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HomeMy WebLinkAboutItem 02 - Bank Depository ContractITEM 0 L MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL t FROM: ROGER NELSON, CITY MANAGER MEETING DATE: MAY 4, 2004 SUBJECT: AWARD OF BANK DEPOSITORY CONTRACT RECOMMENDATION: City Council to consider a Resolution awarding the City Bank Depository Contract and authorizing the City Manager to execute said contract, safekeeping agreements and all other agreements as necessary to implement the depository contract. FUNDING SOURCE: Funds for servicing the bank depository are available in the FY 2004 Budget, account number 100-44580-105-2. BACKGROUND INFORMATION: Chapter 105 (Sub Chapter B 105.011) of the Texas Local Government Code authorizes municipalities to establish depositories for banking services. The City last awarded a depository contract to Texas Bank on March 31, 1998 for a five-year term and a one-year extension to expire March 31, 2004. The current depository contract provides for an extension of up to ninety days if the City is actively engaged in advertising for and soliciting a new depository. This request for applicants was processed in accordance with the Texas Local Government Code; Chapter 105, Section 105.011 and 105.012. Section 105.012 (c) requires the notice to applicants to be published once no later than 21 days prior to the deadline for receipt of applications. This notice was published in the Fort Worth Star Telegram on March 14, 2004. Four local depositories were sent requests for proposals. Four proposals were returned. Proposals were opened on April 5, 2004 at 2:00 p.m. All applicants' proposals were analyzed by City Staff and evaluated in terms of each applicant's proposed annual fees for services and potential earnings for the City from account investments. A copy of the analysis summary is attached. The Texas Bank proposal includes the lowest annual fees. Combined with the investment earnings on City funds in the depository, the Texas Bank proposal will produce the greatest overall benefit to the City. Staff recommends that the City's bank depository contract be awarded to Texas Bank for a five-year term. The contract will be effective May 5, 2004 and expire April 30, 2009. Staff recommends approval A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE A CITY DEPOSITORY CONTRACT WITH TEXASBANK OF GRAPEVINE AND PROVIDING AN EFFECTIVE DATE WHEREAS, the Texas Local Government Code, Chapter 105 authorizes municipalities of the State to establish depositories for the deposit of City funds and for banking services to be provided to the City; and WHEREAS, the current City of Grapevine depository contract is expiring and a new contract needs to be approved; and WHEREAS, the City of Grapevine has advertised for applicants for consideration as a City depository in accordance with the requirements of the Texas Local Government Code, Section 105.012 and has evaluated the applications so received. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS: Section 1. That all matters stated in the preamble are true and correct as if copied herein in their entirety. Section 2. That the City of Grapevine does hereby authorize the City Manager to execute a City Depository Contract with the TexasBank of Grapevine and to execute and deliver a safekeeping agreement and any and all documents, agreements or contracts necessary to complete the implementation of said Depository Contract. Section 3. That the term of said Depository Contract shall be to commence on or before 12:01 A.M., May 5, 2004 and expire at 12:00 A.M.(Midnight), April 30, 2009; except, that if the City is actively involved in soliciting applicants for a new depository contract, that this contract shall continue in force until such new contract is fully executed by all parties. Section 4. That this resolution shall take effect from and after the date of its passage. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS on this the 4th day of May, 2004. 0 APPROVED: ATTEST: APPROVED AS TO FORM: City of Grapevine, Texas - Depository Analysis Texas Bank Bank One Frost Bank Wells Fargo Bank Financing Summary Letter of Credit thru Safekeeping Charges Letter of Credit thru FHLB Federal Reserve Bank Pledge Mortgage Backed Securities Pledge Gott Securities Maximum Days of Overdraft 5 3 30 1 Maximum Amount of Overdraft Aggregate balance of All Accts. Unlimited $10,000,000 Subject to Approval Interest Rate on Overdrafts Texas Prime + $24.00 each ck. Bank One's Prime Rate Frost Bank Prime Rate 0% Short -Term Loans To Be Determined at Time of Loan 365 To Be Determined at Time of Loan Subject to Approval Maximum Amount of Loan To Be Determined at Time of Loan $5,000,000 To Be Determined at Time of Loan Subject to Approval Interest Rate To Be Determined at Time of Loan Libor + 2.00 % To Be Determined at Time of Loan W FB Prime Bank Operating Summary Monthly Analyzed Services x 12 N/A due to fee waiver 13,876.80 25,162.80 29,383.20 On Line Access Service x 12 No Charge 2,160.00 600.00 2,760.00 Account Reconciliation Services 2,940.00 .10/rejected iterm with $10.00/mo. Minimum per Positive Pay No Charge 420.00 account 1.50/exception item Bank Sweep Service Fee x 12 NIA N/A N/A N/A Total Cost of Service All Fees Waived 16,456.80 25,762.80 35,083.20 Applied Earnings Credit x 12 N/A 5,858.64 4,641.36 6,298.08 Earnings Credit Rate - Varibie N/A NIA N/A N/A Earnings Credit Basis N/A 1.20% 0.92% 1.29% Excess Credit Over Cost N/A N/A N/A N/A Excess Credit Forfeited N/A NIA NIA N/A Excess Credit Paid N/A N/A N/A N/A Overnight Sweep Account Program Offered NIA N/A NIA N/A Under $ 100,000 yfr City of Grapevine, Texas - Depository Analysis Texas Bank Bank Depository Summary Bank One Frost Bank Wells Far 9 o Inclusive Cost of Service All Fees Waived 16,456.80 25,762.80 35,083.20 Earnings Credit Applied N/A 5,858.64 4,641.36 6,298.08 Excess Credit Over Service Cost N/A N/A N/A N/A Excess Credit Forfeited N/A N/A N/A N/A Excess Credit Applied to Investment Income N/A N/A N/A WA Total Dollars Subject to Interest 550,000.00 Less: 10 % Reserve Requirement 55,000.00 (a) Balance subject to Interest earnings 495,000.00 13 week T Bill less 20 by 