2022-23-24 RFP Banking FINAL.pdf

Request for Sealed Proposals The City of Weslaco hereby requests electronic proposals submitted through BIDNET for the following:

Depository Banking Services / RFP No.: 2022-23-24

Electronic proposals addressed to Homer Rhodes, Purchasing Agent, will be accepted through BIDNET portal until 10:00 AM. on July 21, 2023, at which time they will be opened and read aloud through ZOOM meeting (ZOOM link provided in RFP document).

Potential respondents are advised that RFP documents can be downloaded from the City of Weslaco web page address: https://www.bidnetdirect.com/texas/cityofweslaco. Be advised that if your banking institution is contemplating on submitting a proposal you must be a registered user with BIDNET. The BIDNET portal/website is the primary source of all proposal documents and submittal of final response.

A Pre-proposal Conference will be held on July 6, 2023 at 10:00 AM through Zoom (Zoom link provided in RFP document).

The City of Weslaco reserves the right to accept any and all proposals and to waive any informalities in the proposing or to accept the proposal to be the best and most advantageous to the City and to hold proposals for a period of sixty (60) days from the date of the proposal opening without acting for the purpose of reviewing the proposals and investigation of respondent’s qualifications prior to proposal award.

City of Weslaco Homer Rhodes / Purchasing Agent hrhodes@weslacotx.gov https://www.bidnetdirect.com/texas/cityofweslaco

TABLE OF CONTENTS

I. INTRODUCTION

II. SUBMISSION AND AWARD PROCEDURES

III. CITY OVERVIEW

IV. FINANCIAL INSITUTION INFORMATION QUESTIONS

V. REQUIRED BANKING SERVICES

VI. PROPOSED ADDITIONAL SERVICES

VII. ZOOM LINKS

ATTACHMENT A: PROPOSED FEES

REQUEST FOR PROPOSAL

DEPOSITORY BANKING SERVICES / RFP No.: 2022-23-24

CITY OF WESLACO, TEXAS

255 Kansas Avenue Weslaco, TX 78596

The City of Weslaco, Texas (the “City”) is soliciting applications from eligible financial institutions to serve as its Banking Services Depository for the purpose of providing banking functions for designated funds of the City. Only those depository institutions doing business within the city limits of Weslaco or within five miles of the City limits and with full depository service capabilities will be eligible to serve as the depository.

I. INTRODUCTION

It is the intention of the City to select a Depository through a competitive Request for Proposals (RFP) process for a depository services contract with an initial term of three years beginning October 1, 2023 and ending September 30, 2026 and may be extended for one additional two year term if approved in writing by both parties 90 days prior to the renewal term.

The depository services agreement will provide that the City may terminate the Agreement immediately for cause. The agreement will also provide that the City reserves the right to terminate any agreement, during the initial term and any option term, upon ninety (90) days prior written notice of its intent to terminate any agreement. All service fees must be guaranteed for the term of the Agreement and City may negotiate fees for any extended term.

Securities pledged as collateral to secure the City’s deposits will be governed by the Local Government Code, Chapter 2257, Public Funds Collateral Act and further by the Investment Policy of the City. Full collateral requirements and conditions are included in this RFP.

The procurement process will be completed through the City’s Purchasing Department BIDNET portal. The RFP can be downloaded by any financial institution in electronic format on this procurement system at the City’s website.

Submission must be in electronic form through BIDNET.

The objective of this Request for Proposal (“RFP”) is to identify the financial institution (the “Respondent”) most capable of providing the highest level of service at the lowest cost to the

City. Through this contract the City intends to minimize banking costs, improve operational efficiency, and maximize earnings. This RFP represents the City's cash management goals, specifies all the required qualifications, banking services required, activity volumes on accounts, method and terms of compensation, submission instructions, and contract award provisions.

By submitting a proposal in response to this RFP, the Respondent is deemed to agree to the City’s general terms and conditions. Any submitting Respondent is deemed to have read, understood, and agreed to all terms, conditions and requirements set forth in the specifications. The RFP and the proposal submitted will be incorporated into the final bank depository services contract.

