General_and_Merchant_Banking,_pCard,_Debit_Card,_Cashiering,_and_Payment_Acceptance_(Addendum_#8_Revision).pdf

CITY OF TUCSON

REQUEST FOR PROPOSAL

240172

GENERAL AND MERCHANT BANKING, PCARD, DEBIT CARD,

CASHIERING, AND PAYMENT ACCEPTANCE

Due Date: Wednesday, May 15, 2024

City of Tucson

255 W Alameda St

Tucson, AZ 85701

Procurement portal https://secure.procurenow.com/portal/tucson-az

Public Portal https://secure.procurenow.com/portal/tucson-az/projects/86444

PUBLISH DATE: March 26, 2024 https://secure.procurenow.com/portal/%7Bproject.government.code%7D https://secure.procurenow.com/portal/%7Bproject.government.code%7D/projects/%7Bproject.id%7D https://secure.procurenow.com/portal/%7Bproject.government.code%7D/projects/%7Bproject.id%7D

CITY OF TUCSON REQUEST FOR PROPOSAL NO. 240172

BUSINESS SERVICES DEPARTMENT Page 2 of 52 SHARED SERVICES PROCUREMENT DIVISION RESPONSIBLE CONTRACT OFFICER: Troy Rombough

255 W. ALAMEDA, 6TH FLOOR, TUCSON, AZ 85701 PH: (520) 837-4139

Attachments:

A - Offer and Acceptance E - City of Tucson Banking RFP 240172 Evaluation Questions UPDATED F - City of Tucson Pricing Pro Forma UPDATED G - Appendix A - Sample Lockbox Remittance Document H - Appendix B - Institutional Custody Portfolios I - Appendix C - Commercial Card Consortium Participants J - Appendix D - Bond Issues K - Appendix E - Sample Lockbox Correspondence L - Appendix F - Utility Bill Redesign RESIDENTIAL M - City of Tucson Investment Policy

BUSINESS SERVICES DEPARTMENT Page 3 of 52

A. NOTICE

A.1. CITY OF TUCSON

NOTICE OF REQUEST FOR PROPOSAL NO 240172

TITLE: General and Merchant Banking, pCard, Debit Card, Cashiering, and Payment Acceptance

SUBMITTAL DUE DATE: Wednesday, May 15, 2024 AT 2:00 P.M. LOCAL AZ TIME

PRE-SUBMITTAL CONFERENCE DATE: Friday, April 5, 2024

TIME: 10:00 am LOCAL AZ TIME

LOCATION: Online via Microsoft Teams: https://teams.microsoft.com/l/meetup-join/19%3ameeting_YjcxYzYwNjEtMTM5Zi00NDY1LWJjYzYtMTkzNDdlMTAwOWVk%40thread.v2/0 ?context=%7b%22Tid%22%3a%22d21e59ec-c208-43eb-aaf1-cf06d9a196e0%22%2c%22Oid%22%3a%22b805a639-d2eb-45cf-98f6-49ad7eee5cc0%22%7d Dial-in by phone +1 213-293-2303,,311476441# United States, Los Angeles Find a local number Phone conference ID: 311 476 441#

QUESTIONS SHALL BE DIRECTED TO: Troy Rombough

(520) 837-4139 troy.rombough@tucsonaz.gov

Posted Date: Tuesday, March 26, 2024

Competitive sealed offers for the material or service specified in this solicitation must be submitted through the City’s online bidding system. No late submitted offer will be accepted or considered.

Reponses submitted in physical form or by facsimile or email will not be considered. Offerors are cautioned to commence the submittal process sufficiently ahead of time to allow for unanticipated delays resulting from things like a slow internet connection, internet outage, difficulty uploading large documents, differing system requirements, etc.

Questions about this solicitation must be addressed to the responsible Contract Officer listed herein.

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B. INTRODUCTION

B.1. Summary

The City of Tucson, AZ (the “City”) is seeking sealed proposals from qualified financial institutions to provide comprehensive banking services at a competitive price. To be considered a qualified financial institution (hereafter referred to as “Bank” or “Firm”), an entity must meet the minimum qualifications as outlined in the Minimum Qualifications section below in the Service Group 1 section of the Scope of Work, The successful Firm will work with the City and assume responsibility for the Scope of Services described below in accordance with a schedule agreed upon between the City and the successful Firm.

The City has retained PFM Group Consulting LLC (“PFMGC”) as a consulting partner for assistance in issuing this RFP and evaluating proposal responses. Evaluation decisions will be made solely by the Evaluation Committee.

B.2. Background

The City of Tucson is a political subdivision of the State of Arizona, located in Pima County, approximately 60 miles from the border of Mexico. The City of Tucson has a Council-Manager form of government. The legislative body establishes the policies for the city. The Mayor and Council set policy and appoint a City Manager to provide general supervision and direction for municipal operations.

With a population of 546,000, Tucson is the second largest city in Arizona and the 34th largest in the country. The City’s budget for FY 2024 is $2.2 billion. The City’s financial statements are available on the City’s website at: https://www.tucsonaz.gov/Departments/Business-Services- Department/Accounting-and-Finance/Annual-Comprehensive-Financial-Reports. The City maintains a high AA credit rating on its outstanding debt. By charter from the State of Arizona, the city is governed by a Mayor and Council. Council member candidates are nominated in primary elections in each of six wards but are elected in citywide elections. The mayor is nominated and elected citywide. Elections occur on an odd-year cycle. The Mayor and Council set policy and appoint a city manager to provide the general supervision and direction for city government operations.

