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HomeMy WebLinkAboutResolution - 3506 - Contract - Ameican State Bank - Municipal Depository Services - 12_06_1990Resolution # 3506 BID #10929 December 6, 1990 Item #29 DGV: js RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Contract by and between the City of Lubbock and American State Bank for Municipal Depository Services, attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 6th day of December , 1990. B. C. McMIN , MAYOR ATTEST: Rane to Boyd, Cityfecretary APPROVED S TO CONTE ene a s, u c asing Manager APPROVED AS TO FORM: Ub-nald G. Vandiver, First Assistant City Attorney l� 3 s DESIGNATION OF DEPOSITORY AND CONTRACT FOR THE CUSTODY OF THE FUNDS OF THE CITY OF LUBBOCK, TEXAS THE STATE OF TEXAS COUNTY OF LUBBOCK THIS CONTRACT made and entered into on this the day of d� �c�,y„/�c� 1990, by and between American State Bank, Lubbock, Texas, a Banking Corporation, acting by and through its duly authorized officers (hereinafter referred to as Bank), and THE CITY OF LUBBOCK, a Home Rule Municipal Corporation, chartered under the laws of the State of Texas, with its domicile in Lubbock County, Texas, acting herein by and through its duly authorized officers (hereinafter referred to as City); WITNESSETH: The governing body of the City of Lubbock does hereby designate the Bank as depository of the City funds and the City of Lubbock has deposited, and will deposit from time to time funds of such City with Bank and Bank does hereby agree to accept such deposit or deposits; and such deposits shall be made on the following terms and conditions: I. The term of this Contract shall be three (3) years commencing on the 1st day of June, 1991, and ending on the 31st day of May, 1994. II. All funds deposited with American State Bank, Lubbock, Texas, by the City of Lubbock will be secured by U.S. Government Securities in accordance with the provisions of V.T.C.A., Local Government Code, Sec. 105.072. Such securities so pledged shall be approved as to kind and value by the governing body of the City of Lubbock. Bank will honor all overdrafts of the City to an amount not exceeding Three Million Dollars and Bank may elect to honor overdrafts exceeding Three Million Dollars. Bank will charge City a rate of interest, as set forth in Exhibit A attached hereto and made a part thereof, for handling any and all overdrafts. Overdrafts will be considered temporary, unless they exceed ten (10) calendar days, at which time the overdrafts will be cleared. 0ON Loans, when requested by City, will be made to City to an amount not to exceed Three Million Dollars. On any loan in excess of Three Million Dollars, Bank shall have full discretion on whether or not to grant such loan and will notify City as soon as possible of its decision in this regard. Loans are to be direct indebtedness of the City of Lubbock, to be made within each fiscal year of the City. This is not intended for long term indebtedness. Bank will charge City interest on all loans as set forth in Exhibit A attached hereto and made a part hereof. V. For and in consideration of the agreements contained in Exhibit A, Bank will furnish to City all necessary and customary banking services including, by way of illustration but not limitation of the following: 1. Bank will handle all foreign and domestic exchange for the City. 2. Bank parking lot facilities which are immediately adjacent to Bank building will be available for use by the City in its transactions of banking business. 3. Bank agrees to furnish to City coin wrappers, night depository services including bags and keys, Cashier's checks and deposit slips. 4. Bank will furnish City a detailed monthly statement of securities pledged against City deposits as of the last business day with an aggregate total of the pledged amount. 5. Bank will deliver to City monthly bank statements on all accounts maintained by City with Bank. 6. Bank will furnish daily balance of each account, including total collected balance. VI. The City will have the right to place any amount of its funds in any demand account or accounts maintained by City with Bank and Bank agrees to accept any amount of City funds placed in said demand deposits. VII. The City will have the right to invest any amount of its funds in the Bank at a rate set forth in Exhibit A or in any other financial institution or investment in which the City is legally authorized to invest. VIII. It is agreed by the parties hereto all time deposits or certificates of deposit which have not elapsed on the termination date of this Depository Contract, shall remain on deposit with the same depository under the same terms and conditions in effect during said Contract until the date such time deposits have elapsed. MR Notwithstanding anything to the contrary contained in this Agreement the City will be at all times free to forward funds to any bank which is serving as a paying agent for the City on bonds issued by the City. X. This Agreement is made subject to the statutes of the Congress of the United States and the State of Texas and subject to the rules and regulations promulgated by the