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HomeMy WebLinkAboutResolution No. 99-37 / . . . , . � � �� y"� . . � . 1 RESOLUTION N0. R99-37 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD, TEXAS, AUTHORIZING THE MAYOR TO EXECUTT A DEPOSITORY CONTRACT AND AGREEMENT BY AND BETWEEN THE CITY OF FRIENDSWOOD, AND CHASE BANK. * * * * * * * * * * * WHEREAS, the City has requested proposals for depository services; and WHEREAS, the City has evaluated the proposals, and its needs for such professional services; and WHEREAS, the City has determined that it is in the City's best interests for Chase Bank to provide the required depository services for a period of three years with two one year extensions; now therefore BE IT RESOLVED, BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD, TEXAS, that the Mayor be, and he is hereby authorized to execute for and in behalf of the City, a contract and Agreement, a copy of which is attached hereto and made a part hereof, by and between the City of Friendswood and Chase Bank, whereby such bank will serve as official depository for City funds for the period February 1, 2000, through January 31, 2003, with renewal periods as stated therein. PASSED, APPROVED, AND RESOLVED this 20th day of December, 1999. ' ^ Mayor Harold L. Whitake City of Friendswood ATTEST: . Deloris McKenzi , TR City Secretary R99.37/LST03 , . , . � �, . , , : CITY OF FRIENDSWOOD, TEXAS DEPOSITORY APPLICATION/ DEPOSITORY SERVICES CONTRACT 910 South Friendswood Drive Friendswood, Texas 77546-4856 (281) 996-3200 . , , � �`� ' (. ,. , � CITY OF FRIENDSWOOD, TEXAS DEPOSITORY APPLICATION/ DEPOSITORY SERVICES CONTRACT 910 South Friendswood Drive Friendswood, Texas 77546-4856 �� (281) 996-3200 . . , . � ,...y . . � , �, TABLE OF CONTENTS I. Introduction ................................................................................................... � II. Calendar of Events........................................................................................ 2 III. Criteria For Evaluation.................................................................................. 3 IV. Account Activities......................................................................................... 3 A. Number of Accounts B. Services and Volumes C. Collateral Required D. Bank Statements E. Method of Payment and Reporting F. Availability of Funds G. Interest Rates H. Federal Income Tax Withholding I. Research Requests J. Bank Errors V. Pledge/Requirements ................................................................................... 5 A. Securities Pledged B. Reporting Requirements C. Safekeeping D. Substitutions E. Certification and Delivery of Collateral VI. Investment Activities .................................................................................... 6 A. Direct Investment Alternative B. Certificates of Deposit C. Interest Calculations D. Extension of Investments VII. Overdraft Provisions..................................................................................... 7 VIII. Other Stipulations......................................................................................... $ A. Regulation Notices B. Wire Transfers C. Right to Cancel Contract D. Right to Audit Records E. Financial Reports F. Term of the Depository Services Contract � , . , � --. IX. Bidding Requirements.................................................................................. $ A. Date, Time, Location B. Responding to this Application C. Additionallnformation D. Right to Reject Applications E. Certification F. Bid Bond G. Questions Regarding Depository Application H. Transfer of Funds X. Other Miscellaneous..................................................................................... 9 A. Periodic Review B. Depository Application and Resulting Contract C. Bid Advertisement D. Designating Officials XI. Depository Application Submitted By,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,11 XII. Acceptance of Depository Application/Depository Services Contract,,, 12 EXHIBITS 1. Bank Transactions �- 2. Account Analysis Summary 3. Investment Policy 4. Investment Summary APPENDIX - To Be Completed By Bidder 1. Bank Service Requirements 2. Other Bank Services 3. Investment Transactions 4. Certificates of Deposit $100,000 or More ATTACHMENTS - To Be Provided By Bidder A. Sample Account Analysis Statement B. Availability Schedule C. Historical Interest Rates D. Depository Pledge Agreement E. Sample Safekeeping Agreement F. Financiallnformation G. Positive Pay and Complete Reconciliation H. Check Imaging I. Controlled Disbursement J. One-Time Setup Fee and Software Fee K. Direct Deposit of Payroll and Employee ATM Accounts - L. Balance Reporting M. Direct Payment for Utilities Charges ' � � .�.. .