The intent of this RFP is to broadly consider the City of Tucson’s (the “City”) use of banking services and to identify future banking partners.

The City intends to select one or more firms to provide the required services. To facilitate the evaluation of proposals, the services have been divided into eight (8) Service Groups, as listed below. Firms may propose to provide one or more of these services, which will be evaluated independently. Awards to multiple suppliers may be made, but the City intends to select only one (1) supplier for each Service Group.

Service Group 1: General Banking Services

Service Group 2: Institutional Custody Services

Service Group 3: Merchant Card Processing Services

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Service Group 4: Commercial Card Services

Service Group 5: Payroll/Prepaid Debit Card Services

Service Group 6: Cashiering System

Service Group 7: Utility Payment Acceptance

Service Group 8: Corporate Trust Services

B.3. Contact Information

Troy Rombough Senior Contract Officer Email: troy.rombough@tucsonaz.gov Phone: (520) 837-4139 Department:

Business Services mailto:troy.rombough@tucsonaz.gov tel:(520)837-4139

BUSINESS SERVICES DEPARTMENT Page 6 of 52

C. SCOPE OF WORK

C.1. Scope of Work

Service Group 1: General Banking Services

A. General Requirements

Account Overview – The firm awarded the contract will be the City’s and the City of Tucson Housing Authority’s (the “Housing Authority”) primary cash management partner. This firm will process both deposits (both electronic and paper), handle payroll and accounts payable disbursements, and be the central point of cash management.

The City’s current banking structure consists of sixteen (16) demand deposit accounts, including one

(1) ZBA master account and two (2) ZBA subsidiary accounts. The Housing Authority maintains eleven

(11) standalone demand deposits accounts.

Expected Systems Integrations:

• Workday - ERP

• Naviline – Current Utility Billing System

• Infor Public Sector Utility Billing (real-time) & Dynamic Portal – Future Utility Billing System

• Core Business Technologies – Cashiering System

• EnerGov – Development Services Plan Submission, Review and Approval System

Requirements include:

A. Be “Well Capitalized” as defined by the Federal Deposit Insurance Corporation (FDIC), B. Establish demand deposit accounts to meet the banking requirements of the City and the Housing Authority and maintain accurate records of activity in those accounts, C. Offer ZBA cash concentration services, D. Provide an overnight sweep or interest-bearing account for balances, E. Comply with all applicable federal and state regulations regarding the provision of the proposed services, and

F. Provide a primary relationship contact and dedicated customer support.

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B. Deposit Services

Check Processing – The City and the Housing Authority deposit approximately 40,300 checks per month. Checks are deposited through the branch/vault, remote deposit capture (“RDC”), and lockbox.

Below are the details.

Branch/Vault: The City deposits approximately 5,700 checks per month through the branch/vault.

Remote Deposit Capture: The Housing Authority uses one Panini Vision X scanner to process checks received at the Housing & Community Development office. There are approximately 1,100 checks processed per month through RDC. The City is interested in exploring utilizing RDC.

Lockbox Services: The City currently uses a wholetail lockbox for the collection of the City’s Utility Services check and credit card payments. Approximately 398,000 checks are processed through the City’s lockbox per month. Payments are sent to the City’s P.O. Box in Los Angeles, California, to be processed. The City prefers a lockbox located in Arizona, although it is not required. Sample remittance documents can be found in Appendix A. The current remittance document will be updated in 2025.

If unable to process at the lockbox facility, a legal copy of the check and supporting documentation is returned to the City by U.S. Mail for the City’s collections department to process.

The City receives a daily Lockbox file transmission from the incumbent provider to update the customer information billing system (Naviline). To streamline processing, the City provides the incumbent bank a daily file of active water utility accounts so the bank can validate and return incoming check and electronic payments as outlined in the file.

A summary of the lockbox is provided below:

Lockbox

Purpose Water Utility Payments

Lockbox Type o Wholesale o Retail þ Wholetail

Annual Collections $115 million

Annual Volume Received 402,000

Standard Remittance Documents þ Yes o No

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Items Scanned þ Envelope þ Check þ Remittance

Document þ Correspondence

Images Available Online þ Yes o No

Length of Time Images are Accessible

7 years

Payment Data Transmitted? þ Yes o No

Physical Copies Returned o Yes þ No eLockbox – The City utilizes eLockbox services to aggregate and process the City’s Utility Services payments initiated through consumer bill pay sites and services. Approximately 40,200 payments are processed per month through the City’s eLockbox.

The City receives a daily eLockbox file transmission from the incumbent provider to update the customer information billing system (Naviline). To streamline processing, the City provides the incumbent bank a daily file of active water utility accounts so the bank can validate and return incoming check and electronic payments as outlined in the file.

Cash Processing – The City processes approximately $350,000 in coin/currency per month through the vault. The City uses Loomis as the armored car carrier.

Currency Needs – The City orders a small amount of coin/currency through the branch or vault.

Deposit Reconciliation – The City uses deposit reconciliation services in order to track deposits from seven (7) locations posting to a single demand deposit account.

