Consistent with Governor Greg Abbott's Suspension of Various Provisions of the Open Meetings Act, Effective August 1, 2020

Notice of Meeting for the General Government and Finance Advisory Board of the City of Georgetown August 26, 2020 at 4:30 PM at Virtual

The City of Georgetown is committed to compliance with the Americans with Disabilities Act (ADA). If you require assistance in participating at a public meeting due to a disability, as defined under the ADA, reasonable assistance, adaptations, or accommodations will be provided upon request. Please contact the City Secretary's Office, at least three (3) days prior to the scheduled meeting date, at (512) 930-3652 or City Hall at 808 Martin Luther King Jr. Street, Georgetown, TX 78626 for additional information; TTY users route through Relay Texas at 711. Consistent with Governor Greg Abbott’s suspension of various provisions of the Open Meetings Act, effective August 1, 2020 and until further notice, to reduce the chance of COVID-19 transmission, all City of Georgetown Advisory Board meetings will be held virtually. Public comment will be allowed via teleconference; no one will be allowed to appear in person.

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Join Zoom Meeting https://georgetowntx.zoom.us/j/99946607088? pwd=MEIyU1FXK3pDT3ZMajFjcXdLbHloQT09 Meeting ID: 999 4660 7088 Passcode: 806585

Dial toll free: 833 548 0276 833 548 0282 877 853 5257 888 475 4499 Meeting ID: 999 4660 7088 Passcode: 806585 Find your local number: https://georgetowntx.zoom.us/u/aex256UUO9 Citizen comments are accepted in three different formats: 1. Submit written comments to [email protected] by noon on the date of the meeting and the Recording Secretary will read your comments into the recording during the item that is being discussed.

Page 1 of 190 2. Log onto the meeting at the link above and “raise your hand” during the item. 3. Use your home/mobile phone to call the toll-free number

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Legislative Regular Agenda A Discussion on how this virtual conference will be conducted, to include options for public comments and how the public may address the Commission –Tommy Gonzalez, GGAF Chair B Review minutes from the June 4, 2020 General Government and Finance Advisory Board Meeting - Danella Elliott, Board Liaison C Consideration and possible action to award contracts for self-funded dental program administration services, employee voluntary short-term and long-term disability insurance, employee supplemental insurance, and employee benefits concierge services and authorizing the City Manager to enter into such contracts on behalf of the City. - Tadd Phillips, Human Resources and Organizational Development Director D Consideration and possible recommendation to approve a contract amendment and extension with Microsoft to provide Microsoft-branded software, and services to the City of Georgetown for a total of $1,129,246.73 over 38 months. -- Greg Berglund, Assistant Director, Information Technology E Consideration and possible recommendation of approval to purchase laptops, desktops, and docking stations from Dell Inc. for an amount not to exceed $199,971.08 -- Greg Berglund, Assistant Director, Information Technology F Consideration and possible action to approve a Construction Contract with Brandt Companies, LLC, of Carrollton, Texas for the Construction of the Natatorium Pool HVAC Unit Replacement, at the Georgetown Recreation Center in the amount of $607,077. – Eric Johnson, CIP Manager. G Discussion and possible action to recommend proposed changes to the Fiscal and Budgetary Policies as part of the FY2021 budget development process. – Leigh Wallace, Finance Director

Adjournment Adjournment

Page 2 of 190 Certificate of Posting

I, Robyn Densmore, City Secretary for the City of Georgetown, Texas, do hereby certify that this Notice of Meeting was posted at City Hall, 808 Martin Luther King Jr. Street, Georgetown, TX 78626, a place readily accessible to the general public as required by law, on the _____ day of ______, 2020, at ______, and remained so posted for at least 72 continuous hours preceding the scheduled time of said meeting.

______Robyn Densmore, City Secretary

Page 3 of 190 City of Georgetown, Texas Government and Finance Advisory Board August 26, 2020

SUBJECT: Discussion on how this virtual conference will be conducted, to include options for public comments and how the public may address the Commission –Tommy Gonzalez, GGAF Chair

ITEM SUMMARY:

FINANCIAL IMPACT: .

SUBMITTED BY: Danella Elliott

Page 4 of 190 City of Georgetown, Texas Government and Finance Advisory Board August 26, 2020

SUBJECT: Review minutes from the June 4, 2020 General Government and Finance Advisory Board Meeting - Danella Elliott, Board Liaison

ITEM SUMMARY:

FINANCIAL IMPACT: .

SUBMITTED BY: Danella Elliott

ATTACHMENTS: Description Type 6.24.2020 Draft GGAF Minutes Backup Material

Page 5 of 190 Minutes of Meeting of the GENERAL GOVERNMENT AND FINANCE ADVISORY BOARD (GGAF) City of Georgetown, Texas June 24, 2020

The General Government and Finance Advisory Board met on Wednesday, June 24, 2020 at 4:30 PM at the Georgetown Public Library, located at 402 W 8 th Street, Georgetown, Texas.

The meeting was held with the Governor’s Order, all City Buildings are following these procedures: • Masks are recommended • Physical distancing; 6 feet between you and anyone not in your household • Practice good hygiene and wash your hands

Board Members Present: City Staff Present: Tommy Gonzalez, Chair David Morgan, City Manager Kevin Pitts, Vice-Chair Laurie Brewer, Assistant City Manager Stu McLennan, Secretary Leigh Wallace, Finance Director Eric Corp Elaine Wilson, Controller Robert Witt Chris Bryce, IT Director Daniel Bethapudi, General Mgr, Electric Utilities Mayra Cantu, Management Analyst Karrie Pursley, Treasurer Danella Elliott, Board Liaison

Others present: Tim Pinon, Valley View Consulting, LLC Susan Anderson, Valley View Consulting, LLC

Legislative Regular Agenda

Tommy Gonzalez called the meeting to order at 4:32 p.m.

Tommy asked everyone to introduce themselves and the two new GGAF Board Members, Eric Corp and Robert (Bob) Witt gave their background information. He welcomed them to the board and said that we look forward to their expertise!

A Review minutes from the February 26, 2020 General Government and Finance Advisory Board Meeting -Danella Elliott, Board Liaison

Motion to approve the amended minutes (with the comments below included) by Stu McLennan; second by Tommy Gonzalez. Approved 4-0. Kevin Pitts absent during this vote.

AMENDED MINUTES TO INCLUDE THE INFORMATION BELOW:

Stu made some observations/suggestions/comments on the minutes.

Page 6 of 190 • Minor point - The header should state the type of meeting (e.g., Regular).

• Main point - The body should contain more detail about our discussions. They always contain appropriate details about the motions, votes, and points of order, but often lack the same about our discussions, specifically post-meeting staff actions and due-outs.

• Minor Point – The final paragraph should contain guest speakers and topics, which we often have, as well as the chairman’s closing remarks.

• Para C. Staff actions. o RFP utility billing in summer 2020 to secure options. o Include the need for on-line billing in the “campaign”. • Para E. Staff actions. o Contract design for the Natatorium HVAC and then bid the project. o Fund FS1 and FS3 as Capital Improvement projects in the annual budget. o Provide GGAF visibility of the HVAC replacement plan. o Inform Council about how many of the city’s 22x HVAC systems have transitioned from R-22 to R-410, and the plan to transition the remainder.

B Election of a Vice Chair and Secretary for the General Government and Finance Advisory Board – Tommy Gonzalez, Board Chair

Motion by Tommy Gonzalez; 2 nd by Robert Witt to nominate Stu McLennan as Secretary. Approved 4-0. Kevin Pitts absent during this vote.

Motion by Tommy Gonzalez; 2 nd by Stu McLennan to nominate Kevin Pitts as Vice Chair. Approved 4-0. Kevin Pitts absent during this vote.

C Review and discuss board purpose and bylaws – Tommy Gonzalez, Board Chair

Tommy discussed the board purpose and told the committee that we would send out the information via e-mail for their review.

D Review of the City Council’s Boards and Commissions Attendance Policy – Danella Elliott, Board Liaison

Tommy discussed the attendance policy told the committee that we would send out the information via e-mail for their review.

Stu asked for a list of the items that would have gone before the GGAF Board from March, April and May but due to the cancellation of meetings due to the pandemic, these items went straight to Council. Tommy said that we would e-mail that information to the members.

E Presentation and discussion with possible action regarding a utility technology review of the City’s Customer Information System and Meter Data Management systems – Laurie Brewer, Assistant City Manager - Note: Kevin Pitts arrived at 4:50 p.m.

Laurie said that the presentation would give an overview of our investment in the City’s utility technology and noted that many decisions were guided with a previous vision for the Utility systems which have since changed. The presentation reviewed the City’s history implementing utility technology within Water, Electric, IT and Customer Care, in particular the Customer Information System and Meter Data Management systems.

Page 7 of 190 Laurie explained that the City has done good work in moving operations and customer programs into the new millennium, but since 2010, “Customer Operations” has evolved into a larger role within each utility, acting as point of contact for all customer interactions instead of only a billing point of contact. When these technology and operational projects were begun in 2009, a different philosophy and direction was being prescribed and followed. While fully supportive of changes in vision and strategic goals, it is important to step back and understand the framework that was in play during the time the original decisions were made to gain clarity and understanding.

Laurie went over some of the history and timeline of the current system. She explained some of the major challenges from 2015 to now, including: • data migration of the legacy system that was not included in the initial pricing, • staff changes, • organizational philosophies that required UMAX to adapt to current processes, • complex system and lack of internal technical knowledge, • realization that the system required a level of support much higher than expected from the preliminary studies by the vendor and selection consultants.

The business and technology leaders in the City agree that the ongoing systems will require long-term growth in staffing, consulting and technology resources to get value from the system which will add further overhead costs. There have been numerous system failures, typically due to system updates and patches. Support staff are either unaware of, or unable to check these on a routine basis. With such a large system, there are requirements for a lot of report writing so it will adapt to our processes.

Laurie highlighted the “then and now” of various topics regarding the system and noted that we have done good work in moving operations and customer programs into the new millennium. She said that future requirements need a CIS and MDM system that can easily be supported and is in scope with the current utility system, create a system that adds value to our customers, reduction in risk within the CIS an MDM systems, staff with the needed business system and data skillsets to support the system and an understanding the ten-year cost of ownership to ensure we have adequate personnel and financial support. Additionally, because we implemented processes that were not standard to the system, there is limited knowledge on how those changes/configurations are impacted when they are updated.

In 2022-23, our current CIS software is moving to a cloud product and will host customers on that platform, so we would need to upgrade to the cloud-based system. Staff discussed if it would be best to upgrade or take a step back and reevaluate our current system.

Staff is recommending to have Gartner (recognized internationally as “experts”) conduct a utility technology review to analyze the systems in place and utilize the study for future strategic decisions regarding the CIS and MDM systems. • Cost: $210,000 • Funding Sources – shared between Water, Electric and Information Technology Funds

The study would evaluate the current system to determine: • Cost of ownership (staffing and financial) • Risk levels • Expectations for the system • Operating models of Customer Care and IT • System’s functional scope • Determine whether these systems are still appropriate and utilizing the analysis to drive future strategic decisions around the meter-to-cash technology ecosystem.

Each director from the areas listed above have all been involved in discussions, and the IT, HR and Finance directors all agreed on the recommendation of a possible review by Gartner, Inc. to assess the systems.

Page 8 of 190

Comments:

• When we replaced Incode with the current system, the vision was very different at what the goal was and has changed drastically; compatibility was lost. In-house expertise that is needed wasn’t there and that is where the gaps happened. We are now stepping back and looking to future needs which are completely different. During this process, we learned what we are “not” going to be but we need to learn the processes, etc. that we will need. Gartner is DIR vendor, which provides better rates for State of Texas and Municipalities. We have worked with Gartner before and we actually subscribe to service where we can get expertise for extremely technical questions. • Is this a reasonable cost? Chris said that with Gartner’s expertise and depth of knowledge, he believes it is definitely a good price. • What are our expectations/recommendations? Full cost of ownership (10 years); very detailed on their analysis on what we will need, plus their technology detail. • Stu went over his notes from November 2018 and questioned Council’s reaction to the money spent to date. He commended staff for always recognizing when things need to be looked at and taking a knee if needed. • Do we have the current system’s support through 2021? Yes. We recognize that they are doing all they can to help us, but it isn’t functioning to meet our needs. • Tommy said that part of the problem is that we are paying for things we have no use for and do not need. Now, we are taking a step back and although it is hard to justify the costs associated with it, we need to correct it now and fix it. • David explained that we just didn’t get the functionality out of system; we need outside experts to assist. • We need an exact plan and cost of that plan over 5-10 years to justify spending more money. This has been a bit of a learning curve but we need to make sure we get solutions to what is wrong. • We are a city that learns, but recognize we made a mistake. We want to have justifications going through cost analysis and come up with solutions that could possibly be a cost savings over the long haul. • We need to own a system that meets our goals and benefits the customers, but we need outside expertise to map out the process. • Bob asked if the City has financial policies for fund balances, etc. Yes, we go over those with this Board annually. • Stu clarified the offer period and data collection via telephone. Chris said the offer period, pricing and data collection methods are all in effect and good until we make our decision.

Motion to approve the contract with Gartner for a utility technology review of the City’s Customer Information System and Meter Data Management systems by Kevin Pitts, second by Stu McLennan. Unanimously approved 5-0.

F Discussion and possible selection of JP Morgan Chase for Bank Depository Services for a two year and eight-month period beginning September 1, 2020 through April 30, 2023, with options to renew for up to two additional one year terms (maximum of four years eight months) – Elaine Wilson, CGFO, Controller

Elaine gave a presentation and background on the current bank depository contract. She noted that the Texas Local Government Code, Chapter105 requires that we solicit applications every 5 years. JPMorgan Chase has been the City’s depository since 2006 and the current contract expires 8/31/2020 with no renewal options remaining.

She said that due to certain factors considered, the City is looking to change the new initial contract term with this Board’s guidance. Valley View Consulting provides depository evaluation services as part of our Investment Advisory Services agreement, and their knowledge in this area gives the City good comparison in all aspects of evaluation. Page 9 of 190

Elaine went over the background and terms, services and evaluation criteria requested. She also explained additional factors and risks which included: • The City just spent $33,840 in setup and testing of bank integrations between the Workday Financial system and JPMorgan Chase (incumbent bank). • Staff is still working through Workday conversion related issues to stabilize the system prior to fiscal year and audit. Bank integrations are stable at this time. • Transition to a new bank will require 8-12 weeks of transition set up and testing which will crossover into fiscal year-end. • This will be the first year-end close in the new Workday financial system which will require staff dedication to the close process to ensure a timely and accurate year end close and a successful audit. • Staff turnover • COVID-19 Pandemic

Elaine gave the names of applicants and noted that Independent Financial and Verabank submitted applications with overall lower costs, they were not able to provide all the required services requested, so the 2 banks considered for selection were JPMorgan Chase and BBVA. She went over the fees and cost of service, earning potential, initial term and differences in service provided comparisons between the two banks.

Elaine told the Board that typically, there is an initial term of two years for the new contract, but in order to try and prevent overlapping with fiscal year end, staff is recommending the contract be for one year 8 months or 2 years 8 months.

Staff recommendation (based on some of the challenges) is to stay with the incumbent, JPMorgan Chase due to the following with the 2 year 8 month period beginning September 1, 2020.

• Based on cost of service including incentives and transition costs • Costly conversion costs, including staff time required • Workday integration costs already incurred • Workday system stabilization before year end • Year-end close of new financial system brings new processes and requirements for staff

Kevin Pitts (full disclosure) said that he used to work for BBVA (does not now) but the last time this RFP was solicited, he was the respondent. He said that at that time (as in this time, his bid was low bid and was not chosen). He asked for clarification and a breakdown of the contract (payment to an outside consultant and staff costs/time) that equates to the $36,000 estimated transition costs for BBVA. Elaine said that she would get that information for him.

Kevin said that looking at the information provided, BBVA’s bid is better. He noted that staff time should not be figured into the costs, as we would be paying them anyway, and feels that the $36,000 is bogus and was figured in to help Chase look better. He understands that changing banks is a hard thing to do but being short-staffed and going through the Workday implementation shouldn’t be the deciding factor as it is not listed in the evaluation criteria and scoring matrix for scoring the respondents. Kevin’s opinion is that Chase didn’t sharpen their pencil or cut their rates on this deal because they didn’t have to due to the fact that they always win the bid. The City of Georgetown always tries to get the best deal for the citizens. There are underlying circumstances and he understands that, but he doesn’t want to do 1 year 8 month with extensions bid award…he does not want any extensions. He feels that Chase should actually bid their best offer as if we were a new customer, and that is why their bid is not better than BBVA. He is fine staying with Chase, but noted that he did not like the presentation, he did not like the way it was presented, and he did not like the way Chase submitted their bid.

Page 10 of 190 Full disclosure from Tommy - he clarified that he currently does currently work for BBVA, but in a different department and division. He has no say or input in any of this, and if staff would have recommended BBVA, he would have recused himself , but he feels that he is well qualified to judge on another proposal. At this time, he does agree with the shorter term. With the process transition costs and going through the Workday implementation, then we may not be getting the best deal, and in the future, if this is the situation, we should not even do an RFQ knowing that we are not going to change. If it is required to go out for bid, then state in the request that we are not going to change but just following policy. There are just too many things going on right now to switch and would agree with staff’s recommendation to maximize the full cost benefit.

Kevin said that his recommendation for the 1 year 8 months was to send Chase a message that they would actually have to bid the next time, and not just throw something up in the air knowing they would win.

Motion to approve the selection of JP Morgan Chase for Bank Depository Services for a two year and eight-month period beginning September 1, 2020 through April 30, 2023, with options to renew for up to two additional one year terms (maximum of four years eight months) by Stu McLennan; second by Robert Witt.

Amendment to the original motion, approving the selection of JP Morgan Chase for Bank Depository Services for one year and eight-month period with no extension options by Kevin Pitts; second by Eric Corp. Approved 3-2 (Stu McLennan and Robert Witt voting against)

Eric and Tommy asked for clarification on staff time required to do another RFP at the end of the one year and eight-month period and if everyone feels that we will be in a non-transitional period with no additional burden on staff in two years. David and Leigh said that there should be no issues.

Motion for approval of the original motion to move forward with the selection of JP Morgan Chase for Bank Depository Services with the approved amended motion for one year and eight-months with no extension options. Approved 3-2 (Stu McLennan and Robert Witt voting against)

Motion to adjourn meeting by Stu McLennan, second by Eric Corp, approved 5-0. Meeting adjourned at 6:10 pm.

______Tommy Gonzalez Date Board Chair

______Stu McLennan Date Board Secretary

______Danella Elliott Date Board Liaison

Page 11 of 190 City of Georgetown, Texas Government and Finance Advisory Board August 26, 2020

SUBJECT: Consideration and possible action to award contracts for self-funded dental program administration services, employee voluntary short-term and long-term disability insurance, employee supplemental insurance, and employee benefits concierge services and authorizing the City Manager to enter into such contracts on behalf of the City. - Tadd Phillips, Human Resources and Organizational Development Director

ITEM SUMMARY: A total of 21 proposals for one or more coverages were received in response to the City’s competitively advertised Request for Proposals (RFP) for Employee Health Benefits (including dental, voluntary short- term disability, long-term disability, supplemental insurance and benefits concierge services) for the upcoming 2021 calendar coverage year.

Proposals were evaluated extensively by Human Resources, Gallagher and Co. (the City’s benefits consultant), and the Employee Benefits Committee, focusing on coverage offered as well as the financial impact. Finalists for major coverages were invited to make a presentation, and the City entered negotiations with the final candidates. Where possible, coverages were bundled during negotiations to achieve the best value for the City. A summary of the overall scores is attached.

Based on the overall offering, financial impact on the City and the impact on employee, staff recommends award as follows:

Program Recommended Partner Self-Funded Dental Administration Guardian Life Employee voluntary short-term & long-term disability BlueCross Blue Shield TX (Dearborn) Employee Supplemental Insurance BlueCross Blue Shield TX Benefits Concierge Services Alight (Compass)

The City anticipates offering competitive benefits to employees while minimalizing the financial impact to both employees and the City. Contract and rate guarantee terms vary between one and year years, depending on program. Coverages will be reviewed during the year to evaluate performance, and the City has the option to renew for an additional year, saving the cost of processing an RFP, providing continuity in care to employees and allowing the City to establish an ongoing relationship with the provider.

FINANCIAL IMPACT: The RFP included a mix of benefits paid by the employee, employer, and a combination of both. The four programs current annual cost to the City is $168,076. The selected bids will result in an increase of $1,596 or less than 1% increase. This is all within self-insurance fund budget. Further details are available in the attached presentation.

Page 12 of 190 SUBMITTED BY: Danella Elliott

ATTACHMENTS: Description Type Presentation Presentation RFP Committee Scoring Sheet Backup Material

Page 13 of 190 FY2021 Annual Budget

EMPLOYEE BENEFITS RFP AWARD RECOMMENDATIONS

GGAF AUGUST 26, 2020

Page 14 of 190 FY2021 Annual Budget AGENDA

• RFP AWARDS/EMPLOYEE HEALTH BENEFITS – RFP PROCESS – RFP AWARDS – RECOMMENDATION

Page 15 of 190 FY2021 Annual Budget REQUEST FOR PROPOSALS

• DENTAL • DISABILITY – SHORT-TERM & – LONG-TERM • SUPPLEMENTAL INSURANCE – ACCIDENTAL, – CRITICAL ILLNESS, – CANCER • CONCIERGE SERVICES – MEDICAL PLAN

Page 16 of 190 FY2021 Annual Budget RFP PRODUCTS

Self Insured Paid by # of bids Dental Employer/Employee/Retiree 5 Fully Insured Paid by # of bids Supplemental Insurance - Accident, Cancer, Critical Employee 8 Illness Short Term Disability Employee 5 City Provided Benefits Paid by # of bids Long Term Disability Employer 5 Concierge Employer 3

Page 17 of 190 FY2021 Annual Budget RFP TIMELINE & PROCESS

2020 • MAY 10TH – RFP POSTED TO PUBLIC MARKET • JUNE 11TH – PROPOSALS RECEIVED • AUGUST 12TH – BEST AND FINALS RECEIVED • AUGUST 14TH – MET WITH BENEFITS COMMITTEE ON RECOMMENDATIONS • AUGUST 26TH – RECOMMENDATIONS TAKEN TO GGAF • SEPTEMBER 8TH – RECOMMENDATIONS TAKE TO COUNCIL • OCTOBER 22ND – OPEN ENROLLMENT BEGINS 2021 • JANUARY 1ST – NEW PLAN YEAR BEGINS

Page 18 of 190 FY2021 Annual Budget RFP COMMITTEE

VOTING MEMBERS • DANIEL BILBREY – BENEFITS COMMITTEE/FIRE • DELTA JOLLY – BENEFITS COMMITTEE/POLICE • MIKE STASNY – BENEFITS COMMITTEE/IT • LAURA MALOY – HUMAN RESOURCES • HOLLY MOYER – HUMAN RESOURCES ADVISORS • NICOLE ABREGO – PURCHASING • CITY LEGAL DEPARTMENT • GALLAGHER BENEFITS CONSULTANTS

Page 19 of 190 FY2021 Annual Budget RFP SCORING CRITERIA

SUPPLEMENTAL INSURANCE, DENTAL CONCIERGE, DISABILITY • COST CONTAINMENT/INNOVATIVE • COST/PLAN 40% SOLUTIONS 30% • REPORTING 20% PLAN DESIGN 20% • • TECHNOLOGY CAPABILITIES 20% POPULATION HEALTH MANAGER • • REFERENCES (CURRENT & ROGRAMS P 20% PAST)/RELEVANT • COMMUNICATION/ENROLLMENT 5% SERVICES/EXPLANATIONS 10% • CLAIMS PROCESSING 10% • ENROLLMENT/COMMUNICATION • INTEGRATED SYSTEMS/TECHNOLOGY MATERIALS 10% INITIATIVE 10% • INTEGRATED SYSTEMS/TECHNOLOGY • PAST PERFORMANCE 5% INITIATIVE 10%

Page 20 of 190 FY2021 Annual Budget RFP RECOMMENDATIONS

PROPOSED NEW VENDOR • DENTAL • SUPPLEMENTAL INSURANCE MAINTAIN CURRENT VENDOR • DISABILITY • CONCIERGE

Page 21 of 190 FY2021 Annual Budget CURRENT VS. RECOMMENDED

DENTAL SUPPLEMENTAL INSURANCE CURRENT RECOMMENDED CURRENT RECOMMENDED AMERITAS GUARDIAN AFLAC BCBSTX EMPLOYER ANNUAL EMPLOYER ANNUAL EMPLOYER ANNUAL EMPLOYER ANNUAL COST - $25,721 COST - $27,317 COST - NONE COST - NONE

• NO CHANGES TO THE CURRENT PLAN • NO EMPLOYER COST – EMPLOYEE OPTION • 3 YEAR ADMIN RATE GUARANTEE WITH AND PAYS 100% MINIMAL INCREASE OF $1,900 ANNUALLY • 2 YR RATE GUARANTEE • NETWORK PROVIDER – INCREASE COVERAGE • MERGES CANCER INTO CRITICAL ILLNESS FOR IN-NETWORK FOR EMPLOYEES & PLAN W/COMPETITIVE RATES FAMILIES • EXPANDS ACCIDENT PLANS WITH 2 OPTIONS • POTENTIAL SAVINGS FOR CLAIMS IF • ABILITY TO INTEGRATE WITH WORKDAY FOR PERFORMANCE MEASURES ARE NOT MET EASE OF ENROLLMENT & ADMINISTRATION

Page 22 of 190 FY2021 Annual Budget CURRENT VS. RECOMMENDED

DISABILITY BENEFITS ADVOCATE CURRENT RECOMMENDED CURRENT RECOMMENDED BLUE CROSS BLUE BLUE CROSS BLUE SHIELD – FORMERLY SHIELD – FORMERLY ALIGHT (COMPASS) ALIGHT (COMPASS) KNOWN AS KNOWN AS DEARBORN DEARBORN EMPLOYER COST - EMPLOYER COST - $37,740 $37,740 EMPLOYER COST - EMPLOYER COST - $104,615 $104,615

• ONLY PROPOSAL WITH COMPREHENSIVE 3 YEAR RATE GUARANTEE • SERVICES • LONG STANDING RELATIONSHIP WITH • MAINTAINS CURRENT RATE CURRENT VENDOR (2016) • 1 YEAR RATE GUARANTEE W/OPTION FOR 2 INCREASE IN WEEKLY STD BENEFIT • ONE-YEAR RENEWALS MAXIMUM FROM $1,000 TO $1,500 WHILE • LONG STANDING RELATIONSHIP WITH VENDOR MAINTAINING CURRENT RATES (2014)

Page 23 of 190 FY2021 Annual Budget ANNUAL FINANCIAL COST - EMPLOYER

COST DENTAL SUPPLEMENTAL DISABILITY BENEFITS INSURANCE CONCIERGE BEFORE $25,721 AFTER $27,317 BEFORE NONE – EE ONLY AFTER NONE - EE ONLY BEFORE $104,615 AFTER $104,615 BEFORE $37,740 AFTER $37,740

Page 24 of 190 FY2021 Annual Budget GGAF ACTIONS

• CONSIDERATION AND POSSIBLE ACTION TO AWARD CONTRACTS FOR DENTAL INSURANCE, SUPPLEMENTAL INSURANCE, DISABILITY COVERAGE, AND CONCIERGE SERVICES, AND AUTHORIZING THE CITY MANAGER TO ENTER SUCH CONTRACTS ON BEHALF OF THE CITY.

• STAFF RECOMMENDS GGAF APPROVAL TO FORWARD TO COUNCIL OF THE FOLLOWING: – GUARDIAN FOR SELF-FUNDED DENTAL ADMINISTRATION – BCBSTX FOR EMPLOYEE SUPPLEMENTAL INSURANCE – BCBSTX/DEARBORN FOR EMPLOYEE VOLUNTARY SHORT-TERM/LONG-TERM DISABILITY COVERAGE – ALIGHT FOR BENEFITS CONCIERGE SERVICES

Page 25 of 190 FY2021 Annual Budget

QUESTIONS?