-� . _ . I. INTRODUCTION The City of Friendswood (the "City") is requesting applications from eligible and qualified financial institutions to serve as the Depository Bank to the City and provide the banking services as described below. The services provided will be in accordance with the Depository Application and attachments, duly executed between the City and the selected financial institution. The philosophy incorporated into this Depository Application is to solicit bids for banking services currently utilized or open for consideration, based on projected activity and transaction volumes. The City intends to invest its funds to maximize interest income as authorized by the City Investment Policy and permitted by state law. From this perspective, the rates the City can earn on its deposits and investments through the financial institution will be an important element in consideration of the net cost/benefit of the relationship to the City. The new depository contract term will be for the period of February 1, 2000, through March 31, 2003, with a provision for two one-year continuations under the same terms and conditions of the contract, subject to the mutual agreement of both parties. The depository contract term will also provide for an extension period not to exceed ninety (90) days for the transition to a new Depository Bank at the end of the term. The Depository Bank is an important component of the treasury and cash management system of the City. From this perspective, the City is seeking a financial institution that is: ➢ capable of providing the services required by the City at the least possible cost; ➢ willing to be attentive and responsive to the City's money matters; and, ➢ financially sound. This Depository Application is intended to serve as the OFFICIAL BID FORM and as the Depository Services Contract. There are several blanks to fill in and questions to be answered. The evaluation of the bidder's application will be based on these responses. Exceptions, conditions, or qualifications to the provisions of the City's specifications or requirements must be clearly identified as such, with the reasons therefore, and alternate language proposed by bidder, if any, clearly stated and inserted in the appropriate place in the bid submission. Each of these exceptions, conditions, or qualifications to the City's specifications will be included, as appropriate, in this Depository Application. Items and matters not explicitly excepted in this manner shall be deemed to be in conformance with the City's specifications. The Depository Application also requests certain information to be attached and DEPOSITORY APPLICATION Page 1 � � • ' � � . . .� r � . ._ specifically labeled. Bids must be complete, address all aspects of the Depository Application, and include all requested information to receive full consideration by the City in the selection process. The City has designated the Director of Administrative Services as coordinator and contact person through the bidding process. The City desires to enter into a contract of mutual party benefit and will be happy to answer all questions pertaining to this Depository Application. In this regard, the City will hold a bidders' conference at City Hall prior to the deadline for submission of bids. Attendance at the bidders' conference is not mandatory but encouraged. Please note the following section of the calendar of events for the dates and times of key elements in the bid procedure. II. CALENDAR OF EVENTS TARGET DATE DESCRIPTION OF EVENTS Wednesday, November 10, 1999 Advertise the Depository Bank notice in the Wednesday, November 17, 1999 newspapers Monday, November 15, 1999 Depository Application distributed to prospective financial institutions Monday, November 29, 1999 Host a bidders' conference at 11:00 a.m. at City Hall to review the Depository Application and answer questions Tuesday, December 7, 1999 Receive applications from interested financial institutions by 2:00 p.m. at City Hall Monday, December 13, 1999 Review applications and discuss recommendations with City staff Monday, December 20, 1999 Council presentation for the award of the contract Monday, December 27, 1999 Begin implementation Tuesday, February 1, 2000 New Depository Services Contract period begins DEPOSITORYAPPLICATION Page 2 � ,. . � ,.., . III. CRITERIA FOR EVALUATION The City staff shall carefully review the submitted applications. The staff recommendation to the City Council shall be based on the application determined to be in the best interest of the City. The evaluation of the applications will be made based on the following criteria: ➢ Ability to perform and provide the required and requested services; ➢ Cost of banking services; ➢ Completeness of bid and agreement to points outlined in the Depository Application; ➢ Funds availability; ➢ Interest rates paid on interest bearing accounts, time deposits, and investments; ➢ Earnings credit on average available account balances; ➢ Financial strength and stability; and ➢ Convenience of location. IV. ACCOUNT ACTIVITIES A. Number of Accounts. The City requires the four (4) bank accounts as set forth in ° Exhibit 1. The Consolidated Cash Account, an interest-bearing account, serves as the City's master account into which all deposits will be made including investment transactions and electronic funds transfers. The City issues approximately 400 checks per month for an estimated $1,200,000 per month through