Banking Department, State of Texas, the Board of Governors of the Federal Reserve System, and the Board of Directors of the Federal Deposit Insurance Corporation, as are now in existence and such other statutes, rules and regulations of these entities as may hereafter become effective during the term of this Agreement; and if this Agreement should be or become in conflict with such statutes, rules and regulations then such statutes, rules and regulations shall control to the extent they are in conflict with this Agreement. XI. Failure of the Bank to consummate investments on a timely basis shall constitute a breach of contract. Such breach, or any other breach of a material provision of this contract, shall be cause for immediate cancellation of this contract by the City or such other action as shall be appropriate. Said termination shall be effective upon the expiration of ninety (90) days from the date of notification of the Bank of such breach. EXECUTED this the -Z i C'4 day of 1990. AMERIC STATE ANK Richard Thornberry Vice President ATTEST: THE CITY OF LUBBOCK 'B. C. MCMINN MAYOR ATTEST: RanCtte Boyd City Secretary APPROVED AS TO CONTENT: APPROVED AS TO FORK: s�-- . Robert Massengal ald G. andiver Assistant City Manager for First Assistant City Attorney Financial Services THE STATE OF TEXAS COUNTY OF LUBBOCK BEFORE ME, the undersigned authority, a Notary Public in and for said County, Texas, on this day personally appeared B. C. McMINN, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same as the act and deed of the City of Lubbock and as Mayor, for the purposes and consideration therein express, and in the capacity therein stated. LGIVEN UNDER MY HAND AND SEAL OF OFFICE this A la4- day of en � , 1990. Notark Public, Lubbo k County, Texas My Commission Expires: THE STATE OF TEXAS COUNTY OF LUBBOCK BEFORE ME, the undersigned authority, a Notary Public in and for said County, Texas, on this day personally appeared Richard Thornberry, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same as the act and deed of the American State Bank, Lubbock, Texas, and as Vice President, for the purposes and consideration therein express, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this air day of i� e ens L y , 1990. Notary Public, Lubbock County, -Texas My Commission Expires: REQUEST FOR APPLICATIONS RFP # 10929 The City of Lubbock is soliciting applications for MUNICIPAL DEPOSITORY SERVICES Any correspondence, questions, or requests for copies of the Request for Applications should be directed to the City of Lubbock, Texas, J. Robert Massengale, Assistant City Manager for Financial Services. Applications will be received in the Office of the City Secretary, Municipal Building, 1625 13th Street, Room 206, Lubbock, TX 79401, until 9:00 a.m. on the 15th day of November, 1990. CITY OF LUBBOCK Q'ai� J. ROBERT MASSENGALE ASSISTANT CITY MANAGER FOR FINANCIAL SERVICES CITY OF LUBBOCK REQUEST FOR APPLICATIONS FOR MUNICIPAL DEPOSITORY SERVICES RFP # 10929 The City of Lubbock is requesting applications for municipal depository services from commercial banks located within the Lubbock City Limits. 1. Sealed Proposals: Responses to this request for applications should be submitted in a sealed envelope no later than 9:00 a.m. on November 15, 1990, clearly identified as "Application for Municipal Depository Services," and mailed (or delivered) to: Ranette Boyd City Secretary 1625 13th Street, Room 206 Lubbock, TX 79401 2. Responses: All responses must be presented on the standardized "Municipal Depository Application Form" which has been provided. Supporting material may be provided. However, the City's decision will primarily be based upon a comparison of the standardized application forms received. The City reserves the right to reject any or all applications or to informally negotiate certain points of the final contract with a qualified banker. 3. Questions and Additional Information: A proposal conference will be held in the City Hall Committee Room on November 2, 1990, at 2:00 p.m. At that time, all prospective banks are invited to request any additional clarification or information necessary to the preparation of their individual applications. Telephone questions to individuals within the City are not encouraged, but will be permitted, with the explicit proviso that any responses thus obtained are not binding on the application process or upon the award of the contract. Request for Applications for Municipal Depository Services Page 2 4. Schedule: 11-02-90 Proposal Conference - 2:00 p.m., Room 103 City Hall Committee Room 11-15-90 All applications must be in the hands of the City Secretary no later than 9:00 a.m. for acceptance by the City Council 12-06-90 The City Council will consider award of the bids 12-13-90 The City Council will consider a contract for Municipal Depository Services Not later than Anticipated implementation date for contract June 1, 1991 5. Selection Criteria: The following criteria will be used to evaluate applications and to make a recommendation for award to the City Council: a. The completeness of the response to all required items on the standardized