0.73% Earning on Accounts $ 3,613.50 IINet Gain ( Cost) to the City $ 3,613.50 (10,598.16) (21,121.44) (28,785.12) TEXAS BANK SECTION IV OVERDRAFTS DEFINED The City does not intend to have a net overdraft position throughout the course of the contract. An overdraft shall be defined as a negative demand balance in the City accounts collectively, not by individual account. This includes daylight. overdrafts. Should an overdraft occur in the aggregate, the following stipulations shall apply: 1. The maximum number of days the overdraft shall be allowed is five 2. The maximum amount of the net overdraft to be allowed shall be � at t a m nt z see h 3. The interest rate shall be attachment % per annum computed on an actual day basis. In the event a check or checks shall be presented for payment on any account or accounts maintained by the City, where there shall be insufficient funds for the purpose of paying checks, the depository bank shall pay such check or checks and agrees to promptly notify the Finance Manager of the City, by telephone or other means; of the existence of the overdraft situation, and to provide the Finance Manager a period of two business days to respond to such overdraft. Charges for insufficient funds shall be a part of the analyzed services and not billed as a separate or charged to the account. Short -Term Loans: The bank agrees to loan funds t o the City on needed, for operational purposes and for capital expenditures onnly.a short-term basis, if Specify the terms and conditions by which the bank shall loan funds to the City on a short- term basis: 1. The maximum number of days for the loan is att a�hmPpf n 2. The maximum amount of the loan shall be attachment D 3. The interest rate shall be attachment % per annum computed on an actual day basis. D Cost of Service Analysis (Cont.) MONTHLY DESCRIPTION UNIT UNITS TOTAL OF SERVICE PRICE USED(EST.) PRICE/MO. Cashier's Fee $ 3.00 1 NO CHARGE Insufficient Fund Fee$24-00 1 See attachment I Chargeback Fee s 4 - on 5 NO CHARZE Total Monthly Analyzed Services $-NQ CHARGE Earning Credit N/A_ OX, interest be paid on collected balances and no analysis charges Reserve Requirement 10 % are proposed. Borrowed Funds (book/collected) 6 % FDIC Assessment N/A % ACCOUNT ANALYSIS SUMMARY Using the above rates and fees and assuming a combined monthly average daily bank collected balance of $550,000, specify the following: Reserve Requirement $NA dup t -,a fee waiver Combined Monthly Investable Balance $NA due to fee waiver Monthly Earnings/ or Investable Balance Credit $NA due to fee waiver Less Monthly Analyzed Services $NA due to fee waiver Monthly Analysis Deficit (excess) charged (credited) to Account $ NA due to fee waiver Annualized Cost of Services (analysis- D. COST OF SERVICE ANALYSIS t"D A key component of the City's evaluation of banking service provider will be the Cost of Service Analysis outlined below. All responders must enter the unit prices, totals and rates indicated below. Monthly units used are estimated for comparison purposes, although actual City use of the listed items will be similar to that listed. ANALYZED SERVICES MONTHLY DESCRIPTION UNIT UNITS TOTAL OF SERVICE PRICE USED (EST.) PRICE/MO. Maintenance Fee 's15-00 5 N.a_cHAP-CF— De%ZItC Pr0GeSsed & 2,3()() .15 1V\ l Credits Processed $ .00 620 NO cHARc;F On Us Items Fee _S _ 0 6 1,900 NO CHARGE_ Return Item Fee $ 4.00 10 NO CHARGE Foreign Item Fee g va � . 07 11,500 NO CHARGE Serial Sort (per item) $ .00 2,300 NO CHARGE Wire Transfer Incoming _$10,00 10 NC) C'HARrF Wire Transfer Outgoing _$ 7.50 10 NO C'HIlRr_F*** Telephone Transfer -$--2.00 10 NQ C'HARG'E ACH Items Processed _ n 3,500 TTS 1-�- virn,�e��c��--- ACH Files Processed 5.00 4 NCl C'HARC F Strapped Currency _$ .35 9 NO rT4APCp Rolled Coin 0 70 Stop Pay Fee $24.00 5 gg�gm ntt,-,meet C & D ***If wire volume exceeds 30 per month, standard pricing will apply. see attachment D charges times 12) $ NA due to fee waiver Cost of Service Analysis (Cont.) (9 On Line Access Services The City will require on-line access with the bank using the City's PC and a modem. This service must provide information on checks cleared on the City's account, status of deposits and available funds, capability for making intra -account transfers and wire transfers. Additionally, it must have automated clearing house functions (ACH), that the City may utilize for direct deposit of employee paychecks. Does your bank provide these services? Yes No Monthly cost for service _NO CHARGE One account C:a-k NO CHARGEadditional account NO CHARGE Set-up charge State any other fees which may apply to this service. Total Estimated Annualized Account Costs for Cost of Service Analysis $ NO CHARGE Account Reconciliation Services The City will provide activity on selected accounts and would require account reconciliation services for these accounts. Please indicate the Cost of account reconciliation services for monthly reconciliation and cost per item. Total Estimated Annualized Account Costs Service for I I $.NO CHARGE Positive Pay Services The City will require positive pay services on all of its accounts. Please indicate the Cost of positive services. Total Estimated Annualized Account Costs Service. $ NO CHARGE Cost of Service Analysis (Cont.) Lock Box Services The City will request a proposal for lock box services on its Utility Billing Services. The Lock Box Service will not be a part of this Depository Contract. The request will be a separate proposal. Additional Services Proposers are to specify any other services available to the City of Grapevine, which may be though to be beneficial or that may apply to the City and state any related fees. (Not to be included in Cost of Service Analysis above). -Service Offered Associated- MoFnth-ly Fee Merchant Services -Attachment G City of Grapevine, Texas Submitted by TexasBank Attachment B — Deposit Services April 5, 2004 Interest Checking: Interest checking accounts will earn interest based on the 13 -week Treasury Bill auction average discount rate (as quoted in the Wall Street Journal) minus 20 basis points (0.20%). This rate is subject to change weekly based upon the weekly auction for Treasury Bills. The 13 -week Treasury Bill discount rate as of March 29, 2004 was 0.93%, therefore providing a rate of 0.73% to the City. Variable Rate 13 -week TBill minus 20 basis points (0.20%) Interest will be paid monthly on average collected balances and the rate is subject to change weekly. Money Market Accounts: Money market accounts are also available to the City at the same rate paid to other depositors. These accounts are limited to six debit transactions per month, three of which may be payments to third parties. Following are the currently priced rates and balances: $2,000 - $9,999 .10% apy $10,000,- $24,999 .25% apy $25,000 - $99,999 .75% apy $100,000 - $999,999 1.15% apy $1,000,000 & up 1.30% apy These rates will be paid monthly on average collected balances and the rate is subject to change daily. .k City of Grapevine, Texas Submitted by TexasBank Attachment H — Investment Securities/Collateral Requirements April 5, 2004 Investment Securities/Collateral Requirements: TexasBank will provide a letter of credit thru FHLB for the City. The State of Texas Legislature approved the use of letters of credit for collateral. It stated that eligible collateral includes a security with fixed, stated rates or a letter of credit. TexasBank will supplement with other approved securities as necessary. The City must notify the bank at least 24 hours prior to depositing funds that will cause the total ledger balance of the City to exceed the amount of collateral pledged, In the unlikely event that the bank is unable to accept such deposits due to collateral limitations, the bank will work with the City to invest the funds elsewhere. The bank is bidding to serve as depository for the City's normal operating funds, not its investments. We understand that the City's normal operating funds will average less that $5 million, but also understand that this level could be exceeded for a few days each year. Should the City wish to exceed $8 million for more that two consecutive weeks, it should make such request in advance. The bank will work with the City to satisfy its needs but reserves the right to refuse deposits that exceed this limit. TexasBank uses Federal Home Loan Bank, located in Irving, Texas, as its safekeeping agent. Investment services are available through the Federal Home Loan Bank. Safekeeping receipts will be forwarded to the District. Investment confirmations will be completed as necessary. City of Grapevine, Texas Submitted by TexasBank Attachment I — Information on Overdrawn Accounts April 5, 2004 Overdrawn Accounts: Overdrafts without charges or interest will be allowed for five consecutive days if the aggregate overdrafts of all funds do not exceed the aggregate balances of all checking accounts. Overdrawn accounts that exceed the above stated balances or numbers of days would be charged TexasBank prime, plus $24.00 for each insufficient check. In addition, all overdrawn accounts must be cleared up within five business days, regardless of balances in other accounts. Daylight overdrafts are allowed at no charge. ft h � • SECTION IV The City does not intend to have a net overdraft position throughout the course of the contract. An overdraft shall be defined as a negative demand balance in the City accounts collectively, not by individual account. This includes daylight overdrafts. Should an overdraft occur in the aggregate, the following stipulations shall apply: 1. The maximum number of days the overdraft shall be allowed is 3 2. The maximum amount of the net overdraft to be allowed shall be unlimited. 3. The interest rate shall be % per annum computed on an actual day basis. *Bank One's prime rate In the event a check or checks shall be presented for payment on any account or accounts maintained by the City, where there shall be insufficient funds for the purpose of paying checks, the depository bank shall pay such check or checks and agrees to promptly notify the Finance Manager of the City, by telephone or other means, of the existence of the overdraft situation, and to provide the Finance Manager a period of two business days to respond to such overdraft. Charges for insufficient funds shall be a part of the analyzed services and not billed as a separate or charged to the account. Short -Term Loans: The bank agrees to loan funds to the City on a short-term basis, if needed, for operational purposes and for capital expenditures only. Bank One is prepared to loan funds to the City; however, this would be subject to Bank One's standard credit policies and procedures and subject to Bank's due diligence and credit approval. Specify the terms and conditions by which the bank shall loan funds to the City on a short- term basis: 1. The maximum number of days for the loan is 365 2. The maximum amount of the loan shall be _ $5.000.1.000.00 3. The interest rate shall be Libor + 2.00* —% per annum computed on an actual day basis. * This is a preliminary outline of a credit facility for the City's consideration. The term, amount and rate are subject to mutual negotiation. The terms given above are intended to be a working outline to facilitate further discussion and remain subject to approval and modification. aj D. COST OF SERVICE ANALYSIS A key component of the City's evaluation of banking service provider will be the Cost of Service Analysis outlined below. All responders must enter the unit prices, totals and rates indicated below. Monthly units used are estimated for comparison n purposes, although actual City use of the listed items 411 be similar to that listed. Please note that pricing for services requested after award of contract will be mutually agreed upon. ANALYZED SERVICES DESCRIPTION OF SERVICE Maintenance Fee Debits Processed Credits Processed On Us Items Fee Return Item Fee Foreign Item Fee Serial Sort (per item) Wire Transfer Incoming Wire Transfer Outgoing Telephone Transfer ACH Items Processed ACH Files Processed Strapped Currency Rolled Coin Stop Pay Fee UNIT PRICE 10.00 .10 .30 .025 1.00 .025 .02 3.00 3.00 1.00 .05 5.00 .10 .05 5.00 MONTHLY UNITS -USED (EST.) 5 2,300 620 1,900 10 11,500 2,300 10 10 10 3,500 4 9 70 5 TOTAL PRICE/MO. 50.00 230.00 186,00 47.50 10.00 287.50 46.00 30.00 30.00 10.00 175.00 