the Consolidated Cash Account, which is utilized to issue vendor payments. The bank must have the capability of receiving and sending wire transfers, ACH transfers, and direct deposits through the Consolidated Cash Account. The City has a biweekly payroll with an average of 184 employees per month representing an average monthly total debit amount of $276,000 from the Payroll Account, which will be interest-bearing. The City offers its employees direct deposit of payroll. Approximately 105 employees will utilize the service, representing monthly payroll dollars of $170,000. Please acknowledge the capability of your bank to provide this service. The Contract Retainage Account and the Capital Improvements Impact Fee Account, both interest-bearing accounts, have less than ten transactions per month and may not be needed in the future. The City reserves the right to open or close any number or type of accounts as it - deems necessary through the term of the Depository Services Contract. Any services not listed, but later requested by the City, will be charged for at a mutually agreed upon DEPOSITORY APPLICATION Page 3 � .. . � � - fee. Fees bid are fixed for the entire contract period. No additional setup fees or software fees shall be charged if the Depository Bank merges or is acquired by another bank. B. Services and Volumes. The services which should be made available to the City include, but are not limited to, the items that are identified in Appendix 1, Bank Service Requirements, and Appendix 2, Other Bank Services. Exhibits 1 and 2 have been included to provide additional bank information regarding transaction volumes and dollar amounts that should be helpful in responding to this Depository Application. To maximize control and investment opportunities, the City requires Balance Reporting for daily access of its bank accounts to obtain balance information. The most desirable access would be accomplished by an IBM compatible personal computer via a modem with a high capacity data transfer rate. The information to be contained in the report should be for the previous business day and include: ledger balance, collected balance, one day float amount, two day float amount, total credits, total debits, and detail debits and credits. The controlled disbursement presentation notification should also be accessible through Balance Reporting. This information should be available and accessible by 10:00 A.M. The City would like to consider the benefits that could be obtained from complete account reconciliation services on the Payroll and Consolidated Cash accounts, and the - use of positive pay to prevent check fraud. C. Collateral Required. The balances maintained in all accounts must be collateralized in the same manner and under the same stipulations as outlined in the Pledge Requirements section. The maximum ledger balances are estimated to be $3,000,000 in the aggregate. The averaqe balances are projected to be in the range of $700,000. D. Bank Statements. Bank statements shall be rendered within seven (7) working days after the close of the calendar month. The statement shall include debits and credits made on the last day of the period and the detail items. E. Method of Pavment and Reportinq. The City intends to pay for all services provided by the institution as set forth in Section IV. B. and Appendices 1 and 2. The method to be used for the payment of these services shall be the direct payment method to the extent that the cost of services exceeds the earnings credit amount generated by account balances. The City shall require account analysis statements on a monthly basis by individual account and at group level which will reflect average ledger balance, average uncollected funds, average collected balance, reserve requirement, average available balance, rate and amount of earnings credit, and detail of services provided with quantities and unit fees for each to arrive at a total service cost. DEPOSITORYAPPLICATION Page 4 . . � ^ Settlement of the excess/deficient condition as reflected by the group level account analysis is to occur on a quarterly basis. Please submit a sample of the monthly account analysis statement that will be provided to the City as Attachment A. F. Availabilitv of Funds. Please provide a schedule and detailed explanation of funds availability, showing both time and day of availability, and specify the institution location to which the availability is applicable. If more than one availability schedule is applicable, provide both. Please submit the availability schedule(s) as Attachment B. G. Interest Rates. The collected balances in each account should be accessible by personal computer inquiry and shall be available for investment at the option of the City. Funds in interest bearing accounts shall earn interest at the rate paid on interest bearing accounts. Please provide an explanation of the institution's policy and methodology used in setting rates paid on interest bearing accounts. Indicate if they are based on a market rate such as T-Bill discount or yield rate, or the federal funds rate, etc., and when the