All questions in this RFP must be responded to in the order given to equitably evaluate each proposal and the banks’ ability to serve the City. A complete response must be given to each item in Sections IV through VI in the order given along with completion of Attachment A (Fee Proposal) and any required City forms as found on the BIDNET portal. The City anticipates and appreciates concise and complete proposals. However, additional explanatory information or materials may be included in the proposal.

Bank Compensation All proposed service fees shall be fixed for the initial contract period as submitted on Attachment A – Proposed Fees. The City may consider a negotiation of fees for any extension if conditions warrant. Only fees listed on Attachment A will be accepted so any fees required to perform the required services should be included as part of the submission. (The Respondent may submit a pro forma, but all service categories needed to provide the current required services must be detailed for use on Attachment A.)

Attachment A represents complete account analysis information for a prior 12-month period.

No additional account analysis or statement information will be made available. On the Attachment the AFP number and unit for the charge, as applicable, should be clearly noted.

Banks differ in categorizing and charging fees so if a particular AFP service category/ line item is not on Attachment A add the items by name and include applicable fees. All fees required to provide the service must be included.

The City will require the ability to pay for services on either a fee and/or compensating balance basis and be able to change between these methodologies during the contract period. A decision on the initial method to be used will be made initially only after analysis of the proposals and on an on-going basis as interest rates change.

City Investments The City reserves the right to purchase, sell and invest its funds and funds under its control, including bond funds, as authorized by the Government Code, Chapter 2256, Public Funds Investment Act, and in compliance with the City’s Investment Policy. All trades will be through third party brokers to perfect delivery versus payment settlement.

The City may choose to invest in time deposits at the institution, but all investments including CDs are bid competitively at the time of purchase.

Collateralization The Respondent must provide collateral per the Local Government Code 2257 and further defined by this RFP. Conditions and questions regarding required collateral are found in the Required Services Collateral Section.

II. SUBMISSION AND AWARD PROCEDURES

Application Submission

To be eligible for consideration under this RFP the proposal must be submitted electronically through the BIDNET portal by 10:00 AM on July 21, 2023.

Submission of the Proposal must be made to: Homer Rhodes, Purchasing Agent

The submission of a proposal shall be prima facie evidence that the Respondent has full knowledge of the detailed requirements as outlined in this RFP. Contact with any City staff in regard to this RFP is strictly forbidden and could result in rejection of the proposal. Oral explanations or instructions given before the award of the contract are not binding and do not form a part of or alter in any way, the written depository contract.

Cover Letter Required

A cover letter must accompany the Proposal and be signed by an individual authorized to bind the institution, state that the proposal is valid for 60 days from the submission date and give full contact information for any proposal questions. The cover letter may not exceed two (2) pages in length.

RFP Questions

Questions regarding this RFP, or the services requested, must be submitted on the BIDNET (Q&A) portal by July 11, 2023 at 5:00 PM (CST). Responses to questions will be posted via Addendum on the BIDNET portal on July 12, 2023 and responsibility for reviewing these addenda falls to the respondent.

Selection Criteria

The following general criteria will be used by the City for evaluation of the proposal.

- Cost of required banking services

- Capability to provide all services required preferably electronically

- Financial strength of the institution

- Earnings potential

- Collateralization

- Customer service structure and network

The City reserves the right to reject any and/or all proposals and to accept the proposal the City considers most advantageous. If any portion or provision of this RFP, proposal or resulting contract between depository and City is found invalid the remainder, at the option of the City, shall remain in full force and effect. City acceptance of a proposal will be based on the total package of services offered by the banking institution.

Schedule for Proposal Submission

The City will make every effort to adhere to the following schedule.

06/28/2023 1st Advertisement in the Advance News Journal and post on BIDNET 07/5/2023 2nd Advertisement in the Advance News Journal 07/6/2023 Pre-Proposal Zoom Meeting at 10:00 AM 07/11/2023 Deadline for questions concerning the RFP or services requested, 5:00 PM 07/12/2023 Responses posted to all questions submitted (on BIDNET) 07/21/2023 Proposal Deadline at 10:00 AM and Proposal Opening / Zoom 08/01/2023 City Council award of contract 10/01/2023 Commencement date for Depository Services

On the Proposal opening date only the names of Respondents will be identified. To the extent permitted by law, applications will be opened in a manner that avoids disclosure of the contents. Each depository must identify any information contained in its application which is either a trade secret or confidential information. Such material must be identified conspicuously by marking each page concerning such information. In the event such material is not conspicuously identified, then by submitting its application, a depository agrees that such material will be considered public information.