Page 26 of 190 Product Vendor Ranking Ameritas 3 BCBS TX 4 Dental Metropolitan Life 5 Guardian Life 1  United Healthcare 2

Product Vendor Ranking BlueCross BlueShield/ Dearborn 1  Lincoln Financial 3 Disability Metripolitan Life 3 Sun Life Assurance 5 United Healthcare 2

Product Vendor Ranking AFLAC 5 American Fidelity 4

BlueCross BlueShield TX Supplemental 1  Insurance Lincoln Financial 3 (Cancer, Metropolitan Life 6 Critical Illness, Sun Life Assurance 7 Accident) T.E.B Benefits Group (Colonial Life) 2 The Guardian Life Insurance 8

Product Vendor Ranking Alight Solutions 1  Reconcile Care Concierge Management 3 Teledoc Health 2

Page 27 of 190 City of Georgetown, Texas Government and Finance Advisory Board August 26, 2020

SUBJECT: Consideration and possible recommendation to approve a contract amendment and extension with Microsoft to provide Microsoft-branded software, and services to the City of Georgetown for a total of $1,129,246.73 over 38 months. -- Greg Berglund, Assistant Director, Information Technology

ITEM SUMMARY: The City entered a three-year Enterprise Agreement with Microsoft in 2017. This request is to extend the agreement with Microsoft for an additional 38 months. The Enterprise Agreement provides the City with licensing rights to install Microsoft products on City computer equipment, enables the IT Department to plan for enterprise upgrades to Microsoft software, utilizes Microsoft cloud services and provides Software Assurance. Software Assurance includes 24 x 7 technical support, access to the most current version of all applications, planning services, and technical training.

The City has standardized on the use of Microsoft products. With Microsoft 365 services, City staff rely on products to run all computers, desktops and servers. Microsoft operating systems and software power every desktop, laptop and server on our computer networks. Staff working for the City rely heavily on Microsoft Office, Hosted Email (Outlook), Microsoft Teams, and SharePoint Online. These tools enhance communication and collaboration and scale seamlessly with growth while providing the top enterprise grade collaboration tools. These services have a financially backed 99.9% uptime service level and allow staff access to the tools across any internet connection.

ATTACHMENTS: 1. Quote – US-QUO-848779.pdf 2. EA Universal Update Statement (Zero True Up Form) 3. Amendment-CTM;M97(New).docx a. Identifies new term dates 4. Previous Enrollment Agreement Form.docx a. Required for Software Assurance and MSDN Subscription 5. Miscellaneous Documents-PrevEnrAgrForm.pdf a. Attachment required for Previous Agreement Form. 6. Product Selection Form a. Details the discount level we receive for products. We are at Price Level D for all services the highest discount awarded to Government entities. This is because we purchase through the DIR contract. This is a very big benefit to the City. 7. Enterprise Enrollment (Indirect).docx a. Documents the reseller and City contacts. b. Documents the Enrollment number. c. Has enrollment Terms and Conditions, product addition terms, yearly true-up requirements 8. Signature Form 9. L1_Agreement. This is the full DIR Contract and Amendments

Page 28 of 190 FINANCIAL IMPACT: This item is requested in the Fiscal Year 2021 budget and will be purchased under Texas Department of Information Resources Contract: DIR-TSO-4061

Year 1 (14 months) $415,810.81 Year 2 $356,717.96 Year 3 $356,717.96

SUBMITTED BY: Danella Elliott

ATTACHMENTS: Description Type Quote Backup Material EA Universal Update Statement Backup Material Amendment - CTM M97 New Backup Material Previous Enrollment Agreement form Backup Material Miscellaneous Document - PrevEnrAgrForm Backup Material Product Selection Form Backup Material Enterprise Enrollment (Indirect) Backup Material Signature Form Backup Material Agreement Backup Material Agreement 2 Backup Material Agreement 3 Backup Material Agreement 4 Backup Material Agreement 5 Backup Material Agreement 6 Backup Material Agreement 7 Backup Material

Page 29 of 190 City of Georgetown Date 07/07/2020 113 E. Eighth Street Customer No. US-SCU-146022 GEORGETOWN, TX 78626 Your Reference EA Renewal Account Manager Phillip Bushman Your Contact Person statestore us E-Mail [email protected] Our Tax ID 39-1501504

Quote US-QUO-848779

Invoice Address Shipping Address License Address

City of Georgetown City of Georgetown City of Georgetown 113 E. Eighth Street 113 E. Eighth Street 113 E. Eighth Street GEORGETOWN, TX 78626 GEORGETOWN, TX 78626 GEORGETOWN, TX 78626

Greg Berglund [email protected]

Start Date Version Description End Date OS Amount Pos. No. Manufacturer Disc-Lev. Format Lic. Model Lic. Metrics Qty. Unit Price Sales Tax (USD) Contract DIR-TSO-4061 EA Renewal 12 Month Total 3 Year EA: 9/1/2020-10/31/2023

10 AAD-34700 M365 E3 From SA GCC Per User NON-SPEC/AL Monthly Subscription Non-Specific Microsoft LEVEL D SUB IEA 420 297.60 0.00 124,992.00

20 AAD-34704 M365 E3 GCC Unified ShrdSvr ALNG SubsVL MVL PerUsr NON-SPEC/AL Government Monthly Subscription Add Prod Non-Specific Microsoft LEVEL D SUB IEA ADD G 480 355.92 0.00 170,841.60

30 77D-00111 Visual Studio Professional w/MSDN NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 6 304.07 0.00 1,824.42

40 F52-02145 BizTalk Server Enterprise 2 Core Lic NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 2 3,576.31 0.00 7,152.62

50 359-00961 SQL User CAL only NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 2 33.78 0.00 67.56

Page 30 of 190 Quote US-QUO-848779

Start Date Version Description End Date OS Amount Pos. No. Manufacturer Disc-Lev. Format Lic. Model Lic. Metrics Qty. Unit Price Sales Tax (USD) 60 228-04433 SQL Server Standard NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 2 145.86 0.00 291.72

70 7NQ-00292 SQL Server Standard Core 2 Lic Core Lic NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 8 580.12 0.00 4,640.96

80 9EN-00198 System Center Standard Core 2 Lic Core Lic NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 8 18.12 0.00 144.96

90 6VC-01254 Windows Remote Desktop Services User CAL only NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 45 21.43 0.00 964.35

100 9EA-00278 Windows Server DataCenter Core 2 Lic Core Lic NON-SPEC/AL Government 1 Year SA Add Prod Non-Specific Microsoft LEVEL D MNT IEA ADD G 112 125.25 0.00 14,028.00

110 9EA-00039 Windows Server DataCenter Core 2 Lic Core Lic NON-SPEC/AL Government License and 1 Year SA Add Prod Added at Signing Non-Specific Microsoft LEVEL D LIC&MNT IEA ADD G 13 290.89 0.00 3,781.57 ADDED

120 LK3-00001 Audio Conf GCC Shared Server Per User NON-SPEC/AL Government Monthly Subscription Non-Specific Microsoft LEVEL D SUB IEA GOV 130 43.56 0.00 5,662.80

130 3GU-00001 Office 365 Exchange ATP for Gov ShrdSvr per User NON-SPEC/AL Government Monthly Subscription Non-Specific Microsoft LEVEL D SUB IEA GOV 900 18.72 0.00 16,848.00

140 LK9-00003 PhoneSysGCC Shared server MVL Per User NON-SPEC/AL Government Monthly Subscription Non-Specific Microsoft LEVEL D SUB IEA GOV 5 74.04 0.00 370.20

150 7E7-00001 Project Online Professional GOV From SA ShrdSvr Per User NON-SPEC/AL Government Monthly Subscription Non-Specific Microsoft LEVEL D SUB IEA GOV 10 236.40 0.00 2,364.00

160 DDJ-00001 Power BI Pro ShrdSvr per User NON-SPEC/AL Government Monthly Subscription Non-Specific Microsoft LEVEL D SUB IEA GOV 4 93.00 0.00 372.00

170 9K4-00003 Visio Online Plan2 From SAGCC ShrdSvr MVL PerUsr NON-SPEC/AL Government Monthly Subscription Added Prod Non-Specific Microsoft LEVEL D SUB IEA ADD G 20 118.56 0.00 2,371.20 Total Annual Year 1 EA: $415,810.81 14 Month Total Annual Year 2 EA: $356,717.96 12 Month Total Annual Year 3 EA: $356,717.96

Page 31 of 190 Quote US-QUO-848779

Start Date Version Description End Date OS Amount Pos. No. Manufacturer Disc-Lev. Format Lic. Model Lic. Metrics Qty. Unit Price Sales Tax (USD) 12 Month

Total USD excl. Tax 356,717.96 Tax 0.00 Total USD incl. Tax 356,717.96

Thank you for your request for quote. This offer is non-binding. Prices are subject to change if supplier prices or currency values fluctuate.

Unless expressly otherwise agreed upon by the parties, by placing an order with SoftwareONE you hereby acknowledge and understand you will be bound by our terms and conditions at www.softwareone.com, and the placement of your order represents your agreement thereto. If Customer is required by law to withhold any tax from any amount payable, the amount payable will be increased so that after making all required withholdings, SoftwareONE receives an amount equal to the amount it would have received had no such withholdings been made.

Payment Terms 30 Days net Shipping Method Electronic Software Delivery Quote valid until 07/31/20

Prices are based on 30 Days net, FOB SoftwareONE. Shipping and Handling and applicable Sales Tax are additional. All products are non-returnable unless otherwise provided for by the Manufacturers Reseller Return Policy. CONFIDENTIAL INFORMATION: This Quote, and any attachment is intended only for the person or entity to which it is addressed, and contains confidential and/or privileged information. Any review, retransmission, dissemination or other use of this information to persons or entities other than the intended recipient is prohibited. View or place within PyraCloud: https://portal.softwareone.com/Quotes/DocumentDetail/US/US-QUO-848779

Page 32 of 190

Enterprise Update Statement

Enterprise Agreement Number 01E73535 Enrollment Number 61473359 Company Name City of Georgetown

In accordance with the terms of entity’s Enterprise Agreement and Enrollment, a true-up order must be submitted for each Enrollment’s anniversary (including at Enrollment expiration and prior to any renewal) to account for License quantity increases for: a. Qualified Desktops/Devices or Qualified Users b. Online Services (where permitted) c. Previously ordered Additional Products d. Products included in the Server and Cloud Enrollment or Enrollment for Core Infrastructure e. Products included in the Enrollment for Application Platform. Products selected with the three year true-up option must place the true-up order only upon enrollment expiration and prior to renewal. If entity has ordered any additional quantities since its last Enrollment anniversary, this annual true-up order is still required. Entity must submit an Enterprise Update Statement for each anniversary when there has been no increase in required License quantities as described above. W In checking this box, entity confirms that under the above referenced Enrollment, there has been no increase in the number of required Licenses not already ordered in a prior placed True Up Orders. Entity understands that it is the responsibility of the entity to ensure that all licenses installed are used according to the Enterprise Agreement and Enrollment referenced above. Select applicable year for this Update statement: 3

Customer/Government Partner (as applicable) Name of Entity * City of Georgetown Signature *

Printed Name*

Printed Title*

Signature Date*

* indicates required fields

EAUniversalUpdateStatement(WW)(ENG)(Jul2015) Page 1 of 1 Page 33 of 190

Amendment to Contract Documents

Enrollment Number 7-UL2LVQDAV

These amendments are entered into between the parties identified on the attached program signature form. They amend the Enrollment or Agreement identified above. All terms used but not defined in these amendments will have the same meanings provided in that Enrollment or Agreement.

Enterprise Enrollment Amendment ID CTM

The Enrollment is hereby amended as follows:

1. The section of the Enrollment entitled “Term” is hereby amended and replaced in full as follows:

Term. The initial term of this Enrollment will expire on the last day of the month, thirty-eight (38) full calendar months from the effective date of the initial term. If the Enrollment is renewed, the renewal term will expire 36 full calendar months after the effective date of the renewal term. Any reference in this Enrollment to “day” will be a calendar day. It could be terminated earlier or renewed as provided in the Microsoft Enterprise Agreement and this Enrollment. Microsoft will advise you of the renewal options before this Enrollment expires.

2. As a result of the revised Term, the anniversary dates and expiration date shall be as follows:

• 1st anniversary: November 1, 2021 • 2nd anniversary: November 1, 2022 • Expiration date: October 31, 2023

AmendmentApp v4.0 CTM-CTC-CTL-CTM,M97 BD Page 1 of 3 Page 34 of 190

Enterprise Enrollment (Indirect) Invoice for Quoted Price Amendment ID M97

The price quoted to Enrolled Affiliate’s Reseller is a fixed price based on an estimated order submission date. Microsoft will invoice Enrolled Affiliate’s Reseller based on this fixed price quote. If this order is submitted later than the estimated order submission date, Enrolled Affiliate’s Reseller will be charged for net new Monthly Subscriptions (including Online Services) for the period during which these services were not provided. Pricing to Enrolled Affiliate is agreed between Enrolled Affiliate and Enrolled Affiliate’s Reseller.

SKU Number SKU Description Existing Quantity Incremental quantities

AAD-34700 M365 E3 FromSA GCC 420 Unified ShrdSvr ALNG SubsVL MVL PerUsr AAD-34704 M365 E3 GCC Unified 480 ShrdSvr ALNG SubsVL MVL PerUsr 3GU-00001 O365AdvThrtPrtctPln1GCC 900 ShrdSvr ALNG SubsVL MVL PerUsr 9K4-00003 VisioPlan2FrmSAGCC 20 ShrdSvr ALNG SubsVL MVL PerUsr LK3-00001 AudioConfGCC ShrdSvr 130 ALNG SubsVL MVL PerUsr LK9-00003 PhoneSysGCC ShrdSvr 5 ALNG SubsVL MVL PerUsr 7E7-00001 Project Plan3 frmSA GCC 10 Shared All Lng Subs VL MVL Per User DDJ-00001 PwrBIProGCC ShrdSvr 4 ALNG SubsVL MVL PerUsr

Except for changes made by these amendments, the Enrollment or Agreement identified above remains unchanged and in full force and effect. If there is any conflict between any provision in these amendments and any provision in the Enrollment or Agreement identified above, these amendments shall control.

This Amendment must be attached to a signature form to be valid.

Microsoft Internal Use Only: Georgetown, TX EE CTM Amend (modified CTM CTM-CTC-CTL-CTM BD term).docx

AmendmentApp v4.0 CTM-CTC-CTL-CTM,M97 BD

Page 2 of 3 Page 35 of 190

(M97)EnrAmend(Ind)(InvoiceforQuotedPrice)( M97 B WW)(ENG)(Dec2019)(IU) .docx

AmendmentApp v4.0 CTM-CTC-CTL-CTM,M97 BD

Page 3 of 3 Page 36 of 190

Previous Enrollment(s)/Agreement(s) Form

Entity Name: City of Georgetown Contract that this form is attached to: State Local Government

For the purposes of this form, “entity” can mean the signing entity, Customer, Enrolled Affiliate, Government Partner, Institution, or other party entering into a volume licensing program agreement.

Please provide a description of the previous Enrollment(s), Agreement(s), Purchasing Account(s), and/or Affiliate Registration(s) being renewed or consolidated into the new contract identified above. a. Entity may select below any previous contract(s) from which to transfer MSDN subscribers to this new contract. Entity shall ensure that each MSDN subscriber transferred is either properly licensed under the new contract or is removed. b. Entity may select below only one previous contract from which to transfer the Software Assurance (SA) Benefit contact details, i.e., benefits contact ( not the SA manager) and the program codes, to this new contract. c. An Open License cannot be used to transfer either the SA Benefit details or MSDN subscribers. d. The date of the earliest expiring Enrollment/Agreement that contains SA or Online Services will be the effective date of the new contract (or SA coverage period for Select Plus). e. Please insert the number of the earliest expiring Enrollment/Agreement with SA or Online Services in the appropriate fields of the new contract. Enrollment/Agreement/ Enrollment/Agreement/ Transfer Transfer Purchasing Account/Affiliate Purchasing Account/Affiliate SA Benefit MSDN Registration Public Customer Registration Description Contact Subscribers Number Standard Enrollment 61473359 X X

PrevEnrAgrForm(WW)(ENG)(Oct2019) Page 1 of 1 Document X20-12873 Page 37 of 190

Previous Enrollment(s)/Agreement(s) Form

Entity Name: City of Georgetown Contract that this form is attached to: Enterprise Enrollment

Please provide a description of the previous Enrollment(s), Agreement(s), Purchasing Account(s), and/or Affiliate Registration(s) being renewed or consolidated into the new contract identified above. a. Entity may select below any previous contract(s) from which to transfer MSDN subscribers to this new contract. Entity shall ensure that each MSDN subscriber transferred is either properly licensed under the new contract or is removed. b. Entity may select below only one previous contract from which to transfer the Software Assurance (SA) Benefit contact details, i.e., benefits contact (not the SA manager) and the program codes, to this new contract. c. An Open License cannot be used to transfer either the SA Benefit details or MSDN subscribers. d. The date of the earliest expiring Enrollment/Agreement that contains SA or Online Services will be the effective date of the new contract (or SA coverage period for Select Plus). e. Please insert the number of the earliest expiring Enrollment/Agreement with SA or Online Services in the appropriate fields of the new contract. Enrollment/Agreement/ Enrollment/Agreement/ Transfer Transfer Purchasing Account/Affiliate Purchasing Account/Affiliate SA Benefit MSDN Registration Public Customer Registration Description Contact Subscribers Number Enterprise Enrollment 61473359

PrevEnrAgrForm(WW)(ENG)(Oct2019) Page 1 of 1 Document X20-12873 Page 38 of 190 Page 39 of 190 Page 40 of 190

Enterprise Enrollment State and Local

Enterprise Enrollment number Framework ID

(Microsoft to complete) 81025330 (if applicable)

Previous Enrollment number (Reseller to complete) 61473359

This Enrollment must be attached to a signature form to be valid.

This Microsoft Enterprise Enrollment is entered into between the entities as identified in the signature form as of the effective date. Enrolled Affiliate represents and warrants it is the same Customer, or an Affiliate of the Customer, that entered into the Enterprise Agreement identified on the program signature form. This Enrollment consists of: (1) these terms and conditions, (2) the terms of the Enterprise Agreement identified on the signature form, (3) the Product Selection Form, (4) the Product Terms, (5) the Online Services Terms, (6) any Supplemental Contact Information Form, Previous Agreement/Enrollment form, and other forms that may be required, and (7) any order submitted under this Enrollment. This Enrollment may only be entered into under a 2011 or later Enterprise Agreement. By entering into this Enrollment, Enrolled Affiliate agrees to be bound by the terms and conditions of the Enterprise Agreement. All terms used but not defined are located at http://www.microsoft.com/licensing/contracts . In the event of any conflict the terms of this Agreement control. Effective date. If Enrolled Affiliate is renewing Software Assurance or Subscription Licenses from one or more previous Enrollments or agreements, then the effective date will be the day after the first prior Enrollment or agreement expires or terminates. If this Enrollment is renewed, the effective date of the renewal term will be the day after the Expiration Date of the initial term. Otherwise, the effective date will be the date this Enrollment is accepted by Microsoft. Any reference to “anniversary date” refers to the anniversary of the effective date of the applicable initial or renewal term for each year this Enrollment is in effect. Term. The initial term of this Enrollment will expire on the last day of the month, 36 full calendar months from the effective date of the initial term. The renewal term will expire 36 full calendar months after the effective date of the renewal term.

Terms and Conditions

1. Definitions. Terms used but not defined in this Enrollment will have the definition in the Enterprise Agreement. The following definitions are used in this Enrollment: “Additional Product” means any Product identified as such in the Product Terms and chosen by Enrolled Affiliate under this Enrollment. “Community” means the community consisting of one or more of the following: (1) a Government, (2) an Enrolled Affiliate using eligible Government Community Cloud Services to provide solutions to a Government or a qualified member of the Community, or (3) a Customer with Customer Data that is subject to Government regulations for which Customer determines and Microsoft agrees that the use of Government Community Cloud Services is appropriate to meet Customer’s regulatory requirements.

EA20201EnrGov(US)SLG(ENG)(Oct2019) Page 1 of 10 Document X20 -10635 Page 41 of 190

Membership in the Community is ultimately at Microsoft’s discretion, which may vary by Government Community Cloud Service. “Enterprise Online Service” means any Online Service designated as an Enterprise Online Service in the Product Terms and chosen by Enrolled Affiliate under this Enrollment. Enterprise Online Services are treated as Online Services, except as noted. “Enterprise Product” means any Desktop Platform Product that Microsoft designates as an Enterprise Product in the Product Terms and chosen by Enrolled Affiliate under this Enrollment. Enterprise Products must be licensed for all Qualified Devices and Qualified Users on an Enterprise-wide basis under this program. “Expiration Date” means the date upon which the Enrollment expires. “Federal Agency” means a bureau, office, agency, department or other entity of the United States Government. “Government” means a Federal Agency, State/Local Entity, or Tribal Entity acting in its governmental capacity. “Government Community Cloud Services” means Microsoft Online Services that are provisioned in Microsoft’s multi-tenant data centers for exclusive use by or for the Community and offered in accordance with the National Institute of Standards and Technology (NIST) Special Publication 800-145. Microsoft Online Services that are Government Community Cloud Services are designated as such in the Use Rights and Product Terms. “Industry Device” (also known as line of business device) means any device that: (1) is not useable in its deployed configuration as a general purpose personal computing device (such as a personal computer), a multi-function server, or a commercially viable substitute for one of these systems; and (2) only employs an industry or task-specific software program (e.g. a computer-aided design program used by an architect or a point of sale program) (“Industry Program”). The device may include features and functions derived from Microsoft software or third-party software. If the device performs desktop functions (such as email, word processing, spreadsheets, database, network or Internet browsing, or scheduling, or personal finance), then the desktop functions: (1) may only be used for the purpose of supporting the Industry Program functionality; and (2) must be technically integrated with the Industry Program or employ technically enforced policies or architecture to operate only when used with the Industry Program functionality. “Managed Device” means any device on which any Affiliate in the Enterprise directly or indirectly controls one or more operating system environments. Examples of Managed Devices can be found in the Product Terms. “Qualified Device” means any device that is used by or for the benefit of Enrolled Affiliate’s Enterprise and is: (1) a personal desktop computer, portable computer, workstation, or similar device capable of running Windows Pro locally (in a physical or virtual operating system environment), or (2) a device used to access a virtual desktop infrastructure (“VDI”). Qualified Devices do not include any device that is: (1) designated as a server and not used as a personal computer, (2) an Industry Device, or (3) not a Managed Device. At its option, the Enrolled Affiliate may designate any device excluded above (e.g., Industry Device) that is used by or for the benefit of the Enrolled Affiliate’s Enterprise as a Qualified Device for all or a subset of Enterprise Products or Online Services the Enrolled Affiliate has selected. “Qualified User” means a person (e.g., employee, consultant, contingent staff) who: (1) is a user of a Qualified Device, or (2) accesses any server software requiring an Enterprise Product Client Access License or any Enterprise Online Service. It does not include a person who accesses server software or an Online Service solely under a License identified in the Qualified User exemptions in the Product Terms. “Reseller” means an entity authorized by Microsoft to resell Licenses under this program and engaged by an Enrolled Affiliate to provide pre- and post-transaction assistance related to this agreement; “Reserved License” means for an Online Service identified as eligible for true-ups in the Product Terms, the License reserved by Enrolled Affiliate prior to use and for which Microsoft will make the Online Service available for activation.

EA20201EnrGov(US)SLG(ENG)(Oct2019) Page 2 of 10 Document X20 -10635 Page 42 of 190

"State/Local Entity" means (1) any agency of a state or local government in the United States, or (2) any United States county, borough, commonwealth, city, municipality, town, township, special purpose district, or other similar type of governmental instrumentality established by the laws of Customer’s state and located within Customer’s state’s jurisdiction and geographic boundaries. “Tribal Entity” means a federally recognized tribal entity performing tribal governmental functions and eligible for funding and services from the U.S. Department of Interior by virtue of its status as an Indian tribe. “Use Rights” means, with respect to any licensing program, the use rights or terms of service for each Product and version published for that licensing program at the Volume Licensing Site and updated from time to time. The Use Rights include the Product-Specific License Terms, the License Model terms, the Universal License Terms, the Data Protection Terms, and the Other Legal Terms. The Use Rights supersede the terms of any end user license agreement (on-screen or otherwise) that accompanies a Product. “Volume Licensing Site” means http://www.microsoft.com/licensing/contracts or a successor site.

2. Order requirements. a. Minimum order requirements. Enrolled Affiliate’s Enterprise must have a minimum of 250 Qualified Users or Qualified Devices. The initial order must include at least 250 Licenses for Enterprise Products or Enterprise Online Services. (i) Enterprise commitment. Enrolled Affiliate must order enough Licenses to cover all Qualified Users or Qualified Devices, depending on the License Type, with one or more Enterprise Products or a mix of Enterprise Products and the corresponding Enterprise Online Services (as long as all Qualified Devices not covered by a License are only used by users covered with a user License). (ii) Enterprise Online Services only. If no Enterprise Product is ordered, then Enrolled Affiliate need only maintain at least 250 Subscription Licenses for Enterprise Online Services . b. Additional Products. Upon satisfying the minimum order requirements above, Enrolled Affiliate may order Additional Products. c. Use Rights for Enterprise Products. For Enterprise Products, if a new Product version has more restrictive use rights than the version that is current at the start of the applicable initial or renewal term of the Enrollment, those more restrictive use rights will not apply to Enrolled Affiliate’s use of that Product during that term. d. Country of usage. Enrolled Affiliate must specify the countries where Licenses will be used on its initial order and on any additional orders. e. Resellers. Enrolled Affiliate must choose and maintain a Reseller authorized in the United States. Enrolled Affiliate will acquire its Licenses through its chosen Reseller. Orders must be submitted to the Reseller who will transmit the order to Microsoft. The Reseller and Enrolled Affiliate determine pricing and payment terms as between them, and Microsoft will invoice the Reseller based on those terms. Throughout this Agreement the term “price” refers to reference price. Resellers and other third parties do not have authority to bind or impose any obligation or liability on Microsoft. f. Adding Products. (i) Adding new Products not previously ordered . New Enterprise Products or Enterprise Online Services may be added at any time by contacting a Microsoft Account Manager or Reseller. New Additional Products, other than Online Services, may be used if an order is placed in the month the Product is first used. For Additional Products that are Online Services, an initial order for the Online Service is required prior to use.