Required services include:

A. Process the deposit of checks via RDC and the branch/vault, B. Provide online access to deposited item images, C. Provide a lockbox solution and process all payments sent to a P.O. Box, D. Image checks, remittance documents, and other forms/documents received, E. Provide online access to images of processed items, remittance documents, and other forms/documents, F. Provide online decision-making for rejected items to include checks images, remittance documents, and other forms/documents received, BUSINESS SERVICES DEPARTMENT Page 9 of 52

G. Provide online reporting and download of transaction detail and summary, including account numbers, payment amounts and payment key or transaction id, H. Provide an eLockbox solution, I. Ability to automatically decline payments on accounts specified by the City through a daily file.

J. Provide automated transmission of daily lockbox and eLockbox payment files to update the City’s customer information billing system, K. Ability to manage a cross-reference file for account number changes for any future system updates.

L. Process the collection of coin and currency at a vault location delivered by Loomis, M. Fulfill orders for currency and coin, and

N. Provide deposit reconciliation services.

C. Check Disbursements

The City and the Housing Authority disburse approximately 1,900 checks per month for accounts payable and other disbursement needs. Accounts payable is processed twice a week on Tuesdays and Thursdays. The City utilizes payee positive pay on all check writing accounts.

Positive pay files are generated by the City and transmitted to the bank through SFTP. The City is interested in exploring controlled disbursement, integrated payables, and outsourced check printing services through this RFP.

A. Provide positive pay with payee validation services with file transmission and manual keying of check details, B. Provide online positive pay exception item review and decisioning, C. Provide check block services on non-check writing accounts, D. Provide online stop payment services, E. Provide electronic archival of cleared checks (images of front and back) to meet the City’s archival requirements, and

F. Provide online access to cashed check images.

D. Electronic Transactions

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The City initiates 14,700 ACH debits/credits per month. Below are the details:

Payroll: The City has approximately 5,000 employees on a bi-weekly payroll cycle. Nearly 100% of employees are on direct deposit. The direct deposit payroll file is directly transmitted to the incumbent banking provider on Wednesday for payment on Thursday and is approximately $10 million. In addition to the bi-weekly payroll, there is also an alternating bi-weekly adjustment payroll batch processed. The file is sent Wednesday for payment on Thursday and is approximately $75,000.

Accounts Payable: The City sends two files for accounts payable on Tuesday and Thursday. A typical accounts payable file can be up to $10 million. The City’s accounts payable files are generated in Workday and transmitted to the bank via secure file transfer.

The City is interested in exploring account validation services through this RFP.

Incoming ACH – The City receives approximately 900 ACH debit/credits per month.

Incoming/Outgoing Wires – The City initiates approximately 14 domestic wires per month and approximately 2 international USD wires annually. The City receives approximately 5 incoming domestic wires per month and 1 international wire annually.

A. Initiate ACH transactions using secure file transmission protocols, B. Establish an ACH daily exposure limit to that prefunding of ACH is not required, C. Provide ACH debit blocking and filtering services, and

D. Provide a secure electronic method for wiring funds.

E. Reporting: The City requires access to daily reports of balances and transaction information, including prior day reporting of ledger balances, available balance, and summary and details of credits/debits posted. The City reconciles its accounts daily and receives an automated daily electronic file in BAI2 format from the incumbent banking provider. Fifty-seven (57) City employees have access to the bank’s online reporting platform. Nine (9) employees have full administrative access. The City uses Workday as its ERP system.

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A. Provide online balance reporting services, B. Allow approximately fifty-seven (57) or more City employees with different levels of authorization to access the firm’s online reporting system, C. Provide prior day reporting, D. Provide daily transmission of DDA activity and balances in BAI format, E. Provide online monthly activity statements and reports for all accounts, and

F. Provide a detailed monthly account analysis statement for each individual account and a consolidated statement showing charges for all account services.

F. Bank Balances: The City is currently targeting $100 million in bank deposits. The amount held at the selected provider bank will depend on the rate paid by the bank compared to other liquid alternatives and security of deposit/investment options. The City does not guarantee that it will hold any minimal account balances at the selected firm. The City will consider using an overnight sweep and/or interest-bearing accounts.

A. Providing an overnight investment service (sweep) and/or interest-bearing account for cash balances in the demand deposit accounts, B. Providing a competitive earnings credit rate for uninvested balances, C. Collateralizing all collected balances, in excess of balances insured by the FDIC, as per the collateral requirements of A.R.S. 35-312 and 35-323.

MINIMUM QUALIFICATIONS

To be eligible for consideration, Offerors must provide evidence of meeting the following minimum requirements:

1. Eligible Public Depository: The Bank must be an Eligible Public Depository as defined in the Arizona Revised Statutes 35-310

2. Community Support Activities: The Bank must have a Community Reinvestment Act (CRA) rating of “Satisfactory”.

3. Local Banking Institution: The Bank must be a bank or savings and loan association with offices in the City that is insured by the Federal Deposit Insurance Corporation, or any successor, or any credit union that is insured by the National Credit Union Administration, or its successor. In addition, it must have numerous branches located in the City and surrounding metro area. City

BUSINESS SERVICES DEPARTMENT Page 12 of 52 employees/retirees must be able to cash City of Tucson payroll/pension checks at no charge at any bank location.

These minimum qualifications must be continuously satisfied throughout the term of any resulting contract. Should any changes to the documentation of the satisfaction of these requirements occur during any term of the contract, the Bank shall document continued satisfaction of these minimum qualifications.