Negotiation and Execution of Contract

The City reserves the right to negotiate any terms of the contract. Unless specifically referenced by an RFP amendment, all requirements, terms and conditions stated in this RFP by the City will apply under the final contract.

Once the contract negotiations are successfully concluded a recommendation will be submitted to the City Council of Weslaco concerning award. The City will not be bound under any such Agreement until the City Council authorizes the City Manager or his designee to execute the Depository Services Contract and Service Agreements (as necessary) and the Contract is executed by both parties.

City Rights

The City reserves the right to:

- waive any defect, irregularity or informality in the proposal or proposal procedures;

- reject any and all proposals;

- accept any proposal or portion thereof most advantageous to City;

- request additional information or require a meeting with Depository representatives for clarification of its proposal;

- cancel, revise, and/or reissue this request for proposal or any portions thereof,

- negotiate any conditions;

- retain all other provisions even if any provision of the proposal is deemed invalid;

- modify deadlines; and

- select any proposal deemed to be in the City’s best interest as determined by the

City.

Other

1. During the contract period, the depository will notify the City in writing within ten

(10) days of any changes in Federal or State regulations or laws that would thereafter affect the depository agreement.

2. The bank's records relating to the City's accounts shall be open to review by either the City or its independent auditors during normal business hours.

3. The City reserves the right to pay for Depository services by compensating balances or by fees and to change the methodology during the contract period with no less than a 30 days’ notice.

5. This RFP and the proposal submitted will be incorporated into and form the basis of the bank depository services contract as will all service agreements.

III. CITY OVERVIEW

City Financial Overview

The City’s Finance Department handles all banking and investment activities as well as accounts payable, receivables, payroll, and financial reporting functions. The Finance Director is responsible for these areas and reports to the City Manager.

The primary source of revenue for the City is ad valorem tax. The City has multiple locations at which funds are collected and from which funds will be deposited. Currently the City does not use remote deposit. Coin/currency deposits are made on a regular basis to a bank branch by City Police. The Finance Department handles all reconciliations. Expenditures are paid by check, wire or ACH (domestic and international). The City has been moving to more ACH transactions and requires as much automation as possible to streamline transitions and reconciliation.

The City pays primary payroll on a bi-weekly basis.

The City currently maintains seven (7) stand-alone bank accounts. The average monthly ledger balance for the City relationship over the past 12 months has been $ 12,148,251.

Average balances for the individual accounts over the past 12 months is shown below:

Monthly Balance by Account Mo Collected Balance Average Weslaco Library Booth 116,592 Interest and Sinking 3,783,221 A/P Clearing 7,396,819 Payroll 39,974 Criminal Investigations 96,464 Forfeitures Account 169,402 PEG Funds 547,719

Detail on each month’s balances is found in the hidden columns on Attachment A.

The primary daily deposit activity will occur in the A/P account. Departments deposit to one central City location which are then delivered to a local branch as separate deposits. Remote deposit is not used so deposits may contain checks and coin/currency. Deposit location tracking is not currently used but may be desired under the new contract. Outgoing wires occur mainly from the A/P account. Incoming wires are rare as the City moves to ACH. ACH transactions occur in two accounts currently. Positive pay is currently being used only in one account. Full reconciliation services are currently used on one account.

The Finance Department handles all reconciliation on the accounts requiring one statement for each account. Full reconciliation services are currently used on one account. Electronic statements and reports are required.

The City accounts are all stand-alone and the City does not currently use a sweep to a money market mutual fund. The City will require an external sweep to a money market fund under the new contract. The City may also require use of interest bearing or money market accounts dependent upon interest rate opportunities and will decide on the use of the account as interest rates and conditions vary. All account structure decisions will be made by the City.

The Finance Director will monitor the bank’s performance against provisions of the contract, including the bank’s proposal submitted in the response to this RFP. The Director will also be responsible for administering the agreement with respect to day-to-day activities. A list of City personnel authorized to deal directly with the bank will be provided following award of contract. The bank shall provide the City with a similar list of authorized personnel.