EA20201EnrGov(US)SLG(ENG)(Oct2019) Page 3 of 10 Document X20 -10635 Page 43 of 190

(ii) Adding Licenses for previously ordered Products. Additional Licenses for previously ordered Products other than Online Services may be added at any time but must be included in the next true-up order. Additional Licenses for Online Services must be ordered prior to use, unless the Online Services are (1) identified as eligible for true-up in the Product Terms or (2) included as part of other Licenses. g. True-up requirements. Enrolled Affiliate must submit an annual true-up order that accounts for any changes since the initial order or last order. If there are no changes, then an update statement must be submitted instead of a true-up order. (i) Enterprise Products. For Enterprise Products, Enrolled Affiliate must determine the number of Qualified Devices and Qualified Users (if ordering user-based Licenses) at the time the true-up order is placed and must order additional Licenses for all Qualified Devices and Qualified Users that are not already covered by existing Licenses, including any Enterprise Online Services. (ii) Additional Products. For Additional Products that have been previously ordered under this Enrollment, Enrolled Affiliate must determine the maximum number of Additional Products used since the latter of the initial order, the last true-up order, or the prior anniversary date and submit a true-up order that accounts for any increase. (iii) Online Services. For Online Services identified as eligible for true-up in the Product Terms, Enrolled Affiliate may place a reservation order for the additional Licenses prior to use and payment may be deferred until the next true-up order. Microsoft will provide a report of Reserved Licenses ordered but not yet invoiced to Enrolled Affiliate and its Reseller. Reserved Licenses will be invoiced retrospectively to the month in which they were ordered. (iv) Subscription License reductions. Enrolled Affiliate may reduce the quantity of Subscription Licenses at the Enrollment anniversary date on a prospective basis if permitted in the Product Terms, as follows: 1) For Subscription Licenses that are part of an Enterprise-wide purchase, Licenses may be reduced if the total quantity of Licenses and Software Assurance for an applicable group meets or exceeds the quantity of Qualified Devices and Qualified Users (if ordering user-based Licenses) identified on the Product Selection Form, and includes any additional Qualified Devices and Qualified Users added in any prior true-up orders. Step-up Licenses do not count towards this total count. 2) For Enterprise Online Services that are not a part of an Enterprise-wide purchase, Licenses can be reduced as long as the initial order minimum requirements are maintained. 3) For Additional Products available as Subscription Licenses, Enrolled Affiliate may reduce the Licenses. If the License count is reduced to zero, then Enrolled Affiliate’s use of the applicable Subscription License will be cancelled. Invoices will be adjusted to reflect any reductions in Subscription Licenses at the true-up order Enrollment anniversary date and effective as of such date. (v) Update statement. An update statement must be submitted instead of a true-up order if, since the initial order or last true-up order, Enrolled Affiliate’s Enterprise: (1) has not changed the number of Qualified Devices and Qualified Users licensed with Enterprise Products or Enterprise Online Services; and (2) has not increased its usage of Additional Products. This update statement must be signed by Enrolled Affiliate’s authorized representative. (vi) True-up order period. The true-up order or update statement must be received by Microsoft between 60 and 30 days prior to each Enrollment anniversary date. The third- year true-up order or update statement is due within 30 days prior to the Expiration Date, and any license reservations within this 30 day period will not be accepted. Enrolled Affiliate

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may submit true-up orders more often to account for increases in Product usage, but an annual true-up order or update statement must still be submitted during the annual order period. (vii) Late true-up order. If the true-up order or update statement is not received when due, Microsoft will invoice Reseller for all Reserved Licenses not previously invoiced and Subscription License reductions cannot be reported until the following Enrollment anniversary date (or at Enrollment renewal, as applicable). h. Step-up Licenses. For Licenses eligible for a step-up under this Enrollment, Enrolled Affiliate may step-up to a higher edition or suite as follows: (i) For step-up Licenses included on an initial order, Enrolled Affiliate may order according to the true-up process. (ii) If step-up Licenses are not included on an initial order, Enrolled Affiliate may step-up initially by following the process described in the Section titled “Adding new Products not previously ordered,” then for additional step-up Licenses, by following the true-up order process. i. Clerical errors. Microsoft may correct clerical errors in this Enrollment, and any documents submitted with or under this Enrollment, by providing notice by email and a reasonable opportunity for Enrolled Affiliate to object to the correction. Clerical errors include minor mistakes, unintentional additions and omissions. This provision does not apply to material terms, such as the identity, quantity or price of a Product ordered. j. Verifying compliance. Microsoft may, in its discretion and at its expense, verify compliance with this Enrollment as set forth in the Enterprise Agreement.

3. Pricing. a. Price Levels. For both the initial and any renewal term Enrolled Affiliate’s Price Level for all Products ordered under this Enrollment will be Level “D” throughout the term of the Enrollment. b. Setting Prices. Enrolled Affiliate’s prices for each Product or Service will be established by its Reseller. Except for Online Services designated in the Product Terms as being exempt from fixed pricing, As long as Enrolled Affiliate continues to qualify for the same price level, Microsoft’s prices for Resellers for each Product or Service ordered will be fixed throughout the applicable initial or renewal Enrollment term. Microsoft’s prices to Resellers are reestablished at the beginning of the renewal term.

4. Payment terms. For the initial or renewal order, Microsoft will invoice Enrolled Affiliate’s Reseller in three equal annual installments. The first installment will be invoiced upon Microsoft’s acceptance of this Enrollment and remaining installments will be invoiced on each subsequent Enrollment anniversary date. Subsequent orders are invoiced upon acceptance of the order and Enrolled Affiliate may elect to pay annually or upfront for Online Services and upfront for all other Licenses.

5. End of Enrollment term and termination. a. General. At the Expiration Date, Enrolled Affiliate must immediately order and pay for Licenses for Products it has used but has not previously submitted an order, except as otherwise provided in this Enrollment. b. Renewal option. At the Expiration Date of the initial term, Enrolled Affiliate can renew Products by renewing this Enrollment for one additional 36-month term or by signing a new Enrollment. Microsoft must receive a Renewal Form, Product Selection Form, and renewal order prior to or at the Expiration Date. Microsoft will not unreasonably reject any renewal.

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Microsoft may make changes to this program that will make it necessary for Customer and its Enrolled Affiliates to enter into new agreements and Enrollments at renewal. c. If Enrolled Affiliate elects not to renew. (i) Software Assurance. If Enrolled Affiliate elects not to renew Software Assurance for any Product under its Enrollment, then Enrolled Affiliate will not be permitted to order Software Assurance later without first acquiring a new License with Software Assurance. (ii) Online Services eligible for an Extended Term. For Online Services identified as eligible for an Extended Term in the Product Terms, the following options are available at the end of the Enrollment initial or renewal term. 1) Extended Term. Licenses for Online Services will automatically expire in accordance with the terms of the Enrollment. An extended term feature that allows Online Services to continue month-to-month (“Extended Term”) is available. During the Extended Term, Online Services will be invoiced monthly at the then-current published price as of the Expiration Date plus a 3% administrative fee for up to one year. If Enrolled Affiliate wants an Extended Term, Enrolled Affiliate must submit a request to Microsoft at least 30 days prior to the Expiration Date. 2) Cancellation during Extended Term. At any time during the first year of the Extended Term, Enrolled Affiliate may terminate the Extended Term by submitting a notice of cancellation to Microsoft for each Online Service. Thereafter, either party may terminate the Extended Term by providing the other with a notice of cancellation for each Online Service. Cancellation will be effective at the end of the month following 30 days after Microsoft has received or issued the notice. (iii) Subscription Licenses and Online Services not eligible for an Extended Term. If Enrolled Affiliate elects not to renew, the Licenses will be cancelled and will terminate as of the Expiration Date. Any associated media must be uninstalled and destroyed and Enrolled Affiliate’s Enterprise must discontinue use. Microsoft may request written certification to verify compliance. d. Termination for cause. Any termination for cause of this Enrollment will be subject to the “Termination for cause” section of the Agreement. In addition, it shall be a breach of this Enrollment if Enrolled Affiliate or any Affiliate in the Enterprise that uses Government Community Cloud Services fails to meet and maintain the conditions of membership in the definition of Community. e. Early termination. Any early termination of this Enrollment will be subject to the “Early Termination” Section of the Enterprise Agreement. For Subscription Licenses, in the event of a breach by Microsoft, or if Microsoft terminates an Online Service for regulatory reasons, Microsoft will issue Reseller a credit for any amount paid in advance for the period after termination.

6. Government Community Cloud. a. Community requirements. If Enrolled Affiliate purchases Government Community Cloud Services, Enrolled Affiliate certifies that it is a member of the Community and agrees to use Government Community Cloud Services solely in its capacity as a member of the Community and, for eligible Government Community Cloud Services, for the benefit of end users that are members of the Community. Use of Government Community Cloud Services by an entity that is not a member of the Community or to provide services to non-Community members is strictly prohibited and could result in termination of Enrolled Affiliate’s license(s) for Government Community Cloud Services without notice. Enrolled Affiliate acknowledges that only Community members may use Government Community Cloud Services. b. All terms and conditions applicable to non-Government Community Cloud Services also apply

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to their corresponding Government Community Cloud Services, except as otherwise noted in the Use Rights, Product Terms, and this Enrollment. c. Enrolled Affiliate may not deploy or use Government Community Cloud Services and corresponding non-Government Community Cloud Services in the same domain. d. Use Rights for Government Community Cloud Services. For Government Community Cloud Services, notwithstanding anything to the contrary in the Use Rights: (i) Government Community Cloud Services will be offered only within the United States. (ii) Additional European Terms, as set forth in the Use Rights, will not apply. (iii) References to geographic areas in the Use Rights with respect to the location of Customer Data at rest, as set forth in the Use Rights, refer only to the United States.

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Enrollment Details

1. Enrolled Affiliate’s Enterprise. a. Identify which Agency Affiliates are included in the Enterprise. (Required) Enrolled Affiliate’s Enterprise must consist of entire offices, bureaus, agencies, departments or other entities of Enrolled Affiliate, not partial offices, bureaus, agencies, or departments, or other partial entities. Check only one box in this section. If no boxes are checked, Microsoft will deem the Enterprise to include the Enrolled Affiliate only. If more than one box is checked, Microsoft will deem the Enterprise to include the largest number of Affiliates: W Enrolled Affiliate only £ Enrolled Affiliate and all Affiliates £ Enrolled Affiliate and the following Affiliate(s) (Only identify specific affiliates to be included if fewer than all Affiliates are to be included in the Enterprise):

£ Enrolled Affiliate and all Affiliates, with following Affiliate(s) excluded:

b. Please indicate whether the Enrolled Affiliate’s Enterprise will include all new Affiliates acquired after the start of this Enrollment: Exclude future Affiliates

2. Contact information. Each party will notify the other in writing if any of the information in the following contact information page(s) changes. The asterisks (*) indicate required fields. By providing contact information, Enrolled Affiliate consents to its use for purposes of administering this Enrollment by Microsoft, its Affiliates, and other parties that help administer this Enrollment. The personal information provided in connection with this Enrollment will be used and protected in accordance with the privacy statement available at https://www.microsoft.com/licensing/servicecenter .

a. Primary contact. This contact is the primary contact for the Enrollment from within Enrolled Affiliate’s Enterprise. This contact is also an Online Administrator for the Volume Licensing Service Center and may grant online access to others. The primary contact will be the default contact for all purposes unless separate contacts are identified for specific purposes Name of entity (must be legal entity name)* City of Georgetown Contact name* First Greg Last Berglund Contact email address* [email protected] Street address* 510 W. 9th Street City* Georgetown State* TX Postal code* 78626-5510- (Please provide the zip + 4, e.g. xxxxx-xxxx) Country* United States Phone* 512-930-3645 Tax ID * indicates required fields

b. Notices contact and Online Administrator. This contact (1) receives the contractual notices, (2) is the Online Administrator for the Volume Licensing Service Center and may grant online access to others, and (3) is authorized to order Reserved Licenses for eligible Online Servies, including adding or reassigning Licenses and stepping-up prior to a true-up order.

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W Same as primary contact (default if no information is provided below, even if the box is not checked). Contact name* First Greg Last Berglund Contact email address* [email protected] Street address* 510 W. 9th Street City* Georgetown State* TX Postal code* 78626-5510- (Please provide the zip + 4, e.g. xxxxx-xxxx) Country* United States Phone* 512-930-3645 Language preference. Choose the language for notices. English £ This contact is a third party (not the Enrolled Affiliate). Warning: This contact receives personally identifiable information of the Customer and its Affiliates. * indicates required fields

c. Online Services Manager. This contact is authorized to manage the Online Services ordered under the Enrollment and (for applicable Online Services) to add or reassign Licenses and step-up prior to a true-up order. Same as notices contact and Online Administrator (default if no information is provided below, even if box is not checked) Contact name*: First Greg Last Berglund Contact email address* [email protected] Phone* 512-930-3645 £ This contact is from a third party organization (not the entity). Warning: This contact receives personally identifiable information of the entity. * indicates required fields

d. Reseller information. Reseller contact for this Enrollment is: Reseller company name* SoftwareONE, Inc. Street address (PO boxes will not be accepted)* 20875 Crossroads Circle, Suite 1 City* Waukesha State* WI Postal code* 53186-4093 Country* United States Contact name* MS. Admin Phone* 262-317-5555 Contact email address* [email protected] * indicates required fields By signing below, the Reseller identified above confirms that all information provided in this Enrollment is correct.

Signature* Printed name* Printed title* Date* * indicates required fields Changing a Reseller. If Microsoft or the Reseller chooses to discontinue doing business with each other, Enrolled Affiliate must choose a replacement Reseller. If Enrolled Affiliate or the Reseller intends to terminate their relationship, the initiating party must notify Microsoft and the

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other party using a form provided by Microsoft at least 90 days prior to the date on which the change is to take effect.

e. If Enrolled Affiliate requires a separate contact for any of the following, attach the Supplemental Contact Information form. Otherwise, the notices contact and Online Administrator remains the default. (i) Additional notices contact (ii) Software Assurance manager (iii) Subscriptions manager (iv) Customer Support Manager (CSM) contact

3. Financing elections. Is a purchase under this Enrollment being financed through MS Financing? £ Yes, W No. If a purchase under this Enrollment is financed through MS Financing, and Enrolled Affiliate chooses not to finance any associated taxes, it must pay these taxes directly to Microsoft.

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Program Signature Form

MBA/MBSA number 7-UL2LVQDAV

Agreement number 01E73535

Note: Enter the applicable active numbers associated with the documents below. Microsoft requires the associated active number be indicated here, or listed below as new.

For the purposes of this form, “Customer” can mean the signing entity, Enrolled Affiliate, Government Partner, Institution, or other party entering into a volume licensing program agreement.

This signature form and all contract documents identified in the table below are entered into between the Customer and the Microsoft Affiliate signing, as of the effective date identified below.

Contract Document Number or Code Enterprise Enrollment (Indirect) X20-10635 Product Selection Form 0978876.002_PSF Enterprise Amendment CTM;M97(New)

By signing below, Customer and the Microsoft Affiliate agree that both parties (1) have received, read and understand the above contract documents, including any websites or documents incorporated by reference and any amendments and (2) agree to be bound by the terms of all such documents.

Customer

Name of Entity (must be legal entity name)* City of Georgetown Signature* Printed First and Last Name* Printed Title Signature Date*

Tax ID * indicates required field

Microsoft Affiliate

Microsoft Corporation

Signature Printed First and Last Name Printed Title Signature Date (date Microsoft Affiliate countersigns)

Agreement Effective Date (may be different than Microsoft’s signature date)

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Optional 2 nd Customer signature or Outsourcer signature (if applicable)

Customer

Name of Entity (must be legal entity name)* Signature* Printed First and Last Name* Printed Title Signature Date* * indicates required field

Outsourcer

Name of Entity (must be legal entity name)* Signature* Printed First and Last Name* Printed Title Signature Date* * indicates required field If Customer requires additional contacts or is reporting multiple previous Enrollments, include the appropriate form(s) with this signature form. After this signature form is signed by the Customer, send it and the Contract Documents to Customer’s channel partner or Microsoft account manager, who must submit them to the following address. When the signature form is fully executed by Microsoft, Customer will receive a confirmation copy.

Microsoft Corporation Dept. 551, Volume Licensing 6880 Sierra Center Parkway Reno, Nevada 89511 USA

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Enterprise Agreement State and Local Not for Use w ith Microsoft Business Agreement or Microsoft Business and Services Agreement

Contents 1. Definitions...... 1 2. How the Enterprise and Enterprise Subscription program work s...... 3 3. Licenses for Products...... 3 4. How to know what Product Use Rights apply...... 4 5. Making copies of Products and re-imaging rights...... 5 6. Transferring and reassigning Licenses...... 5 7. Term and termination...... 6 8. Restrictions on use...... 8 9. Non-Microsoft Software or Technology...... 8 10. Confidentiality...... 8 11. Warranties...... 10 12. Defense of infringement, misappropriation, and third party claims...... 11 13. Limitation of liability...... 12 14. Verifying compliance...... 13 15. Miscellaneous...... 13

This Microsoft Enterprise Agreement is entered into between the entities identified on the program signature form. Effective date. The effective date of this agreement is the effective date of the first Enrollment or the date Microsoft accepts this agreement, whichever is earlier. Any reference in this agreement or an Enrollment to "day" will be a calendar day. This agreement consists of (1) these agreement terms and conditions and the signature form and all attachments identified therein, (2) the Product List, (3) the Product Use Rights applicable to Products licensed under this agreement, (4) any Affiliate Enrollment entered into under this agreement, and (5) any order submitted under this agreement. Please note: Several documents referenced in this agreement but not attached to the signature form may be found at: http://www.microsoft.com/licensing/contracts and are incorporated by reference, including the Product List and Product Use Rights. These documents may contain additional terms and conditions for Products licensed under this agreement and may be changed from time to time. Customer and/or its Affiliates should review such documents carefully, both at the time of signing and periodically, to ensure a full understanding of all terms and conditions applicable to Products licensed.

Terms and Conditions

1. Definitions. “Affiliate” means a. with regard to Customer, (i) any government agency, department, office, instrumentality, division, unit or other entity of the state or local government that is supervised by or is part of Customer, or which supervises Customer or of which Customer is a part, or which is under common supervision with Customer; (ii) any county, borough, commonwealth, city, municipality, town, township, special purpose district, or other similar type of governmental instrumentality established by the laws of

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Customer’s state and located within Customer’s state jurisdiction and geographic boundaries; and (iii) any other entity in Customer’s state expressly authorized by the laws of Customer’s state to purchase under state contracts; provided that a state and its Affiliates shall not, for purposes of this definition, be considered to be Affiliates of the federal government and its Affiliates; and b. with regard to Microsoft, any legal entity that Microsoft owns, that owns Microsoft, or that is under common ownership with Microsoft; “available” means Microsoft has made Licenses for that Product available on the Product List for ordering under a particular licensing program; “Customer” means the entity that has entered into this agreement and its Affiliates; “Customer Data” means all data, including all text, sound, software, or image files that are provided to Microsoft by, or on behalf of, Enrolled Affiliate through its use of the Online Services. “Enrolled Affiliate” means an entity, either Customer or any one of Customer’s Affiliates, that has entered into an Enrollment under this agreement; “Enrollment” means the document that an Enrolled Affiliate submits under this agreement to place its initial order; “Enterprise” means the Enrolled Affiliate and the Affiliates it chooses on its Enrollment to include in its enterprise; “Fixes” means Product fixes, modifications or enhancements, or their derivatives, that Microsoft either releases generally (such as service packs). “License” means Enrolled Affiliate's right to use the quantity of a Product ordered. For certain Products, a License may be available on a subscription basis (“Subscription License”). Licenses for Online Services will be considered Subscription Licenses under this agreement; “L&SA” means a License and Software Assurance for any Product ordered; “Microsoft” means the Microsoft Affiliate that has entered into this agreement or an Enrollment and its Affiliates, as appropriate; “Online Service” means the Microsoft-hosted services identified in the Online Services section of the Product List. “Product” means all software, Online Services and other web-based services, including pre-release or beta versions, identified on the Product List. “Product List” means the statement published by Microsoft from time to time on the World Wide Web at http://www.microsoft.com/licensing/contracts or at a successor site that Microsoft identifies, which identifies the Products that are or may be made available under a program (which availability may vary by region) and any Product-specific conditions or limitations on the acquisition of licenses for, or use of, those Products. “Product Use Rights” means, with respect to any licensing program, the use rights or terms of service for each Product and version published for that licensing program at http://www.microsoft.com/licensing/contracts or at a successor site. “Reseller” means a large account Reseller authorized by Microsoft to resell Licenses under this program; “Service Level Agreement” means the document specifying the standards Microsoft agrees to adhere to and by which it measures the level of service for an Online Service. “Software Assurance” means an offering that provides new version rights and other benefits for Products as further described in the Product List.

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“Trade Secret” means information that is not generally known or readily ascertainable to the public, has economic value as a result, and has been subject to reasonable steps under the circumstances to maintain its secrecy; “use” or “run” means to copy, install, use, access, display, run or otherwise interact.

2. How the Enterprise and Enterprise Subscription program works. The Enterprise and Enterprise Subscription Program. The Enterprise and Enterprise Subscription programs establish a Customer’s overall licensing framework and the applicable terms and conditions. Under the Enterprise program, Customer may license Products by entering into E nrollments.The Enterprise Subscription program offers Customer the same options as the Enterprise Program, but on a subscription basis, with an optional buy-out to obtain perpetual Licenses. a. Enrollments. The Enterprise program gives Customer and/or its Affiliates the ability to enter into one or more Enrollments to order Products. Subscription Enrollments may be available for some of these Enrollments. b. Licenses. The types of Licenses available are L&SA, Licenses obtained under Software Assurance and Subscription Licenses. These License types as well as additional License Types are defined in the Product List. c. How Enrolled Affiliates acquire Licenses. An Enrolled Affiliate will acquire its Licenses through its chosen Reseller. Orders will be made out to and submitted to the Enrolled Affiliate’s Reseller. Microsoft will invoice that Reseller according to the terms in the applicable Enrollment. d. Choosing and maintaining a Reseller. Each Enrolled Affiliate must choose and maintain a Reseller authorized in the Enrolled Affiliate’s location. e. Pricing. (i) Establishing Price Levels. Each Product generally is assigned to a Product pool (e.g., applications, systems, or servers). Each Product pool will be assigned one of four price levels (A, B, C, and D). Enrolled Affiliate’s Price Level will be Level D for all Enterprise Products, Enterprise Online Services, Online Services and Additional Products ordered under any Enrollment. (ii) Placing Orders through Reseller. Orders under an Enrollment will be made to the Reseller. Microsoft will invoice the Reseller according to the terms in the applicable Enrollment. Throughout this agreement the term “price” refers to reference price. The Reseller and the Enrolled Affiliate will determine the Enrolled Affiliate’s actual price and payment terms. f. Order Requirements. Order Requirements are outlined in each Enrollment. g. Management and Reporting. Customer and/or Enrolled Affiliate may manage account details (e.g., contacts, orders, Licenses, software downloads) on Microsoft’s Volume Licensing Service Center (“VLSC”) web site (or successor site) at: https://www.microsoft.com/licensing/servicecenter. Upon the effective date of this agreement and any Enrollments, the contact(s) identified for this purpose will be provided access to this site and may authorize additional users and contacts.

3. Licenses for Products. a. General. Enrolled Affiliate will have the number of Licenses ordered for the latest version of a Product, and may use prior versions as permitted in the Product Use Rights, so long as Microsoft receives timely orders from Reseller for all required Licenses for such Products and complies with applicable license terms. The Licenses obtained under an Enrollment are not

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related to any order or fulfillment of software media. The ability to use a Product ordered may be affected by minimum hardware or software requirements. b. Use by Affiliates. The Enrolled Affiliate may sublicense the right to use the Products to any Affiliates covered under its Enrollment, but Affiliate recipient of these Licenses may not sublicense these rights and their use must be consistent with the License terms contained in this agreement. c. When Licenses become perpetual. The right to run any Product licensed under an Enrollment is temporary unless and until it becomes perpetual as follows: (i) A License is temporary until Enrolled Affiliate’s Reseller has paid for a License in full and the applicable initial Enrollment or renewal term during which the License was ordered must have expired or been terminated as permitted in this agreement. (ii) Subscription Licenses are never perpetual. If a buy-out option is available, Enrolled Affiliate may obtain a perpetual License by exercising the buy-out option and paying for the License in full. (iii) Enrolled Affiliate will have perpetual Licenses to use the Products ordered in the latest version available (or any prior version) as of the date of expiration, termination, or renewal. (iv) All perpetual Licenses acquired under this agreement remain subject to the terms of this agreement and such terms survive expiration or termination of this agreement or an Enrollment. d. Perpetual Licenses through Software Assurance. Perpetual Licenses received through Software Assurance supersede and replace the underlying perpetual Licenses for which Software Assurance coverage was ordered. In the case of Early Termination, the terms in Section 7 titled “Term and Termination will apply.” e. License confirmation. This agreement, the applicable Enrollment, the Enrolled Affiliate’s order confirmation, and any documentation evidencing transfers of Licenses, together with proof of payment, will be the Enrolled Affiliate’s evidence of all Licenses obtained under its Enrollment. f. Reorganizations, consolidations, and privatizations. If the number of Qualified Devices or Qualified Users covered by an Enrollment changes by more than ten percent as a result of a reorganization, consolidation, or privatization of an Enrolled Affiliate, Microsoft will work with the Enrolled Affiliate in good faith to determine how to accommodate its changed circumstances in the context of this agreement. If an Enrolled Affiliate consolidates with a third party with an existing agreement or enrollment, Microsoft will work with the Enrolled Affiliate in good faith to accommodate its changed circumstances in the context of this agreement.

4. How to know what Product Use Rights apply. a. Product Use Rights. The Product Use Rights in effect on the effective date of an Enrollment will apply to Enrolled Affiliate’s use of then-current versions of each Product (excluding Online Services). For future versions, the Product Use Rights in effect when those future versions are first released will apply. In both cases, subsequent changes made by Microsoft to the Product Use Rights for a particular version will not apply to Enrolled Affiliate’s use of that version, unless Enrolled Affiliate chooses to have such changes apply. The use rights for Online Services and the process for updating them as the Online Services evolve are detailed in the Product Use Rights. b. Product Use Rights for earlier versions (downgrade). If Enrolled Affiliate runs an earlier version of a Product than the version that was current on the Enrollment effective date, the Product Use Rights for the version licensed, not the version being run, will apply. However, if

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the earlier version includes components that are not part of the licensed version, any Product Use Rights specific to those components will apply to Enrolled Affiliate’s use of those components. c. Reservation of rights. All rights not expressly granted are reserved.

5. Making copies of Products and re-imaging rights. a. General. Enrolled Affiliate may make as many copies of Products, if applicable, as it needs to distribute them within its organization. Copies must be true and complete (including copyright and trademark notices) from master copies obtained from a Microsoft approved fulfillment source. Enrolled Affiliate may use a third party to make these copies, but Enrolled Affiliate agrees it will be responsible for any third party’s actions. Enrolled Affiliate agrees to use reasonable efforts to notify its employees, agents, and any other individuals who use the Products that the Products are licensed from Microsoft and subject to the terms of this agreement. b. Copies for training/evaluation and back-up. For all Products other than Online Services, Enrolled Affiliate may: (1) use up to 20 complimentary copies of any licensed Products in a dedicated training facility on its premises for purposes of training on that particular Product, (2) use up to 10 complimentary copies of any Products for a 60 day evaluation period, and (3) use one complimentary copy of any licensed Product for back-up or archival purposes for each of its distinct geographic locations. Trials for Online Services may be available if specified in the Product Use Rights. c. Right to re-image. In certain cases, re-imaging is permitted using the Product media. If the Microsoft Product is licensed (1) from an original equipment manufacturer (OEM), (2) as a full packaged Product through a retail source, or (3) under another Microsoft program, then media provided under this agreement may generally be used to create images for use in place of copies provided through that separate source. This right is conditional upon the following: (i) Separate Licenses must be owned from the source for each Product that is re-imaged. (ii) The Product, language, version, and components of the copies made must be identical to the Product, language, version, and all components of the copies they replace and the number of copies or instances of the re-imaged Product permitted remains the same. (iii) Except for copies of an operating system and copies of Products licensed under another Microsoft program, the Product type (e.g., upgrade or full License) must be identical to the Product type from the separate source. (iv) Enrolled Affiliate must adhere to any Product-specific processes or requirements for re- imaging identified in the Product List. (v) Re-images made under this subsection remain subject to the terms and use rights provided with the License from the separate source. (vi) This subsection does not create or extend any warranty or support obligation.

6. Transferring and reassigning Licenses. a. License transfers. You may transfer fully-paid perpetual Licenses: (i) if you are an agency of the U.S. Government, to another agency of the U.S. Government or to an unaffiliated third party in connection with (i) a privatization of the government agency or of an operating division of an Enrolled Affiliate or one of its government agency affiliates, (ii) a reorganization, or (iii) a consolidation; or

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(ii) if you are an agency of a state or local government to: (a) any other government agency, department, instrumentality, division, unit or other office of your state or local government that is supervised by or is part of you, or which supervises you or of which you are a part, or which is under common supervision with you; (ii) any county, borough, commonwealth, city, municipality, town, township, special purpose district, or other similar type of governmental instrumentality established by the laws of your state and located within your state’s jurisdiction and geographic boundaries; and (iii) any other entity expressly authorized by the laws of your state to purchase under state contracts, or (b) an unaffiliated third party in connection with a privatization of an affiliate of agency as set forth in (a) above or of an operating division of the Enrolled Affiliate or one if its affiliates as set forth in (a) above, a reorganization, or a consolidation. b. Customer must notify Microsoft of a transfer of license by completing a transfer notice form, which can be obtained from http://www.microsoft.com/licensing/contracts and send the completed form to Microsoft before the license transfer. No License transfer will be valid unless Customer provides to the transferee, and the transferee accepts in writing, the applicable Product Use Rights, use restrictions, limitations of liability (including exclusions and warranty provisions), and the transfer restrictions described in this section. Any license transfer not made in compliance with this section will be void. c. Internal Assignment of Licenses and Software Assurance. Licenses and Software Assurance must be assigned to a single user or device within the Enterprise. Licenses may be reassigned within the Enterprise as described in the Product Use Rights.