Service Group 2: Institutional Custody Services

The City requires institutional custody services for four (4) fixed-income portfolios. The portfolios have a total current market value of approximately $802 million and are invested in high quality fixed income securities. There are approximately 250 security positions held. A detailed listing of the portfolios can be found in Appendix B.

The portfolio is currently managed by an external investment advisor. The custodian bank will receive trade information from the investment advisor. The custodian bank will have no responsibility for investing or reinvesting these monies except for providing an overnight investment vehicle.

A. Maintaining a custodian account in the bank’s Trust Department for the cash and individual securities owned by the City.

B. Segregating all securities and cash from the assets of others. The custodian shall have only the bare custody thereof and securities shall be and remain the sole property of the City. The securities held by the custodian shall, unless payable to the bearer, be registered in the name of the City. Securities delivered to the custodian shall be in due form for transfer or already registered as provided above.

C. Settling and delivering securities as directed through any broker selected by the City or the City’s investment advisor.

D. Creating, maintaining and retaining all records relating to securities held in custody in City accounts to meet the requirements and obligations under generally accepted accounting principles.

E. Providing an overnight investment vehicle for cash balances in the custody accounts.

F. Providing online reporting of portfolio activity and holdings on a real-time or next day basis.

G. Providing online monthly activity statements and reports including the market value of all portfolio holdings (the statement cut off should be the last day of the month).

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H. Providing corporate action reporting to the City and investment managers of bond calls, conversions, tender offers, exchanges, receipt of stock rights, mergers and reorganizations, and other events that affect fund holdings.

Service Group 3: Merchant Card Processing Services

The firm selected for Service Group 3: Merchant Card Processing Services will be the City’s primary merchant services provider. The firm shall provide services to facilitate the acceptance of credit and debit card transactions that are fully compliant with the Payment Card Industry Data Security Standard (“PCI DSS”) requirements. Some of the City’s merchant card processing activity is initiated in-person using terminals and some merchant card processing activity is initiated online through third-party front-end solutions and gateways. The successful Merchant Card Processing bidder is expected to provide terminals and process in-person/card present transactions and also maintain the appropriate certifications to serve as the back-end merchant processor for online transactions through the following third-party systems:

• Cashiering System

• Utility Payments Acceptance Platform

• Plan Submission, Review and Approval Platform

The City’s online payment applications are summarized in the table below:

Location Name Third-Party Online System

Application Gateway

City of Tucson Core Business Technologies*

Cashiering System

PAYware

Tucson Water Paymentus Utility Payments Acceptance Platform

Development Services

EnerGov Plan Submission, Review and Approval System

Note: Through this RFP, the City is accepting proposals for a third-party cashiering system in Service Group 6: Cashiering System and separately, for a third-party Utility Payments Acceptance Platform in Service Group 7: Utility Payment Acceptance. Details on those systems can be found in their respective sections of this Scope of Work. The City’s Plan Submission, Review and Approval System is not in scope for this RFP.

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The City processes merchant card transactions using twenty (20) merchant identification numbers (“MIDs”). Annual merchant card processing volume is approximately $175.8 million. The City processes approximately 2.8 million transactions per year. The table below summarizes the annual dollar amount and annual transactions by card type. The volumes below include credit card activity processed through the City’s third-party systems previously described:

MERCHANT CARD PROCESSING ACTIVITY

Online In-Person Other

(SMS/IVR)

Annual

Sales

# of Annual Transactions

Annual

Sales

# of Annual Transactions

Annual

Sales

# of Annual Transactions

Visa $89.4M 1,913,677 $2.4M 14,984 $1.3M 19,020

MasterCard $30.3M 332,038 $433k 1,968 $333k 4,200

Discover $1.6M 30,615 $18k 200 $77k 1,344

American Express

$7.0M 57,888 $258k 396 0 0

Debit $41.7M 393,132 0 0 $921k 11,844

Total $170M 2,727,350 $3.1M 17,548 $2.6M 36,408

Below is a table of the City’s existing merchant terminals. All the terminals included below are owned by the City.

Terminal Name Number of terminals

Ingenico Lane 5000 2

ISC 250 Touch 1

Clover 18

Verifone MX915 11

Scheit Bachmann 18

First Data FD130 7

The City requires that its merchant card processor provide services on a “pass-through” or “cost-plus” basis and that all fees paid to card-issuing banks, card associations, and the payment processor be disclosed. Monthly statements are needed for each MID as well as a consolidated statement showing charges for all accounts.

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A. Provide Payment Card Industry Data Security Standard (PCI DSS) compliant merchant card services or contract with a third-party processor to do so, B. Process debit/credit card payments for both in-person and online credit card transactions

C. Maintain certifications with multiple customer and payment portals to process credit card payments, D. Transfer funds to a designated City bank account with any financial institution, E. Provide robust online reporting tools to downloading transaction/report data, F. Provide detailed online monthly invoices for each individual merchant location or payment portal and a consolidated statement showing charges for all account services, G. Clearly split out interchange and assessment fees on monthly invoices through a pass-through pricing model, and

H. Provide reliable technical support for PCI DSS compliance efforts (ad hoc service, service provider relationship support) and provide detailed online compliance reporting tools.

Service Group 4: Commercial Card & Virtual Payables Services

Consortium Card Program

The City, through its current purchasing card contract, is the “lead” of a cooperative consortium of governmental entities in Arizona and New Mexico. The consortium has approximately 58 participants and 81 corporate accounts, Gross combined spend for this consortium for the 12-month period ending June 30, 2023, which including the City, is $286 million. A listing of the consortium participants can be found in Appendix C.