application forms. b. The aggregate total cost of banking services. C. The proposed earnings rate on overnight cash balances. d. The experience and continuity of the bank officials who are identified as primary contact personnel. e. Responses from references. f. Convenience of Banking Services. SCOPE OF BANKING SERVICES 1. Consolidated Account: The City's main operating account covers a broad variety of activities. Several of the City's departments are responsible for their own deposits, and require a 24-hour deposit capability for their collections. Deposits will be made by either City employees or a security service. All deposits will be accompanied by duplicate or triplicate deposit slips. Upon verification of the deposit, a copy of the deposit slip must be acknowledged by the bank and returned to the City Accounting office in the Accounting Department bank bag on the following day. An appropriate supply of padded, triplicate or duplicate deposit slips, coin wrappers, coin envelopes, and locking bank bags will be furnished by the bank at no charge to the City. Request for Applications for Municipal Depository Services Page 3 Should deposited checks be returned because of insufficient funds (or any other reason), one attempt will be made by the bank to redeposit the check, after which the check and charge -back slip will be sent to the City's collection agency for processing. The City writes approximately 2,500 checks per month on the General Fund account and makes approximately 1,050 deposits per month to this account. The Bank must have the capability of receiving wire transfers from local, state, and federal governments for items such as Community Development Block Grants and Lubbock County Appraisal District receipts. The estimated average daily balance in the operating account will be approximately $3,000,000. Payroll Accounts: The City is currently on a biweekly payroll basis, paying an average 1,000 employees by check every other Friday. The net payroll, for employees who receive checks, amounts to approximately $500,000 per pay period. In December of each year, some employees are paid an additional check for longevity. The City is currently utilizing a direct deposit system for part of their payroll. However, all ACH is being handled as a separate RFP. The City will transfer funds from the operating account to the payroll account each payday to cover all payroll checks and ACH deposits. 3. Other Accounts: The City is currently self -insured and maintains a Claims Account to handle all insurance claims. This account is administered by an outside firm who writes approximately 1,500 checks per month on this account. The City makes approximately 5 deposits per month to the account. The estimated average daily balance in this account will be approximately $1,000,000. In addition to the above accounts, the City has 17 other accounts which are handled by various departments. The City writes approximately 500 checks per month on these accounts and makes approximately 70 deposits per month to these accounts. The estimated average daily balance in these accounts will be approximately $2,000,000. Request for Applications for Municipal Depository Services Page 4 4. Deposits: The majority of the deposits presented will contain cash, endorsed and MICR encoded checks, and a check item listing including item number, item amount, and total of checks on magnetic media or paper as the depository bank may elect. The endorsement and MICR encoding shall be performed to accommodate proof standards as specified by the bidder. The City estimates the number of items deposited to be 55,000 per month. 5. Bank Statements: The cut-off date for statement purposes for all City accounts will be the last day of each month. Statements must be received by the City within four working days following the cut-off. The depository bank must furnish the City with a magnetic computer tape for the General Fund account and payroll account. The magnetic computer tape shall be either a 3480 tape.cartridge or a 2400 ft. reel 1600 B.P.I. However, the 3480 tape cartridge is preferred. The tape shall include these items for the statement period: item number, item amount, item date, and total amount of all checks. This tape listing of Bank item processing will be matched against a computer generated item listing and a returned item listing to reconcile the City accounts. Checks are to be arranged in numerical order prior to their return to the City with the statements. A statement must be furnished for all special accounts required by the City on the same schedule as required of the General Fund. The City reserves the right to add additional accounts as necessary. In addition to regular statements, the bank must provide daily balance reporting information regarding all accounts as required by City Finance personnel. 