7. Term and termination. a. Term. The term of this agreement will be 36 months from the Effective date unless terminated by either party as described below. Each Enrollment will have the term provided in that Enrollment. b. Termination without cause. Either party may terminate this agreement, without cause, upon 60 days written notice. Such termination will merely terminate either party’s and its Affiliates’ ability to enter into new Enrollments under this agreement. Such termination will not affect any Enrollment or order not otherwise terminated, and any terms of this agreement applicable to any Enrollment or order not otherwise terminated will continue in effect with respect to that Enrollment or order. An Enrolled Affiliate may terminate an Enrollment without liability, penalty or further obligation to make payments if funds to make payments under the Enrollment are not appropriated or allocated for such purpose. c. Mid-term termination for non-appropriation of Funds. Enrolled Affiliate may terminate this agreement or an Enrollment without liability, penalty or further obligation to make payments if funds to make payments under the agreement or Enrollment are not appropriated or allocated by the Enrolled Affiliate for such purpose. d. Termination for cause. Either party to an Enrollment may terminate it if the other party materially breaches its obligations under this agreement, including any obligation to submit orders or pay invoices. Except where the breach is by its nature not curable within 30 days, the terminating party must give the other party 30 days’ notice and opportunity to cure. If Microsoft gives such notice to an Enrolled Affiliate, Microsoft will give Customer a copy of that notice as well and Customer agrees to assist in attempting to resolve the breach. If the breach also affects other Enrollments and cannot be resolved between Microsoft and Customer within a reasonable period of time, Microsoft may also terminate this agreement and all other Enrollments under it, unless the basis for termination of the Enrollment is non- appropriation of funds to the Enrolled Affiliate, in which event Microsoft may only terminate the affected Enrollment(s). If an Enrolled Affiliate ceases to be Customer’s Affiliate, Customer must promptly notify Microsoft, and Microsoft may terminate its Enrollment.

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e. Early termination. If (1) an Enrolled Affiliate terminates its Enrollment as a result of a breach by Microsoft, or (2) if Microsoft terminates an Enrollment because the Enrolled Affiliate has ceased to be an Affiliate of Customer, or (3) Enrolled Affiliate termi nates an Enrollment for non-appropriation of funds, or (4) Microsoft terminate an Enrollment for non- payment due to non-appropriation of funds, then the Enrolled Affiliate will have the following options: (i) It may immediately pay the total remaining amount due, including all installments, in which case, the Enrolled Affiliate will have perpetual rights for all Licenses it has ordered; or (ii) It may pay only amounts due as of the termination date, in which case the Enrolled Affiliate will have perpetual Licenses for: 1) all copies of Products (including the latest version of Products ordered under SA coverage in the current term) for which payment has been made in full, and 2) the number of copies of Products it has ordered (including the latest version of Products ordered under Software Assurance coverage in current term) that is proportional to the total of installment payments paid versus total amounts due (paid and payable) if the early termination had not occurred. (iii) In the case of Early Termination under Subscription Enrollments, Enrolled Affiliate will have the following options: 1) For eligible products Enrolled Affiliate may obtain perpetual Licenses as described in the section titled “Buy-out option,” provided that Microsoft receives the buy-out order for those Licenses within 60 days after Enrolled Affiliate provides notice of termination. 2) Where not exercising buy-out option, in the event of breach by Microsoft, Microsoft will issue Reseller a credit for any amount paid in advance that would apply after the date of termination. Nothing in this section shall affect perpetual License rights acquired either in a separate agreement or in a prior term of the terminated Enrollment. f. Effect of termination or expiration. When an Enrollment expires or is terminated, (i) Enrolled Affiliate must order Licenses for all copies of Products it has run for which it has not previously submitted an order. Any and all unpaid payments or any order of any kind, including subscription services, remain due and payable. Except as provided in the subsection titled “Early termination,” all unpaid payments for Licenses immediately become due and payable. (ii) Enrolled Affiliate’s right to Software Assurance benefits under this agreement ends if it does not renew Software Assurance. g. Modification or termination of an Online Service for regulatory reasons. Microsoft may modify or terminate an Online Service where there is any current or future government requirement or obligation that: (1) subjects Microsoft to any regulation or requirement not generally applicable to businesses operating there; (2) presents a hardship for Microsoft to continue operating the Online Service without modification; and/or (3) causes Microsoft to believe these terms or the Online Service may be in conflict with any such requirement or obligation. For example, Microsoft may modify or terminate an Online Service in connection with a government requirement that would cause Microsoft to be regulated as a telecommunications provider. h. Program updates. Microsoft may make a change to this program that will make it necessary for Customer and its Enrolled Affiliates to enter into new agreements and Enrollments.

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8. Restrictions on use. Enrolled Affiliate must not: a. separate and use the components of a Product on two or more computers, up grade or downgrade components at different times, or transfer components separately, except as provided in the Product Use Rights; b. reverse engineer, decompile or disassemble any Product or Fix, except where applicable law permits it despite this limitation; or c. distribute, sublicense, rent, lease, lend, or host any Product or Fix except as permitted in the Product Use Rights or in a separate written agreement.

9. Non-Microsoft software or technology. a. Enrolled Affiliate is solely responsible for any non-Microsoft software or technology that it installs or uses with the Products or Fixes. Microsoft is not a party to and is not bound by any terms governing Enrolled Affiliate’s use of non-Microsoft software or technology. Without limiting the foregoing, non-Microsoft software or scripts linked to or referenced from any Product website, are licensed to Enrolled Affiliate under the open source licenses used by the third parties that own such code, not by Microsoft. b. If Enrolled Affiliate installs or uses any non-Microsoft software or technology with the Products or Fixes, it directs and controls the installation in and use of such software or technology in the Products or Fixes, through its actions (e.g., through Enrolled Affiliate’s use of application programming interfaces and other technical means that are part of the Online Services). Microsoft will not run or make any copies of such non-Microsoft software or technology outside of its relationship with Enrolled Affiliate. c. If Enrolled Affiliate installs or uses any non-Microsoft software or technology with the Products or Fix, it may not do so in any way that would subject Microsoft’s intellectual property or technology to obligations beyond those included in the agreement.

10. Confidentiality. To the extent permitted by applicable law, the terms and conditions of this agreement are confidential.Neither party will disclose such terms and conditions, or the substance of any discussions that led to them, to any third party other than Affiliates or agents, or to designated or prospective resellers who: (1) have a need to know such information in order to assist in carrying out this agreement; and (2) have been instructed that all such information is to be handled in strict confidence. For the avoidance doubt, the parties acknowledge that this Confidentiality provision recognizes that when there is a business need to do so, Microsoft and Customer may need to share/exchange their respective Confidential Information with each other to develop a more meaningful business relationship. This section provides Microsoft and Customer with a well -balanced, commercially reasonable and comprehensive set of confidentiality terms that enable both parties to share/exchange a wide range of Confidential Information with each other knowing with confidence that significant confidentiality protections are in place. The confidentiality terms denoted below do not govern Microsoft’s handling of Customer Data. In all instances under this Agreement, Microsoft’s handling of Customer Data shall be governed as described under various other provisions of this Agreement and by Microsoft’s data security policy. a. What is included. “Confidential Information” is non-public information, know-how and Trade Secrets in any form that are designated as “confidential” or a reasonable person knows or reasonably should understand to be confidential. It includes non-public information regarding either party’s products or customers, marketing and promotions, or the negotiated terms of Microsoft agreements.

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b. What is not included. The following types of information, however marked, are not Confidential Information. Information that: (i) is, or becomes, publicly available without a breach of this agreement; (ii) was lawfully known to the receiver of the information without an obligation to keep it confidential; (iii) is received from another source who can disclose it lawfully and without an obligation to keep it confidential; (iv) is independently developed; or (v) is a comment or suggestion one party volunteers about the other’s business, products or services. c. Treatment of Confidential Information. (i) In general. Subject to the other terms of this agreement, each party agrees: 1) it will not disclose the other’s Confidential Information to third parties; and 2) it will use and disclose the other’s Confidential Information only for purposes of the parties’ business relationship with each other. (ii) Security precautions. Subject to the other terms of this agreement, each party agrees: 1) to take reasonable steps to protect the other’s Confidential Information -- these steps must be at least as protective as those the party takes to protect its own Confidential Information; 2) to notify the other promptly upon discovery of any unauthorized use or disclosure of Confidential Information; and 3) to cooperate with the other to help regain control of the Confidential Information and prevent further unauthorized use or disclosure of it. (iii) Sharing Confidential Information with Affiliates and representatives. 1) A “Representative” is an employee, contractor, advisor, or consultant of one of the parties or of one of the parties’ Affiliates. 2) Each party may disclose the other’s confidential information to its Representatives (who may then disclose that Confidential Information to other of that party’s Representatives) only if those Representatives have a need to know about it for purposes of the parties’ business relationship with each other. Before doing so, each party must: A. ensure that Affiliates and Representatives are required to protect the Confidential Information on terms consistent with this agreement; and B. accept responsibility for each Representative’s use of Confidential Information. 3) Neither party is required to restrict work assignments of Representatives who have had access to Confidential Information. Neither party can control the incoming information the other will disclose to it in the course of working together, or what that party’s Representatives will remember, even without notes or other aids. Each party agrees that use of information in Representatives’ unaided memories in the development or deployment of the parties’ respective products or services does not create liability under this agreement or trade secret law, and each party agrees to limit what it discloses to the other accordingly. (iv) Disclosing Confidential Information if required to by law. Each party may disclose the other’s Confidential Information if required to comply with a court order or other government demand that has the force of law. Before doing so, each party must seek

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the highest level of protection available and, when possible, give the other enough prior notice to provide a reasonable chance to seek a protective order. d. Length of Confidential Information obligations. Except as permitted above, neither party will use or disclose the other’s Confidential Information for five years after it is received. The five-year time period does not apply if applicable law requires a longer period or the Product Use Rights provide a more specific requirement.

11. Warranties. a. Limited warranty. Microsoft warrants that: (i) Online Services will perform in accordance with the applicable Service Level Agreement; (ii) Products other than Online Services will perform substantially as described in the applicable Microsoft user documentation; and b. Limited warranty term. The limited warranty for: (i) Online Services is for the duration of Enrolled Affiliate’s use of the Online Service, subject to the notice requirements in the applicable Service Level Agreement; (ii) Products other than Online Services is one year from the date Enrolled Affiliate first uses the Product; and c. Limited warranty exclusions. This limited warranty is subject to the following limitations: (i) any implied warranties, guarantees or conditions not able to be disclaimed as a matter of law last for one year from the start of the limited warranty; (ii) the limited warranty does not cover problems caused by accident, abuse or use in a manner inconsistent with this agreement or the Product Use Rights, or resulting from events beyond Microsoft’s reasonable control; (iii) the limited warranty does not apply to components of Products that Enrolled Affiliate is permitted to redistribute; (iv) the limited warranty does not apply to free, trial, pre-release, or beta products; and (v) the limited warranty does not apply to problems caused by the failure to meet minimum system requirements. d. Remedies for breach of limited warranty. If Microsoft fails to meet any of the above limited warranties and Enrolled Affiliate notifies Microsoft within the warranty term, then Microsoft will: (i) for Online Services, provide the remedies identified in the Service Level Agreement for the affected Online Service; (ii) for Products other than Online Services, at its option either (1) return the price paid or (2) repair or replace the Product; and These are Enrolled Affiliate’s only remedies for breach of the limited warranty, unless other remedies are required to be provided under applicable law. e. DISCLAIMER OF OTHER WARRANTIES. OTHER THAN THIS LIMITED WARRANTY, MICROSOFT PROVIDES NO OTHER EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS. MICROSOFT DISCLAIMS ANY IMPLIED REPRESENTATIONS, WARRANTIES OR CONDITIONS, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SATISFACTORY QUALITY, TITLE OR NON-INFRINGEMENT. THESE DISCLAIMERS WILL APPLY UNLESS APPLICABLE LAW DOES NOT PERMIT THEM.

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12. Defense of infringement, misappropriation, and third party claims. a. Microsoft’s agreement to protect. Microsoft will defend Enrolled Affiliate against any claims made by an unaffiliated third party that any Product or Fix that is made available by Microsoft for a fee infringes that party’s patent, copyright, or trademark or makes unlawful use of its Trade Secret. Microsoft will also pay the amount of any resulting adverse final judgment (or settlement to which Microsoft consents). This section provides Enrolled Affiliate’s exclusive remedy for these claims. b. Limitations on defense obligation. Microsoft’s obligations will not apply to the extent that the claim or award is based on: (i) Customer Data, non-Microsoft software, modifications Enrolled Affiliate makes to, or any specifications or materials Enrolled Affiliate provides or makes available for, a Product or Fix; (ii) Enrolled Affiliate’s combination of the Product or Fix with a non-Microsoft product, data or business process; or damages based on the use of a non-Microsoft product, data or business process; (iii) Enrolled Affiliate’s use of either Microsoft Trademarks or the use or redistribution of a Product or Fix in violation of this agreement or any agreement incorporating its terms or; (iv) Enrolled Affiliate’s use of a Product or Fix after Microsoft identifies Enrolled Affiliate to discontinue that use due to a third party claim. To the extent permitted by applicable law, Enrolled Affiliate will be responsible Microsoft for any costs or damages that result from any of the above actions. c. Enrolled Affiliate’s agreement to protect. To the extent permitted by applicable law, Enrolled Affiliate will defend Microsoft and its Affiliates against any claims made by an unaffiliated third party that: (i) any Customer Data or non-Microsoft software Microsoft hosts on Customer’s behalf infringes the third party’s patent, copyright, or trademark or makes unlawful use of its Trade Secret;or (ii) Arises from violation of the Acceptable use Policy, which is described in the Product Use Rights. Customer will be responsible for the amount of any resulting adverse final judgment (or settlement to which it consents). This Section provides Microsoft’s exclusive remedy for these claims. d. Rights and remedies in case of possible infringement or misappropriation. (i) Microsoft’s offerings. If Microsoft reasonably believes that a Product or Fix may infringe or misappropriate a third-party’s intellectual property rights, Microsoft will seek to: (1) procure for Enrolled Affiliate the right to continue to use the Product or Fix; or (2) modify or replace it with a functional equivalent to make it non-infringing and notify Enrolled Affiliate to discontinue use of the prior version, which Enrolled Affiliate must do immediately. If the foregoing options are not commercially reasonable for Microsoft, or if required by a valid judicial or government order, Microsoft may terminate Enrolled Affiliate’s license or access rights in the Product or Fix. In such a case, Microsoft will provide Enrolled Affiliate with notice and refund any amounts Enrolled Affiliate has paid for those rights to the Product or Fix (or for Online Services, any amount Enrolled Affiliate has paid in advance for unused Online Services). (ii) Customer Data or use of non-Microsoft software with Online Services. If an unaffiliated third party asserts that Customer Data or non-Microsoft software or technology used by Enrolled Affiliate the Online Services violates their intellectual property rights, Microsoft may ask Customer to remove the allegedly infringing item. If

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Enrolled Affiliate fails to do so within a reasonable period of time, Microsoft may suspend or terminate the Online Service to which the Customer Data or non-Microsoft software relates. e. Obligations of protected party. Enrolled Affiliate must notify Microsoft promptly in writing of a claim subject to the Subsection titled “Microsoft’s agreement to protect” and Microsoft must notify Enrolled Affiliate promptly in writing of a claim subject to the Subsection titled “Customer’s agreement to protect.” The party invoking its right to protection must (1) give the other party sole control over the defense or settlement; and (2) provide reasonable assistance in defending the claim. The party providing the protection will reimburse the other party for reasonable out of pocket expenses that it incurs in providing assistance.

13. Limitation of liability. a. Limitation on liability. To the extent permitted by applicable law, the liability of Microsoft and Enrolled Affiliate, their respective Affiliates and contractors arising under this agreement is limited to direct damages up to (1) for Products other than Online Services, the amount Enrolled Affiliate was required to pay for the Product giving rise to that liability and (2) for Online Services, the amount Enrolled Affiliate paid for the Online Service giving rise to that liability during the prior 12 months. In the case of Products provided free of charge, or code that Enrolled Affiliate is authorized to redistribute to third parties without separate payment to Microsoft, Microsoft’s liability is limited to U.S. $5,000. These limitations apply regardless of whether the liability is based on breach of contract, tort (including negligence), strict liability, breach of warranties, or any other legal theory. However, these monetary limitations will not apply to: (i) Microsoft’s and Enrolled Affiliate’s obligations under the section titled “Defense of infringement, misappropriation, and third party claims”; (ii) liability for damages caused by either party’s gross negligence or willful misconduct, or that of its employees or its agents, and awarded by a court of final adjudication (provided that, in jurisdictions that do not recognize a legal distinction between “gross negligence” and “negligence,” “gross negligence” as used in this subsection shall mean “recklessness”); (iii) liabilities arising out of any breach by either party of its obligations under the section entitled “Confidentiality”, except that Microsoft’s liability arising out of or in relation to Customer Data shall in all cases be limited to the amount Enrolled Affiliate paid for the Online Service giving rise to that liability during the prior 12 months; (iv) liability for personal injury or death caused by either party’s negligence, or that of its employees or agents, or for fraudulent misrepresentation; and (v) violation by either party of the other party’s intellectual property rights. b. EXCLUSION OF CERTAIN DAMAGES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, WHATEVER THE LEGAL BASIS FOR THE CLAIM, NEITHER PARTY, NOR ANY OF ITS AFFILIATES, OR CONTRACTORS, WILL BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, OR INCIDENTAL DAMAGES, OR DAMAGES FOR LOST PROFITS, REVENUES, BUSINESS INTERRUPTION, OR LOSS OF BUSINESS INFORMATION ARISING IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR IF SUCH POSSIBILITY WAS REASONABLY FORESEEABLE. HOW EVER, THIS EXCLUSION DOES NOT APPLY TO EITHER PARTY’S LIABILITY TO THE OTHER FOR VIOLATION OF ITS CONFIDENTIALITY OBLIGATIONS (EXCEPT TO THE EXTENT THAT SUCH VIOLATION RELATES TO CUSTOMER DATA), THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS, OR THE PARTIES’ RESPECTIVE OBLIGATIONS IN THE SECTION TITLED “DEFENSE OF INFRINGEMENT, MISAPPROPRIATION, AND THIRD PARTY CLAIMS.”

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c. Affiliates and Contractors. Neither Microsoft nor Enrolled Affiliate shall bring any action against the other’s Affiliates or contractors in respect of any matter disclaimed on their behalf in this agreement.

14. Verifying compliance. a. Right to verify compliance. Enrolled Affiliate must keep records relating to the Products it and its Affiliates use or distribute. Microsoft has the right, to the extent permitted by applicable law, to verify compliance with the license terms for Products, at Microsoft’s expense. b. Verification process and limitations. Microsoft will provide customer at least 30 days’ notice of its intent to verify compliance. Microsoft will engage an independent auditor, which will be subject to a confidentiality obligation. Verification will take place during normal business hours and in a manner that does not interfere unreasonably with Customer’s operations. Customer must promptly provide the independent auditor with any information it reasonably requests in furtherance of the verification, including access to systems running the Products and evidence of licenses for Products Customer hosts, sublicenses, or distributes to third parties. As an alternative, Microsoft may require Customer to complete Microsoft’s self-audit process relating to the Products Customer and any of its Affiliates use or distribute. Such information will be used solely for purposes of determining compliance. c. Remedies for non-compliance. If verification or self-audit reveals any unlicensed use, Customer must within 30 days order sufficient licenses to cover its use. If there is no unlicensed use, Microsoft will not undertake another verification of the same Customer for at least one year. By exercising the rights and procedures described above, Microsoft does not waive its rights to enforce this agreement or to protect its intellectual property by any other means permitted by law.

15. Miscellaneous. a. Notice s to Microsoft. Notices, authorizations, and requests in connection with this agreement must be sent by regular or overnight mail, express courier, or fax to the addresses and numbers listed on the signature form and in this agreement. Notices will be treated as delivered on the date shown on the return receipt or on the courier or fax confirmation of delivery.

Copies should be sent to:

Microsoft Corporation Legal and Corporate Affairs Volume Licensing Group One Microsoft Way Redmond, WA 98052 USA Via Facsimile: (425) 936-7329

Microsoft may provide information about upcoming Enrollment deadlines and Online Services in electronic form. Such information may be provided by email to contacts provided by Enrolled Affiliate under an Enrollment, or through a web site Microsoft identifies. Notice by email is given as of the transmission date. b. Assignment. Either party may assign this agreement to an Affiliate only. Assignment will not relieve the assigning party of its obligations under the assigned agreement. If either party assigns this agreement, it must notify the other party of the assignment in writing.

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c. Severability. If a court holds any provision of this agreement to be illegal, invalid or unenforceable, the rest of the document will remain in effect and this agr eement will be amended to give effect to the eliminated provision to the maximum extent possible. Subcontractors. Microsoft may use contractors to perform Services and support Online Services. Microsoft will be responsible for their performance subject to the terms of this agreement. d. Waiver. A waiver of any breach of this agreement is not a waiver of any other breach. Any waiver must be in writing and signed by an authorized representative of the waiving party. e. Applicable law; Dispute resolution. The terms of this agreement will be governed by the laws of Enrolled Affiliate’s state, without giving effect to its conflict of laws. Disputes relating to this agreement will be subject to applicable dispute resolution laws of Enrolled Affiliate’s state. f. This agreement is not exclusive. Customer is free to enter into agreements to license, use or promote non-Microsoft software. g. Entire agreement. This agreement, the Product List, all Enrollments under this agreement, and the Product Use Rights constitute the entire agreement concerning the subject matter and supersede any prior or contemporaneous communications. In the case of a conflict between any documents referenced in this agreement that is not expressly resolved in the documents, their terms will control in the following order: (1) these terms and conditions and the accompanying signature form; (2) an Enrollment; (3) the Product List; (4) the Product Use Rights; (5) any other documents; and (6) all orders submitted under this agreement. h. Survival. Provisions regarding ownership and license rights, fees, Product Use Rights, restrictions on use, evidence of perpetual licenses, transfer of licenses, warranties, defense of infringement and misappropriation claims, Microsoft’s and Customer’s obligations to protect each other, limitations of liability, confidentiality, compliance verification, obligations on termination or expiration and the other provisions in this section entitled “Miscellaneous” will survive termination or expiration of this agreement and of any ag reement in which they are incorporated. i. No transfer of ownership. Microsoft does not transfer any ownership rights in any licensed Product. j. Free Products. It is Microsoft's intent that the terms of this agreement and the Product Use Rights be in compliance with all applicable federal law and regulations. Any free Product provided to Enrolled Affiliate is for the sole use and benefit of the Enrolled Affiliate, and is not provided for use by or personal benefit of any specific government employee. k. Amending the agreement. This agreement (except the Product List and the Product Use Rights) can be changed only by an amendment signed by both parties. l. Resellers and other third parties cannot bind Microsoft. Resellers and other third parties do not have authority to bind or impose any obligation or liability on Microsoft. m. Privacy and security. Microsoft and Enrolled Affiliate will each comply with all applicable privacy and data protection laws and regulations (including applicable security breach notification law). However, Microsoft is not responsible for compliance with any laws applicable to Enrolled Affiliate or Enrolled Affiliate’s industry that are not also generally applicable to information technology services providers. Enrolled Affiliate consents to the processing of personal information by Microsoft and its agents to facilitate the subject matter of this agreement. Enrolled Affiliate may choose to provide personal information to Microsoft on behalf of third parties (including Enrolled Affiliate’s contacts, resellers, distributors, administrators, and employees) as part of this agreement. Enrolled Affiliate will obtain all required consents from third parties under applicable privacy and data pr otection law before providing personal information to Microsoft. The personal information Enrolled Affiliate provides in connection with this agreement will be processed according to the privacy statement available at https://www.microsoft.com/licensing/servicecenter (see footer), except

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that Product-specific privacy statements are in the Product use rights. Personal data collected through Products or Services may be transferred, stored and processed in the United States or any other country in which Microsoft or its service providers maintain facilities. By using the Products or Services, Customer consents to the foregoing. Microsoft abides by the EU Safe Harbor and the Swiss Safe Harbor frameworks as set forth by the U.S. Department of Commerce regarding the collection, use, and retention of data from the European Union, the European Economic Area, and Switzerland. For Online Services, additional privacy and security details are in the Product use rights. n. Voluntary Product Accessibility Templates. Microsoft supports the government’s obligation to provide accessible technologies to its citizens with disabilities as required by Section 508 of the Rehabilitation Act of 1973, and its state law counterparts. The Voluntary Product Accessibility Templates (“VPATs”) for the Microsoft technologies used in providing the online services can be found at Microsoft’s VPAT page. Further information regarding Microsoft’s commitment to accessibility can be found at http://www.microsoft.com/enable. o. Natural disaster. In the event of a “natural disaster,” Microsoft may provide additional assistance or rights by posting them on http://www.microsoft.com at such time. p. Copyright violation. Except as set forth in the section above entitled “Transferring and reassigning Licenses”, the Enrolled Affiliate agrees to pay for, and comply with the terms of this agreement and the Product Use Rights, for the Products it uses. Except to the extent Enrolled Affiliate is licensed under this agreement, it will be responsible for its breach of this contract and violation of Microsoft’s copyright in the Products, including payment of License fees specified in this agreement for unlicensed use. q. U.S. export jurisdiction. Products and Fixes are subject to U.S. export jurisdiction. Customer will comply with all U.S. Export Administration Regulations and International Traffic in Arms Regulation requirements as well as all end-user, end-use, and destination restrictions issued by the U.S. and other governments applicable to this agreement. For additional information, see http://www.microsoft.com/exporting.

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SUBJECT: Consideration and possible recommendation of approval to purchase laptops, desktops, and docking stations from Dell Inc. for an amount not to exceed $199,971.08 -- Greg Berglund, Assistant Director, Information Technology

ITEM SUMMARY: This item is to purchase of 153 laptops, 18 desktops, and accessories. This purchase was previously planned for FY 2020 as part of the City’s desktop computer strategy implementation. Half of the planned purchase order was expedited in response to COVID-19. This request is to complete the original planned purchase.

Dell Inc. has been the City’s vendor for desktop computers for approximately 10 years. In the first and second quarter of Fiscal Year 2020, the IT Department evaluated three vendors (Dell, HP, Lenovo) and determined Dell products to be the best value. Vendors were evaluated on cost, local economic impact of company, responsiveness, professional services, product support offerings, city staff knowledge of the products, product options, and fit with the City’s internal support model.

In the Year 2019, after conducting a study and a laptop computer pilot program, the City implemented a new strategy for the provision of desktop computers to employees. The strategy acknowledges that the City’s previous approach to providing desktop computer technology must be changed in order to meet modern business needs and address technology changes. Since 2011, the IT department had aggressively implemented virtual desktops (VDI). While the City was successful in driving virtual desktop adoption, VDI technology did not deliver on its expected benefits due to intensive infrastructure demands, complexity, and poor technical performance. There is organizational consensus that VDI harms productivity, flexibility, innovation, and emergency preparedness.

A five-year, three-pronged strategy was proposed to address these issues: 1. Replace virtual desktops with physical desktops in the near term (FYs 20, 21, 22) while preparing for and eventually implementing Cloud based virtual desktops as they mature (FYs 22, 23, 24). 2. Improve management of desktops with Unified Endpoint Management (UEM) systems. 3. Retire on-premise virtual desktop infrastructure. Implementation of these strategies over the next five years will prepare the City need to efficiently manage a hybrid environment that includes physical desktops and Cloud based virtual desktops.

FINANCIAL IMPACT: This item was budgeted in the Fiscal Year 2020 budget under account: IT - Computer Equipment 570-5- 0641-52-330. Products will be purchased under Texas Department of Information Resources Contract: DIR-TSO-3763.

SUBMITTED BY: Danella Elliott

Page 96 of 190 ATTACHMENTS: Description Type Quote from Dell Inc Backup Material

Page 97 of 190 A quote for your consideration.

Based on your business needs, we put the following quote together to help with your purchase decision. Below is a detailed summary of the quote we’ve created to help you with your purchase decision.

To proceed with this quote, you may respond to this email, order online through your Premier page, or, if you do not have Premier, use this Quote to Order.