IV. FINANCIAL INSTITUTION QUALIFICATIONS

1. Creditworthiness

In order to fulfill the City’s fiduciary responsibility to protect public funds, each respondent submitting proposals shall provide the following in response to these questions. A local branch is required for deposits of checks, coin and currency. Each bank shall carry FDIC coverage.

a. Provide a link to the most recent audited annual financial statement of the respondent. The respondent will be required to submit an audited statement to the City each year of the contract period as soon as it is publicly available. Confirm agreement to this requirement.

b. Provide current certification and rating of the respondent’s Community Reinvestment Act (CRA) by its rating agency.

c. Provide the most recent senior and subordinate debt ratings of the holding company or if not rated, the rating from an independent rating agency such as Highline, Veribanc, or comparable bank rating agency.

d. The bank must notify the City within thirty (30) days of any change in credit ratings during the contract period. Confirm agreement to this requirement.

2. Customer Service

Service is a primary focus of the evaluation. The City is particularly interested in timely, high-performance customer service. The City needs ongoing rapid service and dedicated support should emergency situations occur.

a. How does the bank anticipate satisfying the City’s need for customer service?

b. How will the bank provide the City with local relationship support for its services?

c. What service structure or approach will be instituted to provide optimal service?

d. What services are provided by the holding company (non-local)?

e. How, specifically, does the bank support the local community as well as the City?

f. Will representatives meet with the City regularly? How often? How will the bank communicate on banking issues or new products?

g. Is there a process for escalation of unresolved problems or issues in place?

h. How will service and contract performance be monitored?

i. Are any new services in process which may impact the City? When are these planned to be available?

j. Is the bank offering any transition or retention incentives? Describe fully and quantify completely.

k. What support will the bank be able to offer the City in a disaster situation to maintain stable banking functions? Focus on systems, telecommunications and power, and operational facilities.

l. The City requires the right to use a third-party auditor to review the City’s accounts, collateral, transactions, and bank records at any reasonable time. Confirm agreement with this condition.

m. Will the bank charge for audit confirmations?

n. Should special events be held by the City will the bank support the efforts with available night deposits and coin/currency needs?

3. References.

List references from three comparable Texas public entity clients: preferably in the Valley.

For each reference, include the length of time under contract, a client contact, title, email address, and telephone number.

4. Depository Agreement and Service Agreements

Provide a copy of all depository and service agreements which will be required to be executed under the contract for services rendered including any standard depository and collateral agreements and any service agreements which will need to be executed. Any changes required on the agreements will be discussed and agreed upon before award of the contract is made by the City.

5. Implementation timeline.

The contract period will commence October 1, 2023. The City recognizes that not all services and funds will be transferred by this date but expects that most funds should be transferred by that date and that all services should be available by that date. Collateral shall be in place before any City funds are transferred.

a. Provide a proposed, detailed timeline for transitional implementation of the contract.

Include each activity required defined by its responsible party and assigned responsibilities. Denote any limitations or potential delay points.

The timeline must reflect the number of business days required to assure the services are in place or the end date of when such services will be in place and available to the City.

Default in promised delivery of services, without acceptable reasons, or failure to meet the terms or conditions of the depository contract without remedy, shall result in the City having the right to terminate the contract, but the exercising of such right to terminate the contract does not limit any other remedies the City may have for damages or other relief under law.

V. REQUIRED BANKING SERVICES

To be considered, the proposal must include a response to each of the questions in this Section and all associated fees to provide that service must be detailed on

Attachment A. Add any level of detail as necessary for complete disclosure.

It is the City’s intent that the contract negotiated between the City and the Depository selected through this process will encompass all the services and conditions required in this section. Additional services offered by the Respondent may be included in Section VII as Proposed Additional Services. The Required Services are minimum requirements, and any Respondent unable to provide such minimal services will not be considered for selection as the Depository.

1. Consolidated Account Structure with Sweep Mechanism

The City is interested in assuring that all funds are earning at the best, then-current interest rates at all times. The City does currently use an automated sweep to a money market mutual fund which will be considered for continuance under this RFP as a preference. A bank alternative structure may be proposed if competitive in order to reach its full investment goal and to minimize collateral requirements. Availability of spread products for money market accounts may be considered as a potential earnings option.