6. Investments: The bank will handle the purchase or liquidation of investments only upon instruction by the Director of Finance of the City of Lubbock or his designee. Investment transactions must be consummated on the same day that instructions are received from authorized City personnel, or on the next business day if so instructed. Failure to consummate investments on a timely basis will constitute a breach of contract, and will constitute cause for immediate cancellation of the contract, or legal action for damage, or both. Request for Applications for Municipal Depository Services Page 5 Upon maturity or liquidation of an investment, written notification will be sent to the Director of Finance or his designee showing the deposit of the proceeds. The same type of written notification will be required for all purchases of investments handled through the bank, whether purchased by check, wire transfer, electronic debit, etc. These notifications will be mailed on the same day that the transactions occur. The bank shall provide safekeeping facilities for investments owned by the City; an alternate method will be considered as long as an acceptable audit trail is established. A copy of all safekeeping receipts will be issued to the City at the consummation of each investment transaction. Safety Deposit Boxes: The bank shall provide safety storage of registered bonds, exceptional security. Sweep Accounts: deposit boxes as needed for the coupons, or other material requiring At the close of each business day, all collected balances (in all City accounts) will be transferred to a special investment account, called a Sweep Account. The total collected balances will then be invested in a repurchase agreement at the bank, backed by U.S. Government securities whose total current market value is equal to at least 105% of the total amount invested. Simultaneously, the bank will issue a safekeeping receipt for the specific securities sold to the City under the terms of the repurchase agreement, evidencing clear ownerships of the securities by the City. Such evidence of ownership is subject to the examination and approval by the City, and the lack of satisfactory evidence of ownership and sufficiency of market value shall constitute breach of this contract. The bank selected to perform this contract shall be required to maintain a sufficient portfolio of U.S. Government securities to enable it to meet the sweep account requirements on a daily basis. Although the City anticipates an average daily balance of approximately $6,000,000 in all of the City's accounts, variances in daily balances will require that the bank have the capability of providing sufficient securities to accept deposit totals of up to $20,000,000. At the beginning of the next business day, all balances in the sweep account shall be transferred back into the City's accounts. Written notification of interest earned will be given to the City. In addition, monthly statements will be forwarded with the City's Request for Applications for Municipal Depository Services Page 6 regular bank statement, outlining the details of sweep account earnings for the period. The payment to the City will be the net amount of the interest earned on the sweep account minus the charges for banking services for all City accounts. Payment to the City will be made on or before the second working day following the last day of each month. All interest earnings will be computed in strict accordance with the negotiated rate which was agreed to in the contract for banking services. This negotiated rate shall be stated by prospective bidders as a fixed weekly rate which bears a direct relationship to the "average weekly Fed Funds Rate," which is published in the Tuesday (or Wednesday) edition of the Wall Street Journal each week. The rate bid by the bank will be quoted in decimal points, such as "The average Fed Funds rate, minus .35%," (35 "basis points"), "The average Fed Funds rate, plus .10%," "The average Fed Funds rate minus 1.00%," etc. In no case will the City accept another source for computation of the weekly Fed Funds rate. One of the major advantages of such an arrangement (the "sweep account") is the manner in which bank reserve requirements are eliminated, allowing full investment of all rather than merely a portion of the City's daily collected balances. This advantage stems from the provisions of the Federal Reserve's Board's Regulation D, 12C.F.R., paragraph 204.2 (a) (1) (vii) (B), which defines such balances as exceptions to the definition of reservable deposits. 9. Payment for Services: All account charges will be itemized on a monthly basis, and remitted with the regular monthly statements. Following the City's opportunity to review the charges and reconcile any differences or errors, the bank will receive payment for such charges in excess of sweep account earnings on the 15th of each month. 