Quote No. 3000066835230.1 Sales Rep Danielle Eads Total $199,971.08 Phone (800) 456-3355, 6180188 Customer # 23014 Email [email protected] Quoted On Aug. 12, 2020 Billing To ACCOUNTS PAYABLE Expires by Sep. 11, 2020 CITY OF GEORGETOWN Deal ID 19021084 PO BOX 409 CITY OF GEORGETOWN GEORGETOWN, TX 78627-0409

Message from your Sales Rep

Please contact your Dell sales representative if you have any questions or when you're ready to place an order. Thank you for shopping with Dell!

Regards, Danielle Eads

Shipping Group

Shipping To Shipping Method BEN COLLIER Standard Delivery CITY OF GEORGETOWN 300 INDUSTRIAL AVE 1 GEORGETOWN, TX 78626-8445 (512) 930-3654

Product Unit Price Qty Subtotal

Dell Latitude 5420 $1,637.73 20 $32,754.60 Dell Latitude 5410 $1,066.01 95 $101,270.95 Dell Dock- WD19 130w Power Delivery - 180w AC $146.99 115 $16,903.85 Dell Thunderbolt Dock- WD19TB $161.70 20 $3,234.00 Mobile Precision 3551 $1,695.07 20 $33,901.40

Page 98 of 190 Page 1 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

OptiPlex 5070 MFF MLK $661.46 18 $11,906.28

Subtotal: $199,971.08 Shipping: $0.00 Non-Taxable Amount: $199,971.08 Taxable Amount: $0.00 Estimated Tax: $0.00

Total: $199,971.08

Special lease pricing may be available for qualified customers. Please contact your DFS Sales Representative for details.

Page 99 of 190 Page 2 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

Shipping Group Details

Shipping To Shipping Method BEN COLLIER Standard Delivery CITY OF GEORGETOWN 300 INDUSTRIAL AVE 1 GEORGETOWN, TX 78626-8445 (512) 930-3654

Qty Subtotal Dell Latitude 5420 $1,637.73 20 $32,754.60 Estimated delivery if purchased today: Aug. 27, 2020 Contract # C000000006841 Customer Agreement # DIR-TSO-3763

Description SKU Unit Price Qty Subtotal

Dell Latitude 5420 Rugged, CTO 210-AQPT - 20 -

8th Gen Intel Core i5-8350U Processor (Quad Core, 6M Cache, - 379-BDHC 20 - 1.7GHz,15W, vPro)

Win 10 Pro 64 English, French, Spanish 619-AHKN - 20 -

No AutoPilot 340-CKSZ - 20 -

Microsoft(R) Office 30 Days Trial 658-BCSB - 20 -

Intel Core i5-8350U Processor Base with AMD Radeon RX540 Graphics - 338-BPTG 20 - 128 Bit

Intel vPro Technology Advanced Management Features 631-ABWJ - 20 -

16GB, 2x8GB, 2666MHz DDR4 Non-ECC 370-AEVG - 20 -

M.2 256GB PCIe NVMe Class 40 Solid State Drive 400-BBTW - 20 -

14" FHD WVA (1920 x 1080) Anti-Glare Non-Touch 391-BDXO - 20 -

Full Security – FPR, Contacted SC, Contactless SC 346-BEVD - 20 -

RFID Module Label 389-DOOP - 20 -

RFID Module Label 389-DOQY - 20 -

Dell USB,USB,AUDIO,Smart Card left I/O module 590-TEXZ - 20 -

SYSTEM RATING LABEL 389-DOPP - 20 -

Sealed Internal RGB Backlit English Keyboard 580-ABYR - 20 -

Intel Dual Band Wireless AC 8265 (802.11ac) 2x2 (No BT) Driver (Later - 555-BEPC 20 - upgrade not possible for the system)

Intel Dual Band Wireless AC 8265 (802.11ac) 2x2 555-BDGD - 20 -

WLAN Bracket 575-BBYW - 20 -

Qualcomm Snapdragon X20 (DW5821e) Vrz 556-BBZJ - 20 -

WWAN Bracket 575-BBYX - 20 -

3 Cell 51Whr ExpressCharge Capable Battery 451-BCHG - 20 -

90 Watt AC Adapter 492-BCNQ - 20 -

No Anti-Virus Software 650-AAAM - 20 -

OS-Windows Media Not Included 620-AALW - 20 -

E5 US Power Cord 537-BBBD - 20 -

Quick Referene Guide 340-CHGB - 20 -

Page 100 of 190 Page 3 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

Factory Installed Rigid handle tied sku 540-BCIH - 20 -

US Order 332-1286 - 20 -

2nd 3 Cell 51Whr ExpressCharge Capable Battery 451-BCHH - 20 -

SERI Guide (English/Spanish) 340-AGIN - 20 -

Regulatory Label included 389-BEYY - 20 -

TPM Enabled 340-AJPV - 20 -

System Driver, Dell Latitude 5420 640-BBRG - 20 -

Dell Developed Recovery Environment 658-BCUV - 20 -

Shuttle SHIP Material 328-BCXL - 20 -

Directship Info Mod 340-CKTD - 20 -

8th Gen Intel Core i5 vPro processor label 389-CGJO - 20 -

No Option Included 340-ACQQ - 20 -

No Resource DVD / USB 430-XXYG - 20 -

ENERGY STAR Qualified 387-BBNJ - 20 -

BTO Standard shipment Air 800-BBGF - 20 -

No UPC Label 389-BDCE - 20 -

No Additional IO Ports 590-TEYC - 20 -

No Option Included 340-ACQQ - 20 -

RGB Camera 319-BBFN - 20 -

ProSupport Plus: Next Business Day Onsite, 3 Years 808-6797 - 20 -

Dell Limited Hardware Warranty Initial Year 808-6805 - 20 -

ProSupport Plus: Accidental Damage Service, 3 Years 808-6817 - 20 -

ProSupport Plus: Keep Your Hard Drive, 3 Years 808-6818 - 20 -

ProSupport Plus: 7X24 Technical Support, 3 Years 808-6847 - 20 -

Thank you for choosing Dell ProSupport Plus. For tech support, visit - 997-8367 20 - www.dell.com/contactdell or call 1-866-516-3115 Qty Subtotal Dell Latitude 5410 $1,066.01 95 $101,270.95 Estimated delivery if purchased today: Aug. 25, 2020 Contract # C000000006841 Customer Agreement # DIR-TSO-3763

Description SKU Unit Price Qty Subtotal

Latitude 5410 XCTO 210-AWLI - 95 -

10th Generation Intel Core i5-10210U (4 Core, 6M cache, base 1.6GHz, - 379-BDVI 95 - up to 4.2GHz)

Win 10 Pro 64 English, French, Spanish 619-AHKN - 95 -

No AutoPilot 340-CKSZ - 95 -

Intel UHD Graphics 620 with Displayport over Type-C for Intel 10th Gen - 338-BUPY 95 - Core i5-10210U

No Out-of-Band Systems Management - No vPro 631-ACKT - 95 -

16GB,1x16GB, DDR4 Non-ECC 370-AFEE - 95 -

M.2 256GB PCIe NVMe Class 40 2280 Solid State Drive 400-BIJV - 95 -

Latitude 5410 Bottom Door 321-BFGT - 95 -

LCD back cover for Latitude 5410/5411, WWAN Capable, Carbon Fiber 320-BDRJ - 95 -

Page 101 of 190 Page 4 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

Reinforced Polymer

RGB Camera and Microphone Bezel 325-BDRI - 95 -

14" HD (1366 x 768) Anti-Glare Non-Touch, 220nits 391-BFBG - 95 -

Dual Pointing US English Backlit Keyboard 583-BFKP - 95 -

No Mouse 570-AADK - 95 -

Wireless Intel AX201 WLAN Driver 555-BFRG - 95 -

Intel Dual Band Wi-Fi 6 AX201 2x2 802.11ax 160MHz + Bluetooth 5.1 555-BFNI - 95 -

Dual Pointing, Touch Fingerprint Reader, Displayport over USB Type-C 346-BGDD - 95 -

Verizon SIM Card 556-BCEZ - 95 -

Intel XMM 7360 LTE-Advanced 556-BCFS - 95 -

3 Cell 51Whr ExpressCharge Capable Battery 451-BCKC - 95 -

E5 65W type-C PCR EPEAT, Chicony 492-BCWX - 95 -

E5 US Power Cord 450-AAEJ - 95 -

Latitude 5410 Quick Start Guide 340-COTF - 95 -

US Order 332-1286 - 95 -

No Resource DVD / USB 430-XXYG - 95 -

SERI Guide (ENG/FR/Multi) 340-AGIK - 95 -

No ENERGY STAR Qualified 387-BBCE - 95 -

Custom Configuration 817-BBBB - 95 -

Regulatory Label, FCC 389-DPGZ - 95 -

System Shipment, Latitude 5410,K34 340-CPZL - 95 -

Mix Model Packaging DAO 340-CPZM - 95 -

Mix Model Packaging DAO 340-CPZN - 95 -

Mix Model Packaging DAO 340-CPZO - 95 -

Mix Model Packaging DAO 340-CPZP - 95 -

Intel 10th Core i5 non-vPro CPU Label 340-COTH - 95 -

No Option Included 340-ACQQ - 95 -

BTO Standard Shipment (VS) 800-BBQK - 95 -

No UPC Label 389-BCGW - 95 -

No Removable CD/DVD Drive 429-AATO - 95 -

EPEAT 2018 Registered (Gold) 379-BDZB - 95 -

Dell Limited Hardware Warranty Extended Year(s) 975-3461 - 95 -

Thank you choosing Dell ProSupport. For tech support, visit - 989-3449 95 - //support.dell.com/ProSupport

Dell Limited Hardware Warranty 997-8317 - 95 -

ProSupport: 7x24 Technical Support, 3 Years 997-8344 - 95 -

ProSupport: Next Business Day Onsite, 1 Year 997-8349 - 95 -

ProSupport: Next Business Day Onsite, 2 Year Extended 997-8354 - 95 -

Microsoft(R) Office 30 Days Trial 658-BCSB - 95 -

No Anti-Virus Software 650-AAAM - 95 -

Dell Applications for Windows 10 658-BERY - 95 -

OS-Windows Media Not Included 620-AALW - 95 -

Page 102 of 190 Page 5 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

Qty Subtotal Dell Dock- WD19 130w Power Delivery - 180w AC $146.99 115 $16,903.85 Estimated delivery if purchased today: Aug. 19, 2020 Contract # C000000006841 Customer Agreement # DIR-TSO-3763

Description SKU Unit Price Qty Subtotal

Dell Dock- WD19 130 PD 210-ARIQ - 115 -

Advanced Exchange Service, 3 Years 824-3984 - 115 -

Dell Limited Hardware Warranty 824-3993 - 115 - Qty Subtotal Dell Thunderbolt Dock- WD19TB $161.70 20 $3,234.00 Estimated delivery if purchased today: Aug. 18, 2020 Contract # C000000006841 Customer Agreement # DIR-TSO-3763

Description SKU Unit Price Qty Subtotal

Dell Thunderbolt Dock- WD19TB 210-ARIK - 20 -

Advanced Exchange Service, 3 Years 824-3984 - 20 -

Dell Limited Hardware Warranty 824-3993 - 20 - Qty Subtotal Mobile Precision 3551 $1,695.07 20 $33,901.40 Estimated delivery if purchased today: Aug. 26, 2020 Contract # C000000006841 Customer Agreement # DIR-TSO-3763

Description SKU Unit Price Qty Subtotal

Dell Mobile Precision Workstation 3551 CTO 210-AVJY - 20 -

Intel Core Processor i7-10750H (6 Core, 12MB Cache, 2.60 GHz to 5.00 - 379-BDWY 20 - GHz, 35W)

Win 10 Pro 64 English, French, Spanish 619-AHKN - 20 -

Microsoft(R) Office 30 Days Trial 658-BCSB - 20 -

Intel Core Processor i7-10750H with Nvidia Quadro P620 Graphics, - 329-BETJ 20 - Thunderbolt

Nvidia Quadro P620 w/ 4GB GDDR5 490-BFBH - 20 -

WWAN Support 320-BDRR - 20 -

Bezel, Camera & Mic 325-BDRO - 20 -

15.6" FHD 1920x1080, Anti-Glare Non-Touch, 100% sRGB 391-BFGK - 20 -

16GB, 1X16GB, DDR4 2933Mhz Non-ECC Memory 370-AFFB - 20 -

M.2 512GB PCIe NVMe Class 40 Solid State Drive 400-BDWU - 20 -

Bracket for M.2 PCIe NVMe 2280 SSD 575-BBYI - 20 -

No Additional Hard Drive 401-AAGM - 20 -

Dual Pointing Backlit US English Keyboard 583-BFBO - 20 -

DP Palmrest w/ Touch Fingerprint Reader only, TBT 346-BFZB - 20 -

Intel WiFi6 AX201 Wireless Card for WW 555-BFNV - 20 -

6 Cell 97Whr ExpressCharge Capable Battery 451-BCJI - 20 -

Cable for 6 cell battery 470-ADOZ - 20 -

130W E5 Type C Power Adapter (EPEAT) 492-BCWZ - 20 -

Page 103 of 190 Page 6 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

No Out-of-Band Systems Management - No vPro 631-ACLF - 20 -

Resource Media not Included 430-XYGV - 20 -

OS-Windows Media Not Included 620-AALW - 20 -

Quick Setup Guide for Mobile Precision 3551 340-COUO - 20 -

No ENERGY STAR Qualified 387-BBCE - 20 -

No HD/SSD Filler 750-ABLD - 20 -

Custom Configuration 817-BBBB - 20 -

Intel AX201 2x2 + Bluetooth 5.1 Driver 555-BFNX - 20 -

US Order 332-1286 - 20 -

Regulatory Label included 389-BEYY - 20 -

FCC Label 389-DPPX - 20 -

Bottom door 354-BBCD - 20 -

BTO Standard Shipment (S) 800-BBGT - 20 -

Verizon SIM Card 556-BCEZ - 20 -

Intel XMM 7360 LTE-Advanced 556-BCFD - 20 -

WWAN bracket 575-BBZL - 20 -

E5 US Power Cord 450-AAEJ - 20 -

Intel(R) Core(TM) i7 Processor Label 340-CNBW - 20 -

SERI Guide (ENG/FR/Multi) 340-AGIK - 20 -

Mix Model Packaging 340-CRFV - 20 -

No AutoPilot 340-CKSZ - 20 -

No Mouse 570-AADK - 20 -

SupportAssist 525-BBCL - 20 -

System Driver for Mobile Precision 3551 631-ACLD - 20 -

Dell(TM) Digital Delivery Cirrus Client 640-BBLW - 20 -

Dell Optimizer for Precision 640-BBSC - 20 -

Dell Client System Update (Updates latest Dell Recommended BIOS, - 658-BBMR 20 - Drivers, Firmware and Apps)

Waves Maxx Audio 658-BBRB - 20 -

Dell Power Manager 658-BDVK - 20 -

Dell SupportAssist OS Recovery Tool 658-BEOK - 20 -

No UPC Label 389-BCGW - 20 -

No Anti-Virus Software 650-AAAM - 20 -

Not EPEAT Registered 389-DVNR - 20 -

Thank you choosing Dell ProSupport. For tech support, visit - 989-3449 20 - //support.dell.com/ProSupport

ProSupport: 7x24 Technical Support, 3 Years 997-1109 - 20 -

Dell Limited Hardware Warranty Plus Service 997-1129 - 20 -

ProSupport: Next Business Day Onsite, 3 Years 997-6028 - 20 - Qty Subtotal OptiPlex 5070 MFF MLK $661.46 18 $11,906.28 Estimated delivery if purchased today: Aug. 24, 2020

Page 104 of 190 Page 7 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

Contract # C000000006841 Customer Agreement # DIR-TSO-3763 Description SKU Unit Price Qty Subtotal

OptiPlex 5070 Micro XCTO 210-ASDM - 18 -

Intel Core i5-8500T (6 Cores/9MB/6T/up to 3.5GHz/35W) 338-BNZV - 18 -

Win 10 Pro 64 English, French, Spanish 619-AHKN - 18 -

16GB (2X8GB) 2666MHz DDR4 Memory 370-ADZN - 18 -

M.2 256GB PCIe NVMe Class 35 Solid State Drive 400-BEUP - 18 -

Thermal Pad 412-AALV - 18 -

M2X3.5 Screw for SSD/DDPE 773-BBBC - 18 -

No Additional Hard Drive 401-AANH - 18 -

No Wireless LAN Card 555-BBFO - 18 -

No Wireless Driver 340-AFMQ - 18 -

Optional HDMI 2.0b Video Port 382-BBFI - 18 -

OptiPlex 5070 Micro 329-BEIR - 18 -

Black Dell KM636 Wireless Keyboard & Mouse 580-AIFH - 18 -

Mouse included with Keyboard 570-AADI - 18 -

No Cable Cover 325-BCZQ - 18 -

No Additional Cable Requested 379-BBCY - 18 -

Not selected in this configuration 817-BBBC - 18 -

No Stand Option 575-BBBI - 18 -

SupportAssist 525-BBCL - 18 -

Dell(TM) Digital Delivery Cirrus Client 640-BBLW - 18 -

Dell Client System Update (Updates latest Dell Recommended BIOS, - 658-BBMR 18 - Drivers, Firmware and Apps)

Waves Maxx Audio 658-BBRB - 18 -

Software for OptiPlex Systems 658-BEGP - 18 -

Dell SupportAssist OS Recovery Tool 658-BEOK - 18 -

No Media 620-AAOH - 18 -

ENERGY STAR Qualified 387-BBLW - 18 -

No Dell Backup and Recovery software 637-AAAM - 18 -

Trusted Platform Module (Discrete TPM Enabled) 329-BBJL - 18 -

90 Watt AC Adapter 450-AELY - 18 -

Dell Watchdog Timer 379-BDLB - 18 -

Intel Standard Manageability 631-ACDE - 18 -

Quick Setup Guide 5070 Micro 340-CMGB - 18 -

Intel Core(TM) i5 Processor Label 389-CGBB - 18 -

System Power Cord (Philipine/U 450-AAZN - 18 -

SERI Guide (ENG/FR/Multi) 340-AGIK - 18 -

No UPC Label 389-BCGW - 18 -

US Order 332-1286 - 18 -

Desktop BTO Standard shipment 800-BBIO - 18 -

No AutoPilot 340-CKSZ - 18 -

Page 105 of 190 Page 8 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

CMS Software not included 632-BBBJ - 18 -

MFF: Regulatory LBL for Mexico, 90W 389-DQIT - 18 -

No Intel Responsive 551-BBBJ - 18 -

Custom Configuration 817-BBBB - 18 -

No Optane 400-BFPO - 18 -

Ship Material for OptiPlex Micro Form Factor 340-CDWS - 18 -

Shipping Label for DAO 389-BBUU - 18 -

No CompuTrace 461-AABF - 18 -

No Option Included 340-ACQQ - 18 -

No External ODD 429-ABGY - 18 -

Dell Limited Hardware Warranty Plus Service 804-9043 - 18 -

Onsite/In-Home Service After Remote Diagnosis 3 Years 804-9044 - 18 -

Microsoft(R) Office 30 Days Trial 658-BCSB - 18 -

No Anti-Virus Software 650-AAAM - 18 -

Subtotal: $199,971.08 Shipping: $0.00 Estimated Tax: $0.00

Total: $199,971.08

Page 106 of 190 Page 9 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

Important Notes Terms of Sale

This Quote will, if Customer issues a purchase order for the quoted items that is accepted by Supplier, constitute a contract between the entity issuing this Quote (“Supplier”) and the entity to whom this Quote was issued (“Customer”). Unless otherwise stated herein, pricing is valid for thirty days from the date of this Quote. All product, pricing and other information is based on the latest information available and is subject to change. Supplier reserves the right to cancel this Quote and Customer purchase orders arising from pricing errors. Taxes and/or freight charges listed on this Quote are only estimates. The final amounts shall be stated on the relevant invoice. Additional freight charges will be applied if Customer requests expedited shipping. Please indicate any tax exemption status on your purchase order and send your tax exemption certificate to [email protected] or [email protected], as applicable.

Governing Terms: This Quote is subject to: (a) a separate written agreement between Customer or Customer’s affiliate and Supplier or a Supplier´s affiliate to the extent that it expressly applies to the products and/or services in this Quote or, to the extent there is no such agreement, to the applicable set of Dell’s Terms of Sale (available at www.dell.com/terms or www.dell.com/oemterms), or for cloud/as-a-Service offerings, the applicable cloud terms of service (identified on the Offer Specific Terms referenced below); and (b) the terms referenced herein (collectively, the “Governing Terms”). Different Governing Terms may apply to different products and services on this Quote. The Governing Terms apply to the exclusion of all terms and conditions incorporated in or referred to in any documentation submitted by Customer to Supplier.

Supplier Software Licenses and Services Descriptions : Customer’s use of any Supplier software is subject to the license terms accompanying the software, or in the absence of accompanying terms, the applicable terms posted on www.Dell.com/eula. Descriptions and terms for Supplier-branded standard services are stated at www.dell.com/servicecontracts/global or for certain infrastructure products at www.dellemc.com/en-us/customer-services/product-warranty-and-service-descriptions.htm.

Offer-Specific, Third Party and Program Specific Terms : Customer’s use of third-party software is subject to the license terms that accompany the software. Certain Supplier-branded and third-party products and services listed on this Quote are subject to additional, specific terms stated on www.dell.com/offeringspecificterms (“Offer Specific Terms”).

In case of Resale only: Should Customer procure any products or services for resale, whether on standalone basis or as part of a solution, Customer shall include the applicable software license terms, services terms, and/or offer-specific terms in a written agreement with the end-user and provide written evidence of doing so upon receipt of request from Supplier.

In case of Financing only: If Customer intends to enter into a financing arrangement (“Financing Agreement”) for the products and/or services on this Quote with Dell Financial Services LLC or other funding source pre-approved by Supplier (“FS”), Customer may issue its purchase order to Supplier or to FS. If issued to FS, Supplier will fulfill and invoice FS upon confirmation that: (a) FS intends to enter into a Financing Agreement with Customer for this order; and (b) FS agrees to procure these items from Supplier. Notwithstanding the Financing Agreement, Customer’s use (and Customer’s resale of and the end-user’s use) of these items in the order is subject to the applicable governing agreement between Customer and Supplier, except that title shall transfer from Supplier to FS instead of to Customer. If FS notifies Supplier after shipment that Customer is no longer pursuing a Financing Agreement for these items, or if Customer fails to enter into such Financing Agreement within 120 days after shipment by Supplier, Customer shall promptly pay the Supplier invoice amounts directly to Supplier.

Customer represents that this transaction does not involve: (a) use of U.S. Government funds; (b) use by or resale to the U.S. Government; or (c) maintenance and support of the product(s) listed in this document within classified spaces. Customer further represents that this transaction does not require Supplier’s compliance with any statute, regulation or information technology standard applicable to a U.S. Government procurement.

For certain products shipped to end users in California, a State Environmental Fee will be applied to Customer’s invoice. Supplier encourages customers to dispose of electronic equipment properly.

Electronically linked terms and descriptions are available in hard copy upon request.

^Dell Business Credit (DBC): OFFER VARIES BY CREDITWORTHINESS AS DETERMINED BY LENDER. Offered by WebBank to Small and Medium Business customers with approved credit. Taxes, shipping and other charges are extra and vary. Minimum monthly payments are the greater of $15 or 3% of account balance. Dell Business Credit is not offered to government or public entities, or business entities located and organized outside of the United States.

Customer agrees to accept delivery of its order within a reasonable amount of time from when the order is shipped.

Page 107 of 190 Page 10 Dell Marketing LP. U.S. only. Dell Marketing LP. is located at One Dell Way, Mail Stop 8129, Round Rock, TX 78682

City of Georgetown, Texas Government and Finance Advisory Board August 26, 2020

SUBJECT: Consideration and possible action to approve a Construction Contract with Brandt Companies, LLC, of Carrollton, Texas for the Construction of the Natatorium Pool HVAC Unit Replacement, at the Georgetown Recreation Center in the amount of $607,077. – Eric Johnson, CIP Manager.

ITEM SUMMARY: This project is to provide a replacement HVAC unit in the pool area of the Georgetown Recreation Center. It was identified that original unit needed extensive repairs. The City contracted with Jose I. Guerra, Inc (JIG) in 2019 to design a replacement unit for the pool area. The City was provided Construction Specifications and Construction Documents from JIG in June of 2020.

This item has been previously presented to City Council at the March 24, 2020 Workshop, June 9, 2020 City Council Workshop Mid-Year Budget Amendment Presentation, and the June 23, 2020 Council Meeting.

On July 20, 2020, the City of Georgetown issued an Invitation to Bid for the Rec Center Natatorium Pool Unit replacement. On August 14, 2020 we received three (3) competitive bids. The low qualified bidder for the project was Brandt Companies, LLC with a total bid of $607,077. Jose I. Guerra, Inc (JIG) has reviewed the submitted bid by the Brandt Companies. As a result of the findings JIG recommend the contract be awarded to Brandt Companies, LLC.

FINANCIAL IMPACT: This project is budgeted in FY2020 at $800,000 and will be funded with the sale of 2021 Certificates of Obligation in the Spring of 2021. The reimbursement resolution for this project was approved at Council on 6/23/2020.

SUBMITTED BY: Danella Elliott

ATTACHMENTS: Description Type Bid Tab Backup Material Presentation Presentation

Page 108 of 190 Bid Invitation No.: 202026 - Rec Center HVAC Replacement Unit Division: Facilities Bid Opening Date: 8/14/20 at 2:00PM 1 2 3 Brandt DKC Texas Chiller Companies Construction Systems BIDDERS Carrollton, TX Dallas, TX Houston, TX BASE BID $607,077.00 $910,000.00 $671,400.00

TOTAL $607,077.00 $910,000.00 $671,400.00

CALENDAR DAYS - Manufacture/Delivery 112 114 168 CALENDAR DAYS - Construction 45 56 0 Add Alternate #1 - Expidited Shipping 10,000.00 n/a n/a Alternate #1 reduction Calendar Days 14

FOR REFERENCE ONLY - This document summarizes bids received and some key pieces of information which may be located with a brief examination of the bids, and is not intended to replace a complete detailed evaluation of each bid.

Responses received from: Addendum No. 1 Addendum No. 2 C & A Brandt Companies acknowledged acknowledged  DKC Construction    Texas Chiller Systems   

Page 109 of 190 Recreation Center Natatorium Pool HVAC Unit Replacement

GGAF August 26, 2020

Page 110 of 190 Purpose

• Consideration and possible action to approve a Construction Contract with Brandt Companies, LLC, of Carrollton, Texas for the Construction of the Natatorium Pool HVAC Unit Replacement, at the Georgetown Recreation Center in the amount of $607,077

Page 111 of 190 Background

• GGAF - February 26, 2020 • City Council Workshop – March 24, 2020 • City Council Workshop – June 9, 2020 • City Council Regular Session - June 23, 2020 Mid- year Budget Amendment

Page 112 of 190 Capital Expenditure

• Recreation Center Natatorium HVAC Replacement • 800,000 budget

 Boiler is not in operation - no heat  One of the two circuits is down  $68K in repairs in 2019  Copper inside the unit has extensive corrosion  Pitted and starting to leak

Page 113 of 190 Invitation to Bid

• Invitation to bid - July 20, 2020 • Bid Opening – August 14, 2020 • 3 bids received – Brandt Companies, LLC – $607,077 & 157 Days – DKC Construction – $910,000 & 170 Days – Texas Chiller Systems – 671,400 & 168 Days • 16-week lead (112 days) on manufacture and shipping of new unit

Page 114 of 190 Next Steps

• Award Construction Contract for Rec Center Natatorium HVAC • Execute contract • Begin 16-week lead on the unit

Page 115 of 190 City of Georgetown, Texas Government and Finance Advisory Board August 26, 2020

SUBJECT: Discussion and possible action to recommend proposed changes to the Fiscal and Budgetary Policies as part of the FY2021 budget development process. – Leigh Wallace, Finance Director

ITEM SUMMARY: The purpose of this item is to discuss and receive feedback on the proposed changes to the Fiscal and Budgetary Policy for the upcoming budget.

The purpose of the Fiscal and Budgetary Policy is to provide the framework for financial operations of the City and to ensure prudent stewardship, financial planning and accountability. The bond rating agencies and external auditors are the primary external parties that review the policies and compliance.

Each year the Policy is administratively amended to recognize date and amount changes within the text; and to address any new financial or regulatory requirement that may need to be added. Other amendments may be recommended to clarify wording or to further define a particular policy area.

