HomeMy WebLinkAboutResolution - 2706 - Contract - American State Bank - Depository Designation - 12_17_1987Resolution #2706
December 17, 1987
Item #31
BID #9542
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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 Designation
of Depository and Contract for the Custody of the Funds of the City of
Lubbock, Texas by and between the City of Lubbock and American State Bank of
Lubbock, Texas, 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 17th day of
ATTEST:
Ranette Boyd, City Secretary
APPROVED AS TO FORM:
Donald U. Vandiver, First Assistant
City Attorney
December , 1987.
xf. C.h,-S
B. C. McMINN, MAYOR
REQUEST FOR PROPOSALS
RFP # 9542
The City of Lubbock is soliciting proposals for
PROPOSAL FOR BANKING SERVICES
Any correspondence, questions, or requests for copies of the
Request for Proposals should be directed to the City of
Lubbock, Texas, Gene Eads, Purchasing Manager.
Proposals will be received in the Office of the Purchasing
Manager, Municipal Bldg., 1625 13th St., Room L-04, Lubbock,
TX 79401 until 2:00 o'clock p.m. on the 19th day of
November, 1987.
CITY O LUBBOCK
'By: 41WE EABS, C. .M.
PURCHA ING MANAGER
BANKING SERVICES PROPOSAL RESPONSE FORM
BANK NAME: American State Bank, Lubbock, TX
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OFFICIAL SUBMITTING (TYPED) D_on Hudg_eons� _
OFFICIAL S i GNATURE s_-i
V
TITLE OF OFFICIAL: Executive V' President
TELEPHONE NUMBER: (806) 763-7061
ELNK 1ffi_5EEV 19EZ
UNIT .EBIGE
Account Maintenance
$10.00
Items Paid by Check
.175
Items Paid by Direct Deposit
.08
Deposits
.15
Items Deposited, MICR Encoded
.05
Items Deposited, Non -Encoded
.07
Stop Payments
15.00
Wire Transfers
15.00
investment Transactions
35.00
Safety Deposit Box
96.00/yr
Returned Items
.50
Other itemized Services, as
Suggested by Bidding Banks
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Other Quotations:
Rate Quotation on Sweep Account:The A_verage_Fed Funds Rate minus .65%
Rate Quotation on Overdrafts: The $verra�e_Fed_Funds Rate minus 1.50%
Rate Quotation on Loans: The Average_Fed Funds Rate minus 1.50%
Our Bank can comply with all
aspects of the City's banking
service requirements. ( yes or no) -w?� ,_,_w__�
(If no, list all exceptions on separate page.)
CITY OF LUBBOCK
REQUEST FOR PROPOSAL FOR BANKING SERVICES
RFP 19542
The City of Lubbock is requesting proposals for banking services from
commercial banks located within the Lubbock City Limits.
Responses to this request for proposals (RFP) should be submitted
to a sealed envelope no later than 2:00 p.m. on November 19, 1987,
clearly identified as "Proposal for Banking Services", and mailed
(or delivered) to:
Gene Eads, C.P.M.
Purchasing Manager
1625 - 13th Street, Room L04
Lubbock, Texas 79401
2. a;z!?QanAl
All responses must be presented on the standardized "Banking
Services Proposal Response 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
proposal forms received. The City reserves the right to reject
any or all proposals, or to informally negotiate certain points of
the final contract with a qualified banker.
3. 4���tl�n�-;�n9-89�1t isn�1_lnigcm;�tig>ai
A proposal conference will be held in the City Hall Committee Room
on November 5, 1987, at 10:00 a.m. At that time, all prospective
banks are invited to request any additional clarification or
information necessary to the preparation of their individual
responses. Telephone questions to individuals within the City are
not encouraged, but will be permitted, with the g�AJjgjt_)?tgyl8g
that any responses thus obtained are not binding on the proposal
process or upon the award of the contract.
