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HomeMy WebLinkAboutResolution - 2092 - Depository Agreement - American State Bank - 07/25/1985DGV:js occni 11TTnsi Resolution #2092 July 25, 1985 Agenda Item #26 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 25th day of July , 1985. day ENRY, MA R ATTEST: rR e Boyd, City Secretary APPROVED AS TO FORM: Ar— /I �1 - �Lk D, ' d' ) � (C,6. I"C) l Donald G. Vandiver, Asst. City Attorney Resolution #2092 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 25th day of July , 1985, 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 Corpora- tion, 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 two (2) years commencing on the 1st day of June, 1986, and ending on the 31st day of May, 1988. However, both parties to this Agreement shall meet on or before April 1, 1987, and if this Agreement is extended as hereinafter provided the parties shall meet on or before April 1st of each succeeding year for the purposes of renegotiating the terms set forth in Exhibit A, which consists of the City RFP and the Bank's Services Proposal Response Form attached hereto and made a part hereof for all purposes. If both parties agree to the terms in Exhibit A as renego- tiated, then in such event there shall be afidded automatically a one (1) year extension to the full remaining term of this Contract. If both parties agree to renegotiate the terms of Exhibit A as hereinabove provided and the parties come to an agreement on such terms, such agreement shall be reduced to writing marked Exhibit A and such renegotiated Exhibit A shall be dated, executed by both parties, and attached to this Contract and shall then supersede the original or former Exhibit A. However, it is agreed between the parties that any such renegotiation of Exhibit A shall be for the years subsequent to May 31, 1988 it being the intention of the parties hereto that the original Exhibit A attached hereto shall be effective from the 1st day of June, 1986 until the 31st day of May, 1988. If both parties hereto at anytime fail to agree on the terms to be contained in Exhibit A, as renegotiated then in such event the remaining year on the original Contract or the remaining year on the Contract as extended shall be discharged by both parties hereto and thereafter the obligations of both parties under this Agreement shall cease and this Agreement shall terminate. 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. III. 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 hereof, for handling any and all over- drafts. Overdrafts will be considered temporary, unless they exceed ten (10) calendar days, at which time the overdrafts will be cleared. - 2 - IV. 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 transaction of banking business. 3. Bank agrees to furnish to City coin wrappers, night depository services including bags and keys, Cashiers' 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. - 3 - 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. 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. 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 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 here- after become effective during the term of this Agreement; and if this Agreement should be or become in conflict with such stat- - 4 - utes, rules and regulations then such statutes, rules and regulations shall control to the extent they are in conflict with this Agreement. EXECUTED this the r_ day of , 1985. AMERICAN STATE BANK THE CIfi 0417 LUBBO/K DON HUDGEONS EXECUTIVE VICE PRESIDENT ATTEST: .......... X,as hier THE STATE OF TEXAS COUNTY OF LUBBOCK 0 R MAYOR ATTEST: CR a Boyd City Secretary APPROVED AS TO FORM: o d G. Vandiver Assistant City Attorney BEFORE ME, the undersigned authority, a Notary Public in and for said County, Texas, on this day personally appeared ALAN HENRY, 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 expressed, and in the capacity therein stated. GIVENUNDERMY HAND AND SEAL OF OFFICE this A(O day of UAA 1985. V Iq L 4? - Notary Public Lubbock County, Texas My Commission Expires:'_ - 5 - 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 executed 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 expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 19th day of July , 1985. Not, ry Publ c Lubbock County, Texas My Commission Expires: March 18, 1988 !W-� Resolution #2092 CiTY OF LUBBOCK REQUEST FOR PROPOSAL FOR BANKING SERVICES RFP #8613 The City of Lubbock Is requesting proposals for banking services from commercial banks located within the Lubbock City Limits. 1.Sealgd P!!COP05§lam.'