rates are changed. Also, please provide a historical schedule of rates paid on this type of interest bearing account. Please provide the interest rate information as Attachment C. H. Federal Income Tax Withholdinq. The City requires the Depository Bank to provide Federal Income Tax withholding depository services. � I. Research Requests. The City requests that all research requests be responded to within three business days of the request. J. Bank Errors. Bank errors resulting in lost interest to the City will be reimbursed by the Bank to the City. The method of reimbursement will be agreed upon by the Bank and the City. V. PLEDGE / REQUIREMENTS A. Securities Pledged. As security for the deposits of the City, the institution shall pledge to the City securities equal to 102% of their market or par value, whichever is lower, of the largest total balances the City maintains in the institution, less the amount provided by the Federal Deposit Insurance Corporation (FDIC). These aggregate balances are estimated not to exceed $3,000,000. This Pledge shall be evidenced by a separate Depository Pledge Agreement in accordance with the requirements of State and Federal law. Please submit a copy of the Depository Pledge Agreement as Attachment D. The securities comprising the pledge shall be calculated using market value. The securities so pledged, the amounts thereon, and the time for pledging same shall satisfy statutory requirements and the City Investment Policy as included in Exhibit 3. B. Reporting Requirements. The institution shall provide the City a report of DEPOSITORY APPLICATION Page 5 �- ---u . - securities pledged at the end of each month or at any time requested by the Director of Administrative Services, the City Manager, or any other designated official. The report should reflect the total pledged securities itemized by: Name Type/Description Par Value Market Value Maturity Date Rating by Moody's or Standard & Poor's C. Safekeeping. The securities pledged shall be held in safekeeping at a financial institution acceptable to the City. The original copy of all security receipts shall be filed with the Director of Administrative Services. The City shall reimburse the Depository Bank for safekeeping charges, if any. Specify the safekeeping charges that shall apply. Please submit a copy of the Safekeeping Agreement as Attachment E. The safekeeping agreement shall clearly state that the Trustee is instructed to release the collateralized securities to the City if the City has determined that the Depository Bank has failed to pay on any accounts including, but not limited to, matured investments in Certificates of Deposit, or the City has determined that the City funds are in jeopardy for any reason including, but not limited to, involuntary closure or change in ownership. The Safekeeping Agreement shall have signatories and be executed by the Trustee institution, the Depository Bank, and the City. D. Substitutions. Any substitutions of the securities or reductions in the total amount pledged shall be made only by and with the proper written authorization approved by an authorized signatory. The City shall approve all securities pledged. In the case of reductions, the Depository Bank shall provide in writing that collateral shall be available when needed to meet normal City balance increases throughout the year. Any securities pledged shall satisfy statutory requirements and the City Investment Policy as included in Exhibit 3. E. Certification and Delivery of Collateral. In accordance with state law, the Board of Directors of the selected Depository Bank will be required to provide a resolution of certification approving the commitment and delivery of the collateral to the safekeeping institution not later than five days before the commencement of the contract period. VI. INVESTMENT ACTIVITIES For illustration of the City's investment activity, Exhibit 4 has been included. -° A. Direct Investment Alternative. The City desires a Bank Depository relationship which provides full legal flexibility in investment activities. Since state law permits the DEPOSITORY APPLICATION Page 6 ,� - - City to invest in direct debt securities of the United States Government or its agencies or instrumentalities guaranteed by the full faith and credit of the United States Government, the City shall have the right, at its sole discretion, and based on maturities and liquidity needs of the City, to select direct investment in government obligations. Appendix 3, Investment Transactions, provides the scenarios of three sample investment opportunities for a specific date. For each of the three investment options, enter the information that would represent the optimum use of the funds for the time permitted, including agency type, maturity date, par value, cost, bond yield, and transaction fee, if any. B. Certificates of Deposit. Certificates of Deposit (CDs) purchased for the City shall be non-negotiable and shall be registered in the name of the City. CDs must be fully insured by the FDIC or collateralized by fully guaranteed Federal obligations that are pledged to