10. Line of Credit: The bank shall honor all overdrafts of the City to an amount not exceeding $3,000,000 and Bank may elect to honor overdrafts exceeding $3,000,000 (overdrafts as used in this paragraph shall mean that the City does not have a compensating balance in other City funds or accounts equaling or exceeding overdrafts in a City fund or account). The bank will charge the City a rate of interest in strict accordance with the negotiated rate which was agreed to in the contract for banking services. This negotiated rate shall be stated by prospective bidders as a fixed rate which bears a direct relationship to the "average weekly Fed Funds Rate," which is published in the Wall Street Journal each week. Request for Applications for Municipal Depository Services Page 7 Overdrafts will be considered temporary, unless they exceed ten (10) calendar days, at which time the overdrafts will be cleared. Loans, when requested by the City, will be made to the City to an amount not to exceed $3,000,000. On any loan in excess of $3,000,000 the bank shall have full discretion on whether or not to grant such loan and will notify the City as soon as possible of its decision in this regard. Loans are to be direct indebtedness of the City of Lubbock to be made within each fiscal year of the City and not intended for long-term indebtedness. The bank will charge the City a rate of interest in strict accordance with the negotiated rate which is agreed to in the contract for banking services. This negotiated rate shall be stated by prospective bidders as a fixed rate which bears a direct relationship to the "average weekly Fed Funds Rate," which is published in the Wall Street Journal each week. 11. Designated Bank Contact Personnel: The bank shall provide a list of contact personnel within the bank who are qualified to provide information and assistance in each area such as investments, safekeeping, bookkeeping, sweep account, etc. In addition, the bank will provide a summary of qualifications for such designated personnel, indicating position, length of service, and a brief summary of their professional experience. Such information shall be updated as designated personnel are changed over time. If, from the City's perspective, the quality or ability of the designated personnel deteriorates beyond a reasonable level, the Director of Finance may elect to cancel this agreement, or to negotiate for an acceptable change in designated personnel. 12. References: The bank must provide a list of names and addresses of business customers of similar size and complexity to the City's requirements. In addition, each bank must attach a current statement of financial condition and income statement, plus similar statements for the preceding five years. 13. Contract: The City will enter into a signed contractual agreement with the bank selected as "depository bank" for a period of three years. MUNICIPAL DEPOSITORY SERVICES APPLICATION FORM BANK NAME: AMERICAN STATE BANK OFFICIAL SUBMITTING (TYPE): Richard Yphornberry OFFICIAL SIGNATURE: TITLE OF OFFICIAL: vice President TELEPHONE NUMBER: 806/763-7061 BANKING SERVICES UNIT PRICE Account Maintenance $10.00 Items Paid by Check .20 Items Paid by Direct Deposit .10 Deposits •25 Items Deposited, MICR Encoded •06 Items Deposited, Non -Encoded •07 Stop Payments 17.50 Wire Transfers 15.00 Investment Transactions 35.00 Safety Deposit Box 35.00 Returned Items 1.25 Other temized Services, as Suggested by Bidding Bank: Safekeeping Securities $5.00/Bond/month Daily Balance Recap $25.00/month Sorting Checks .02/check Other Quotations: Rate Quotation on Sweep Account: Average F.F. Rate-1.05 Rate Quotation on Overdrafts: Average F.F. Rate+1.50., Rate Quotation on Loans: Average F.F. Rate+1.50 Statement of Capability: Our Bank can comply with all aspects of the City's banking service requirements. (yes or no) YES (If no, list all exceptions on separate page.) 2 _�5'� l , V \i CITY OF LUBBOCK PROPOSAL FOR BANKING SERVICES FROM AMERICAN STATE BANK NOVEMBER 15, 1990 SUPPORTING MATERIAL SELECTION CRITERIA ITEM #11 NAME YEARS AT ASB W. R. Collier 31 years President Bill Blackwell 18 years Executive Vice President Mike Long 15 years Senior Vice President Anthony White, CPA 3 years Vice President & Controller Jackie Duncan 30 years Vice President Charles Graham 10-1/2 years Vice President Selma Sedgwick 21 years Vice President Richard Thornberry 6 years Vice President SELECTION CRITERIA ITEM #12 Texas Tech University - contact Robert Hall YEARS AT PRESENT POSITION 16 years as President 16 years in Operations 5 months as Senior Vice President 5 months as Vice President & Controller 15 years as Head of Bookkeeping Department 7 years as MTS Director 32 years of D.P. experience 20 years Investments and Cash Management 5 years in Investments MUNICIPAL DEPOSITORY SERVICES APPLICATION FORM BANK NAME: OFFICIAL SUBMITTING (TYPE): OFFICIAL SIGNATURE: TITLE OF OFFICIAL: TELEPHONE NUMBER: BANKING SERVICES Account Maintenance Items Paid by Check Items Paid by Direct Deposit Deposits Items Deposited, MICR Encoded Items Deposited, Non -Encoded Stop Payments Wire Transfers Investment Transactions Safety Deposit Box Returned Items Other Itemized Services, as Suggested by Bidding Bank: r /SiHERLAN SEL%KE SR VICE PRESIDENT & CASHIER 792-7101 UNIT PRICE Other Quotations: Rate Quotation on Sweep Account: Rate Quotation on Overdrafts: Rate Quotation on Loans: Statement of Capability: Our Bank can comply with all aspects of the City's banking service requirements. (yes or no) (If no, list all exceptions on separate page.) NO BID REQUEST FOR APPLICATIONS tiR�V 0 ` RFP # 10929 N' f,CT�990 o The City of Lubbock is soliciting applications for MUNICIPAL DEPOSITORY SERVICES Any correspondence, questions, or requests for copies of the Request for Applications should be directed to the City of Lubbock, Texas, J. Robert Massengale, Assistant City Manager for Financial Services. Applications will be received in the Office of the City Secretary, Municipal Building, 1625 13th Street, Room 206, Lubbock, TX 79401, until 9:00 a.m. on the 15th day of November, 1990. CITY OF LUBBOCK [*—.