Potential changes for consideration and discussion are noted in the overview presentation. The full version of the policies with tracked changes is provided, as well as a clean copy.

FINANCIAL IMPACT: .

SUBMITTED BY: Danella Elliott

ATTACHMENTS: Description Type Overview Presentation Presentation Proposed Fiscal Policies - Tracked Changes Backup Material Proposed Fiscal Policies - Clean copy Backup Material

Page 116 of 190 FY2021 Annual Budget

Fiscal and Budgetary Policies Update for FY2021

GGAF August 26, 2020

Page 117 of 190 FY2021 Annual Budget Purpose

• Fiscal and budgetary policies guide: – Budget development and monitoring process • Revenue and Expense – Capital asset replacement – Debt philosophy and process – Reserves and Financial Ratios – Accounting and audit procedures • Goal: Find a balance between flexible and firm

Page 118 of 190 FY2021 Annual Budget Audience

• Reviewed annually by GGAF and Council as part of budget development process • Internal staff • External auditors • Credit rating agencies

Page 119 of 190 FY2021 Annual Budget Administrative Changes

• Clarify existing wording and formatting • Remove old language that no longer applies • Update compliance for coming fiscal year

Page 120 of 190 FY2021 Annual Budget Substantive Changes

• Changing the meaning of the policy – Calculation change – Definition change – Change in decision maker • Adding new policies

Page 121 of 190 FY2021 Annual Budget Examples of Past Updates

• Add new reserves • Update policy to align with opportunities in new software system • Clarify goals for rate-setting and revenue recovery • Define appropriate uses of one-time savings

Page 122 of 190 FY2021 Annual Budget Pandemic Context

Section IX. Budget Contingency Plan • FY2020 use of Budget Contingency Plan for first time in several years, and under new emergency circumstances • Broaden the wording in the plan to accommodate a wider variety of circumstances • Leave intact the actions authorized by City Manager and the Council

Page 123 of 190 FY2021 Annual Budget Pandemic Context Cont’d

Section XI. Capital Maintenance and Replacement • Economic changes resulting in decreased revenues • FY2021 budget uses various reserves to sustain services/projects • Reviewed with Council during budget development

Page 124 of 190 FY2021 Annual Budget Pandemic Context Cont’d

Section XIV. Debt Management • Collapse of the municipal debt market in March and April 2020 led City to postpone annual debt sale for capital projects • Financial Advisor recommended various options • Broaden wording for method of sale to include options other than competitive bidding • Keep wording alternatives must be approved by Council

Page 125 of 190 FY2021 Annual Budget Re-organization

• Georgetown Utility Systems Board re-organized to two separate boards to specialize in Electric Utility and Water Utility affairs • Each board will review rates, contracts, and capital infrastructure plans

Page 126 of 190 FY2021 Annual Budget Updates to Reserves

Section XV. Financial Conditions and Reserves • Add GTEC and GEDCO reserves consistent with bylaws and existing practice • Remove Downtown TIRZ debt service reserve no longer needed since Garage debt repurposed to Waste Transfer Station • Add Cemetery reserve consistent with existing practice

Page 127 of 190 FY2021 Annual Budget Summary

• Several additions/clarifications to the policies for FY2021 reflecting current practices – Opportunity to see policies in new light of pandemic circumstances – Use of reserves as planned during difficult economic environment and uncertainty • City continues to be recognized by credit rating agencies for strong fiscal policies that emphasize flexible liquidity

Page 128 of 190 FY2021 Annual Budget Next Steps

• Receive GGAF feedback and recommendation • Council update in September • Adopt policies with budget in September

Page 129 of 190

FY20201 Annual Budget

Fiscal and Budgetary Policy

Adopted: September 224, 202019

I. PURPOSE

The City of Georgetown is committed to financial management through integrity, prudent stewardship, planning, accountability, transparency and communication. The broad purpose of the Fiscal and Budgetary Policies is to enable the City and its related component units, including the Georgetown Transportation Enhancement Corporation (GTEC) and the Georgetown Economic Development Corporation (GEDCO), to achieve and maintain a long-term stable and positive financial condition, and provide guidelines for the day-to-day planning and operations of the City’s financial affairs.

Policy scope generally spans areas of accounting, operational and capital budgeting, revenue and expenditure management, financial reporting, internal controls, investment and asset management, debt management and forecasting. This is done in order to:

A. Demonstrate to the residents of Georgetown, the investment community, and the bond rating agencies that the City is committed to a strong fiscal operation;

B. Provide precedents for future policy-makers and financial managers on common financial goals and strategies;

C. Fairly present and fully disclose the financial position of the City in conformity to generally accepted accounting principles (GAAP); and

D. Demonstrate compliance with finance-related legal and contractual issues in accordance with the Texas Local Government Code and other legal mandates.

These policies will be reviewed and updated annually as part of the budget preparation process.

II. FUND STRUCTURE AND BASIS OF BUDGETING

The budgeted funds for the City of Georgetown include:

Governmental Funds: General Fund which accounts for all financial resources except those required to be accounted for in another fund, and include basic governmental services, such as Street Maintenance, Planning and Development, Police, Fire, Parks, as well as Solid Waste Management.

Special Revenue Funds (SRF) account for specific revenues that are legally restricted for specified purposes. Examples include Tourism, Parkland Dedication, Library Donations, Animal Services Donations, and Street Maintenance Sales Tax.

Debt Service Fund is used to account for the payment of general long-term debt principal and interest.

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FY20201 Annual Budget Capital Project Funds are used to account for the acquisition or construction of major capital facilities other than those financed by enterprise activities.

Proprietary Funds: Internal Service Funds account for goods or services provided by one internal department to another. The City uses this system to recognize cost for fleet replacement and maintenance, facility maintenance, computer replacement and maintenance and employee health insurance costs.

Enterprise Funds include the City’s business like activities including all the utility funds and the airport.

Basis of Accounting and Basis of Budgeting

The City accounts and budgets for all Governmental Funds using the modified accrual basis of accounting. This basis means that revenue is recognized in the accounting period in which it becomes available and measurable, while expenditures are recognized in the accounting period in which the liabilities are incurred. Because the appropriated budget is used as the basis for control and comparison of budgeted and actual amounts, the basis for preparing the budget is the same as the basis of accounting. Exceptions to the modified accrual basis of accounting include:

• Encumbrances, which are treated as expenditures in the year they are encumbered, not when expended • Grants, which are considered revenue when awarded, not received • Principal and interest on long-term debt, which are recognized when paid.

Proprietary Funds are accounted and budgeted using the full-accrual basis of accounting. Under this method, revenues are recognized when they are earned and measurable, while expenses are recognized when they are incurred regardless of timing or related cash flows. The basis for preparing the budget is the same as the basis of accounting except for principal payments on long-term debt and capital outlay which are treated as budgeted expenses. Exceptions include:

• Depreciation which is not budgeted • Non-budgeted accruals such as compensated absences.

III. OPERATING BUDGET

Budgeting is an essential element of the financial planning, control and evaluation process of municipal government. The operating budget is the City’s annual financial operating plan. The annual budget includes all of the operating departments of the General Fund, proprietary funds, debt service funds, special revenue funds, and capital improvement funds of the City.

A. Form of Government – The Charter (Section 1.03) established a Council-Manager Government wherein the City vests power in the City Council to “enact legislation, adopt budgets, determine policies, and appoint the City Manager who shall execute the laws and administer the government of the City.”

B. Comprehensive Plan – The Charter (Section 1.08) requires that the City Council “establish comprehensive planning as a continuous and ongoing governmental function in order to promote and strengthen the existing

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FY20201 Annual Budget role, processes and powers of the City of Georgetown.” The current comprehensive plan is the 2030 Plan adopted in 2006.

C. Preparation – The Charter (Section 6.02) requires “a proposed budget prepared by the City Manager and submitted to the City Council at least thirty days prior to the end of the fiscal year. The budget shall be adopted not later than the twenty-seventh day of the last month of the fiscal year. No budget will be adopted or appropriations made unless the total estimated revenues, income and funds available shall be equal to or in excess of such budget or appropriations, except otherwise provided.”

1. Proposed Budget – A proposed budget shall be prepared by the City Manager with participation of all of the City’s Directors within the provision of the Charter and the 2030 Plan.

a. The budget shall include four basic segments for review and evaluation:

• Revenue • Personnel Costs • Operations and Maintenance Costs • Capital and other non-project Costs

b. The budget review process will include City Council participation in the development of each segment and allow for resident participation in the process, and will allow for sufficient time to address policy and fiscal issues by the City Council.

c. A copy of the proposed and approved budgets will be filed with the City Secretary when it is submitted to the City Council and will be available on the City’s website.

2. Adoption – Upon finalization of the budget appropriations, the City Council will hold a public hearing, and subsequently adopt by Ordinance the final budget as amended. The budget will be effective for the fiscal year beginning October 1st.

The Annual Budget document will be submitted annually to the Government Finance Officers Association (GFOA) for evaluation and consideration for the Distinguished Budget Presentation Award.

D. Balanced Budget – The goal of the City is to adopt and maintain a balanced operating budget using sustainable funding sources that are expected to continue to be available in subsequent fiscal years. Excess balances in operating funds from previous fiscal years shall remain in the fund in which they were appropriated until either such excess balances are proposed and adopted pursuant to Section III. C. Preparation of this policy; until they are used to reduce outstanding debt obligations of the City; or both.

The Charter (Section 6.04) requires that an operating deficit created in any fiscal year shall be paid off and discharged during the following year. In practice, deficit has been interpreted to mean City funds as a whole. The City Council may choose from time to time to allow individual funds to have a negative balance as long as Operating Reserve requirements for the City as a whole are maintained.

E. Planning – The budget process will be coordinated so that major policy issues are identified prior to the budget approval date. This will allow City Council adequate time for consideration of appropriate decisions and analysis of financial impacts.

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FY20201 Annual Budget

F. Reporting – Summary financial reports will be presented to the City Council quarterly. These reports will be in a format appropriate to enable the City Council to understand the overall budget and financial status.

G. Control and Accountability – Each Director, appointed by the City Manager, will be responsible for the administration of his/her departmental budget. This includes accomplishing the Goals and Objectives adopted as part of the budget and monitoring each department budget for revenue collections and compliance with spending limitations. Directors may transfer funds up to $25,000 within the operations and maintenance or capital line items within a departmental budget category with approval from Finance. All transfers from or to the Personnel line items require approval of the Finance Director and City Manager. All other transfers of appropriation or budget amendments require either City Council or City Manager approval as outlined in Section III.G Budget Amendments and Section V.C.4 Use of Excess Salary Savings.

H. Budget Amendments – The Charter (Section 6.04) and the Local Government Code 102.009 and 102.010 provide a method to amend the budget for emergency appropriations and municipal purposes. The City Council may authorize, with a majority plus one vote, an amendment to the original budget. This may be done in cases of grave public necessity, or to meet an unusual and unforeseen condition that was not known at the time the budget was adopted. The following criteria will be used in evaluation of budget amendments:

• Is the request necessary? • Why was the item not budgeted in the normal budget process? • Why can't a transfer be done within the Division to remedy the condition?

The Finance Director must certify availability of revenues or funding sources prior to adoption.

If needed, the City will amend the budget at year end for increased revenue and for expenditures that exceeded budgeted amounts. The City may also amend the budget for any capital project timing adjustments from prior year, as well as any other known adjustments needed and approved at that time.

I. Contingency Appropriations – The budget may include contingency appropriations within designated operating department budgets. These funds are used to offset expenditures for unexpected maintenance or other unanticipated expenses that might occur during the year. Currently, the City maintains contingency appropriations for items such as insurance deductibles, unexpected legal expenses and equipment repairs.

J. Use of Unanticipated and Unappropriated General Fund Balances – Within 90 days after fiscal year end, staff will report the projected General Fund balance to Council. In the event that unexpected, unbudgeted amounts are determined to be available in the General Fund after year end, these funds may be used for any of the following purposes, as approved by the City Council: 1. to fund capital projects;

2. to fund equipment purchases in lieu of issuing debt;

3. to reduce outstanding City debt, including bonded indebtedness and unfunded pension liabilities;

4. to fund contingent liabilities such as the benefit payout reserve, cemetery trust fund, and similar obligations of the City;

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FY20201 Annual Budget 5. to take other steps to reduce property tax rates or mitigate any future increases;

6. to hold those funds in reserve for future commitments or contingencies that may be pending, and/or;

7. to fund an Economic Stability Reserve of annual General Fund operating expenditures according to Section XV, A, 2, b, Economic Stability Reserve.

IV. REVENUE MANAGEMENT

A. Characteristics – The City will strive for the following optimum characteristics in its revenue system:

1. Simplicity – The City, where possible and without sacrificing accuracy, will strive to keep the revenue system simple in order to reduce compliance costs for the taxpayer or service recipient.

2. Certainty – A knowledge and understanding of revenue sources increases the reliability of the revenue system. The City will understand its revenue sources and enact consistent collection policies to provide assurances that the revenue base will materialize according to budget.

3. Equity – The City shall make every effort to maintain equity in its revenue system; i.e., the City should seek to minimize or eliminate all forms of subsidization between entities, funds, services, utilities, and customer classes, and ensure an on-going return on investment for the City.

a. The City will make every effort to recognize the benefit that City tax payers contribute to City programs and services.

b. The annual Recreation residential membership rates are established at 75% of non-residential rates plus or minus 10% at the discretion of the Parks and Recreation Director in keeping with the targeted market cost recovery.

4. Revenue Adequacy – The City should require there be a balance in the revenue system; i.e., the revenue base will have the characteristics of fairness and neutrality as it applies to cost of service, willingness to pay, and ability to pay.

Overall Operational Cost Recovery for Recreation is targeted to be between 50 – 60%, with some variance in individual programs.

5. Realistic and Conservative Estimates – Revenues will be estimated realistically, and conservatively, taking into account the volatile nature of various revenue streams.

6. Administration – The benefits of a revenue source should exceed the cost of levying and collecting that revenue.

7. Diversification and Stability – A diversified revenue system with a stable source of income shall be maintained. This will help avoid instabilities in revenue sources due to factors such as fluctuations in the economy and variations in the weather.

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FY20201 Annual Budget B. Other Considerations – The following considerations and issues will guide the City in its revenue policies concerning specific sources of funds:

1. Cost/Benefit of Incentives for Economic Development – The City will use due caution in the analysis of any incentives that are used to encourage development. A cost/benefit (fiscal impact) analysis will be performed as part of the evaluation.

2. Non-Recurring Revenues – One-time or non-recurring revenues should not be used to finance current ongoing operations.

3. Sustainable Revenues – Sustainable means revenue that is consistently available year after year, and includes revenues realized subsequent to adopted projections.

4. Property Tax Revenues – Annually, the City will forecast property tax revenue as part of the budget process. Certified Assessed Value Reports from the Williamson Central Appraisal District are used to forecast property tax. The City will comply with State law regarding publication notices and Truth in Taxation requirements.

5. Interest Income – Interest earned from investments will be distributed to the funds in accordance with the average daily cash balance of the fund from which the monies were provided to be invested.

6. User-Based Fees and Service Charges – For services associated with a user fee or charge, the direct or indirect costs of that service will be offset by a fee where possible. The City will review fees and charges no less than once every five years on a rotating schedule to ensure that fees provide adequate coverage for the cost of services. The City Council will determine how much of the cost of a service should be recovered by fees and charges.

7. Enterprise Activity Rates – The City will review and adopt utility and airport rates as needed to generate revenues required to fully cover operating expenses, meet the legal requirements of all applicable bond covenants, and provide for an adequate level of working capital. Enterprise rates will be reviewed annually as part of the budget process. A rate study will be conducted every 3 years to review rate methodology and ensure revenues will meet future needs. All enterprise rates will be based on standardized cost of service methodologies and conservation goals.

a. Water Rates will recognize at least 75% of the fixed cost of service, including debt payments and ROI costs, within the monthly base charge determined by meter size. Volumetric charge will recognize the balance of fixed costs not included in the base rate, plus all variable costs associated with procuring and treating water. . b. Wastewater Rates are fixed for all residential customers based on the cost of providing services. Commercial customer rates are fixed and volumetric depending on size and specifications of each commercial customer.

c. Electric Rates include 100% of fixed costs within the base rate, and demand rates, with all variable costs included in the kWh rate. The Power Cost Adjustment (PCA) Factor and Transmission Cost Adjustment (TCA) Factor are determined by comparing forecasted costs against actual costs in a budget year, and seek to recover/credit variances within 6 to 12 months. For reference, see Code of Ordinances 13.04.075 and 13.04.080.

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FY20201 Annual Budget d. Stormwater Drainage Fees are based on a mathematical calculation using impervious cover and applied in compliance with State Law.

e. Solid Waste and Environmental Services Rates are based on the wholesale cost of service and retail incentives for conservation, plus a return to the General Fund for wear and tear of heavy trucks on City streets, a franchise fee, and an administrative allocation for managing the solid waste contract and solid waste departmental programing. f. Airport Fuel and Lease Rates are based on the cost of the fuel plus a profit margin to fund operations, capital improvement, contingency, and debt service requirements.

8. Internal Cost Recovery Fees – Additionally, enterprise activity rates will include transfers to and receive credits from other funds as follows:

a. General and Administrative Charges – Administrative costs should be charged to all funds for services of general overhead, such as administration, finance, customer billing, legal and other costs as appropriate. These charges will be determined through an indirect cost allocation following accepted practices and procedures and reviewed annually by the City’s external auditors.

b. Payment for Return on Investment – The intent of this transfer is to provide a benefit to the citizens for the ownership of the various utility operations they own. For all utilities except for Electric:

• In-Lieu-of-Franchise-Fee. This transfer, currently 3% of operating revenues generated inside the City, is consistent with the franchise rates charged to investor owned utilities franchised to operate within the City.

• Return on Investment. The return on investment (ROI) transfer for In-City utility customers is currently calculated at 7% of operating revenues for all non-electric utilities. ROI for water and sewer customers outside the City is 10% of operating revenues.

The Franchise and Return on Investment for the Electric Utility are both derived from the base monthly charge gross revenue and kWh sold. For customers inside the City, the franchise fee is $0.002947/kWh sold, and the Return on Investment is 7% of gross revenue of the base monthly charge, and $0.007253/kWh sold. For customers outside the City, there is no franchise fee to the City of Georgetown; however, those customers may be subject to franchise fees in the jurisdiction in which they reside. Outside the City customers are charged a Return on Investment equal to 7% of gross revenue of the base monthly charge, and $0.0102/kWh sold.

9. Revenue Monitoring – Received revenues will be regularly compared to budgeted revenues and variances will be investigated, and any abnormalities will be included in the quarterly report to the City Council.

10. Other Funding Alternatives

When at all possible, the City will research alternative funding opportunities prior to issuing debt or increasing user-related fees.

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FY20201 Annual Budget a. Grants – All grant applications must be approved by the City Council prior to being submitted to a granting agency. Prior to submittal to Council, departments will verify that the benefits of the grant exceed the cost of grant administration and will also provide the required grant forms to Finance for review in accordance with the Grant Acquisition, Management, and Compliance Policy. Finance will review and sign the forms which provides detailed information including, but not limited to, the term of the grant, any matching requirements, the resulting operational requirements once the grant is discontinued, and a budget request detailing the line items to be effected, all of which should be included in the Council agenda item packet requesting approval to apply. The City Council must also authorize acceptance of any grant awards received.

b. Use of Reserve Funds – The City may authorize the use of reserve funds to potentially delay or eliminate a proposed bond issue. This may occur due to higher than anticipated fund balances in prior years, thus eliminating or reducing the need for debt proceeds, or postpone a bond issue until market conditions are more beneficial or timing of the related capital improvements does not correspond with the planned bond issue. Reserve funds used in this manner are replenished upon issuance of the proposed debt.

c. Developer Contributions – The City will require developers who negatively impact the City's utility capital plans offset those impacts. These policies are further defined within the City's utility line extension policy and other development regulations.

d. Leases – The City may authorize the use of lease financing for certain operating equipment when it is determined that the cost benefit of such an arrangement is advantageous to the City.

e. Impact Fees – The City will impose impact fees as allowable under state law for both water and wastewater services. These fees will be calculated in accordance with statute and reviewed at least every three years. All fees collected will fund projects identified within the Fee study and as required by state laws.

V. EXPENDITURE MANAGEMENT

A. Appropriations – The point of budget control is at the department level budget for all funds. The Charter (Section 6.03) provides that any transfer of appropriation between funds must be approved by the City Council and that the City Manager, without City Council approval, is authorized to transfer appropriations among departments, within the same operational division and fund.

B. Expenditure Monitoring – Expenditures and encumbrances will be regularly compared to budget, variances will be investigated, and any abnormalities will be included in the quarterly report to the City Council. Projected year-end expenditures will be reported in the annual budget.

C. Personnel Costs – Costs related to salaries and benefits are budgeted at 100% total costs, assuming open positions are filled throughout the fiscal year. New positions that are added during the budget process may have staggered hire dates with appropriate costs reflected in the budget.

1. Vacancy Factor – Major Funds with Personnel Budgets will include a vacancy factor of at least 1% of total fund salaries and related benefits (retirement, FICA, Medicare) to offset salary savings within the budget. The vacancy factor will be budgeted as a negative expense within the fund. This factor

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FY20201 Annual Budget will be reduced throughout the year as vacant positions are recognized within the department budget.

Compliance Status – General Fund, Electric Fund, Water Fund and Joint Services Fund FY2020 FY2021 in compliance.

2. Benefit Payout Reserve – The City will establish a benefit payout reserve equal to 15% of the accrued benefit liability for employees in the General and Joint Services Funds who are currently eligible to retire. Only terminating employee benefit expenses may be paid from this reserve. This reserve shall be funded as an offset to the vacancy factor.

Compliance Status – Benefit payout reserve FY202120 in compliance.

3. Position Control – The annual budget includes a set number of positions within departments when approved and adopted by City Council. Additional positions cannot be added without approval of the City Council. The City Manager may approve the transfer of authorized positions between departments if funds are available within the department.

4. Use of Excess Salary Savings – Departmental savings generated due to open positions or other salary line item savings cannot be spent by the department unless previously approved by the City Manager and validated by Finance as excess funds.

D. Special Purpose Funding – In order to support community assistance programs, the City designates specific funding for special purposes, including Social Services, Children’s Programs, and Public Art. The City reserves the ability to cap this special purpose funding when necessitated by budget contingency or compliance issues, such as revenue shortfalls, or other reasons as determined by City Council.

1. Strategic Partnerships for Community Services – The City of Georgetown values partnerships with organizations that are committed to addressing our communities’ greatest public challenges and has identified key priorities in the following areas:

a. Public Safety b. Transportation c. Housing d. Parks & Recreation e. Veteran Services f. Safety Net

The City has targeted funding for these programs to be $5.00 per capita, which may be adjusted to offset the effects of general inflation based upon Consumer Price Index. If previous funding levels are higher than the targeted amount, and to avoid significant reductions in levels of funding, the City Council shall seek to attain this target chiefly through population growth. These funds will be allocated and paid according to the City Council’s guidelines for such programs.

Compliance Status – FY202120 in compliance.

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FY20201 Annual Budget 2. Public Art Funding – The City will annually allocate $43,000 of funding for Public Art in the Tourism Fund. Any unspent funds will accumulate and be reallocated in the following budget year. Disbursement of these funds will be determined by the City’s Arts & Culture Advisory Board.

Compliance Status – FY2021 in compliance.

Every effort will be made to include public art funding in future City facilities whose primary purpose is for public use. These projects will include a reasonable allowance for public art that fits the scope and purpose of the building so long that it does not negatively impact the project cost beyond the original budget. In the event there is cost savings in the construction of City Facilities, the City Council may consider utilizing that savings on the purchase of public art for the facility.

E. Purchasing – The City will maintain and regularly review written Purchasing Policies. All City purchases of goods or services will be made in accordance with the City’s Charter, current Purchasing Policy and with State law.

The following table shows a summary of requirements for purchases of goods and services and does not substitute the formal Purchasing Policies.

Dollar Limits: Procurements: Requirements: $3,000 and less Under the small purchase No competitive bids and City credit limit cards may be used. $3,001 Within informal bid limit A minimum of three informal up to competitive bids required unless $50,000 exempted; Historically Underutilized Business (HUB) requirements apply in accordance with state law. $50,001 In excess of the informal bid Formal solicitations, which includes and above limit public notices, required unless exempted. Advisory board review and recommendation may be required. Council approval required.

Common exemptions to the formal solicitation process include the procurement of professional services, the purchase of goods or services from a sole source provider, and purchases for public health emergencies.

In addition to the above, all purchases must be approved according to signature authority limits.

F. Contracts, Change Orders and Amendments – Contracts and related change orders and amendments must follow the City’s Purchasing Policies and State Law. Contract term lengths should balance the need for value as well as the ability to respond to changing conditions.

G. Prompt Payment – In accordance with State Law, all invoices approved for payment by the proper City authorities shall be paid within thirty (30) calendar days of receipt of goods or services or invoice date, whichever is later in accordance with State law. The City will take advantage of all purchase discounts, when possible.

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FY20201 Annual Budget

H. Risk Management – The City will pursue every opportunity to provide for the Public’s and City employees’ safety and to manage its risks. The goal shall be to minimize the risk of loss of resources through liability claims with an emphasis on safety programs.

I. Retirement Benefits – Proposals to revise benefits administered and provided by the Texas Municipal Retirement System shall include a written description, and, detailed and summary numerical assessments of the changes that would result from the proposed benefit revision.

1. The numerical assessments shall include the following:

a. The estimated change to the TMRS contribution rate that would result from the proposed change in benefits, expressed as a percentage of employee pay and as an annual dollar amount to the General Fund and to each City fund.

b. The estimated change to the City’s unfunded pension liability, expressed as a dollar amount.

c. The estimated change to the City’s actuarial funding ratio.

2. The description and numerical assessments must be provided to the City Council at least 72 hours prior to consideration and approval, and must be read aloud to the Council prior to Council consideration.

3. The estimated changes to the City’s contribution rate and the unfunded pension liability presented pursuant to the section must be based on information provided by the TMRS actuary or by a professional actuary authorized by the TMRS to provide such information.

4. Proposals to revise TMRS benefits must be voted on individually as part of the City Council’s legislative agenda.

5. The City will amortize any unfunded actuarial liability (UAAL) over a period not to exceed the amortization period used by the TMRS actuary. The City may amortize its UAAL more quickly by making contributions to TMRS in excess of the rate specified by TMRS.

6. The City may elect to pay a higher contribution rate than required by the TMRS, to reduce the City’s unfunded pension liability. Such payment will be approved and authorized by the City Council as part of the City's annual budget process.

J. Retirement Cost-of-Living Adjustment

1. Within 60 days of when the TMRS annual funding update becomes available each year, staff will review and may prepare a summary of costs and options for potential cost-of-living adjustment (COLA) for City of Georgetown retirees.

2. Consistent with state statutes governing the Texas Municipal Retirement System, the City may provide an automatic COLA for members of the TMRS who are retired from the City of Georgetown and receiving a monthly retirement benefit from the TMRS.

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FY20201 Annual Budget 3. The City Council may adjust the COLA provided to city retirees based upon the funding level of the City’s pension plan, as calculated by the TMRS, as follows:

When the funding level of the The COLA City’s pension plan is should be

Less than 70.0% Zero

70.0% to 79.9% 0.3% of CPI

80.0% to 89.9% 0.5% of CPI

90.0% and greater 0.7% of CPI

4. Adjustments made pursuant to Subsection J.3. should reflect the reciprocal effect of the prospective change in the COLA on the funding level of the City’s pension plan.

K. Deferred Compensation Benefits – In addition to the retirement benefit administered by the TMRS, the City will sponsor a Deferred Compensation 457 plan, which is a supplementary individual retirement savings plan. The City will encourage employee participation in this plan.

VI. STAFFING AND COMPENSATION

City Council and Management recognize the importance of attracting, hiring, developing, and retaining the best people, and compensating them for the value they create. Our outstanding and innovative City employees work diligently to bring the Vision of Council to life and deliver exceptional services to our customers while exemplifying our Core Values. The following programs are subject to available funding in the annual operating budget.

A. Adequate Staffing – Staffing levels will be adequate for the fiscal functions of the City to operate effectively. Workload allocation alternatives will be explored before adding additional staff.