An AAA-rated SEC registered money market fund which strives to maintain a $1 NAV would be used for the sweep. If the bank has a valid alternative to a SEC money market fund in compliance with the City's Investment Policy, it may be presented. A repurchase agreement or off-shore accounts are not acceptable as sweep investment vehicles.

The bank shall clearly describe the bank's proposed structure for accounts considering varying interest rate environments.

a. Describe the bank’s ability to provide a ZBA sweep structure and indicate whether the sweep would be from the master or subsidiary account(s).

b. How is sweep activity reported? Is a separate monthly report provided?)

c. How is interest from a sweep applied. (Master account only or separate accounts.)

d. Describe any alternatives to the sweep proposed.

e. If the internal IB and MMA account rates are indexed (versus managed) provide the index base.

f. Provide the prospectus for any sweep fund alternatives. An AAA-rated, SEC registered fund striving to maintain a $1 NAV is required for such a sweep.

g. Is the sweep processed as the last transaction of the day? If it is a next day sweep, describe how funds are collateralized for funds held un-invested overnight.

h. Is the bank a member of Insured Cash Sweep or CDARS?

i. The City may be required or may desire to open additional accounts or close/change accounts during the contract period. Any new accounts shall be charged at the same contracted amount. Confirm agreement to this condition.

j. The City may contract for new services not proposed (or known) by the bank at this time. Unanticipated or new services may be charged at not more than the then-published rates. Please confirm agreement to this condition.

k. Will the bank assess a direct balance-based fee on the account analysis? What is the current rate?

l. Complete the following table with the rates for each category for the last twelve months and the current rate.

Type Avg Past 12 Months Current Rate

ECR % %

Interest Bearing Accounts % % Money Market Accounts % % Sweep MMMF % %

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Imaging of all checks, deposit slips and deposit items is required. All statements and account analyses must be available in electronic form along with available archiving of information.

To reduce paper handling and storage, the City is focused on electronic processing and imaging.

The City desires timely access to downloadable information for direct download to the City’s accounting software. Daily balance reporting should include detail on all transactions with summary reporting on closing ledger and collected balances, at a minimum.

a. Provide a link to the automated information system with a password for the City to review the capabilities.

b. Fully describe and list the bank’s on-line service capabilities and systems.

c. Describe the ability to search on historical transactions and reports as well as the ability to retrieve and download historical images.

d. What level of customization is available for reporting?

e. When is previous day information available? Is intra-day information real-time or periodically made available throughout the day? Specify.

f. Define the history retention schedules for various information.

g. Describe provisions for off-site backup and continuation of services in local or regional disaster situations.

h. Describe the security protocol for online services. How is authentication and authorization provided?

i. How and by whom is the administration of the security module established and maintained?

j. What are the hours of available technical support? How is that support provided?

Is training available?

k. What items are imaged (checks, statements, deposit slips, deposited items, etc.)?

l. Describe your event messaging process. Must the user be online or are text/emails sent directly to individuals as defined?

m. Provide a list of other ERP software you are downloading information into.

n. Describe your mobile services including security provisions for those services.

o. Describe any cash forecasting capabilities.

3. Deposit and Collection Services

Standard commercial deposit services are required for the all accounts. Deposits are taken to a branch by City Policy Officers. Branch deposits of coin/currency are made regularly averaging 153 per month. OTC deposits contain checks, coin and currency and change orders are processed at the branch. Coins are not rolled. Currency is not strapped. The City wants the ability to continue making necessary deposits to a close branch location.

The City expects all deposited checks to clear based on the bank’s current published availability schedule, but, any expedited availability options should be noted in the proposal.

All cleared deposits received by the bank's established deadline must be processed for same day credit. The bank shall guarantee immediate credit on all incoming wires, ACH transactions, on-us items, and U.S. government security maturities and coupon payments.