�ROBERT MASSENGALE ASSISTANT CITY MANAGER FOR FINANCIAL SERVICES 23anC CITY OF LUBBOCK REQUEST FOR APPLICATIONS FOR MUNICIPAL DEPOSITORY SERVICES RFP # 10929 The City of Lubbock is requesting applications for municipal depository services from commercial banks located within the Lubbock City Limits. 1. Sealed Proposals: Responses to this request for applications should be submitted in a sealed envelope no later than 9:00 a.m. on November 15, 1990, clearly identified as "Application for Municipal Depository Services," and mailed {or delivered} to: Ranette Boyd City Secretary 1625 13th Street, Room 206 Lubbock, TX 79401 Responses: All responses must be presented on the standardized "Municipal Depository Application Form" which has been provided. Supporting material may be provided. However, the City's decision will primarily be based upon a comparison of the standardized application forms received. The City reserves the right to reject any or all applications or to informally negotiate certain points of the final contract with a qualified banker. Ouestions and Additional Information: A proposal conference will be held in the City Hall Committee Room on November 2, 1990, at 2:00 p.m. At that time, all prospective banks are invited to request any additional clarification or information necessary to the preparation of their individual applications. Telephone questions to individuals within the City are not encouraged, but will be permitted, with the explicit proviso that any responses thus obtained are not binding on the application process or upon the award of the contract. Request for Applications for Municipal Depository Services Page 2 4. Schedule: 11-02-90 Proposal Conference - 2:00 p.m., Room 103 City Hall Committee Room 11-15-90 All applications must be in the hands of the City Secretary no later than 9:00 a.m. for acceptance by the City Council 12-06-90 The City Council will consider award of the bids 12-13-90 The City Council will consider a contract for Municipal Depository Services Not later than Anticipated implementation date for contract June 1, 1991 5. Selection Criteria: The following criteria will be used to evaluate applications and to make a recommendation for award to the City Council: a. The completeness of the response to all required items on the standardized application forms. b. The aggregate total cost of banking services. C. The proposed earnings rate on overnight cash balances. d. The experience and continuity of the bank officials who are identified as primary contact personnel. e. Responses from references. f. Convenience of Banking Services. SCOPE OF BANKING SERVICES 1. Consolidated Account: The City's main operating account covers a broad variety of activities. Several of the City's departments are responsible for their own deposits, and require a 24-hour deposit capability for their collections. Deposits will be made by either City employees or a security service. All deposits will be accompanied by duplicate or triplicate deposit slips. Upon verification of the deposit, a copy of the deposit slip must be acknowledged by the bank and returned to the City Accounting office in the Accounting Department bank bag on the following day. An appropriate supply of padded, triplicate or duplicate deposit slips, coin wrappers, coin envelopes, and locking bank bags will be furnished by the bank at no charge to the City. Request for Applications for Municipal Depository Services Page 3 Should deposited checks be returned because of insufficient funds (or any other reason), one attempt will be made by the bank to redeposit the check, after which the check and charge -back slip will be sent to the City's collection agency for processing. The City writes approximately 2,500 checks per month on the General Fund account and makes approximately 1,050 deposits per month to this account. The Bank must have the capability of receiving wire transfers from local, state, and federal governments for items such as Community Development Block Grants and Lubbock County Appraisal District receipts. The estimated average daily balance in the operating account will be approximately $3,000,000. 2. Payroll Accounts: The City is currently on a biweekly payroll basis, paying an average 1,000 employees by check every other Friday. The net payroll, for employees who receive checks, amounts to approximately $500,000 per pay period. In December of each year, some employees are paid an additional check for longevity. The City is currently utilizing a direct deposit system for part of their payroll. However, all ACH is being handled as a separate RFP. The City will transfer funds from the operating account to the payroll account each payday to cover all payroll checks and ACH deposits. 