-. Responses to this request for proposals (RFP) should be submitted in a sealed envelope no later than 3:00 p.m. on July 10, 1985, clearly identified as "Proposal for Banking Services", and matted (or delivered) to: Gene Eads, C.P.M. Purchasing Manager 1625 - 13th Street, Room L04 Lubbock, Texas 79401 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. A - •1 . .. . t. •If • A proposal conference will be held in the City Hall Committee Room on June 25, 1985. 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 explicit proviso that any responses thus obtained are not binding on the proposal process or upon the award of the contract. 4. Schedule• 6-25-85 Proposal Conference - 10:00 a.m., Room 103 City Hall Committee Room 7-10-85 All proposals must be in the hands of the City Purchasing Department no later than 3:00 p.m. 7-25-85 The City Council will consider award of the contract. EXHIBIT "A" Request for Proposal for Banking Services Page 2 Not later than Anticipated Implementation date for contract June 1, 1986 5. 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. 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 Finance 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. 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 Retail Merchants for processing. The City writes approximately 1,800 checks per month on the General Fund account and makes approximately 750 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 federal revenue sharing, Community Development Block Grants and Lubbock County Appraisal District receipts. The estimated average daily balance in the operating account will be approximately $2,000,000. Request for Proposal for Banking Services Page 3 2. Payroll Account: The City is currently on a bi-weekly payroll basis, paying an average of 2,100 employees every other Friday. The net payroll amounts to approximately $875,000 per pay period. In December of each year, some employees are paid an additional check for longevity. In December of 1984, the City paid out approximately $460,000 to 1,200 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 bankts 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. Other Accounts: The City currently has five other accounts which are handled by various departments. These accounts are: Clearing Fund, Jury Account, Utilities Refund Account, Parks and Recreation Account, and Personal Appearance Account. The City writes approximately 250 checks per month on these accounts and makes approximately 40 deposits per month to these accounts. The estimated average daily balance in these operating accounts will be approximately $20,000. 4. Deposits: 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 60,000 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. Request for Proposal for Banking Services Page 4 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 and 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 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 dally balance reporting information regarding all accounts as required by City Finance personnel. 6. i nvestmgnt• 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 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, either within the bank's own facilities, or at the Federal Reserve. A copy of all safekeeping receipts will be issued to the City at the consumation of each investment transaction. 7. Safety Deposit Bpxe The bank shall provide safety deposit boxes as needed for the storage of registered bonds, coupons, or other material requiring exceptional security. Request for Proposal for Banking Services Page 5 8. 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 $2,000,000, 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 to the General Fund account. Daily written notification of Interest earned will be given to the City. In addition, monthly statements will be forwarded with the City'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 Monday (or Tuesday) addition of the Wall Street Journal every week. The rate bid by the bank will be quoted in decimal points, such as "The average Fed Funds rate, minus .35%11, (or 35 "basis points"), "the average Fed Funds rate, P-[ua .10%11, "The average Fed Funds rate minus 1.00%11, etc. In no case will the City accept another source for computation of the weekly Fed Funds rate. Request for Proposal for Banking Services Page 6 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 &U, rather than merely a portigr of the City's daily cash 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. PaMent for Sery icgg. 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 over drafts exceeding $3,000,000 (over draft 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 over drafts 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 Wail Street Journal 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 indeptedness. 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 Waii Street Jourm&L each week. 