Failure to credit City accounts in a timely fashion will require interest payment reimbursement to the City at the then-current daily Fed Funds rate.

a. What is the bank’s daily cut-off time to assure same day ledger and, pending availability, collected credit at the Weslaco banking centers/branches?

b. Can the bank accept branch deposits? What location?

c. Is a vault deposit required?

d. What e-receivables services are available?

e. When and how are credit/debit advices sent to the City?

f. What images are provided online? When?

g. How does the bank handle discrepancies in deposit amounts? What dollar limits are used for decisioning? What settlement process is followed?

h. How and when does notification of return items take place?

i. How are returned checks reported to the City? Do all NSF/returned items advices include a full description and reason for return? List the elements reported.

j. What type deposit bags are used or required? Are these available from the bank?

k. Can the bank handle location tracking on deposits? Describe.

l. What advance notice is required for branch change orders? Are there any limits?

m. Provide a list of all the bank's locations in Weslaco and within five miles of the

City’s limits.

n. Besides positive pay, how does the bank assist in fraudulent check recovery?

Remote Deposit Services

The City does not currently use remote deposit. A web-based system is required.

o. Describe the bank's capability to provide remote deposit/capture processing.

p. Describe equipment needs, capabilities, and limitations.

q. What is the final deposit cut-off time with remote deposit?

r. Provide a sample remote deposit batch report. How long are these retained for access online?

s. Will the current scanner operate with your system? If not, is scanner equipment available through the contract: purchase or lease? List the equipment required along with its approximate cost(s).

t. Will the bank provide a scanner?

4. Standard Disbursing Services

Standard disbursing services are required. Payrolls are paid primarily by ACH but may issue checks new employees. An occasional physical check may be written during the pre-noting process period.

The City currently utilizes positive pay services on one account and will require it under the proposed contract. The City also intends to continue to move toward more vendor payments by ACH.

a. When is daily check clearing information available online through intra-day reporting? How long are transaction details maintained online?

b. The City requires the bank to cash free of charge any non-account holder payroll checks for City employees at the bank. Confirm agreement with this condition.

c. Are payee positive pay services available?

d. Describe any e-payables or payment consolidation services available.

e. Describe the bank’s virtual credit card capabilities?

f. Describe any commercial card program available including any rebate opportunities.

5. Stop Payments

The City uses few stop pays per month. An online stop pay process is required.

a. What are the time periods available for stop pays?

b. What are the time periods for extended/renewed stop pays?

c. How is a stop pay extended/renewed?

d. Can a stop pay be initiated through positive pay files? Describe.

e. What is the deadline for same day action on stop pays?

f. What information on current and expiring stop pays is available on-line?

g. Will the on-line system verify if the check was cleared before accepting the stop pay?

6. Reconciliation and Positive Pay

The City requires positive pay services with complete indemnification for fraudulent checks.

Payee verification is not currently used but is preferred. The bank must provide a fully automated, web compatible transmission process. Transmissions will be made as part of each check run. Manual check information must be able to be input online. Batch and individual transactions may be submitted.

The City utilizes full reconciliation on the one account and may desire the ability to download clearing information to the internal general ledger system.

a. Describe data transmission file and timing requirements for check registers. Are transmissions charged by file and by detail item?

b. Is positive pay input for manual checks available on-line? Describe.

c. Is exception reporting and handling managed totally online? Describe.

d. At what specific time is positive pay exception information reported to the City?

How is notification made? Is there daily notification of exceptions? Must the staff member be online to receive notification?

e. At what specific time is the response required for City exception elections?

f. Does the bank review exceptions (scrub) errors for possible repair before creating a City exception item?

g. Are all checks, including those received over the counter by the tellers, verified against the positive pay file before processing? How often is teller information updated? If not verified, what are the process, liability, and security on OTC transactions?

h. Describe your partial and full reconciliation services including specific transmission requirements and reporting. What reports are available?

7. Funds Transfer and Wire Services

The City currently has an average of ten (10) wires a month along with internal transfers, primarily domestic. International wire capability is required.