4. ZQbQ9M1s1
11-5-87 Proposal Conference - 10:00 a.m., Room 103 City
Hall Committee Room
11-19-87 All proposals must be in the hands of the City
Purchasing Department no later than 2:00 p.m.
Request for Proposal
for Banking Services
Page 2
12-17-87 The City Council will consider award of the
contract
Not later than Anticipated implementation date for contract
June 1, 1988
5. WQgt14Il_9L1tPr1A1
The following criteria will be used to evaluate proposal responses
and to make a recommendation for award to the City Council:
a. The completeness of the response to all required items on
the standardized proposal 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.
��QeE_QE�E6N1511�G:.&EBx1�E�
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 a locking bank bags will be furnished by the
bank at no charge to the City.
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 1,600 checks per month on the
General Fund account and makes approximately 725 deposits per
month to this account.
Request for Proposal
for Banking Services
Page 3
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• P_i�YLgll_6ggQgDf�=
The City is currently on a bl-weekly payroll basis, paying an
average of 1,800 employees every other Friday. The net payroll
amounts to approximately $950,000 per pay period. In December of
each year, some employees are paid an additional check for
longevity. In December of 1986, the City paid out approximately
$485,000 to 1,250 employees.
The City will not deposit funds to the payroll account. Instead,
the bank will operate a "zero balance account", to which funds are
automatically transferred from the General Fund account as payroll
checks are presented to the bank for payment.
Although the City does not currently utilize a direct deposit
system for payroll, the City is anticipating initiation of this
service and the bank's ability to provide this system Is
desirable. The ability to provide Direct Deposit into banks of
the employee's choosing is preferable. The bidder must provide a
description of the facilities available for providing direct
deposit. Please state all requirements such as lead time, etc.
3. Qtb�>r_6��s�Df�z
The City currently has five other accounts which are handled by
various departments. These accounts are: Clearing Fund, Jury
Account, Bond Account Utilities Refund Account, Parks and
Recreation Account, and Personal Appearance Account.
The City writes approximately 400 checks per month on these
accounts and makes approximately 40 deposits per month to these
accounts. The estimated average dally balance in these operating
accounts will be approximately $500,000.
All 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.
Request for Proposal
for Banking Services
Page 4
5. agtlUtgtognta
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 2400 ft. reel 1600 B.P.I. and
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 ail 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 gp11x
balance reporting information regarding all accounts as required
by City Finance personnel.
6. 1nY'Q;;tmgnti.
The bank will handle the purchase of liquidation of investments
only upon instruction by the Director of Finance of the City of
Lubbock or his designee.
Investment transactions must be consumated on the same day that
instructions are received from authorized City personnel, or on
the next business day if so instructed. Failure to consumate
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.
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 consumation
of each Investment transaction.
Request for Proposal
for Banking Services
Page 5
7. ��i>3tx_QaR4�lt_�Q��s�
The bank shall provide safety
storage of registered bonds,
exceptional security.
8. �cg�A_$&�4g13t3
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 $3,000,000, variances In daily balances will require
that the bank have the capability of providing sufficient
securities to accept deposit totals of up to $6,000,000.
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 Clty's
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) addition of the ftjj
Lggf_�4btfl�1 every week. The rate bid by the bank will be
quoted in decimal points, such as "The average Fed Funds rate,
Request for Proposal
for Banking Services
Page 6
@jpME .35%", (35 "basis points"), "The average Fed Funds rate,
gIME .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 1211, rather than merely
ggr±JgD 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• P.;�xmgnt_f4L_��LYjgg�=
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. LLnc_Q1_.QLg4.1f:
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 }j�jj_�fL�gf_�!gllLOt�l each week.
Over drafts will be considered temporary, unless they exceed ten
(10) calendar days, at which time the over drafts will be cleared.
Loans, when requested by 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 Y�i�jj_�tLBgf_�I12SiLII�l each week.