20.00 .90 3.50 25.00 Cost of Service Analysis (Cont.) MONTHLY DESCRIPTION UNIT UNITS TOTAL OF SERVICE PRICE USEDLEST) I PRICE/MO. Cashier's Fee 0 1 0 Insufficient Fund Fee 0 1 0 Chargeback Fee 1.00 5 5.00 Total Monthly Analyzed Services $1,156.40 RATE SUMMARY Earning Credit 1.20% Reserve Requirement 10% Borrowed Funds (book/collected) —,Prime + 0 % FDIC Assessment 3.85 /o Based upon $550,000 ledger balance the quarterly fee would be approximately $17.00 The FDIC charge is calculated as follows: FDIC rate * days in period * FDIC Balance (100 * day base) The FDIC assessment rate is based on the current FDIC annualized assessment rate per $100 in ledger balances. This annual rate is adjusted for float and multiplied by three to account for the way CAP calculates the annualized rate and because the Quarterly assessment represents charges for three months, in advance ACCOUNT ANALYSIS SUMMARY Using the above rates and fees and assuming a combined monthly average daily bank collected balance of $550,000, specify the following: Reserve Requirement $55,000 Combined Monthly Investable Balance 1495,000 Monthly Earnings/ or Investable Balance Credit 4.88.22 Less Monthly Analyzed Services $1,156.40 Monthly Analysis Deficit (excess) charged (credited) to Account $668.18 Annualized Cost of Services (analysis charges times 12) $8,018.16 • Have automatic access to the latest version of the product without the need to install a new version. • Reduce billing and setup errors by using standardized and simplified billing units of measure and implementation. Please refer to Exhibit A -Tab 1 for features and benefits on Bank One's One Net information Reporting product. Monthly cost for service 10.00 One account 10.00 Each additional account No Charge Set- State et State any other fees, which may apply to this service. 05 cents Per detail item on balance reporting. The City of Grapevine can choose revious day reporting and/or current day reporting of account(s). Total Estimated Annualized Account Costs for Cost of Service Analysis $2 1160 (est.) One Net ACHsmoffers an effective and secure solution for originating ACH transactions and retrieving related information via the Internet. One Net ACH allows users to create, store and send an electronic file of ACH payment and collection instructions. With the ACH service the City of Grapevine can initiate a variety of cost-effective and time- saving transactions through the ACH network using preformatted templates and various import routines that simplify data entry. One Net ACH bundles and processes ACH transactions and batches throughout each banking day. The processing cutoff time is 8:30 p.m. CST. If a batch is sent after the cutoff, it is processed the next banking day. Due to processing speed over the Internet and product capacity, Bank One recommends a transaction limit of 1,000 items per batch. Value Propositions: One Net ACH allows the City of Grapevine to: Initiate secure ACH transactions for collections, disbursements and funds concentration • Access multiple transaction formats and a variety of preformatted templates, including tax and child support • Transfer information from back-office systems using a data import function • Manage ACH data and related transactions • Schedule databases for automatic batch creation and release daily, weekly or monthly • Export database detail and batch reports Please refer to Exhibit A -Tab 2 for features and benefits on Bank One's One Net ACH product Monthly cost for service 25.00 One account 25.00 Each additional account No Charge Set-up charge State any other fees, which may apply to this service. No The City of Grapevine can eliminate the current transmission fees and use of modem for ACH processing by utilizing the One Net ACH product via the internet. Total Estimated Annualized Account Costs for Cost of Service Analysis x_300.00 (one account) est One Net Wiressm provides the means to complete wire transfers with all the convenience afforded by the Internet. One Net Wires allows the user to create and send wire transfer payments online, in real-time, from any PC connected to the Internet. This is accomplished with the utmost in security, not only in transmission, but also by providing the tools to manage access within the customer's own offices. The City of Grapevine can customize the payment process, and monitor funds flow through a selection of configurable reports. Whether you want to create free -format payments or build payment templates for immediate availability, One Net Wires offers flexibility to meet your preferred work process. Most importantly, One Net Wires enables you to transmit immediately available wire transfers, providing all the security and monitoring that the City of Grapevine requires. Value Propositions: One Net Wires will allow the City of Grapevine to: • Initiate U.S. Dollar and Foreign Currency wire transfers to almost any location around the world. r_9 • Easily move Internal Transfer funds between the your Bank One accounts. • Monitor the progress of payments as they flow through Bank One through regular status updates. • Build individual payment templates for immediate use, or modify a previous payment for a payment today. • View and export historical data on outbound payments and design "favorite" reports to display the information the customer wishes to see. • Create icons for one-step access to payment screens and reports of your choice. Please refer to Exhibit A -Tab 3 for features and benefits on Bank One's One Net Wire product. Monthly cost for service 0 One account 0 Each additional account No Charge Set-up charge State any other fees, which may apply to this service. There are no additional cost for the City of Grapevine to use the One Net Wire product via the internet Individual wire fees for incoming and outgoing wires will remain the same as priced on the cost of service analysis. Total Estimated Annualized Account Costs for Cost of Service Analysis 0 One Net Account Transfers"", will enables the City of Grapevine to transfer funds between their Bank One checking accounts. The funds move in real-time between a chosen debit account and credit account. Funds Transfers are executed against