Consortium participants currently use a physical one-card solution used both for purchasing and travel as well as a virtual card/ePayables solution. Multiple ERP and card expense reporting systems may be in use by the consortium’s 58 participants. Consortium participants are able to choose their preferred payments terms from any of the following options: 7/3 (3 accounts), 14/7 (2 accounts), 30/3 (4 accounts), 30/7 (4 accounts), 30/10 (1 account), 30/14 (24 accounts), 30/20 (2 accounts) and 30/25 (41 accounts).

City of Tucson Card Program

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The City’s commercial card program has approximately 563 cards in circulation. During the 12-month period ending June 2023, the City had total spend of approximately $36.8 million. During this period, there were approximately 38,800 transactions with an average transaction size of $950. Currently, the City has 30/14 payment terms (30-day billing cycle with payment due within 14 days).

The City’s card expense reporting is managed through Workday. The incumbent bank generates a daily XML file with card transaction details which is automatically transmitted to Workday.

In addition to rebate schedules proposed for the individual consortium participants, the City encourages bidders to include a separate bonus, incentive or rebate escalators for the City, given its role as lead.

A. Provide a comprehensive commercial card program that provides multiple card solutions and platforms, including OneCard, Purchasing Card, Corporate Card and Virtual Card/e-Payables which are fully supported by a team of customer service and technical support services for a cooperative consortium of governmental entities in Arizona and New Mexico, B. Issue cards with a recognized and widely used brand, such as MasterCard or Visa

C. Provide consolidated “lead’ consortium summary and detail reporting by participant, D. Provide sales and marketing teams to actively promote, market and convert public agencies to the City’s cooperative contract.

E. Provide detailed online reporting services, F. Provide a daily file transmission of card transactions for reconciliation in Workday, G. Provide access to 24/7 support for program administrators and cardholders, and

H. Provide an aggressive rebate structure paid on combined (physical card and virtual card) and aggregate (all consortium participants) transaction volume, with rebates calculated and paid directly to each participating entity.

Service Group 5: Payroll/Prepaid Debit Card Services

A. Payroll Cards

For employees that do not accept direct deposit of payroll, the City offers payroll cards. There are currently 120 payroll cards in use. The City uses an instant issue card program. The City handles the assignment of cardholders and mails cards out to employees. The City’s incumbent banking provider tracks the City’s level of card stock and mails new card stock to the City when volume falls below a designated threshold.

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A. Provide instant issue payroll cards, B. Provide administrative card management, C. Support marketing to employees, D. Provide written instructional materials when employees sign up, E. Offer a system linked to a global ATM network (e.g., Cirrus, Plus, etc.), F. Provide 24/7 telephone customer service for lost or stolen cards, G. Provide employees with a detailed electronic monthly statement, H. Prohibit overdrawn accounts, and

I. Provide a primary relationship contact and a dedicated customer support representative.

B. Prepaid Debit Cards

The City uses reloadable pre-paid or “stored value” cards for Section 8 Housing recipients for public assistance. There are approximately 8,965 active cards in use for monthly utility payments.

Approximately 30 new cards are issued each month.

A. Provide prepaid debit cards, B. Provide administrators with an easy solution to load additional balances onto the same card, C. Provide cardholders with immediate access to funds on the prepaid debit cards upon clearing of deposits, D. Provide flexibility for cardholders to use funds at a wide number of retail establishments, and

E. Provide a primary relationship contact and a dedicated customer support representative.

Service Group 6: Cashiering System

The City uses a vendor-hosted, in-house cashiering system to track the City’s cash and check receipts.

The City’s current platform also has the ability to process online credit card payments and track receipts for online and in-house credit card payments. Through this proposal, the City desires a streamlined

BUSINESS SERVICES DEPARTMENT Page 18 of 52 approach to draft and post payment receipts from multiple tender types to multiple systems. Current and future integrations to the City’s systems are listed below:

Expected System Integrations:

• ERP – Workday (nightly)

• Tucson Water’s Current Customer Information Utility Billing System – Naviline (nightly)

• Tucson Water’s Future Customer Information Utility Billing System – Infor Public Sector Utility Billing (real-time) & Dynamic Portal

• Development Service’s Plan Submission, Review and Approval Platform - EnerGov

The City has approximately 100 employee users with varying levels of access to its current in-house cashiering system, including 10 vendors that have access to assist with troubleshooting and problem resolution. The City’s current set-up is as follows:

Location # of Cashiers # of Workstations

City Hall 2 4

Development Services

2 2

Midtown City Hall 2 2

Thomas Price Service Center

2 2

Park Tucson 1 6

East Side 1 1

TOTAL 10 17

The City’s annual activity currently processed through the City’s 3rd party cashiering system is summarized in the table below:

Tender Type # of Transactions Volume

Online Credit Card Visa 34,168 $12,723,074.00

Mastercard 9,050 $4,823,940.58

Discover 418 $49,973.70

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American Express 3,934 $2,196,298.34

In- House Credit Cards

Visa 14,984 $2,359,727.70

MasterCard 1,968 $433,385.94

Discover 200 $18,635.74

American Express 396 $258,335.42

Online ACH 9,050 $4,823,940.58

In-House Cash 21,712 $453,085,465.80

In-House Checks 23,938 $135,713,136.84

TOTAL 119,818 $616,485,914.64

The City is open to proposals that include new approaches and best practices that would support desired goals and overcome current challenges and pain points, which are:

