, include:
I. When time constraints duc to amtsual circumstances preclude the use of the competiti%.c
bidding process.
2. When no active market exists for the issue being traded duc to file age or depth of the issue,
(On a " %vork -out" basis).
3. When a security is unique to a single dealer, for example a private placement.
4. When the transaction involved nciv issues or issues on the "when issued" market.
13 9 G=
Packet Page_ -126-
9/23/2014 10.B.
SEP 2 ri 1995
If the matuting investment is a certificate of deposit, one of the contacts made shall be the present holder
of the funds subject to portfolio diversification requirements in the Investment Policy, Due to the cost of
safekeeping, one business day repurchase agreements less than S1,000,000, and the overnight sweep
repurchase agreement associated with the Now Account will not be bid.
The Deposi-ory Bank/Concentration Bank shall be selected through a competitive process on a periodic
basis that takes into account the quality and stop-- of service,
TERNAI, CONTROL,q
The Chief Financial Officer shall establish and monitor a set of written internal controls designed to
Protect the County's financial assets and ensure proper accounting and reporting of the transactions. The
Chief Financial Officer shall establish an annual process of indcpcn,Jcnr. review by an external auditor
which will scrn•c as an internal control by assuring compliance with policies and procedures.
Internal controls will encompass at a minimum the following issurs:
I. transfers of all funds (purchases, sales, ctc.).
2, separation of functions including transaction authority frorn accounting and record - keeping,
3. custodial safekeeping.
4. avoidance of delivery of bearer -form or non- wircable securities.
S. delegation of authority to subordinate staff members,
6. written confirmation of telephone transactions,
7. supervisory control of employee actions,
8. identification and minimization of authorized investment officials,
9, documentation of decisions and transactions, and
10, documentation of complete description of mortgage securities purchased and yield tables at
purchase date.
REPORTIN G
Annual, quatterly and monthly reports of asscts «•ill be presented to the Board. The following items will
be included i t the reports at *]cast annually:
I - Srcuritics in the portfolio by type, book
zr eragc life. value, income earned, market value, final maturity and
2. fic formation on activity in the account. and
3. Performance based on total rate of return which includes earned income as well as realized and
unrealized gains and losses.
OTHER
1. �Irandfather existing securities in the portfolio to reduce the possibility of having to sell
financial assets before maturity at a loss.
2. Any and all exceptions to the Investment Policy require majority vote of the Board of County
Commissioncrs.
/3? H
Packet Page -127- M