the available balance (not the ledger balance) and are effectively transferred real-time. The cutoff time for same-day transaction posting is 6:30 p.m. CST. One Net Account Transfer saves recurring transfers in a template format to expedite entry and release. Providing quick access and user-friendly functionality, One Net Account Transfer enables the user to view current -day transfer activity and access previous -day transfer history for up to 90 calendar days, in maximum increments of 30 calendar days. One Net Account Transfer Services are available 24/7 less scheduled maintenance. ) Value Propositions One Net Account Transfer will allow the City of Grapevine to: • Transfer funds between same -state Bank One accounts in real-time • Create and save templates for recurring transfers • Take advantage of same-day, real-time credit and debit entries, including updated teller line balances • Access transfer history for up to 90 calendar days, in maximum increments of 30 calendar days. • Avoid transfer duplications Please refer to Exhibit A -Tab 4 for features and benefits on Bank One's One Net Account Transfer product. Monthly cost for service 0 One account 0 Each additional account No Charge Set-up charge State any other fees which may apply to this service. Total Estimated Annualized Account Costs for Cost of Service Analysis $ 0 Account Reconciliation Services The City of Grapevine will provide activity on selected accounts and would require account reconciliation services for these accounts. Please indicate the Cost of account reconciliation services for monthly reconciliation and cost per item. Bank One's Account Reconciliation Processing is a service provided to customers to assist and expedite account reconciliation between bank account statements and the customer's general ledger. Bank one offers a wide variety of Account Reconciliation services designed to provide customers with detailed information regarding disbursement and depository activity. ARP products range from a simple listing of paid checks to multiple reports that list detailed information on all checks issued and deposits posted. Full Reconciliation - The most comprehensive ARP service offered by Bank One. The City of Grapevine would provide information on checks issued via data transmission or the Internet through The One Net Check Services. (Please refer to Exhibit A -Tab 6 for features and benefits on Bank One's One Net Check Services product). Full Reconciliation reports provide lists of all items clearing the account, with exception items clearly identified and all issued but unpaid checks. Exception items are those that were not included in a City's list of issued checks. A detailed reconciliation report is also provided, making it easier and faster you to balance your checking account. Information such as "paid checks" is also available via data transmission and CD-ROM. Partial Reconciliation - Makes it easier for the City of Grapevine to perform their own reconciliation by comparing bank information about your paid checks with your internal records. The City of Grapevine will be provided with a hard copy report and/or data transmission of paid checks in numerical sequence, including the dollar amount and date paid. Images of checks are available via One Image Viewer CD-ROM. Partial Reconciliation is also known as "Paid Only". Please refer to Exhibit A -Tab 5 for features and benefits on Bank One's Account Reconciliation Services. Total Estimated Annualized Account Costs for Service $ 2,688 (est based on current volume) Positive Pay Services The City will require positive pay services on all of its accounts. Please indicate the Cost of positive services. Bank One's Positive Pay Service provides check reconciliation and fraud prevention by identifying discrepancies between checks presented to Bank One for payment and those issued by customers. Positive Pay, also known as Bank Match, is designed to assist The City of Grapevine in approving payment of only authorized items. The City of Grapevine will provide Bank One with an issue file containing the checks they have disbursed. Bank One will verify each check presented for payment against the City's issue file and identify exceptions. Exception items are made available to the City of Grapevine to decide whether exception items should be paid or returned. Checks presented to a teller at a Bank One Banking Center will also be matched against your check issue file. If a check appears on the file, it will be honored. If a check is not on the file, the teller will direct the presenter to contact the originator of the check. Additionally, Payee Name Verification feature can be activated when the user provides the payee names within your check issue file. This highly advanced feature enhances traditional Positive Pay by identifying potential fraudulent checks when the payee name has been changed, Value Proposition: • Minimize exposure to check fraud • Maintain control over check payments and returns • Make timely pay/no-pay decisions • Receive check fraud protection at the teller window • Increase your protection with payee name verification to detect altered payee names • Save time and increase efficiency with optional Internet access to exception items and images Please refer to Exhibit A -Tab 7 for features and benefits on Bank One's Positive Pay product. Total Estimated Annualized Account Costs for Service. $ 420.00 est. 4) Cost of Service Analysis (Cont.) Lock Box Services The City will request a proposal for lock box services on its Utility Billing Services. The Lock Box Service will not be a part of this Depository Contract. The request will be a separate proposal. Bank One has been a leader in remittance processing since 1947 when we invented the first lockbox. We were one of the first banks to install automated processing equipment and the first bank to establish a multi -site proprietary wholesale network. We are committed to being one of the largest providers of retail lockbox services with national coverage. Bank One welcomes the opportunity to bid on the Lock Box services. Additional Services Proposers are to specify any other services available to the City of