Request for Proposal
for Banking Services
Page 7
11 • Qas.tsn;3t�9_�.�n�_S�snt��t_EQx;zQnn�1L
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. Bgfgt�ng�s�
The bank must provide a list of names and addresses or business
customers of similar size and complexity to the Cityfs
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. Cgntagti
The City will enter into a signed contractual agreement with the
bank selected as "depository bank" for a period of three years.
Resolution #2706
December 17, 1987
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 17th day
of December , 1987, 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 au-
thorized officers, (hereinafter referred to as City);
WITNESSETH:
The governing body of the City of Lubbock does hereby desig-
nate 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 fol-
lowing terms and conditions:
I.
The term of this Contract shall be three (3) years commenc-
ing on the 1st day of June, 1988, and ending on the 31st day of
May, 1991.
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 Vernon's
Ann.Civ.Stat., Art. 2560, Sec. d. 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 over-
drafts exceeding Three Million Dollars. Bank will charge City a
rate of interest, as set forth in Exhibit A attached hereto and
made a part hereof, for handling any and all overdrafts. over-
drafts will be considered temporary, unless they exceed ten (10)
calendar days, at which time the overdrafts will be cleared.
IV.
Loans, when requested by City, will be made to City to an
amount not to exceed Three Million Dollars. On any loan in ex-
cess 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 in-
tended 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 Ex-
hibit A, Bank will furnish to City all necessary and customary
banking services including, by way of illustration but not limi-
tation of the following:
1. Bank will handle all foreign and domestic exchange for
the City.
2. Bank parking lot facilities which are immediately adja-
cent to Bank building will be available for use by the
City in its transaction of banking business.
3. Bank agrees to furnish to City coin wrappers, night de-
pository 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.
- 2 -
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, in-
cluding 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 cer-
tificates 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.
IX.
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 Depart-
ment, State of Texas, the Board of Governors of the Federal Re-
serve 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 here-
- 3 -
after 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.
EXECUTED this the day of 1987.
AMERICAN STATE BANK THE CITY OF LUBBOCK
&4w'- e. C .1,v S
DON HUDGEONS . C. McMINN
EXECUTIVE VICE PRESIDENT MAYOR
ATTEST:
A.
l f &" d[ r�
Cashier (Assistant)
THE STATE OF TEXAS §
COUNTY OF LUBBOCK §
ATTEST:
Ran tte Boyd
City Secretary
APPROVED AS TO FORM:
Donald G. Vandiver
First Assistant City Attorney
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.
6rVEN DER MY HAND AND SEAL OF OFFICE this day of
1987.
Notary Public, —Lubbock County,
Texas
My Commission Expires:
r MY COMMISSION EXPIRESITi
NOVEMBER 30, 1989
OLIVIA R. SOLIS
- 4 -
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 DON
HUDGEONS, known to me to be the person whose name is subscribed
to the foregoing instrument and acknowledged to me that he exe-
cuted the same as the act and deed of the American State Bank,
Lubbock, Texas, and as Executive Vice President, for the purposes
and consideration therein express, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 10th day of
December 1987.
_ ----------
NotaLvy Pubic, Lubbock County,
Texas
My Commission Expires: 3-18-88
- 5 -
City of Lubbock
Proposal for Banking Services
from American State Bank
November 19, 1987
Supporting Material
Selection Criteria Item #11
Name
W. R. Collier
President
Years at ASB
28 years
Don Hudgeons
33
years
Executive Vice President
Bill Blackwell
15
years
Sr. V. P. & Cashier
Jackie Duncan
27
years
Vice President
Ken Kingston
6
years
Vice President
Selma Sedgwick
18
years
Vice President
Selection Criteria Item #12
Texas Tech University - Contact Robert Hall
Years at Present position
13 years as President
13 years as Exec. Vice Pres.
13 years in operations
12 years as Head Bookkeeper
2 years as D. P. Manager
21 years of D. P. Experience
17 years Investments and Cash
management