Hutto - Depository RFA 2024-020-AB-001 - PROTECTED.docx

SOLICITATION OVERVIEW

The City of Hutto, Texas is soliciting applications for:

TITLE: Request for Applications

#2024-020-AB-001

Primary Bank and Depository Services

ISSUE DATE: Friday, March 22, 2024

DUE DATE: Friday, May 3, 2024 at 2:00 PM

AND

City of Hutto Kyle Tran, Purchasing Supervisor 500 W. Live Oak St. Hutto, TX 78634

Valley View Consulting, L.L.C. is assisting the City with the preparation of this RFA and the evaluation of applications received. All times referenced are Central Time.

CALENDAR OF EVENTS

Friday, March 22, 2024 RFA available to prospective financial institutions ☐

Monday, April 1, 2024 Non-mandatory Pre-Application Conference via Zoom (11:00 A.M.)

Friday, April 5, 2024 Deadline for Questions/Requests for Additional Information is 5:00 P.M. via email to Kyle.Tran@HuttoTX.gov

Thursday, April 11, 2024 Deadline for City Responses to Questions (5:00 P.M.). The City will post an addendum via BidNet Direct. https://www.bidnetdirect.com/

Friday, May 3, 2024 Responses due to City by 2:00 P.M.

Week of June 10, 2024 Bank Presentation/Demonstrations (if necessary)

Thursday, July 11, 2024 Anticipated City Council consideration of award (7:00 P.M.)

Sunday, October 1, 2024 New Depository Services Contract period begins

INTRODUCTION

The City of Hutto, Texas (the “City”) requests applications from qualified financial institutions, to provide the City with primary bank and depository services. The award of the depository services contract is scheduled for consideration by the City Council of Hutto, Texas, in the Council Chamber at 500 W Live Oak Street, Hutto, TX 78634, at its meeting to be held on Thursday, July 11, 2024, at 7:00 P.M. ☐

The City desires to enter into a depository services contract of mutual party benefit and reserves the right to contact and negotiate with all applicants regarding their applications prior to award, to clarify, verify, or request information regarding any application. The City Council will award the depository services contract to the applicant(s) whose application provides the most advantageous terms for the City, based on compliance with the RFA requirements and the City’s needs. The City may request presentations and/or demonstrations from any one or all applicants, and reserves the right to waive any formality or irregularity, (with the exception of the due date and time) and to make awards to more than one applicant, or to reject any or all applications.

Delivery Instructions: Applications will be accepted until 2:00 P.M. on May 3, 2024, via the City’s BidNet Direct website: https://www.bidnetdirect.com/

AND

City of Hutto Kyle Tran, Purchasing Supervisor 500 W. Live Oak St. Hutto, TX 78634

Governing Statutes: Chapter 105, Texas Local Government Code Chapter 2256, Texas Government Code, “Public Funds Investment Act” as amended Chapter 2257, Texas Government Code, “Public Funds Collateral Act” as amended.

City of Hutto’s adopted Investment Policy.

Chapter 131, Sub-chapter Z, Sec. 131.903, Conflict of Interest, Texas Local Government Code, “Finances”.

Eligibility to Apply: All qualified financial institutions with a main office or a branch office located within the City’s municipal boundaries. (Section 105.011)

Term of Contract: The term of the depository services contract will be for a maximum of five (5) years; further delineated as an initial term of two years with options to extend for up to three additional one-year periods. The agreement will also provide for a transition period at the end of the contract not to exceed ninety (90) days for migration to a new bank at the end of the term.

Application Requirements:

1. One original (So marked), bound copy of the application response.

2. One complete copy of the application response as a PDF file uploaded via BidNet Direct

3. The MS-Excel Bank Service Fee Schedule uploaded via BidNet Direct.

Pre-Application Conference:

Location: Virtual - Zoom

Join Zoom Meeting https://us06web.zoom.us/j/87084741954?pwd=byrb3wTbrx0nWpanqn0IsktMFbMpbq.1 Meeting ID: 870 8474 1954 Passcode: 193184

Or, via dial-in at 346-248-7799

Authorized City Contact:

All inquiries and or, questions, should be in writing, directed to Kyle Tran, Purchasing Supervisor at Kyle.Tran@HuttoTX.gov

Pursuant to Chapter 105 of the Texas Local Government Code, this RFA is intended to serve as the application submission form. There are multiple blanks to fill in and questions to be answered. The evaluation of all applications received will be based on the responses included herein.

Exceptions, conditions, or qualifications to the provisions of the City’s specifications or requirements must be clearly identified as such, with the reasons therefore, and alternate language proposed by the applicant, if any, clearly stated and inserted in the appropriate place in the application submission.

Each of these exceptions, conditions, or qualifications to the City’s specifications may be included, as appropriate, in the awarded depository services contract documents. Items and matters not explicitly notated in this manner shall be deemed to be in conformance with the City’s specifications.