Incoming wire transfers must receive immediate, same day collected credit. Wire initiation must be available online. The City requires that wires be released the same or scheduled business day if information is provided by the established deadline. The City will require compensation for delays caused by the bank at that day’s Fed Funds rate.

a. Are wires and book transfer transactions initiated online?

b. Can wire status be monitored online? Is online notification on wires provided?

c. Can repetitive templates be created and stored? Is there a fee?

d. Describe the wire security protocol. What level of authorization/release do repetitive or non-repetitive wires require? Is dual authorization required for all wires?

e. Is future dating of wires and transfers available? How far in advance?

f. Can international and FX wires be sent from the online system?

g. Describe wire detail reporting.

h. Describe wire access on mobile devices.

i. State wire access and cut-off times.

j. Describe the processing of book debits/credits.

k. State the bank’s policy on the use of ledger balances for outgoing wires in anticipation of scheduled activity or incoming wires.

l. Can internal account transfers be processed totally on-line? Book debits/credits?

Is there a charge for internal transfers?

8. ACH Services

The City expects to continue moving toward more ACH transactions for vendor transactions.

ACH is currently used for payrolls and periodic transfers through the two (2) accounts but there are no fraud filters in place. The City requires pre-notification and filters/blocks on all accounts. The bank must be a member of SWACHA.

a. Is online ACH service available for individual transactions as well as by transmission for batched files?

b. Can you provide same-day, one-day, and two-day transactions?

c. Will the City be debited on initiation or settlement?

d. What is the policy and process for handling of ACH returned items?

e. Can ACH items and files be future dated? How far in the future?

f. What specific filters and blocks are available? How are items reported?

g. What process is used for file and item reversals and deletions?

h. Are ACH addenda shown in their entirety on-line and on detail reporting, reports and statements? How is the addenda information made available – online and on reports?

i. What protective measures will the bank take to prevent or recover from electronic fraud?

9. Safekeeping/Custody Services

The City is not currently using safekeeping or custody services but wants to be sure that the service is available for suture use. The bank should provide a book-entry safekeeping/custody services for securities owned by the City. All City investments will be made by the City and instructions for clearing and safekeeping will be transmitted to the bank in writing or on its automated system.

The bank will not be used for brokerage services to perfect delivery versus payment.

Therefore, all trades will be third party clearing.

All securities must be cleared on a delivery versus payment (DVP) basis and ownership documented by original clearing confirmations and safe-keeping receipts/reports/advices provided within one business day of the transaction. Funds for investments will be drawn from a City designated account. All coupon payments and maturities must receive automated same day collected credit on the City designated account without requiring any additional City action.

If the bank is not a member of the Federal Reserve and utilizes a correspondent bank for safekeeping/custody of City securities, the transactions will be handled through the depository bank's systems and shall not require additional interaction by the City with the correspondent bank. No delay in transactions, wires, or flow of funds will be acceptable under a correspondent relationship.

a. Does the bank provide safekeeping/custody services? Is the respondent proposing safekeeping or custody services?

b. Are trades entered on an automated system? Does the system require dual authorization or initiation/release? Describe the process and show example screens.

c. Is online monitoring of transactions available? How?

d. Is online access to securities holdings available? How?

e. Describe bank safekeeping arrangements proposed if a correspondent bank is to be used.

f. How are services charged for individual clearing, safekeeping, and income distribution?

g. Will safekeeping be hard charged or charged through analysis?

h. Are notifications sent on all transactions? When and how?

i. What time are delivery instructions required? Is there a fee charged for late instructions.

The City may choose to purchase time deposits from the depository but all time deposits will be competitively bid at the time of purchase.

10. Collateral Requirements

Authorized collateral, as defined below, must be pledged against the total of time and demand deposits net of FDIC insurance with a 102% margin to deposits and maintained daily by the bank. All the City requirements listed below, including those more restrictive than the Public Funds Collateral Act, must be met by the bank.

The City will consider a blanket approval for collateral substitution if the City has online daily access to view the collateral, if the collateral is marked to market daily and if the custodian provides a monthly report.

If exceptions are made they must be fully detailed in the response. Preference will be given to pledged individual securities over a letter of credit.

All collateral pledged to the City must be held in an independent, third-party bank outside the bank’s holding company.

A depository agreement shall be executed with the City for custody of pledged securities in full compliance with FIRREA requiring a bank resolution. (Or completion of Circular 7 if the Federal Reserve is acting as custodian.)

All time and demand deposits above FDIC coverage shall be collateralized at a market value minimum of 102% of principal plus accrued interest daily.