the City and that have a market value equal to or greater than the CD for the life of the CD. Proof of collateral must be supplied to the City before the CDs are paid for. Bidders shall state the rate of interest payable and the basis used to establish the rate, for each of the time periods as indicated on Appendix 4, Certificates of Deposit $100,000 or More. Also, indicate the investment minimums and maximums for maturity lengths and dollar amounts. C. Interest Calculations. Interest on all CDs shall be computed on an actual day basis, and the interest shall be paid to the City on the maturity date. Payments shall be made by crediting the accounts from which investments were made. Interest calculations shall include the first day in the investment period but shall not include the day of maturity. D. Extension of Investments. The Depository Bank agrees to honor and continue any investments made during the term of the Depository Services Contract that will mature after the expiration date of the contract at the same rate established before the expiration of the contract. VII. OVERDRAFT PROVISIONS The City does not intend to have a net overdraft position occur during the course of the contract period. A net overdraft shall be defined as a negative balance in the City's accounts collectively, not by individual account. However, should a net overdraft condition occur, the following stipulations shall apply: (To be completed by the financial institution.) ➢ The maximum number of days the overdraft condition shall be allowed is one 1 banking days. ➢ The maximum amount of the overdraft to be allowed shall be $ n/a DEPOSITORYAPPLICATION Page 7 p-. � ➢ The interest rate shall be Prime + 0% per annum computed on an actual day basis for the days and amount of the overdraft. In the event a check or checks shall be presented for payment where there is insufficient funds for the purpose of paying checks, the Depository Bank agrees to promptly notify the Director of Administrative Services, by telephone or other means, of the overdraft condition, and to provide the Director of Administrative Services a period not exceeding one business day to respond and rectify the condition. VIII. OTHER STIPULATIONS A. Regulation Notices. The successful bidder shall notify the City in writing within ten (10) days of any changes in Federal or State regulations or laws that would affect the Depository Services Contract. B. Wire Transfers. Notification of wire transfers shall be made by telephone to the Director of Administrative Services within one hour of the transaction and a written confirmation mailed to the City the same day of the transaction. C. Riqht to Cancel Contract. In the event it would be ruled illegal under the provisions of any Federal or State laws or regulations for the Depository Bank to comply with the requirements of the Depository Services Contract, then the City expressly ° reserves the right and privilege to cancel the Depository Services Contract and to re- bid. D. Riqht to Audit Records. The Depository Bank's records relating to the City's accounts shall be open for review during normal business hours by designated City staff members or City appointed independent auditors. E. Financial Reports. The proposing institution shall submit a copy of the latest annual financial statements, the past two most recent quarterly FDIC call reports, and the Uniform Bank Performance Report for the latest fiscal year end, all as Attachment F. F. Term of the Depository Services Contract. The term of the Depository Services Contract shall be for the period February 1, 2000, through March 31, 2003, with a provision for two one-year extensions under the same contract terms and conditions, with the mutual agreement of both parties. Further, the agreement will have a ninety- day extension period for transition to the new depository bank at the end of the term. IX. BIDDING REQUIREMENTS A. Date, Time, Location. Sealed applications clearly marked "Depository Application" shall be delivered to the following person by 2:00 p.m., on Tuesday, -- December 7, 1999: Ms. Deloris McKenzie, City Secretary, City of Friendswood, 910 South Friendswood Drive, Friendswood, Texas 77546-4856. DEPOSITORY APPLICATION Page 8 �„ �--�,, . � � NO DEPOSITORY APPLICATION WILL BE RECEIVED AFTER 2:00 p.m. B. Responding to this Application. The proposing institution shall use this Depository Application as the Official Bid Form to submit prices, rates, and to answer questions. C. Additional Information. The City reserves the right to request additional information or to meet with representatives from proposing organizations to discuss points in the application before and after submission, any and all of which may be used in forming a recommendation. D. Riqht to Reiect Applications. The City reserves the right to reject any and all applications, and to accept the application it considers to be in its best interest based upon the ability to perform the requested services, agreement to points outlined in the Depository Application, interest rates paid on time deposits, cost of banking services, and