Grapevine, which may be though to be beneficial or that may apply to the City and state any related fees. (Not to be included in Cost of Service Analysis above). Service Offered Bank One At Work Pay Connexion ELockbox Paymentech Leasing Associated Monthly Fee No Charge (see Exhibit F) Customized (see Exhibit F) Customized (see Exhibit F) Customized (see Exhibit F) Customized (see Exhibit F) SECTION III 0 COLLATERAL REQUIREMENTS Securities Pledged: As security for the deposits of the City, the Bank shall pledge to the City securities equal to the largest total balances the City maintains in the bank, less the amount of coverage provided by the Federal Deposit Insurance Corporation (FDIC). The maximum levels needing to be collateralized are estimated to be $10,000,000 for the General Operating and Payroll accounts. The securities comprising the pledge shall comply with City Investment Policy or an approved letter of credit with the Federal Home Loan Bank. Securities pledged shall not have a stated maturity greater than 5 years. Reporting Requirements: The bank shall provide the City a report of securities pledged at the end of each month or at any time requested by the City Manager or Finance Manager. Safekeeping: The securities pledged shall be held in safekeeping under the name of the bank and pledged to the City of Grapevine. Safekeeping must be done by a separate and different bank other than the depository bank or any affiliate of the depository bank. The safekeeping receipt shall clearly state the security is pledged to the City of Grapevine and the original copy of the safekeeping receipt shall be filed with the Finance Manager of the City of Grapevine. The City shall reimburse the depository bank for safekeeping charges at the rate proposed through the Account Analysis. Specify the safekeeping charges that will apply: There is no collateral fee if Frost Bank canledge m P ortgage backed securities approved by HB 2 * 257 with a 110% coverage ratio less FDIC insurance. If we are not allowed to pledge these securities there will be a 50 basis point collateral fee. An explanation of how the City's claim to book entry securities can be perfected is required with a response. A copy of the safekeeping agreement and the name of the safekeeping bank to be used are to be included with the bid response. The safekeeping agreements shall clearly state that the safekeeping bank 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, has been closed by a regulatory authority, is in default of this agreement, or if the instructions for release have been formally requested by the City Council by ordinance or Resolution. The Federal Reserve Bank and the Federal Home Loan Bank do not have safekeeping agreements. The safekeeping agreement shall have signatories from the safekeeping bank, the. depository bank and the City of Grapevine and must be formally adopted by the governing entities of the depository bank and the safekeeping bank. SECTION IV OVERDRAFTS DEFINED The City does not intend to have a net overdraft position throughout the course of the contract. An overdraft shall be defined as a negative demand balance in the City accounts collectively, not by individual account. This includes daylight overdrafts. Should an overdraft occur in the aggregate, the following stipulations shall apply: 1. The maximum number of days the overdraft shall be allowed is 30 days 2. The maximum amount of the net overdraft to be allowed shall be $10,000,000.00 . 3. The interest rate shall be Frost Bank Prime Rate% per annum computed on an actual day basis. In the event a check or checks shall be presented for payment on any account or accounts maintained by the City, where there shall be insufficient funds for the purpose of paying checks, the depository bank shall pay such check or checks and agrees to promptly notify the Finance Manager of the City, by telephone or other means, of the existence of the overdraft situation, and to provide the Finance Manager a period of two business days to respond to such overdraft. Charges for insufficient funds shall be a part of the analyzed services and not billed as a separate or charged to the account. Short -Term Loans: The bank agrees to loan funds to the City on a short-term basis, if needed, for operational purposes and for capital expenditures only. Specify the terms and conditions by which the bank shall loan funds to the City on a short- term basis: Frost Bank will consider any loan request made by the City on an individual basis which will be made on mutually agreeable terms and conditions. 1. The maximum number of days for the loan is 2. The maximum amount of the loan shall be 3. The interest rate shall be basis. L % per annum computed on an actual day D. COST OF SERVICE ANALYSIS A key component of the City's evaluation of banking service provider will be the Cost of Service Analysis outlined below. All responders must enter the unit prices, totals and rates indicated below. Monthly units used are estimated for comparison purposes, although actual City use of the listed items will be similar to that listed. ANALYZED SERVICES MONTHLY DESCRIPTION UNIT UNITS TOTAL OF SERVICE PRICE USED (EST.) PRICE/MO. Maintenance Fee 10.00 5 50.00 Debits Processed .12 2,300 276.00 Credits Processed .35 620 217.00 On Us Items Fee .04 1,900 76.