3. Other Accounts: The City is currently self -insured and maintains a Claims Account to handle all insurance claims. This account is administered by an outside firm who writes approximately 1,500 checks per month on this account. The City makes approximately 5 deposits per month to the account. The estimated average daily balance in this account will be approximately $1,000,000. In addition to the above accounts, the City has 17 other accounts which are handled by various departments. The City writes approximately 500 checks per month on these accounts and makes approximately 70 deposits per month to these accounts. The estimated average daily balance in these accounts will be approximately $2,000,000. Request for Applications for Municipal Depository Services Page 4 Deposits: The majority of the deposits presented will contain cash, endorsed and MICR encoded checks, and a check item listing including item number, item amount, and total of checks on magnetic media or paper as the depository bank may elect. The endorsement and MICR encoding shall be performed to accommodate proof standards as specified by the bidder. The City estimates the number of items deposited to be 55,000 per month. 5. Bank Statements: The cut-off date for statement purposes for all City accounts will be the last day of each month. Statements must be received by the City within four working days following the cut-off. The depository bank must furnish the City with a magnetic computer tape for the General Fund account and payroll account. The magnetic computer tape shall be either a 3480 tape cartridge or a 2400 ft. reel 1600 B.P.I. However, the 3480 tape cartridge is preferred. The tape shall include these items for the statement period: item number, item amount, item date, and total amount of all checks. This tape listing of Bank item processing will be matched against a computer generated item listing and a returned item listing to reconcile the City accounts. Checks are to be arranged in numerical order prior to their return to the City with the statements. A statement must be furnished for all special accounts required by the City on the same schedule as required of the General Fund. The City reserves the right to add additional accounts as necessary. In addition to regular statements, the bank must provide daily balance reporting information regarding all accounts as required by City Finance personnel. 6. Investments: The bank will handle the purchase or liquidation of investments only upon instruction by the Director of Finance of the City of Lubbock or his designee. Investment transactions must be consummated on the same day that instructions are received from authorized City personnel, or on the next business day if so instructed. Failure to consummate investments on a timely basis will constitute a breach of contract, and will constitute cause for immediate cancellation of the contract, or legal action for damage, or both. Request for Applications for Municipal Depository Services Page 5 Upon maturity or liquidation of an investment, written notification will be sent to the Director of Finance or his designee showing the deposit of the proceeds. The same type of written notification will be required for all purchases of investments handled through the bank, whether purchased by check, wire transfer, electronic debit, etc. These notifications will be mailed on the same day that the transactions occur. The bank shall provide safekeeping facilities for investments owned by the City; an alternate method will be considered as long as an acceptable audit trail is established. A copy of all safekeeping receipts will be issued to the City at the consummation of each investment transaction. 7. Safety Deposit Boxes: The bank shall provide safety storage of registered bonds, exceptional security. 8. Sweep Accounts: deposit boxes as needed for the coupons, or other material requiring At the close of each business day, all collected balances (in all City accounts) will be transferred to a special investment account, called a Sweep Account. The total collected balances will then be invested in a repurchase agreement at the bank, backed by U.S. Government securities whose total current market value is equal to at least 105% of the total amount invested. Simultaneously, the bank will issue a safekeeping receipt for the specific securities sold to the City under the terms of the repurchase agreement, evidencing clear ownerships of the securities by the City. Such evidence of ownership is subject to the examination and approval by the City, and the lack of satisfactory evidence of ownership and sufficiency of market value shall constitute breach of this contract. The bank selected to perform this contract shall be required to maintain a sufficient portfolio of U.S. Government securities to enable it to meet the sweep account requirements on a daily basis. Although the City anticipates an average daily balance of approximately $6,000,000 in all of the City's accounts, variances in daily balances will require that the bank have the capability of