financial stability. E. Certification. Bidder must provide certification that it is an institution qualified under current state law to serve as the City's Depository Bank. F. Bid Bond. Bidder shall supply a bid bond of $5,000. The bid bond shall be in _ the form of a cashier's check made payable to the City of Friendswood, and shall be returned to each bidder upon final acceptance and execution of this Depository Services Contract with the successful bidder. Should the institution selected as the Depository Bank by the City fail to become the Depository Bank, for whatever reason, the bid bond will be forfeited to the City as liquidated damages. G. Questions Reqardinct Depository Application. Any questions concerning this Depository Application should be directed to: Mr. Roger C. Roecker Director of Administrative Services City of Friendswood 910 South Friendswood Drive Friendswood, Texas 77546-4856 (281) 996-3211 (Direct line) H. Transfer of Funds. Transfer of funds will commence at such time the successful bidder has provided the City with all required forms and supplies necessary to insure uninterrupted day-to-day operations. Bidder shall, upon termination of contract, cooperate with the new Depository Bank for transfer of funds. X. OTHER MISCELLANEOUS A. Periodic Review. The City shall require a review meeting at least once every six DEPOSITORY APPLICATION Page 9 _ _ � . . . - months to evaluate the working relationship between the City and the Depository Bank. The objective shall be to address any problems and to seek solutions, as well as keeping abreast of changes, new services, or new requirements. B. Depository Application and Resulting Contract. The final appointment of the Depository Bank shall be made by the City by a contract award of the City Council. The successful bidder may be required to execute a new Depository Application/Depository Services Contract which incorporates all of the requirements of this Depository Application, accompanying related schedules and materials as called for in this Depository Application, and any exceptions, conditions, or qualifications to the specifications included herein as deemed appropriate by the City. In the alternative, this fully executed Depository Application and accompanying related schedules, attachments, and materials shall constitute the Depository Services Contract upon acceptance and execution by the City. Chase Bank of Texas requests that the Treasury Management Services Agreement and Addendum for Public Funds be considered as part of the contract for services befinreen the City of Friendswood and Chase. The agreement is included at the end of the depository application herein. C. Bid Advertisement. This Depository Application has been duly advertised and is -� being offered for consideration to financial institutions as permitted by State law. D. Desiqnatinq Officials. The bidder shall provide a list of contact personnel within the financial institution for communication and assistance with the City: DESCRIPTION NAME TITLE Relationship Officer Sherry Curry Vice President General Information Sherry Curry Vice President Investments & Safekeeping Karen Samples Vice President Accounting/Bookkeeping Phyllis Wagner Client Services Rep. Deposit Discrepancies Phyllis Wagner Client Services Rep. Controlled Disbursement Sherry Curry Vice President Balance Reporting Sherry Curry Vice President Account Reconciliation Sherry Curry Vice President ACH Processing Sherry Curry Vice President This Depository Application is being offered by the following person duly authorized to act on behalf of the City of Friendswood. CITY OF FRIENDSWOOD �- Roger C. Roecker Director of Administrative Services DEPOSITORYAPPLICATION Page 10 . � � * * * * * * * * * * * * * � DEPOSITORY APPLICATION Page 11 �, �o... I XI. DEPOSITORY APPLICATION SUBMITTED BY This Depository Application is being submitted to the City of Friendswood, Texas, by the following person duly authorized to act on behalf of this financial institution. All terms contained herein, including the accompanying schedules, attachments, and materials, are agreed to by said financial institution. CHASE BANK OF TEXAS, N.A. Name of Financial Institution 712 MAIN HOUSTON. TX 77002 Address of Financial Institution 713-216-5763 Telephone Number Sherrv C. Currv, Vice President Officer Name & Title (Printed) Officer Sign re December 7, 1999 Date * * * * * * * * * * * * * DEPOSITORYAPPLICATION Page 12 XII. ACCEPTANCE OF DEPOSITORY APPLICATION/ DEPOSITORY SERVICES CONTRACT IN WITNESS WHEREOF, the Mayor of the City of Friendswood, Texas, as attested to by the City Secretary of the City of Friendswood, Texas, has executed this Depository Application/Depository Services Contract under the authority granted to them under the provisions of Resolution No.R99-37 , a Resolution duly enacted by the City Council of the City of Friendswood, Texas, on the 2oth day of December , 1999. Harold L. Whitaker City of Friendswood, Texas December 20, 1999 Date ATTEST: Deloris McKenzie, City Secretary City of Friendswood, Texas * * * * * * * * * * * * * DEPOSITORYAPPLICATION Page 13