*00 (unencoded) Return Item Fee 3.00 10 30.00 Foreign Item Fee .07 11,500 805.00 (estimated average) Serial Sort (per item)* .03 2,300 69.00 *Not needed with CD-ROM service Wire Transfer In"coming 6.50 10 65.00 Wire Transfer Outgoing 7.00 10 70.00 (repetitive wire on Cash Manager) Telephone Transfer 3.50 10 35.00 (.50 on Cash Manager) ACH Items Processed .09 3,500 340.00 (+25.00/month) ACH Files Processed No charge 4 0.00 (on Cash Manager) Strapped Currency .55 9 4.95 Rolled Coin .085 70 5.95 Stop Pay Fee 5.00 5 25.00 (on Cash Manager) Cost of Service Analysis (Cont.) MONTHLY DESCRIPTION UNIT UNITS TOTAL OF SERVICE PRICE USED (EST.) PRICE/MO. Cashier's Fee 3.00 1 3.00 Insufficient Fund Fee 25.00 1 25.00 Chargeback Fee NA 5 0.00 Total Monthly Analyzed Services 2,096.90 RATE SUMMARY Earning Credit 0.92% (March 2004) Reserve Requirement 10% Borrowed Funds (book/collected) 4% (Frost Bank prime rate) (Negative collected funds) FDIC Assessment 0% ACCOUNT ANALYSIS SUMMARY Using the above rates and fees and assuming a combined monthly average daily bank collected balance of $550,000, specify the following: Reserve Requirement $ 55,000.00 Combined Monthly Investable Balance $ 495,000.00 Monthly Earnings/ or Investable Balance Credit $ 386.78 Less Monthly Analyzed Services $ 2,096.90 Monthly Analysis Deficit (exams) charged (Q;e4#od) to Account $ 1,710.12 Annualized Cost of Services (analysis charges times 12) $ 20,521.44 Cost of Service Analysis (Cont.) On Line Access Services The City will require on-line access with the bank using the City's PC and a modem. This service must provide information on checks cleared on the City's account, status of deposits and available funds, capability for making intra -account transfers and wire transfers. Additionally, it must have automated clearing house functions (ACH), that the City may utilize for direct deposit of employee paychecks. Does your bank provide these services? Yes 419 Monthly cost for service 50.00 One account ,No charge Each additional account No charge Set-up charge State any other fees which may apply to this service. See fee schedule Total Estimated Annualized Account Costs for Cost of Service Analysis $ Account Reconciliation Services* 600.00 (estimate only) The City will provide activity on selected accounts and would require account reconciliation services for these accounts. Please indicate the Cost of account reconciliation services for monthly reconciliation and cost per item. Total Estimated Annualized Account Costs Cannot be determined without knowing for Service $the volume associated with selected accounts. *Not needed with Cash Manager or CD-ROM services. Positive Pay Services The City will require positive pay services on all of its accounts. Please indicate the Cost of positive services. M Total Estimated Annualized Account Costs for Service. $Depends on number of rejected items (There is no fee for Positive Pay except for rejected items (.11 O/item with a $10.00 per month per account minimum). W M= Cost of Service Analysis (Cont.) Lock Box Services The City will request a proposal for lock box services on its Utility Billing Services. The Lock +,!a Box Service will not be a part of this Depository Contract. The request will be a separate proposal. Additional Services Proposers are to specify any other services available to the City of Grapevine, which may be though to be beneficial or that may apply to the City and state any related fees. (Not to be included in Cost of Service Analysis above). Service Offered CD-ROM Image Archive Associated Monthly Fee 25.00/CD +.03/item *See "Treasury Management Services" section and "Fees/Rates" section L'I 0 EXCEPTIONS TO RFP 1. Collateral Requirements: There is no collateral fee if Frost Bank can pledge mortgage backed securities approved by H.B. 2257 with a 110% coverage ratio less FDIC insurance. If we are not allowed to pledge these securities, there will be a 50 basis points collateral fee. 2. Safekeeping Agreement: Pledged securities will be safekept at the Federal Reserve Bank or the Federal Home Loan Bank, but neither has a safekeeping agreement. The Federal Reserve Bank will not sign a tri -party agreement. 3. Short -Term Loans: Frost Bank cannot commit to specific terms on loans without reviewing the specific request. The City may qualify for a tax-exempt interest rate. Frost Bank will consider any loan request made by the City on an individual basis which will be made on mutually agreeable terms and conditions. 4. Account Reconciliation Services: Whereas Frost Bank offers account reconciliation services, we are unable to estimate annualized- account costs for this service without knowing the volumes associated with selected accounts. WELLS-FARGO BANK Section li (Cont.) 0 The City shall receive same day credit for all funds deposited by 3 p.m. and drawn on a bank located in Dallas, Tarrant, Denton or Collin County and next day credit for all other funds. The funds shall be investable for any investment transaction that can be executed. If not invested, the funds shall earn interest at whatever rate is being paid for Sweep accounts. Wells Fargo Bank offers a Sweep Account that will pay an investment rate of 10 We will also offer a Wells Farao Premium Market Rate Account Public Funds that will pay an interest rate of .90. (Rate as of April 2 2004 and suibect to change after that date.) SECTION III Securities Pledged: As security for the deposits of the City, the Bank shall pledge to the City securities equal to the largest total balances the City maintains in the bank, less the amount of coverage provided by the Federal Deposit Insurance Corporation (FDIC). The maximum levels needing to be collateralized are estimated to be $10,000,000 for the General Operating and Payroll accounts. The securities comprising the pledge shall comply with City Investment Policy or an approved letter of credit with the Federal Home Loan Bank. Securities pledged shall not have a stated maturity greater than 5 years. Reporting Requirements: The bank shall provide the City a report of securities pledged at the end of each month or at any time requested by the City Manager or Finance Manager. Safekeeping: The securities pledged shall be held in safekeeping under the name of the bank and pledged to the City of Grapevine. Safekeeping must be done by a separate and different bank other than the depository bank or any affiliate of the depository bank. The safekeeping receipt shall clearly state the security is pledged to the City of Grapevine and the original copy of the safekeeping receipt shall be filed with the Finance Manager of the City of Grapevine. The City shall reimburse the depository bank for safekeeping charges at the rate proposed through the Account Analysis. Specify the safekeeping charges that will apply: The charges for pledged fees are: Outstanding collateral x US Agencies (d). 