B. Competitive Compensation – In order to maintain a competitive pay scale, the City has implemented a Competitive Employee Compensation Maintenance Program to address competitive market factors and other issues impacting compensation. The program consists of:

1. Annual Pay Plan Review – To ensure the City’s pay system is accurate and competitive within the market, the City will review its pay plans annually for any potential market adjustments necessary to maintain the City’s competitive pay plans.

2. Pay for Performance – Each year the City will fund performance based pay adjustments for regular non-public safety personnel. This merit-based program aids in retaining quality employees by rewarding their performance. Pay for Performance adjustments are based on the employee’s most recently completed performance evaluation.

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FY20201 Annual Budget 3. Public Safety Steps – Each year the City will fund anniversary step increases for public safety sworn personnel consistent with public safety pay scale design.

C. Self-Insurance Program – The City is committed to providing quality healthcare insurance that offers the most flexibility in health benefits and options to its employees. In order to provide the most cost effective solution, the City has determined that establishing a self-funded health insurance plan offers the greatest opportunity to mitigate future cost increases while offering quality health care services to its employees. The City has established a mechanism to manage the accounts and payments associated with this program. Per GASB Statement No. 66, such funding should be accounted for as an Internal Service Fund (ISF).

1. Employee Health Insurance ISF – This fund contains premium contributions from employees and budgeted health insurance contributions included in the City’s annual budget process. To maintain stable revenue to this fund, and to clearly set expenditure expectations for departments, any budgeted appropriations for employee health insurance that are unused at the end of each fiscal year will be transferred back to the self-insurance fund.

2. Self-Insurance Reserves – Annually through the budget process, staff and the City’s Health Benefit Consultant firm will evaluate and recommend to Council the appropriate funding levels for two reserves.

a. Incurred but Not Reported (IBNR) Reserve: In the event the City stopped self-insuring for health benefits and was required to pay incurred costs, the City will reserve between 5 and 10 percent of the annual costs of claims, benefit administration and stop loss coverage.

Compliance Status – IBNR reserve FY202120 in compliance.

b. Rate Stabilization Reserve: To alleviate shocks to the City and employees due to sharp increases in health insurance costs, the City will reserve between 10 and 20 percent of annual medical claims, benefit administration and stop loss coverage. Staff and the benefits consultant will consider a 3 year forecast on premiums when determining to utilize the funds or rebuild the reserve.

Compliance Status – Rate stabilization reserve FY202120 in compliance.

3. Employee Premiums – Annual premiums will be recommended to City Council through a collaborative process between the City’s Employee Benefit Committee and external Health Benefits consulting firm using historical data, reserves history and other analytic analysis.

VII. FUND BALANCE POLICIES

The City’s Fund Balance is the accumulated difference between assets and liabilities within governmental funds, and it allows the City to meet its contractual obligations, fund disaster or emergency costs, provide cash flow for timing purposes and fund non-recurring expenses appropriated by City Council. This policy establishes limitations on the purposes for which Fund Balances can be used in accordance with Governmental Accounting Standards Board (GASB) Statement Number 54.

The City’s Fund Balance will report up to five components:

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FY20201 Annual Budget A. Non-spendable Fund Balance – includes inherently non-spendable assets that will never convert to cash, as well as assets that will not convert to cash soon enough to affect the current financial period. Assets included in this category are prepaid items, inventory and non-financial assets held for resale. B. Restricted Fund Balance – represents the portion of fund balance that is subject to legal restrictions, such as grants or hotel/motel tax and bond proceeds. C. Committed Fund Balance – describes the portion of fund balance that is constrained by limitations that the City Council has imposed upon itself, and remains binding unless the City Council removes the limitation. D. Assigned Fund Balance – is that portion of fund balance that reflects the City’s intended use of the resource and is established in a less formal method by the City for that designated purpose. E. Unassigned Fund Balance – represents funds that cannot be properly classified in one of the other four categories.

VIII. LONG-TERM LIABILITY RESERVES

The City of Georgetown recognizes certain long-term unfunded commitments and contingencies that will require substantial funding at some point in the future. The City is committed to addressing these commitments in a fiscally prudent method by acknowledging their future financial impacts and developing strategies and designated reserve funds to mitigate those future impacts.

A. The Finance Director will maintain a list of unfunded liabilities. The list will be included in the quarterly financial report to Council and considered during the annual budget process.

IX. BUDGET CONTINGENCY PLAN

This policy is designed to establish general guidelines for managing revenue shortfalls resulting from local and national economic downturns that adversely affect the City's revenue streams.

A. Immediate Action – Once a budgetary shortfall is projected, the City Manager will take the necessary actions to offset any revenue shortfall with a reduction in current expenses. The City Manager may:

1. Freeze all new hire and vacant positions except those deemed to be a necessity. 2. Review all planned capital expenditures. 3. Delay all "non-essential" spending or equipment replacement purchases.

The City Manager shall report in a timely manner to the City Council the projected shortfall and the actions taken to resolve it.

B. Further Action – If the actions identified in subsection A are insufficient to offset the projected revenue deficit for the current fiscal year, the City Council may approve the following actions, in the order listed:

1. Apply unspent, unobligated surplus funds from prior fiscal years to fund one-time costs in the current fiscal year budget.

2. Authorize the use of the General Fund Economic Stability Reserve pursuant to Section XV.A.2.b. Economic Stability Reserve., contingency reserves, capital reserves or any other reserves appropriate as outlined in the sections XII. CAPITAL MAINTENANCE AND REPLACEMENT and XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS

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FY20201 Annual Budget 3. Direct other reductions in services, including workforce reductions.

4. Authorize a temporary reduction in one or more fund’s contingency reserves from 90 days to 75 days. the unobligated fund balance in the General Fund, pursuant to Section XV.A.2.a. Base Level Reserve of this policy, from 90 to 75 days.

C. Replenish Fund Balance – As soon as practical, without placing undue strain on City services, the City Council shall increase the unobligated fund balance in the General Fund, up to the 90-day amount required in Section XV.A.2.a. Base Level Reserve of this policy and shall restore the General Fund Economic Stability Reserve as required in Section XV.A.2.b of this policy.

X. CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET

The City’s goal is to maintain City facilities and infrastructure in order to provide excellent services to the customers within the community, meet growth related needs, and comply with all state and federal regulations.

A. Preparation – The City annually updates and adopts a five-year Capital Improvement Program (CIP) schedule as part of the operating budget adoption process. The plan is reviewed and adjusted annually as needed, and year one is adopted as the current year capital budget. The capital budget will include all capital projects, capital resources, and estimated operational impacts.

1. Needed capital improvements are identified through system models, repair and maintenance records and growth demands.

2. A team approach will be used to prioritize CIP projects, whereby City staff from all operational areas provide input and ideas relating to each project and its effect on operations.

3. Citizen involvement and participation will be solicited in formulating the capital budget through master planning processes, board meetings, public hearings and other forums.

4. Capital infrastructure necessary to meet the requirements of the City’s Annexation Plan will be identified separately within the CIP plan, so that funding alternatives can be developed if needed.

Prior to Council approval, the following Advisory Boards will review the Capital Projects budget and contracts for expenditures:

Georgetown General Water Georgetown Georgetown Utility Systems Government Parks Utility Transportation Transportation Advisory Board and Finance Advisory Board Advisory Board Enhancement (GUS)Electric Advisory Board Board (GTAB) Corporation Utility Board (GGAF) (GTEC) Electric Water Streets Facilities, Fleet, Parks and Transportation Water Wastewater Stormwater IT and Recreation projects Wastewater Drainage related to

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FY20201 Annual Budget Airport Other General economic Government development Capital Projects

B. Control – All capital project expenditures must be appropriated in the capital budget.

C. Financing Programs – Where applicable, assessments, impact fees, pro rata charges, or other fees should be used to fund capital projects which have a primary benefit to specific identifiable property owners. Debt financing is referenced in Section XIV. Debt Management of this document.

XI. CAPITAL MAINTENANCE AND REPLACEMENT

The City recognizes that deferred maintenance increases future capital costs. Therefore, a portion of all individual funds with infrastructure should be budgeted each year to maintain the quality within each system.

A. Infrastructure Maintenance — On-going maintenance and major repair costs are included as expense within the departmental operating budgets. These costs are generally considered system repairs and are not capitalized for accounting purposes. They include such items as park and recreation facility repairs, street repair, water line repairs and other general system maintenance.

B. Modified Approach — Pavement Condition Index (PCI) — Governmental Accounting Standards Board Statement # 34 provides for an alternative approach to depreciation for measuring the value of infrastructure assets and the related costs incurred to maintain their service life at a locally established minimum standard. The City has elected to implement this modified approach in maintaining its non-enterprise fund infrastructure assets. In order to adopt this alternative method, the City has implemented an asset management system that determines if the minimum standards are being maintained. This measurement system will be updated at least every 3 years.

The City uses a Pavement Management Information System to track the condition levels of each of the street sections. The condition of the pavement is based on the following factors:

• Type of Distress • Amount of Distress • Severity of Distress • Deduct Values (function of first three)

The Pavement Condition Index (PCI) is a measurement scale is based upon a condition index ranging from zero for a failed pavement to 100 for pavement with perfect condition. The condition index is used to classify pavement in the following conditions:

PCI Rating 100 – 85 Good 85 – 45 Fair 45 – 0 Poor

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FY20201 Annual Budget The City’s administrative policy is to achieve an average PCI level of 85. An 85 PCI is considered maintaining the streets in a “good” condition. Staff will prepare a street maintenance budget that meets this target for Council’s consideration during the budget process. The PCI level as of 2018 was 85.5.

C. Internal Service Funds Capital Maintenance & Replacement – The City currently utilizes internal service funds to maintain and replace existing assets. Assessments are made to other funds for the use of existing equipment and to purchase new equipment. In this way, suitable funds are available for the purchase of operational assets without the issuance of debt.

1. Fleet Maintenance and Replacement – The City has a major investment in its fleet of cars, trucks, tractors, and other equipment. The City will anticipate replacing existing equipment, as necessary and will establish charges that are assigned to the using departments to account for the cost of that replacement. Vehicle maintenance is also allocated in this manner. The targeted asset replacement reserve amount is the average (1/5th) of the next five years on the replacement schedule for cash- funded vehicles.

Compliance Status – Fleet replacement reserve FY20210 in compliance.

It is the general policy of the City not to hold back vehicles or equipment from replacement or disposition. Departmental requests to hold back units must be approved by the Fleet Manager and the City Manager.

2. Technology – It is the policy of the City to plan and fund the maintenance and replacement of its computer network and other technology systems. A reserve will be established within the ISF for replacement of major systems and will be funded over time through excess revenues within the Fund. The targeted amount is the average (1/5th) of the next five years on the replacement schedule. While cash funding is preferred, major IT systems and projects may require debt that is amortized over a shorter useful life appropriate for the software or hardware.

Compliance Status – IT replacement reserve FY20210 in partial compliance. The IT Fund will need to increase recovery rates in future years to cover the purchase of the fiber asset from the Electric Fund.

3. Facilities Maintenance – The City has established an on-going maintenance program, which includes major repairs, equipment, as well as contracts for maintaining City facilities. The City has anticipated a useful life of such equipment and established a means of charging those costs to the various departments in order to recognize the City’s continuing costs of maintaining its facilities. Determination for facility repairs is based on useful life of the various elements of each facility. A proportional cost for each element is expensed within the budget for capital replacement. The targeted replacement reserve amount is the average (1/5th) of the next five years on the replacement schedule.

Compliance Status – Facilities replacement reserve FY20210 partial compliance. Due to the economic impacts of the pandemic, the City has elected not to increase recovery rates to build the reserve to compliance. It is estimated to take 21 additional years to build the replacement reserve.

D. Departmental Capital Maintenance & Replacement – The City also utilizes department capital maintenance and replacement schedules for specialized assets and equipment necessary to provide services.

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FY20201 Annual Budget 1. Parks and Recreation – As part of the City’s on-going maintenance program, the City also recognizes the need to regularly maintain and replace playgrounds, equipment and facilities that are part of the City’s Parks and Recreation system. Separate replacement and maintenance schedules will be maintained for these items including, but not limited to, playground equipment, buildings, sport courts, trees and grounds, and restroom facilities. The City’s goal is to provide level on-going funding to ensure safe, well-maintained facilities for its citizens. The current funding level is an annual $297,000 transfer from the General Fund.

Compliance Status – Parks maintenance replacement FY20210 in partial compliance. Due to the economic impacts of the pandemic, the General Fund is transferring $50,000.

2. Public Safety Equipment – As part of the City’s on-going maintenance program, the City also recognizes the need to regularly maintain and replace specialized equipment in Police and Fire. Separate replacement and maintenance schedules will be maintained for these items including but not limited to for Fire: SCBA’s and other firefighting equipment and protective gear; and for Police: bullet proof vests, armaments and other tactical equipment. The City’s goal is to provide level on- going funding to ensure proper protection for employees and residents. The current funding level is an annual appropriation in the General Fund of $80,000 for Fire and $88,000 for Police.

Compliance Status – Public safety equipment replacement FY20210 in partial compliance. Due to the economic impacts of the pandemic, reductions were made to General Fund base budgets including public safety equipment.

E. Surplus Property

1. From time to time it is necessary to dispose of certain vehicles or equipment that have been procured with City funds and used in City services. Individual surplus property items with expected sales value in excess of $50,000 must be approved by the City Council prior to disposition.

2. City staff will maintain reports and records of all surplus property dispositions in accordance with good internal controls.

XII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING

A. Accounting – The City is solely responsible for the recording and reporting of its financial affairs, both internally and externally. The Finance Director is responsible for establishing the structure for the City’s Chart of Accounts and for assuring that procedures are in place to properly record financial transactions and report the City’s financial position.

B. General Government and Finance Advisory Board (GGAF) – The City may establish a subcommittee consisting of at least 2 City Council members and not more than 3 citizens that may meet monthly to provide additional oversight to the City’s Finance operations. This subcommittee will also review general government items that are not reviewed by another City advisory board before being presented to City Council. The City’s Finance Director will be the liaison for this subcommittee.

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FY20201 Annual Budget firm will serve for up to 5 years, at which time, the City will re-bid these services and change firms if deemed necessary by GGAF and City Council.

D. External Reporting – Upon completion and acceptance of the annual audit by the City’s auditors, the City shall prepare a written Comprehensive Annual Financial Report (CAFR) which shall be presented to the City Council within 180 calendar days of the City’s fiscal year end. The CAFR shall be prepared in accordance with Generally Accepted Accounting Principles (GAAP) and shall be presented annually to the Government Finance Officer Association (GFOA) for evaluation and consideration for the Certificate of Achievement in Financial Reporting.

XIII. ASSET MANAGEMENT

A. Cash Management and Investments – The City Council has formally approved a separate Investment Policy for the City of Georgetown that meets the requirements of the Public Funds Investment Act (PFIA), Section 2256 and 2257 of the Texas Local Government Code. This policy is reviewed annually by the City Council and applies to all financial assets held by the City and applies to all entities (component units) included in the City’s Comprehensive Annual Financial Report (CAFR) and/or managed by the City. Refer to the separate policy for details regarding:

1. Statement of Cash Management Philosophy

2. Objectives

3. Safekeeping and Custody

4. Standard of Care and Reporting

5. Investment Strategies

6. Authorized Investments and Approved Broker/Dealer List.

B. Fixed Assets – These assets will be reasonably safeguarded and properly accounted for, and prudently insured.

1. Capitalization Criteria – For purposes of budgeting and accounting classification, the following criteria must be met in order to be capitalized:

a. The asset owned by the City b. The expected useful life of the asset must be longer than one year, or extend the life of an identifiable existing asset by more than one year c. The original cost of the asset must be at least $5,000 d. The asset must be tangible, or uniquely intangible like a trademark.

On-going repairs and general maintenance are not capitalized. Public Education and Government (PEG) Funds will capitalize assets in aggregate over $1,000 on an annual basis.

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FY20201 Annual Budget of the asset cost once the decision or commitment to purchase the asset is made. The cost of land acquired should include all related costs associated with its purchase.

3. Improvements and Replacement – Improvements will be capitalized when they extend the original life of an asset or when they make the asset more valuable than it was originally. The replacement of assets components will normally be expensed unless they are a significant nature and meet all the capitalization criteria.

4. Contributed Capital – Infrastructure assets received from developers or as a result of annexation will be recorded as equity contributions when they are received.

5. Distributions Systems – All costs associated with public domain assets, such as streets and utility distribution lines will be capitalized in accordance with the capitalization policy. Costs should include engineering, construction and other related costs including right of way acquisition.

6. Reporting and Inventory – The Finance Division will maintain the permanent records of the City’s fixed assets, including description, cost, department of responsibility, date of acquisition, depreciation and expected useful life. Periodically, random sampling at the department level will be performed to inventory fixed assets assigned to that department. Responsibility for safeguarding the City’s fixed assets lies with the department supervisor or manager whose department has been assigned the asset.

XIV. DEBT MANAGEMENT

The City of Georgetown recognizes the primary purpose of capital facilities is to provide services to the community. Using debt financing to meet the capital needs of the community must be evaluated according to efficiency and equity. Efficiency must be evaluated to determine the highest rate of return for a given investment of resources. Equity is resolved by determining who should pay for the cost of capital improvements. In meeting demand for additional services, the City will strive to balance the needs between debt financing and “pay as you go” methods. The City realizes that failure to meet the demands of growth may inhibit its continued economic viability, but also realizes that too much debt may have detrimental effects on the City’s long-range financial condition.

The City will issue debt only for the purpose of acquiring or constructing capital assets for the general benefit of its citizens and to allow it to fulfill its various purposes as a city. The City will seek input on major projects funded with debt via bond elections, master planning exercises, board meetings, budget workshops, and other methods as needed.

A Debt Condition Update report will be provided annually.

A. Usage of Debt – Long-term debt financing will be considered for non-continuous capital improvements of which future citizens will benefit. Alternatives for financing will be explored prior to debt issuance and include, but not limited to:

• Grants • Use of Reserve Funds • Use of Current Revenues • Contributions from developers and others

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FY20201 Annual Budget • Leases • Impact Fees

When the City utilizes long-term financing, it will ensure that the debt is soundly financed by conservatively projecting revenue sources that will be used to pay the debt. It will not finance the improvement over a period greater than the useful life of the improvement and it will determine that the cost benefit of the improvement, including interest costs, is positive to the community.

The City may utilize the benefits of short-term debt financing to purchase operating equipment provided the debt doesn’t extend past the useful life of the asset and the potential impact to the tax rate is within policy guidelines.

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FY20201 Annual Budget B. Types of Debt

1. General Obligation Bonds (GO’s) – General obligation bonds must be authorized by a vote of the citizens of Georgetown. They are used only to fund capital assets of the general government and are not to be used to fund operating needs of the City. The City’s ad valorem taxing authority backs general obligation bonds. Conditions for issuance of general obligation debt include:

a. When the project will have a significant impact on the tax rate;

b. When the project may be controversial even though it is routine in nature; or

c. When the project falls outside the normal bounds of projects the City has typically done.

For debt programs that include multiple projects that will be issued over multiple years at the discretion of the City Council, the City may approve an Agreement with the Voters to manage future property tax rate impacts. The Agreement with the Voters will be included in educational information for all applicable GO Bond elections, and will include a maximum annual tax rate increase and a cumulative total per bond authorization maximum tax rate increase. The City will include these impacts in its annual Debt Condition report.

The City Council will carefully manage the unissued GO Bond authorization through annual review of related projects to ensure full disclosure on future timing of projects included in the bond package. Timing of authorized projects and related bond issuance will be included in the Annual Budget and published on the City’s website. Any changes to this schedule require specific Council authorization.

2. Revenue Bonds – Revenue bonds will be issued to provide for the capital needs of any activities where the capital requirements are necessary for the continuation or expansion of a service. The improved activity shall produce a revenue stream to fund the debt service requirements of the necessary improvement to provide service expansion. The average life of the obligation should not exceed the useful life of the asset(s) to be funded by the bond issue, and will generally be limited to no more than twenty (20) years. An exception can be made for plant expansions or related system expansions whose useful life is in excess of 30 years. A cost benefit analysis will be done to fully disclose the impacts of extending debt beyond 20 years.

3. Certificates of Obligation, Contract Obligations (CO’s) – Certificates of obligation or contract obligations may be used to fund capital requirements that are not otherwise funded by general obligation or revenue bonds. Debt service for CO’s may be either from general revenues (tax- supported) or supported by a specific revenue stream(s) or a combination of both. Typically, the City may issue CO’s when the following conditions are met:

a. When the proposed debt will have minimal impact on future effective property tax rates; b. When the projects to be funded are within the normal bounds of City capital requirements, such as for roads, parks, various infrastructure and City facilities and equipment; and c. When the average life of the obligation does not exceed the useful life of the asset(s) to be funded by the issue.

Certificates of obligation will be the least preferred method of financing and will be used with prudent care and judgment by the City Council during the budget development process.

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FY20201 Annual Budget

4. Self-supporting Certificates of Obligation Debt – Refers to certificates of obligation issued for a specific purpose and repaid through dedicated revenues other than ad valorem taxes. The annual debt requirements are not included in the property tax calculation. Both the Airport and Stormwater Drainage funds will issue this type of debt. In addition, the Electric and Water Services Funds can utilize this method of funding non-system capital assets. The City also issues debt on behalf of the Georgetown Transportation Enhancement Corporation (GTEC) and the Georgetown Economic Development Corporation (GEDCO) whom then pledge 4A and 4B sales tax revenue for the repayment of that debt. Tax Increment Reinvestment Zones also may issue self-supporting debt.

5. Internal borrowing between City Funds – The City Council can authorize use of existing long-term reserves as loans between funds. The borrowing fund will repay the loan at a rate consistent with current market conditions. The loan will be repaid within ten (10) years. The loan will be considered an investment of working capital reserves by the lending fund.

6. Other Short-term Borrowing – The City may authorize the issuance of Public Property Finance Contractual Obligations (PPFCO) which is short-term obligations for the acquisition of personal public property, such as equipment. PPFCOs are payable from either ad valorem taxes or another dedicated revenue stream. Each issuance will be assessed to ensure cost effectiveness and the repayment schedule will not exceed the useful life of the asset. Multiple equipment acquisitions can be grouped in a single PPFCO issue in order to develop economies of scale.

C. Method of Sale – The City will use a competitive bidding process in the sale of bonds unless conditions in the bond market or the nature of the issue warrant a negotiated bid or other method. In such situations, the City will publicly present the reasons for the the other methodnegotiated sale. The City will rely on the recommendation of the financial advisor in the selection of the underwriter or direct purchaser. The financial advisor must meet all licensing requirements and comply with all Municipal Securities Rulemaking Board (MSRB) regulations. The City’s financial advisor will not act as the underwriter on any City bond issue.

D. Disclosure – Full disclosure of operating costs along with capital costs will be made to the bond rating agencies and other users of financial information. The City staff, with assistance of the financial advisor and bond counsel, will prepare the necessary materials for presentation to the rating agencies and will aid in the production of the Preliminary Official Statements. The City will take responsibility for the accuracy of all financial information released.

E. Federal Requirements – The City will maintain written procedures to follow post issuance compliance rules, arbitrage rebate and other Federal requirements.

1. Post issuance tax compliance rules will include records retention, arbitrage rebate, use of proceeds, and

2. Continuing disclosure requirements under SEC Rule 15c2-12, MSRB standards, or as may be required by bond covenants or related agreements.

F. Debt Structuring – The City will issue bonds with an average life of twenty (20) years or less, not to exceed the useful life of the asset acquired. The structure should approximate level debt service unless operational matters dictate otherwise. Market factors, such as the effects of tax-exempt designations, the cost of early redemption options and the like, will be given consideration during the structuring of long term debt instruments. Exceptions to the 20 year average life include debt issues for major system expansions, such as

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FY20201 Annual Budget water, sewer or electric plants, in which case the City may issue debt greater than 20 years since the average life of the asset exceeds 30 years. A cost benefit analysis indicating the impacts of extending debt beyond 20 years will be completed.

G. Utility and Self-Supporting Debt Coverage Ratio – Refers to the number of times all utility supported debt service requirements or payments would be covered by the current operating revenues net of on-going operating expenses of the City’s combined utilities (Electric, Water, and Wastewater).

The City will maintain a minimum debt service coverage ratio of 1.5 times for the utilities as a whole. The bond ordinances allow the City to forego a debt reserve fund for its utility debt if the coverage is maintained at 1.35 times or better. A coverage ratio of 1.5 times will also be required for all funds issuing self-supporting debt (Airport, Stormwater, GTEC, GEDCO, and TIRZ).

Compliance Status – Debt coverage ratio FY20210 in compliance.

H. Bond Reimbursement Resolutions – The City may utilize bond reimbursements as a tool to manage its debt issues, due to arbitrage requirements and project timing. In so doing, the City uses its capital reserve cash to delay bond issues until such time when issuance is favorable and beneficial to the City.

The City Council may authorize a bond reimbursement resolution for General Capital projects that have a direct impact on the City's ad valorem tax rate when the bonds will be issued within the term of the existing City Council. In the event of unexpected circumstances that delay the timing of projects, or market conditions that prohibit financially sound debt issuance, the approved project can be postponed and considered by a future council until circumstantial issues can be resolved.

The City Council may also authorize revenue bond reimbursements for approved utility and other self- supporting capital projects within legislative limits. Currently revenue bonds must be issued within 18 months after an eligible bond funded project is begun.

The total outstanding bond reimbursements may not exceed the total amount of the City’s reserve funds.

XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS

The City of Georgetown will maintain budgeted minimum reserves in the ending working capital/fund balances to provide a secure, healthy financial base for the City in the event of a natural disaster or other emergency, allow stability of City operations should revenues fall short of budgeted projections and provide available resources to implement budgeted expenditures without regard to actual timing of cash flows into the City.

A. Operational Coverage – The City’s goal is to maintain operations coverage of 1.0 (one), such that operating revenues will at least equal or exceed current operating expenditures. Deferrals, short-term loans, or one- time sources will be avoided as budget balancing techniques. Reserves will be used only for emergencies or non-recurring expenditures, except when balances can be reduced because their levels exceed guideline minimums as stated below.

1. Operating Reserves – The City will maintain reserves at a minimum of seventy-five (75) days (20.83%) of net budgeted operating expenditures. Net budgeted operating expenditure is defined as total budgeted expenditures less interfund transfers and charges, capital improvements, direct cost for purchased power, debt service, non-operating special revenue funds and payments to third party

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FY20201 Annual Budget grant agents. The amount of these funds are allocated within the following operating funds and using the following guidelines to maintain the fund balance, working capital and retained earnings (reserves) of the various operating funds at levels sufficient to protect the City’s creditworthiness, as well as, its financial position from unforeseeable emergencies. For asset replacement reserves, see Section XI. Capital Maintenance and Replacement.

Compliance Status – 75 day citywide reserves FY20210 in compliance.

2. General Fund – General Fund reserves will be assigned on the balance sheet. Reserves are allocated as follows:

a. Base Level Reserve – will equal ninety (90) days, or 25%, of current year budgeted operating expenditures designated for emergency use only. If the Base Level Reserve is used during the fiscal year, the balance must return to the ninety (90) day requirement within the following fiscal year’s adopted budget.

Compliance Status – General Fund 90 day Reserve FY20210 in compliance.

b. Economic Stability Reserve – will equal up to 6% of current year budgeted operating expenditures. The reserve will be designated to temporarily offset a decline in any General Fund revenue source during the current fiscal year or in planning the future budget year. The reserve may be used when growth in any General Fund revenue source from one fiscal year to the next is below zero. The reserve will be available to support only existing programs approved in a prior fiscal year. Used funds shall be restored up to the 6% reserve as soon as practical.

Compliance Status – General Fund Stability Reserve FY20210 at 03%.

3. Tourism Fund – A minimum ninety (90) days of operating expenditures will be reserved within the fund balance. These funds are designated to be used to offset any potential revenue shortfall that occurs during the fiscal year and should be replenished in the following fiscal year’s budget.

Compliance Status – Tourism Fund Reserve FY20210 in compliance.

4. Joint Services Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – Joint Services Fund Reserve FY20210 partial compliance. Due to the economic impact of the pandemic, the City is not increasing recovery rates to build this reserve. It is estimated to take approximately 3 years to build the reserve to 90 days.