• The City desires a system that interfaces with their ERP, Workday, and Customer Information Utility Billing System,

• The City desires a system that is nimble and flexible and can be easily adapted when and as needed,

• The City desires a streamlined process where they can accept payments and account for them in both the City’s Customer Information Utility Billing System and ERP Workday without posting duplicate payments,

• The City desires a solution that has the ability to manage and map multiple charts of account,

• The City desires a solution for applying multiple tender types and channels to multiple bill types,

• The City prefers a solution where it can choose its merchant processor for credit card transactions, and

• The City desires flexible reporting capabilities with report timeframes that minimally include daily, monthly, quarterly, and annual reports.

Service Group 7: Utility Payment Acceptance

The City utilizes an online portal to accept one-time and scheduled payments for water utility payments.

The City may, in the future opt to expand the payment acceptance capabilities to other departments within the City. Currently, the City is able to accept payments made via ACH, Credit Card, Apple Pay, Google Pay, Wal-Mart Pay, pay by SMS, PayPal, Venmo and IVR. The City would also like to add

BUSINESS SERVICES DEPARTMENT Page 20 of 52 kiosks as a payment channel. The City is absorbing the merchant processing fees for all payment channels, with the exception of Wal-Mart Pay where a convenience fee is being passed to the payor.

The City’s current system allows users/utility accountholders to access the system for online support.

The City’s current IVR solution, Selectron’s On-Prem Relay, integrates with the payment processor to accept credit cards and check payments. A payment acceptance file is sent to City’s current Customer Information Utility Billing System (Naviline) for real-time posting.

The City may deem certain accounts ineligible for debit, credit, or check payments. To manage this, the City sends a “stop file” to ensure the implementation of the change in account status. A daily reversal file is also sent to City’s Customer Information Utility Billing System with a unique payment identifier for processing. The City doesn’t require APIs but would prefer using APIs vs. files for these processes.

Expected System Integrations:

• ERP – Workday (nightly)

• Current Customer Information Utility Billing System – Naviline (nightly)

• Future Customer Information Utility Billing System – Infor Public Sector Utility Billing (real-time) & Dynamic Portal

The City processes 1,772,964 payment transactions annually through its 3rd party Utility Payment Acceptance portal. Details of this activity is shown in the table below:

Payment Activity Online SMS IVR

# of Transactions

Volume # of Transactions

Volume # of Transactions

Volume

Checking Account/eCheck 766,944 $111,456,771 9,012 $810,557 24,372 $1,838,047

Apple Pay 16,632 $2,025,068 0 0 0 0

Google Pay 1,788 $218,682 0 0 0 0

Walmart Pay 0 0 0 0 0 0

PayPal/PayPal Credit 87,996 $7,953,938 60 $10,574 0 0

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Venmo 0 0 0 0 0 0

Credit Card - Visa 313,188 $38,206,845 2,688 $232,742 16,332 $1,093,713

Credit Card - MasterCard

99,852 $14,569,991 744 $71,264 3,456 $261,992

Credit Card - Discover

15,024 $1,240,074 156 $9,565 1,188 $68,375

Debit Payments 393,132 $41,703,620 2,184 $212,986 9,660 $707,568

Other – One Time

API 0 0 0 0 338,388 $37,537,447

TOTAL 1,694,556 $217,374,989 14,844 $1,347,688 393,396 $41,507,142

Note that Walmart Pay and Venmo are recently implemented payment channels that just became available to payers. While the City has no current transaction volume through these payment channels, the volumes are expected to increase.

The City prefers a solution that will allow the successful bidder for Service Group 3: Merchant Card Processing to serve as the back-end merchant processor for credit card transactions processed through the 3rd party Utility Payment Acceptance platform. The City desires to use APIs and integrations to eliminate manual or duplicative processes and gain efficiencies where possible.

A. Ability to accept online payments through multiple channels, B. Ability to send payment acceptance data for all channels to the City’s Customer Information Utility Billing System for real-time posting, C. Flexible auto scheduling features for the payor, D. Ability to store payment methods, E. Ability to send reversals, and

F. Ability to process payments real time with approve or deny decisioning feature.

Service Group 8: Corporate Trust Services

The City will require the services of a qualified trustee, transfer agent and registrar for future bond issues. It is expected that the bonds will be issued in fully registered form. The bonds will be issued under book-entry only system, as one fully registered bond for each maturity. Interest will be paid semi-annual. A list of bond issues can be found in Appendix D.

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Given the large number of outstanding bond issues, the City is mindful of the costs that may apply for transitioning trustee services. Firms that are willing to waive implementation fees for transitioning these services is desired.

A. Performing complete trustee functions for one or more future bond issues, B. Acting as registrar, transfer, and paying agent and/or depository trustee as appropriate, C. Establishing and administering various funds as required by bond covenants, D. Acting as disbursement agent for requisitions of project costs to meet construction requirement, and

E. Transferring existing accounts from current vendor.

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D. INSTRUCTIONS TO OFFERORS

D.1. DEFINITION OF KEY WORDS USED IN THE SOLICITATION

For purposes of this solicitation and any subsequent contract, the following terms have the meanings set forth below:

City:The City of Tucson, Arizona

Contract:The legal agreement(s) executed between City and the Successful Offeror(s). The Contract will be deemed to include all the conditions and requirements set forth in this solicitation and any Addenda to the solicitation, all the Special Terms and Conditions and Standard Terms and Conditions, and all the terms of the Offer submitted by Offeror as finally negotiated and accepted by the City.

