PILLAR: Fiscally Sound
AGENDA DATE: November 12, 2025
COUNCIL DISTRICT(S): N/A
DEPARTMENT: City Controller’s Office
PRIORITY: N/A
______________________________________________________________________
SUBJECT
Title
Authorize an five-year Interlocal Agreement with the City of Fort Worth for comprehensive custodial services with UMB Bank, N.A. for the safekeeping of City investment securities - Total nNot to exceed $740,000 - Financing: General Fund (subject to annual appropriations)
Body
BACKGROUND
The safekeeping and custody of investment securities is a critical function that ensures the security, transparency, and compliance of the City’s investment program. In accordance with Section 12.0 of the City’s Investment Policy, all securities transactions-except those involving local government investment pools and money market mutual funds-must be conducted on a delivery versus payment basis. Investment securities must be held by a third-party custodian designated and contracted by the City, and the custodian must issue safekeeping receipts clearly identifying the City as the owner of the securities. Safekeeping and custody of both investment securities and collateral must comply with applicable law and accounting standards.
The Government Finance Officers Association recommends that governments use an independent third-party custodial service for the safekeeping of investments. This practice helps mitigate risk and ensures that governments maintain secure and uninterrupted access to their investment assets.
Historically, the City has received custodial services through its primary banking contract with Bank of America, which has provided safekeeping as part of its broader banking services. However, this contract is set to expire on December 10, 2025. During the most recent banking services procurement, safekeeping services were intentionally excluded from the scope of work, as the City anticipated pursuing a separate custodial arrangement.
On September 29, 2025, the City of Fort Worth completed a formal procurement process for custodial banking services. Following a competitive evaluation, UMB Bank was selected as the most qualified and cost-effective provider. The Dallas City Council, by Resolution No. 04-2282 dated August 11, 2004, authorized an Interlocal Agreement between the City of Dallas and the City of Fort Worth, establishing a Cooperative Purchasing Program in accordance with Chapter 791 of the Texas Government Code. The current proposal allows Tthe City of Dallas to utilize this ILA with the City of Fort Worth to satisfy statutory procurement requirements as authorized by Texas Local Government Code, Chapter 271, Subchapter F. has the opportunity to leverage this procurement through an interlocal agreement, in accordance with Chapter 791 of the Texas Government Code. The transfer of securities is scheduled for December 1, 2025.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Committee on Finance City Council was briefed by memorandum regarding this matter on November 47, 2025. <https://dallascityhall.com/government/citymanager/Documents/Council%20Materials/36.%2025-3085A.pdf>
FISCAL INFORMATION
|
Fund |
FY 2025-26 |
FY 2026-27 |
Future Years |
|
General Fund |
$120,000.00 |
$155,000.00 |
$465,000.00 |