5. Fleet Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – Fleet Fund Reserve FY20210 in compliance.

6. Facilities Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – Facilities Fund Reserve FY20210 in compliance.

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FY20201 Annual Budget

7. Information Technology Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – IT Fund Reserve FY202119 in compliance.

8. Water Services Fund – The Water Fund will maintain the following reserves and assign them on the balance sheet. These reserves are designated to be used to offset potential revenue shortfalls or fund unexpected or emergency expenses that occur during the fiscal year. These reserves should be replenished in the following budget cycle. a. Operations Contingency Reserve – A minimum ninety (90) days or 25% of operating expenses, including wholesale water contracts and net of transfers, designated for unexpected or emergency use during the fiscal year.

Compliance Status – Operating Water Fund Reserve FY20210 in compliance.

b. Non-Operating Contingency Reserve – to maintain continuity of debt payments, capital projects and to begin recovering from a natural disaster during the lag time of revenue recovery. This reserve will be evaluated annually as part of the budget process, considering the 5 year CIP and future debt requirements.

Compliance Status – Non-operating Water Fund Reserve FY20210 in compliance.

9. Stormwater Drainage Fund – The Stormwater Fund will maintain the following reserves and assign them on the balance sheet: a. A minimum ninety (90) days or 25% of operating expenses, will be reserved in fund balance. These funds are designated to be used to offset any potential revenue shortfall that occurs during the fiscal year and should be replenished in the following fiscal year’s budget.

Compliance Status – Contingency Reserve FY20210 in compliance.

b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY20210 in compliance.

10. Electric Fund – The Electric Fund will maintain the following reserves and assign them on the balance sheet: a. Operations Contingency Reserve – A minimum ninety (90) days or 25% of operating expenses, net of transfers and purchased power, designated for unexpected or emergency use during the fiscal year and to be replenished in the following year’s budget.

Compliance Status – Operating Contingency reserve FY20210 in compliance.

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FY20201 Annual Budget b. Rate Stabilization Reserve – Up to 10% of purchased power costs will be reserved to protect against energy market exposure and to maintain wholesale power contracts and stability until expenses are recovered through revenue generated in the Power Cost Adjustment Factor.

Compliance Status – Rate stabilization reserve FY20210 partial in compliance. It is estimated to take 3 years to build this reserve after enacting the new cost of service rate structure and PCA.

c. Non-Operating Contingency Reserve – to maintain continuity and begin recovery process from a natural disaster during the lag time of revenue recovery: • 1% of historical rate base (total assets plus accumulated depreciation) • 1/5th of the average cash funded portion of the 5 year CIP • At least 50% of annual debt service payment

Compliance Status – Non-operating reserve FY20210 not in partial compliance. It is estimated to take 13 years to complete this reserve after enacting the new cost of service rate structure and PCA.

d. Uses of Unanticipated and Unappropriated Electric Fund Balances – In the event that fund balance in the Electric Fund exceeds recommended minimum cash as enumerated in the above reserves, the funds may be used for the following purposes as approved by the City Council: • Reduce the Power Cost Adjustment • Reduce outstanding utility debt • Fund capital projects • Fund other one-time projects or equipment

11. Airport Fund – The Airport Fund will maintain the following reserves and assign them on the balance sheet; a. A contingency reserve of ninety (90) days of operating expenses will be maintained in the fund for unforeseen or emergency expenditures. The reserve will represent all operating expenses minus fuel costs and any transfers. Used funds should be replenished in the following year’s budget.

Compliance Status – Contingency Reserve FY20210 in compliance.

b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY20210 in compliance.

12. GEDCO Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue. Compliance Status – Contingency Reserve FY2021 in compliance.

a.b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

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FY20201 Annual Budget Compliance Status – Debt Service Reserve FY20210 in compliance.

13. GTEC Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue.

Compliance Status – Contingency Reserve FY2021 in compliance.

a.b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY20210 in compliance.

14. Rivery TIRZ Fund – A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY20210 in partial compliance. It is estimated to take two years to complete this new reserve.

15. Downtown TIRZ Fund – A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY2020 in partial compliance. It is estimated to take one year to complete this new reserve. 15. Cemetery Fund – A perpetual reserve should build over time so that interest earnings can offset annual operational costs. The General Fund makes an annual transfer of $75,000 to this fund.

Compliance Status – In FY2021 not in compliance. Due to the economic impact of the pandemic, the General Fund is transferring $35,000. The reserve has $560,000. Annual operational costs are $100,000. With an interest rate of 2%, the reserve needs a balance of $5 million to support operations. This fund is not likely to build this level of reserve without a significant change in revenue.

For all other funds, the fund balance is an indication of the balance of each particular fund at a specific time. The ultimate goal of each such fund is to have expended the fund balance at the conclusion of the activity for which the fund was established.

Reserve requirements will be calculated as part of the annual budget process and any additional required funds to be added to the reserve balances will be appropriated within the budget.

Funds in excess of the minimum reserves within each fund may be expended for City purposes at the will of the City Council once it has been determined that use of the excess will not endanger reserve requirements in future years. This action requires an amendment to the City’s Annual Budget and is outlined in Section III. J. Use of Unanticipated and Unappropriated General Fund Balances.

B. Liabilities and Receivables – Procedures will be followed to maximize discounts and reduce penalties offered by creditors. Current liabilities will be paid within 30 days of receiving the invoice. Accounts Receivable procedures will target collection for a maximum of 90 days of service. The Finance Director is authorized to write-off non-collectible, non-utility accounts that are delinquent for more than 180 days, and utility accounts delinquent more than 180 days, provided proper delinquency procedures have been followed, and include this information in the Comprehensive Annual Financial Report to the City Council.

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FY20201 Annual Budget

C. Capital Project Funds – Every effort will be made for all monies within the Capital Project Funds to be expended in a timely manner preferably within thirty-six (36) months of receipt. Due to the long timeline of some projects, unused cash or bond proceeds will be reserved on the fund schedule and appropriated when needed. The fund balance will be invested and income generated will offset increases in construction costs or other costs associated with the project. Capital project funds are intended to be expended totally, with any unexpected excess to be approved for use according to the bond covenant and opinion of bond counsel.

D. General Debt Service Funds – Revenues within this fund are stable, based on property tax revenues. Balances are maintained to meet contingencies and to make certain that the next year’s debt service payments may be met in a timely manner. Fund balance should not fall below 45 days annual debt service requirements, in accordance with IRS guidelines.

Compliance Status – Debt Fund Reserve FY20210 in compliance.

E. Investment of Reserve Funds – The reserve funds will be invested in accordance with the City’s investment policy.

F. Ratios/Trend Analysis – Ratios and significant balances will be incorporated into the quarterly financial reports to the City Council for the Electric, Water and General Debt Service Funds. This information will provide users with meaningful data to identify major trends of the City's financial condition through analytical procedures. The following ratios/balances will be used as key financial indicators:

• Debt Ratio: Current liabilities plus long-term liabilities divided by total assets CL +LTL/TA AL < 0.5

• Times Coverage Ratio: Operating revenue less operating expense divided by annual debt service (OR-OE)/DSV AL > 1.5

The City will develop minimum/maximum levels for the above ratios/balances through analyzing of City historical trends and future projections.

XVI. RISK MANAGEMENT AND INTERNAL CONTROLS

A. Written Procedures – Wherever possible, written procedures will be established and maintained by the Finance Director for all functions involving cash handling and/or accounting throughout the City. These procedures will embrace the general concepts of fiscal responsibility set forth in this policy statement.

B. Internal Audit Program – An internal audit program will be maintained by the Finance Director to ensure compliance with City policies and procedures and to prevent the potential for fraud.

1. Departmental Audits – departmental processes will be reviewed to ensure dual control of City assets and identify the opportunity for fraud potential, as well as, to ensure that departmental internal procedures are documented and updated as needed.

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FY20201 Annual Budget

2. Employees or Transaction Review – Programs to be audited include Petty Cash, City Credit Card accounts, time entry, and travel. All discrepancies will be identified, and the employee’s Director will be notified. The City Manager will also be notified depending on the seriousness of the infraction.

3. Fraud Awareness and Reporting – The City will maintain its personnel policy regarding fraud. The will maintain an arrangement with a third party for anonymous reporting of fraud, waste or abuse of City resources. The City will provide training to all City employees on recognizing and reporting fraud.

4. The Finance Director and City Manager will present an annual audit plan to the General Government and Finance board. Results of all internal audits will be provided to the GGAF and City Council at year-end.

C. Directors Responsibility – Each Director is responsible for ensuring that good internal controls are followed throughout their department, that all Finance Division directives are implemented and that all independent auditor internal control recommendations are addressed. Departments will develop and periodically update written internal control procedures.

D. Cybersecurity – The Information Technology department shall regularly assess new forms of security risk and maintain multiple layers of protections and controls to thwart cyber attacks. The City will provide regular cybersecurity awareness training for all employees.

E. Electric Utility Risk – Chapter 13.38 of the City’s Code of Ordinances establishes Council’s authority to oversee all risk of the Electric utility including CRR auctions, wholesale power agreements, futures contracts, and other transactions that expose the City to significant risk.

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FY2021 Annual Budget

Fiscal and Budgetary Policy

Adopted: September 22, 2020

I. PURPOSE

A. Demonstrate to the residents of Georgetown, the investment community, and the bond rating agencies that the City is committed to a strong fiscal operation;

B. Provide precedents for future policy-makers and financial managers on common financial goals and strategies;

C. Fairly present and fully disclose the financial position of the City in conformity to generally accepted accounting principles (GAAP); and

D. Demonstrate compliance with finance-related legal and contractual issues in accordance with the Texas Local Government Code and other legal mandates.

These policies will be reviewed and updated annually as part of the budget preparation process.

II. FUND STRUCTURE AND BASIS OF BUDGETING

The budgeted funds for the City of Georgetown include:

Debt Service Fund is used to account for the payment of general long-term debt principal and interest.

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FY2021 Annual Budget Capital Project Funds are used to account for the acquisition or construction of major capital facilities other than those financed by enterprise activities.

Enterprise Funds include the City’s business like activities including all the utility funds and the airport.

Basis of Accounting and Basis of Budgeting

• Depreciation which is not budgeted • Non-budgeted accruals such as compensated absences.

III. OPERATING BUDGET

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FY2021 Annual Budget role, processes and powers of the City of Georgetown.” The current comprehensive plan is the 2030 Plan adopted in 2006.

1. Proposed Budget – A proposed budget shall be prepared by the City Manager with participation of all of the City’s Directors within the provision of the Charter and the 2030 Plan.

a. The budget shall include four basic segments for review and evaluation:

• Revenue • Personnel Costs • Operations and Maintenance Costs • Capital and other non-project Costs

c. A copy of the proposed and approved budgets will be filed with the City Secretary when it is submitted to the City Council and will be available on the City’s website.

The Annual Budget document will be submitted annually to the Government Finance Officers Association (GFOA) for evaluation and consideration for the Distinguished Budget Presentation Award.

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FY2021 Annual Budget

• Is the request necessary? • Why was the item not budgeted in the normal budget process? • Why can't a transfer be done within the Division to remedy the condition?

The Finance Director must certify availability of revenues or funding sources prior to adoption.

2. to fund equipment purchases in lieu of issuing debt;

3. to reduce outstanding City debt, including bonded indebtedness and unfunded pension liabilities;

4. to fund contingent liabilities such as the benefit payout reserve, cemetery trust fund, and similar obligations of the City;

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FY2021 Annual Budget 5. to take other steps to reduce property tax rates or mitigate any future increases;

6. to hold those funds in reserve for future commitments or contingencies that may be pending, and/or;

7. to fund an Economic Stability Reserve of annual General Fund operating expenditures according to Section XV, A, 2, b, Economic Stability Reserve.

IV. REVENUE MANAGEMENT

A. Characteristics – The City will strive for the following optimum characteristics in its revenue system:

1. Simplicity – The City, where possible and without sacrificing accuracy, will strive to keep the revenue system simple in order to reduce compliance costs for the taxpayer or service recipient.

a. The City will make every effort to recognize the benefit that City tax payers contribute to City programs and services.

Overall Operational Cost Recovery for Recreation is targeted to be between 50 – 60%, with some variance in individual programs.

5. Realistic and Conservative Estimates – Revenues will be estimated realistically, and conservatively, taking into account the volatile nature of various revenue streams.

6. Administration – The benefits of a revenue source should exceed the cost of levying and collecting that revenue.

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FY2021 Annual Budget B. Other Considerations – The following considerations and issues will guide the City in its revenue policies concerning specific sources of funds:

2. Non-Recurring Revenues – One-time or non-recurring revenues should not be used to finance current ongoing operations.

3. Sustainable Revenues – Sustainable means revenue that is consistently available year after year, and includes revenues realized subsequent to adopted projections.

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FY2021 Annual Budget d. Stormwater Drainage Fees are based on a mathematical calculation using impervious cover and applied in compliance with State Law.

8. Internal Cost Recovery Fees – Additionally, enterprise activity rates will include transfers to and receive credits from other funds as follows:

10. Other Funding Alternatives

When at all possible, the City will research alternative funding opportunities prior to issuing debt or increasing user-related fees.

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FY2021 Annual Budget a. Grants – All grant applications must be approved by the City Council prior to being submitted to a granting agency. Prior to submittal to Council, departments will verify that the benefits of the grant exceed the cost of grant administration and will also provide the required grant forms to Finance for review in accordance with the Grant Acquisition, Management, and Compliance Policy. Finance will review and sign the forms which provides detailed information including, but not limited to, the term of the grant, any matching requirements, the resulting operational requirements once the grant is discontinued, and a budget request detailing the line items to be effected, all of which should be included in the Council agenda item packet requesting approval to apply. The City Council must also authorize acceptance of any grant awards received.

d. Leases – The City may authorize the use of lease financing for certain operating equipment when it is determined that the cost benefit of such an arrangement is advantageous to the City.

V. EXPENDITURE MANAGEMENT

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FY2021 Annual Budget will be reduced throughout the year as vacant positions are recognized within the department budget.

Compliance Status – General Fund, Electric Fund, Water Fund and Joint Services Fund FY2021 in compliance.

Compliance Status – Benefit payout reserve FY2021 in compliance.

a. Public Safety b. Transportation c. Housing d. Parks & Recreation e. Veteran Services f. Safety Net

Compliance Status – FY2021 in compliance.

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FY2021 Annual Budget 2. Public Art Funding – The City will annually allocate $43,000 of funding for Public Art in the Tourism Fund. Any unspent funds will accumulate and be reallocated in the following budget year. Disbursement of these funds will be determined by the City’s Arts & Culture Advisory Board.

Compliance Status – FY2021 in compliance.

The following table shows a summary of requirements for purchases of goods and services and does not substitute the formal Purchasing Policies.

In addition to the above, all purchases must be approved according to signature authority limits.

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FY2021 Annual Budget

1. The numerical assessments shall include the following:

b. The estimated change to the City’s unfunded pension liability, expressed as a dollar amount.

c. The estimated change to the City’s actuarial funding ratio.

4. Proposals to revise TMRS benefits must be voted on individually as part of the City Council’s legislative agenda.

J. Retirement Cost-of-Living Adjustment

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FY2021 Annual Budget 3. The City Council may adjust the COLA provided to city retirees based upon the funding level of the City’s pension plan, as calculated by the TMRS, as follows:

When the funding level of the The COLA City’s pension plan is should be

Less than 70.0% Zero

70.0% to 79.9% 0.3% of CPI

80.0% to 89.9% 0.5% of CPI

90.0% and greater 0.7% of CPI

4. Adjustments made pursuant to Subsection J.3. should reflect the reciprocal effect of the prospective change in the COLA on the funding level of the City’s pension plan.

VI. STAFFING AND COMPENSATION

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FY2021 Annual Budget 3. Public Safety Steps – Each year the City will fund anniversary step increases for public safety sworn personnel consistent with public safety pay scale design.

Compliance Status – IBNR reserve FY2021 in compliance.

Compliance Status – Rate stabilization reserve FY2021 in compliance.

VII. FUND BALANCE POLICIES

The City’s Fund Balance will report up to five components:

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FY2021 Annual Budget A. Non-spendable Fund Balance – includes inherently non-spendable assets that will never convert to cash, as well as assets that will not convert to cash soon enough to affect the current financial period. Assets included in this category are prepaid items, inventory and non-financial assets held for resale. B. Restricted Fund Balance – represents the portion of fund balance that is subject to legal restrictions, such as grants or hotel/motel tax and bond proceeds. C. Committed Fund Balance – describes the portion of fund balance that is constrained by limitations that the City Council has imposed upon itself, and remains binding unless the City Council removes the limitation. D. Assigned Fund Balance – is that portion of fund balance that reflects the City’s intended use of the resource and is established in a less formal method by the City for that designated purpose. E. Unassigned Fund Balance – represents funds that cannot be properly classified in one of the other four categories.

VIII. LONG-TERM LIABILITY RESERVES

A. The Finance Director will maintain a list of unfunded liabilities. The list will be included in the quarterly financial report to Council and considered during the annual budget process.

IX. BUDGET CONTINGENCY PLAN

This policy is designed to establish general guidelines for managing revenue shortfalls resulting from local and national economic downturns that adversely affect the City's revenue streams.

The City Manager shall report in a timely manner to the City Council the projected shortfall and the actions taken to resolve it.

1. Apply unspent, unobligated surplus funds from prior fiscal years to fund one-time costs in the current fiscal year budget.

2. Authorize the use of the General Fund Economic Stability Reserve , contingency reserves, capital reserves or any other reserves appropriate as outlined in the sections XII. CAPITAL MAINTENANCE AND REPLACEMENT and XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS

3. Direct other reductions in services, including workforce reductions.

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FY2021 Annual Budget

4. Authorize a temporary reduction in one or more fund’s contingency reserves from 90 days to 75 days.

X. CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET

1. Needed capital improvements are identified through system models, repair and maintenance records and growth demands.

2. A team approach will be used to prioritize CIP projects, whereby City staff from all operational areas provide input and ideas relating to each project and its effect on operations.

3. Citizen involvement and participation will be solicited in formulating the capital budget through master planning processes, board meetings, public hearings and other forums.

Prior to Council approval, the following Advisory Boards will review the Capital Projects budget and contracts for expenditures:

General Water Georgetown Georgetown Government Parks Electric Utility Utility Transportation Transportation and Finance Advisory Board Board Advisory Board Enhancement Advisory Board Board (GTAB) Corporation (GGAF) (GTEC) Electric Water Streets Facilities, Fleet, Parks and Transportation Wastewater Stormwater IT and Recreation projects Drainage Other General related to Airport Government economic Capital Projects development

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FY2021 Annual Budget

B. Control – All capital project expenditures must be appropriated in the capital budget.

XI. CAPITAL MAINTENANCE AND REPLACEMENT

The City uses a Pavement Management Information System to track the condition levels of each of the street sections. The condition of the pavement is based on the following factors:

• Type of Distress • Amount of Distress • Severity of Distress • Deduct Values (function of first three)

PCI Rating 100 – 85 Good 85 – 45 Fair 45 – 0 Poor

The City’s administrative policy is to achieve an average PCI level of 85. An 85 PCI is considered maintaining the streets in a “good” condition. Staff will prepare a street maintenance budget that meets this target for Council’s consideration during the budget process. The PCI level as of 2018 was 85.5.

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FY2021 Annual Budget C. Internal Service Funds Capital Maintenance & Replacement – The City currently utilizes internal service funds to maintain and replace existing assets. Assessments are made to other funds for the use of existing equipment and to purchase new equipment. In this way, suitable funds are available for the purchase of operational assets without the issuance of debt.

Compliance Status – Fleet replacement reserve FY2021 in compliance.

Compliance Status – IT replacement reserve FY2021 in partial compliance. The IT Fund will need to increase recovery rates in future years to cover the purchase of the fiber asset from the Electric Fund.

Compliance Status – Facilities replacement reserve FY2021 partial compliance. Due to the economic impacts of the pandemic, the City has elected not to increase recovery rates to build the reserve to compliance. It is estimated to take 2 additional years to build the replacement reserve.

1. Parks and Recreation – As part of the City’s on-going maintenance program, the City also recognizes the need to regularly maintain and replace playgrounds, equipment and facilities that are part of the City’s Parks and Recreation system. Separate replacement and maintenance schedules will be maintained for these items including, but not limited to, playground equipment, buildings, sport courts, trees and grounds, and restroom facilities. The City’s goal is to provide level on-going funding

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FY2021 Annual Budget to ensure safe, well-maintained facilities for its citizens. The current funding level is an annual $297,000 transfer from the General Fund.

Compliance Status – Parks maintenance replacement FY2021 in partial compliance. Due to the economic impacts of the pandemic, the General Fund is transferring $50,000.

Compliance Status – Public safety equipment replacement FY2021 in partial compliance. Due to the economic impacts of the pandemic, reductions were made to General Fund base budgets including public safety equipment.

E. Surplus Property

2. City staff will maintain reports and records of all surplus property dispositions in accordance with good internal controls.

XII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING

C. Audit of Accounts – In accordance with the Charter, an independent audit of the City accounts will be performed every year. The auditor is retained by and is accountable directly to the City Council. The auditing firm will serve for up to 5 years, at which time, the City will re-bid these services and change firms if deemed necessary by GGAF and City Council.

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FY2021 Annual Budget Generally Accepted Accounting Principles (GAAP) and shall be presented annually to the Government Finance Officer Association (GFOA) for evaluation and consideration for the Certificate of Achievement in Financial Reporting.

XIII. ASSET MANAGEMENT

1. Statement of Cash Management Philosophy

2. Objectives

3. Safekeeping and Custody

4. Standard of Care and Reporting

5. Investment Strategies

6. Authorized Investments and Approved Broker/Dealer List.

B. Fixed Assets – These assets will be reasonably safeguarded and properly accounted for, and prudently insured.

1. Capitalization Criteria – For purposes of budgeting and accounting classification, the following criteria must be met in order to be capitalized:

On-going repairs and general maintenance are not capitalized. Public Education and Government (PEG) Funds will capitalize assets in aggregate over $1,000 on an annual basis.

2. New Purchases – All costs associated with bringing the asset into working order will be capitalized as part of the asset cost. This will include startup costs, engineering or consultant type fees as part of the asset cost once the decision or commitment to purchase the asset is made. The cost of land acquired should include all related costs associated with its purchase.

3. Improvements and Replacement – Improvements will be capitalized when they extend the original life of an asset or when they make the asset more valuable than it was originally. The replacement

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FY2021 Annual Budget of assets components will normally be expensed unless they are a significant nature and meet all the capitalization criteria.

4. Contributed Capital – Infrastructure assets received from developers or as a result of annexation will be recorded as equity contributions when they are received.

XIV. DEBT MANAGEMENT

A Debt Condition Update report will be provided annually.

• Grants • Use of Reserve Funds • Use of Current Revenues • Contributions from developers and others • Leases • Impact Fees

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FY2021 Annual Budget period greater than the useful life of the improvement and it will determine that the cost benefit of the improvement, including interest costs, is positive to the community.

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FY2021 Annual Budget B. Types of Debt

a. When the project will have a significant impact on the tax rate;

b. When the project may be controversial even though it is routine in nature; or

c. When the project falls outside the normal bounds of projects the City has typically done.

Certificates of obligation will be the least preferred method of financing and will be used with prudent care and judgment by the City Council during the budget development process.

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FY2021 Annual Budget

C. Method of Sale – The City will use a competitive bidding process in the sale of bonds unless conditions in the bond market or the nature of the issue warrant a negotiated bid or other method. In such situations, the City will publicly present the reasons for the other method. The City will rely on the recommendation of the financial advisor in the selection of the underwriter or direct purchaser. The financial advisor must meet all licensing requirements and comply with all Municipal Securities Rulemaking Board (MSRB) regulations. The City’s financial advisor will not act as the underwriter on any City bond issue.

E. Federal Requirements – The City will maintain written procedures to follow post issuance compliance rules, arbitrage rebate and other Federal requirements.

1. Post issuance tax compliance rules will include records retention, arbitrage rebate, use of proceeds, and

2. Continuing disclosure requirements under SEC Rule 15c2-12, MSRB standards, or as may be required by bond covenants or related agreements.

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FY2021 Annual Budget water, sewer or electric plants, in which case the City may issue debt greater than 20 years since the average life of the asset exceeds 30 years. A cost benefit analysis indicating the impacts of extending debt beyond 20 years will be completed.

Compliance Status – Debt coverage ratio FY2021 in compliance.

The total outstanding bond reimbursements may not exceed the total amount of the City’s reserve funds.

XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS

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FY2021 Annual Budget grant agents. The amount of these funds are allocated within the following operating funds and using the following guidelines to maintain the fund balance, working capital and retained earnings (reserves) of the various operating funds at levels sufficient to protect the City’s creditworthiness, as well as, its financial position from unforeseeable emergencies. For asset replacement reserves, see Section XI. Capital Maintenance and Replacement.

Compliance Status – 75 day citywide reserves FY2021 in compliance.

2. General Fund – General Fund reserves will be assigned on the balance sheet. Reserves are allocated as follows:

Compliance Status – General Fund 90 day Reserve FY2021 in compliance.

Compliance Status – General Fund Stability Reserve FY2021 at 3%.

Compliance Status – Tourism Fund Reserve FY2021 in compliance.

4. Joint Services Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – Joint Services Fund Reserve FY2021 partial compliance. Due to the economic impact of the pandemic, the City is not increasing recovery rates to build this reserve. It is estimated to take approximately 3 years to build the reserve to 90 days.

5. Fleet Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – Fleet Fund Reserve FY2021 in compliance.

6. Facilities Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – Facilities Fund Reserve FY2021 in compliance.

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FY2021 Annual Budget

7. Information Technology Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses.

Compliance Status – IT Fund Reserve FY2021 in compliance.

Compliance Status – Operating Water Fund Reserve FY2021 in compliance.

Compliance Status – Non-operating Water Fund Reserve FY2021 in compliance.

Compliance Status – Contingency Reserve FY2021 in compliance.

b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY2021 in compliance.

Compliance Status – Operating Contingency reserve FY2021 in compliance.

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FY2021 Annual Budget b. Rate Stabilization Reserve – Up to 10% of purchased power costs will be reserved to protect against energy market exposure and to maintain wholesale power contracts and stability until expenses are recovered through revenue generated in the Power Cost Adjustment Factor.

Compliance Status – Rate stabilization reserve FY2021 in compliance.

Compliance Status – Non-operating reserve FY2021 in partial compliance. It is estimated to take 1 years to complete this reserve after enacting the new cost of service rate structure and PCA.

Compliance Status – Contingency Reserve FY2021 in compliance.

b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY2021 in compliance.

12. GEDCO Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue. Compliance Status – Contingency Reserve FY2021 in compliance.

b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY2021 in compliance.

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FY2021 Annual Budget 13. GTEC Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue.

Compliance Status – Contingency Reserve FY2021 in compliance.

b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY2021 in compliance.

14. Rivery TIRZ Fund – A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale).

Compliance Status – Debt Service Reserve FY2021 in compliance.

15. Cemetery Fund – A perpetual reserve should build over time so that interest earnings can offset annual operational costs. The General Fund makes an annual transfer of $75,000 to this fund.

Reserve requirements will be calculated as part of the annual budget process and any additional required funds to be added to the reserve balances will be appropriated within the budget.

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FY2021 Annual Budget

Compliance Status – Debt Fund Reserve FY2021 in compliance.

E. Investment of Reserve Funds – The reserve funds will be invested in accordance with the City’s investment policy.

• Debt Ratio: Current liabilities plus long-term liabilities divided by total assets CL +LTL/TA AL < 0.5

• Times Coverage Ratio: Operating revenue less operating expense divided by annual debt service (OR-OE)/DSV AL > 1.5

The City will develop minimum/maximum levels for the above ratios/balances through analyzing of City historical trends and future projections.

XVI. RISK MANAGEMENT AND INTERNAL CONTROLS

B. Internal Audit Program – An internal audit program will be maintained by the Finance Director to ensure compliance with City policies and procedures and to prevent the potential for fraud.

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FY2021 Annual Budget 3. Fraud Awareness and Reporting – The City will maintain its personnel policy regarding fraud. The will maintain an arrangement with a third party for anonymous reporting of fraud, waste or abuse of City resources. The City will provide training to all City employees on recognizing and reporting fraud.

Page 189 of 190 City of Georgetown, Texas Government and Finance Advisory Board August 26, 2020

SUBJECT: Adjournment

ITEM SUMMARY:

FINANCIAL IMPACT: .

SUBMITTED BY: Danella Elliott

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