Contractor/Consultant:A Successful Offeror that enters into a Contract with the City.

Contract Representative:The City employee or employees who have been designated to act as the City contact for this solicitation process and who are responsible for monitoring and overseeing the Contractor's performance under the Contract.

Business Services Director:The contracting authority for the City, authorized to sign contracts and addenda thereto on behalf of the City.

May: Indicates something that is not mandatory but permissible.

May not:The indicated party is prohibited from taking the action.

Must: The action or condition is required.

Offer:Any proposal, statement of qualifications, bid, or other submission provided by an Offeror in response to this Solicitation.

Offeror: Each individual or entity that submits an Offer in response to this solicitation.

Successful Offeror: An Offeror who received a Notice of Award or a Notice of Intent to Award from the City.

Will:The indicated party is promising to take the action or abide by the condition.

D.2. PRE-SUBMITTAL MEETING

A Pre-Submittal Meeting will be held at the date and time stated on the cover page of this solicitation, if such a date and time is provided. Attendance at this meeting is not mandatory, but written minutes and/or notes regarding the meeting will NOT be provided, so attendance is encouraged. The purpose of this meeting will be to clarify the contents of this solicitation in order to prevent any misunderstanding of the City's position.

D.3. INQUIRIES

Any questions about this solicitation or the proposed Contract must be presented at the Pre-Submittal Meeting, if there is one (see above), or submitted in writing, via email, or through the online bidding system, to the Contract Officer by the Question Submission Deadline. The email must refer to the solicitation number and the paragraph number of the provision that the question concerns. The Contract

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Officer may respond by email or may, if they deem it appropriate, address the question in a solicitation addendum or response through the question and answer portal in the online bidding system. Offeror may not rely on oral interpretations or clarifications about the solicitation; only questions answered in an email by the Contract Officer, posted through the online bidding system, or posted as a formal solicitation addendum will be binding.

D.4. ADDENDUM OF SOLICITATION

Solicitation Addenda will be posted on the City’s link to the online bidding website. Offeror is responsible for checking the webpage regularly for new solicitation addenda and must acknowledge each addendum to this solicitation in its submittal. Please note that vendors who have registered with the Business Services Department at https://procurement.opengov.com/portal/tucson-az and follow the City of Tucson will receive email notifications of solicitation addenda.

D.5. UNDERSTANDING SCOPE OF WORK

Before submitting an Offer to this solicitation, Offeror must familiarize itself with the Scope of Work, laws, regulations, physical conditions, and other factors affecting the obligations – including the expense and difficulty of fulfilling those obligations – that Offeror will have under the Contract if awarded to Offeror. No adjustment to the financial or other terms of the Contract will be justified by Offeror’s failure to fully understand or appreciate the Contract requirements or other factors affecting Contract performance.

D.6. PREPARATION OF OFFER

A. Form and Organization. If Offer forms are included in this Solicitation, Offeror’s Submittal must be on those forms. Supporting documentation must be arranged in a manner that follows and clearly refers to corresponding sections of the solicitation. Offeror may copy the submittal forms in order to complete them electronically but may not alter or rearrange them or change any paragraph designations.

B. Confidential Information. Any information in its submittal that Offeror wishes to be treated as confidential must be clearly marked “CONFIDENTIAL.”

C. Offer Contents. Offeror’s submittal must contain responses to all sections of this solicitation, any Offer forms provided must be completed and any requested supporting documentation must be attached.

D. Signatures. Offeror must include in their submittal signed copies of the Offer and Acceptance page. Any cover letter accompanying the proposal documents must be signed. Offeror must initial each erasure, interlineation or other modification in the submittal. The person signing and initialing on behalf of Offeror must be a person authorized to legally bind Offeror.

E. Prices. Where a unit price is provided it will govern over any erroneous extension of the price.

F. Time Periods. Periods of time, stated as a number of days, will be calendar days unless specifically stated otherwise.

G. Accuracy. Mistakes in preparation of its submittal confers on Offeror no right to modify or withdraw its submittal after the Submittal Deadline.

https://procurement.opengov.com/portal/tucson-az

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H. Cost of Preparation. The City will not reimburse Offeror for the cost of developing, presenting, submitting or providing any response to this solicitation.

I. Subcontractors. Offeror must, in their submittal, list any subcontractors that it will utilize in the performance of the Contract if they are awarded the Contract and must describe their qualifications in detail.

J. Incomplete Information. Failure to include all requested information may have a negative impact on the evaluation of Offeror’s submittal.

D.7. PAYMENT DISCOUNTS

Payment discount periods shall be computed from the date of receipt of the material/service or correct invoice, whichever is later, to the date City’s payment warrant is mailed. Unless freight and other charges are itemized, any discount provided shall be taken on full amount of invoice. Payment discounts of twenty-one calendar days or more shall be deducted from the proposed price in determining the price points. However, the City shall be entitled to take advantage of any payment discount offered by a vendor provided payment is made within the discount period. The payment discount shall apply to all purchases and to all payment methods.