providing sufficient securities to accept deposit totals of up to $20,000,000. At the beginning of the next business day, all balances in the sweep account shall be transferred back into the City's accounts. Written notification of interest earned will be given to the City. In addition, monthly statements will be forwarded with the City's Request for Applications for Municipal Depository Services Page 6 regular bank statement, outlining the details of sweep account earnings for the period. The payment to the City will be the net amount of the interest earned on the sweep account minus the charges for banking services for all City accounts. Payment to the City will be made on or before the second working day following the last day of each month. All interest earnings will be computed in strict accordance with the negotiated rate which was agreed to in the contract for banking services. This negotiated rate shall be stated by prospective bidders as a fixed weekly rate which bears a direct relationship to the "average weekly Fed Funds Rate," which is published in the Tuesday (or Wednesday) edition of the Wall Street Journal each week. The rate bid by the bank will be quoted in decimal points, such as "The average Fed Funds rate, minus .35%," (35 "basis points"), "The average Fed Funds rate, plus .10%," "The average Fed Funds rate minus 1.00%," etc. In no case will the City accept another source for computation of the weekly Fed Funds rate. One of the major advantages of such an arrangement (the "sweep account") is the manner in which bank reserve requirements are eliminated, allowing full investment of all rather than merely a portion of the City's daily collected balances. This advantage stems from the provisions of the Federal Reserve's Board's Regulation D, 12C.F.R., paragraph 204.2 (a) (1) (vii) (B), which defines such balances as exceptions to the definition of reservable deposits. Payment for Services: All account charges will be itemized on a monthly basis, and remitted with the regular monthly statements. Following the City's opportunity to review the charges and reconcile any differences or errors, the bank will receive payment for such charges in excess of sweep account earnings on the 15th of each month. 10. Line of Credit: The bank shall honor all overdrafts of the City to an amount not exceeding $3,000,000 and Bank may elect to honor overdrafts exceeding $3,000,000 (overdrafts as used in this paragraph shall mean that the City does not have a compensating balance in other City funds or accounts equaling or exceeding overdrafts in a City fund or account). The bank will charge the City a rate of interest in strict accordance with the negotiated rate which was agreed to in the contract for banking services. This negotiated rate shall be stated by prospective bidders as a fixed rate which bears a direct relationship to the "average weekly Fed Funds Rate," which is published in the Wall Street Journal each week. Request for Applications for Municipal Depository Services Page 7 Overdrafts will be considered temporary, unless they exceed ten (10) calendar days, at which time the overdrafts will be cleared. Loans, when requested by the City, will be made to the City to an amount not to exceed $3,000,000. On any loan in excess of $3,000,000 the bank shall have full discretion on whether or not to grant such loan and will notify the City as soon as possible of its decision in this regard. Loans are to be direct indebtedness of the City of Lubbock to be made within each fiscal year of the City and not intended for long-term indebtedness. The bank will charge the City a rate of interest in strict accordance with the negotiated rate which is agreed to in the contract for banking services. This negotiated rate shall be stated by prospective bidders as a fixed rate which bears a direct relationship to the "average weekly Fed Funds Rate," which is published in the Wall Street Journal each week. 11. Designated Bank Contact Personnel: The bank shall provide a list of contact personnel within the bank who are qualified to provide information and assistance in each area such as investments, safekeeping, bookkeeping, sweep account, etc. In addition, the bank will provide a summary of qualifications for such designated personnel, indicating position, length of service, and a brief summary of their professional experience. Such information shall be updated as designated personnel are changed over time. If, from the City's perspective, the quality or ability of the designated personnel deteriorates beyond a reasonable level, the Director of Finance may elect to cancel this agreement, or to negotiate for an acceptable change in designated personnel. 12. References: The bank must provide a list of names and addresses of business customers of similar size and complexity to the City's requirements. In addition, each bank must attach a current statement of financial condition and income statement, plus similar statements for the preceding five years. 13. Contract: The City will enter into a signed contractual agreement with the bank selected as "depository bank" for a period of three years.