The bank shall be responsible for the daily monitoring and maintaining of collateral at the City's required margin levels.

Pledged collateral shall be evidenced by original safekeeping receipts/report/advices sent directly to the City preferably by the custodian within one business day of receipt.

The City shall receive a monthly report of collateral pledged including description, par, and cusip. Market values are preferred.

Collateral must be in place before deposits are made originally.

Authorized collateral includes only:

Obligations of the US Treasury.

Obligations of US Government agencies and instrumentalities including mortgage-backed securities and CMOs which pass the bank test.

Obligations of US states and their subdivisions rated A or better.

Irrevocable FHLB letter of credit.

Preference will be given to pledged securities.

a. State the bank’s acceptance of the collateral conditions above. Note any exceptions.

b. What institution will the bank use to serve as the Custodian?

c. Is the respondent requesting a blanket approval for substitutions?

d. Will monthly reports and receipts be provided by the custodian?

11. Account Analysis

Monthly account analysis reports must be provided for each account and on a consolidated (relationship) basis. Within five business days of the City’s receipt of the account analysis and subsequent approval of the fees by City the bank may direct debit the designated account for fees due if compensation is being calculated on a fee basis.

A complete account analysis will be required monthly regardless of the payment basis.

a. When is the analysis available online each month?

b. How long is it maintained online?

c. Provide a sample.

12. Monthly Statements

The bank must provide monthly account statements on all accounts with complete supporting documentation. The City currently receives statements online. All accounts must be on a calendar month cycle. Timeliness of statements is critical and non-performance will be grounds for termination of contract.

a. When are monthly statements available online each month?

b. How long are they maintained online?

c. Provide a partial sample.

13. Account Executive

To ensure smooth contract implementation and the continuation of service levels, a specific account executive and a back-up at the local bank must be assigned to the City account.

These individuals will be responsible for coordinating services and expediting solutions of any problem encountered. The account executive should be available to meet with City staff to review the relationship and discuss banking matters as needed and, at a minimum, annually.

a. How often does the representative plan to meet with the City on services?

b. Provide the name and title of the proposed account executive and the back-up.

14. Overdrafts

Every effort will be made to eliminate daylight and inter-day overdrafts. However, because this situation may arise, state the bank’s policy regarding account and total account overdraft policy. The City prefers aggregation of accounts for overdraft purposes.

a. Are all accounts aggregated for overdraft calculation purposes or do accounts stand-alone?

a. State the rate basis for intra-day and overnight overdrafts.

17. Company Banking

The City is interested in giving its employees the opportunity for enhanced banking services.

a. Does the bank have an established banking services program available for City employees?

b. List services provided under this program with applicable discounts or fees to the City or employee.

VI. PROPOSED ADDITIONAL SERVICES

If the bank has alternatives or additional services not covered by the RFP to present, please provide summary information on the service in this section.

VII. ZOOM LINKS

Topic: PRE-PROPOSAL - Depository Banking Services RFP No.: 2022-23-24 Time: Jul 6, 2023 10:00 AM Central Time (US and Canada)

Join Zoom Meeting https://us02web.zoom.us/j/83147832362?pwd=WTdXMk9DM3Z3bUx6RFY3Nm9MVnFUU T09

Meeting ID: 831 4783 2362 Passcode: 492889

Topic: PROPOSAL OPENING Depository Banking Services / RFP No.: 2022-23-24 Time: Jul 21, 2023 10:00 AM Central Time (US and Canada)

Join Zoom Meeting https://us02web.zoom.us/j/81134775545?pwd=NDVNTEh4UFBYeWhnMnY5V2JLWVZDQ T09

Meeting ID: 811 3477 5545 Passcode: 353023 https://us02web.zoom.us/j/83147832362?pwd=WTdXMk9DM3Z3bUx6RFY3Nm9MVnFUUT09 https://us02web.zoom.us/j/83147832362?pwd=WTdXMk9DM3Z3bUx6RFY3Nm9MVnFUUT09 https://us02web.zoom.us/j/81134775545?pwd=NDVNTEh4UFBYeWhnMnY5V2JLWVZDQT09 https://us02web.zoom.us/j/81134775545?pwd=NDVNTEh4UFBYeWhnMnY5V2JLWVZDQT09