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. Request for Proposal for Banking Services Page 7 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. Reference_ 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 two years, with an option to renew the contract for one additional one-year extension. BANK NAME: OFFICIAL SUBMITTING: TITLE OF OFFICIAL: TELEPHONE NUMBER: RESPQRSE_ FORM Price Cost Total Estimated Monthly Fees Other Quotations: Rate Quotation on Sweep Account: Rate Quotation on Overdrafts: Rate Quotation on Loans: Statement of Capab i, l i�tv__ Our Bank can comply with all aspects of the Cityts banking service requirements. (yes or no) (If no, list all exceptions on separate page.) Estimated Monthly Banking Service Activjty Account Maintenance Items Paid 6,100 Deposits 800 Items Deposited, MICR Encoded 60,000 Non -encoded Items Deposited Stop Payments 3 Wire Transfers 10 Investment Transactions 8 Safety Deposit Box 1 Returned Items 300 Other Itemized Services, as Suggested by Bidding Bank: RESPQRSE_ FORM Price Cost Total Estimated Monthly Fees Other Quotations: Rate Quotation on Sweep Account: Rate Quotation on Overdrafts: Rate Quotation on Loans: Statement of Capab i, l i�tv__ Our Bank can comply with all aspects of the Cityts banking service requirements. (yes or no) (If no, list all exceptions on separate page.) Resolution #2092 RFP # 8613 Addendum # 1 to Request for Banking Services Please change the following items on the Request for Proposal for Banking Services: Page 4, paragraph 1, sentence 2 - 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. Page 4, Item 6, paragraph 4 - The bank shall provide safekeeping facilities for investments owned by the City, either within the bank's own facilities, or at the Federal Reserve. An alternate method will be considered as long as an acceptable audit trial is established. A copy of all safekeeping receipts will be issued to the City at the consumation of each investment transaction. RFP # 8613 Addendum # 1 BANKING SERVICES PROPOSAL RESPONSE FORM BANK NAME: OFFICIAL SUBMITTING (TYPED) 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 Non -encoded Items Deposited Stop Payments Wire Transfers Investment Transactions Safety Deposit Box Returned Items Other Itemized Services, as Suggested by Bidding Bank: Estimated Monthly Activity 4,000 2,100 800 60,000 3 10 8 1 300 Total Unit Estimated Price Cost Total Estimated Monthly Fees 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.) RFP # 8613 Addendum # 1 BANKING SERVICES PROPOSAL RESPONSE FORM BANK NAME:. American State Bank, Lubbock, TX OFFICIAL SUBMITTING (TYPED) Don Hudgeons OFFICIAL SIGNATURE: gdZL12Z�� TITLE OF OFFICIAL: Executive Vic President TELEPHONE NUMBER: 806 763-7061 Estimated Total Monthly Unit Estimated Banking Services Activity - Price Cost Account Maintenance 7 $10.00 $ 70.00 Items Paid by Check 4,000 .15 600.00 Items Paid By Direct Deposit 2,100 .08 168.00 Deposits 800 .15 120.00 Items Deposited, MICR Encoded 60,000 .05 3,000.00 Non -encoded Items Deposited .07 none Stop Payments 3 15.00 45.00 Wire Transfers 10 15.00 150.00 Investment Transactions 8 35.00 280.00 Safety Deposit Box 1 96.00/yr 8.00 Returned Items 300 .25 75.00 Other Itemized Services, as Suggested by Bidding Bank: Total Estimated Monthly Fees $ 4,516.00 Other Quotations: Rate Quotation on Sweep Account: The Average Fed Funds Rate, minus .450 Rate Quotation on Overdrafts: e� ,r ge Fed Fun_ Rate, minus 2.00% Rate Quotation on Loans: The Average Fed Fun -ds Rate, minus 2.00% Statement of Capability: Our Bank can comply with all aspects of the City's banking service requirements. (yes or no) ----des (If no, list all exceptions on separate page.) { City of Lubbock Proposal for Banking Services from American State Bank July 8, 1985 1; Supporting Material i i !j Selection Criteria Item #5-d Name Yrs. at ASB Yrs. at Present Position W. R. Collier 26 years 11 years as President President Don Hudgeons 31 years 11 years as Exec. V. P. Exec. V. P. ' Bill Blackwell 13 years 11 years in Operations Sr. V. P. & Cashier Jackie Duncan 25 years 10 years as dead Bookkeeper Vice President Charles Graham 5 years 5 years as D. P. :-tanager Vice President ,S 22 years of D. P. Experience ' Selma Sedgwick 16 years 15 years Investments and Cash Vice President management Selection Criteria Item #5-E 1. Current Banking References a. Texas Tech University - Contact Robert Hall b. St. Mary's Hospital - Contact Helen Vance or Irene Herrera 2. Previous Customers a. Lubbock Independent School District b. Methodist Hospital Scope of Banking Services Item #2 ASB operates an in house computer facility capable of handling the City`s activity. Specifically, we have the capability of accepting ACH formatted and compatible magnetic tapes and the ability to dis- tribute these to other financial processing centers or ACH Clearing Houses. This will accomodiate any direct deposits or direct debits the city proposes.