20 Basis Points divided N 360 x 30 days An explanation of how the City's claim to book entry securities can be perfected is required with a response. A copy of the safekeeping agreement and the name of the safekeeping bank to be used are to be included with the bid response. The safekeeping agreements shall clearly state that the safekeeping bank 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, has been closed by a regulatory authority, is in default of this agreement, or if the instructions for release have been formally requested by the City Council by Ordinance or Resolution. The safekeeping agreement shall have signatories from the safekeeping bank, the depository bank and the City of Grapevine and must be formally adopted by the governing entities of the depository bank and the safekeeping bank. 46 SECTION IV OVERDRAFTS DEFINED The City does not intend to have a net overdraft Position throughout the course of the contract. An overdraft shall be defined as a negative demand balance in the City accounts collectively, not by individual account. This includes daylight overdrafts. Should an overdraft occur in the aggregate, the following stipulations shall apply: 1. The maximum number of days the overdraft shall be allowed is one 2. The maximum amount of the net overdraft to be allowed shall be subiect to approval 3. The interest rate shall be -0- % per annum computed on an actual day basis. In the event a check or checks shall be presented for payment on any account or accounts maintained by the City, where there shall be insufficient funds for the purpose of paying checks, the depository bank shall pay such check or checks and agrees to promptly notify the Finance Manager of the City, by telephone or other means, of the existence of the overdraft situation, and to provide the Finance Manager a period of two business days to respond to such overdraft. Charges for insufficient funds shall be a part of the analyzed services and not billed as a separate or charged to the account. Short -Term Loans: The bank agrees to loan funds to the City on a short-term basis, if needed, for operational purposes and for capital expenditures only. Specify the terms and conditions by which the bank shall loan funds to the City on a short- term basis: 1. The maximum number of days for the loan is subiect to approval 2. The maximum amount of the loan shall be to approval 3. The interest rate shall be WFB Prime per annum computed on an actual day basis. D. COST OF SERVICE ANALYSIS A key component of the City's evaluation of banking service provider will be the Cost of Service Analysis outlined below. All responders must enter the unit prices, totals and rates indicated below. Monthly units used are estimated for comparison purposes, although actual City use of the listed items will be similar to that listed. ANALYZED SERVICES DESCRIPTION OF SERVICE Maintenance Fee Debits Processed Credits Processed On Us Items Fee Return Item Fee Foreign Item Fee Serial Sort (per item) Wire Transfer Incoming Wire Transfer Outgoing Telephone Transfer ACH Items Processed ACH Files Processed Strapped Currency Rolled Coin Stop Pay Fee UNIT PRICE $10.00 .10 .65 .06 $3.00 .10 .03 $5.00 $5.00 $10.00 $1.00 per 1,000 .08 $5.00 MONTHLY UNITS USED (EST.) 5 2,300 ME 1,900 10 11,500 2,300 10 10 10 3,500 4 9 70 5 TOTAL PRICE/MO. $ 50.00 $ 230.00 $ 403.00 $ 114.00 $ 30.00 $1,150.00 $ 69.00 $ 50.00 $ 50.00 -0- $ 175.00 $ 40.00 $ 9.00 $ 5.60 $ 25.00 Cost of Service Analysis (Cont.) MONTHLY DESCRIPTION UNIT UNITS OF SERVICE PRICE USED (EST.) Cashier's Fee -0- 1 Insufficient Fund Fee $33.00 1 Chargeback Fee $3.00 5 Total Monthly Analyzed Services RATE SUMMARY Earning Credit 1.29% Reserve Requirement 10% Borrowed Funds TOTAL PRICE/MO. L-_33.00 $ 15.00 $ 2,448.60 (book/collected) WF -B Base + 4.0% FDIC Assessment 0.03 Per 1,000 per quarter ACCOUNT ANALYSIS SUMMARY Using the above rates and f ees a nd a ssuming a combined rn onthly a verage d aily b ank collected balance of $550,000, specify the following: Reserve Requirement $ 55,000 Combined Monthly Investable Balance $495,000 Monthly Earnings/ or Investable Balance Credit $ 524.84 Less Monthly Analyzed Services $ 2,448.60 Monthly Analysis Deficit (excess) charged (credited) to Account $ 1,923.76 Annualized Cost of Services (analysis charges times 12) $ 23,085.12 IM E Cost of Service Analysis (Cont.) On Line Access Services The City will require on-line access with the bank using the City's PC and a modem. This service must provide information on checks cleared on the City's account, status of deposits and available funds, capability for making intra -account transfers and wire transfers. Additionally, it must have automated clearing house functions (ACH), that the City may utilize for direct deposit of employee paychecks. Does your bank provide these services' Yes x No Monthly cost for service 30.00 One account 18.00 Each additional account Waived Set-up charge State any other fees which may apply to this service. .05 per item — 2,920 items x .05 = 146.00 Total Estimated Annualized Account Costs for Cost of Service Analysis $2,760 Account Reconciliation Services The City will provide activity on selected accounts and would require account reconciliation services for these accounts. Please indicate the Cost of account reconciliation services for monthly reconciliation and cost per item.. .05 per item, assumes full ARP on 4 accounts Total Estimated Annualized Account Costs for Service $2940 Positive Pay Services The City will require positive pay services on all of its accounts. Please indicate the Cost of positive services. Total Estimated Annualized Account Costs for Service. $1.50 per exception item Cost of Service Analysis (Cont.) Lock Box Services The City will request a proposal for lock box services on its Utility Billing Services ' . The Lock Box Service will not be a part of this Depository Contract. The request will be a separate proposal. See Section 4 of proposal Additional Services Proposers are to specify any other services available to the City of Grapevine, which may be though to be beneficial or that may apply to the City and state any related fees. (Not to be included in Cost of Service Analysis above). Service Offered Associated Monthly Fee Merchant Services See Proposal in Appendix Employee Benefit Services Membership Banking WellsOne Commercial Card (purchasing card)