D.8. TAXES

The City is exempt from federal excise tax, including the federal transportation tax, but is not exempt from any other taxes, including state and local sales and excise taxes.

D.9. EXCEPTIONS TO CONTRACT PROVISIONS

By submitting an offer in response to this solicitation, Offeror is offering to enter into the Contract with the City. If Offeror wishes to modify any Contract terms and conditions, Offeror must, in its Offer, clearly identify the changes it is requesting. No requested modification will be deemed accepted by the City unless and until the City’s Business Services Director or their designee expressly accepts it in writing.

D.10. PUBLIC RECORD

Any documents submitted by Offeror in response to this solicitation will become the property of the City.

Except as set forth below with respect to Confidential Information, the Submittal will be deemed to be a public record available for review by the public after the award notification.

D.11. CONFIDENTIAL INFORMATION

The City is obligated to abide by the Arizona Public Records Law, A.R.S. §§ 39-101 through 39-161. If Offeror believes that any portion of its Offer, specification, protest or correspondence contains information that is confidential and subject to being withheld from disclosure in the event that the City receives a public records request to which the record is responsive, Offeror must, when the record is submitted, provide the Contract Officer written notification of that fact. The records or portions of records that Offeror wishes to be treated as confidential must also be clearly marked “CONFIDENTIAL” on their face. Pricing will not be treated as confidential.

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If the City, after award notification, receives a public-records request the scope of which includes a document submitted by Offeror and marked "CONFIDENTIAL", the Contract Officer will make a written determination regarding whether the document will be provided to the requestor. If the Contract Officer determines that the document should be released, City will notify Offeror in writing. Unless Offeror, within 10 days after the date of that notice, obtains and provides to City an order from a court of competent jurisdiction prohibiting the City from releasing the documents, the City may release the documents without any liability to Offeror.

D.12. WHEN AND HOW TO SUBMIT OFFERS

In order to be considered, Offeror must, no later than the Offer Submittal Deadline, submit its Offer electronically through the City’s online bidding system:

https://procurement.opengov.com/portal/tucson-az

NOTE: THE ENTIRE OFFER MUST BE IN "“SUBMITTED"” STATUS IN THE CITY’S ONLINE

BIDDING SYSTEM IN ORDER TO BE CONSIDERED. RESPONSES THAT HAVE BEEN CREATED

IN THE SYSTEM, BUT THAT ARE NOT IN "“SUBMITTED"” STATUS BY THE OFFER SUBMITTAL

DEADLINE WILL NOT BE CONSIDERED.

D.13. CERTIFICATION OF NONCOLLUSION; CONFLICTS OF INTEREST

Offeror will not communicate, orally or in writing, with any member of the Mayor and Council, or with any City staff outside the Procurement Division of the Business Services Department, regarding this Solicitation. By submitting an Offer, Offeror warrants that:

A. Preparation and submission of the submittal did not involve collusion or other anti-competitive practices.

B. Offeror has not given, offered to give, nor intends to give at any time hereafter, any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, meal or service to a public servant in connection with this solicitation.

C. No person has been employed or retained to solicit or secure a Contract under this solicitation upon a promise of a commission, percentage, brokerage, or contingent fee.

D. No employee of the City involved in this Solicitation process, or any family member of such an employee, has any substantial financial interest in Offeror’s firm. No member of the City of Tucson Mayor and Council who has, or whose family member has, any substantial financial interest in Offeror’s firm will participate in any action taken by the Mayor and Council with respect to this Contract. The terms “relative” and “substantial interest” have the meanings assigned in A.R.S. § 38-502

The City may disqualify Offeror from further participation in the solicitation process if the City determines that any City employee or official involved in this Solicitation process has an actual or apparent conflict of interest or if Offeror has engaged in any collusion or anti-competitive practices.

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D.14. WITHDRAWAL OF OFFER; BINDING OFFER

By submitting an Offer in response to this Solicitation, Offeror is offering to enter into the Contract with the City. Offeror may withdraw a submitted Offer at any time prior to the Offer Submittal Deadline.

Telephonic or oral withdrawals are not effective.

Offeror cannot withdraw an Offer that is in “submitted” status as of the Offer Submittal Deadline unless the Director of the Business Services Department consents in writing to the withdrawal. The Offer will be irrevocable for 90 days after the Offer Submittal Deadline.

D.15. DISCUSSIONS

The City may, at its discretion, conduct discussions with Offeror for the purpose of eliminating minor irregularities, informalities, or apparent clerical mistakes in Offeror’s submittal in order to clarify the offer and assure full understanding of, and responsiveness to, solicitation requirements.

D.16. VENDOR REGISTRATION; BUSINESS LICENSE

In order to be eligible for award of a Contract, Offeror must:

A. Register with the City’s Business Services Department. Registration can be completed at https://procurement.opengov.com/portal/tucson-az

B. Obtain a City of Tucson Business License or a written determination from the City's Business License Section that a license is not required. For questions contact the City's Business License Section at

(520) 791-4566 or email at license@tucsonaz.gov mailto:license@tucsonaz.gov

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E. OFFER EVALUATION AND CONTRACT AWARD

E.1. PROPOSAL EVALUATION CRITERIA – (listed in relative order of importance)

A. Method of Approach

B. Qualifications & Experience

C. Price Proposal

E.2. INTERVIEWS

The City may interview some or all of the offerors at any point during the evaluation process.