The services and fees represented in the RFA submission response from the awarded financial institution shall overrule any and all previous service or other contracts between the City and the financial institution, as they relate to the accounts and services included herein. The City will not be obligated by any charges and fees not clearly and accurately presented in the RFA submission from the awarded financial institution. Services initiated after consummation of the depository services contract shall carry charges and fees mutually agreed to, in writing, by the City and the awarded financial institution. Regardless of time delay, the awarded financial institution shall refund or credit the City for any erroneous charges and fees not agreed to in writing.

ACCOUNT ACTIVITIES

Transactions by Account

The City’s current account structure and activity are reflected in the following table: ☐

Payroll Account activity:

The City’s 164 employees are all paid via direct deposit bi-weekly The payroll file is transmitted on Wednesday for payment on Friday.

The average monthly payroll is $756,911.71

Average Monthly Balances

Bank Services Fee Schedule – See included Excel Spreadsheet

EVALUATION PROCESS AND CRITERIA

The City will carefully review the submitted applications. The following criteria will be part of the analysis:

1. Ability of applicant to perform and provide the required and requested services;

2. References provided and quality of services;

3. Cost of services;

4. Transition cost, retention and transition offers, and incentives;

5. Interest rates on interest bearing accounts and deposits;

6. Earnings credit rate on compensating balances;

7. Previous service relationship with the City;

8. Convenience of location(s);

9. Completeness of application; and

10. Financial strength and stability of the institution.

Phase 1: Evaluation of the services provided and financial impact of each application to the City.

Phase 2: Favorable Proposals may be invited to provide additional information and demonstrate their banking services and platforms.

Phase 3: The references provided will be contacted for additional information regarding the bank’s performance.

The Final Recommendation will be based on the most advantageous overall package as determined by the City.

EXPECTED BANK SERVICES

The following services must be provided as described or in an alternative form that results in essentially the same outcome or capability.

Online Banking Portal

1. ONLINE REPORTING SERVICES – The City uses Tyler Incode Pro 10 and expects online reporting that at a minimum includes:

· ledger balance,

· collected balance,

· one day float amount,

· total credits,

· total debits,

· detail debits and credits,

· transaction search capability, and

· export capability to MS-Excel.

2. WIRE TRANSFERS – The online banking system must offer wire transfer capability. Wires may be one time or be set up as repetitive of varying amounts. Notification of incoming wire transfers shall be made via the online banking portal and email/text alerts.

What is the deadline for originating domestic wire transfers:

3. ACH – The City expects a robust ACH system to create ACH credits for direct deposit of payroll. The City wants the option to include Vendor Payments in the future. The City expects effective date settlement versus pre-funded settlement of ACH Files.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

What is the ACH origination cut-off time for:

4. ONLINE BANKING HISTORICAL INFORMATION RETENTION – How long is continuous historical information retained online and accessible by the users? We understand that the standard retention period for check images is 7 years. Please list your retention period for the items listed below:

Comment:

5. ONLINE BANKING ADMINISTRATION/SELF-ADMINISTRATION – Once the service is in place, users are expected to be managed through self-administration. To confirm, can these services be completed online and without a request to the bank:

· Are there any other functions that require the bank to make the changes rather than the self-administrators?

Comment:

6. MOBILE APP FUNCTIONALITY/ACCESS – The City is interested in having access to perform certain online banking functions for the City via their smartphones. If your institution offers these services, what functions are available for use?

|_| Balance Reporting and Transaction Detail |_| Initiate Wire Transfers |_| Release/Approve Wire Transfers |_| ACH – Release/Approve Batches |_| Positive Pay Exception Decisions |_| Please list any additional functionality or clarifications in the comments |_| Our bank does not currently offer any banking services through a mobile app Comment:

7. AUTHENTICATION FOR ACCESS – Please confirm the methods that are available with your bank for protecting the City against unauthorized access:

|_| Secure Token |_| Secure Token app through cell phone |_| Secure Browser |_| Confirmation code sent via text message or email |_| Biometric authentication Comment:

8. ALERT/MESSAGING SYSTEM – The City is interested in alerts sent via email and/or text messaging to alert the City of specific activities such as incoming wires, positive pay exceptions, etc. If your institution offers this service, how is the City charged for this service?

|_| Messaging is provided at no cost

|_| Messaging of this type is not currently offered by our bank

Comment:

9. ELECTRONIC DATA INTERCHANGE – The City requires Electronic Data Interchange (“EDI”) service to see addenda information included with ACH deposits.

10. PAID CHECK IMAGE OPTIONS – What options does your institution offer for providing copies of paid checks to the City?

|_| Image of paid checks printed on statements |_| Image of paid checks printed on the online version of the statements |_| PDF File downloadable to the City each month |_| Online Image Inquiry/Search

Comment:

Collections

1. BRANCH DEPOSITORY/CASH VAULT – City staff currently delivers deposits to a local bank branch. The monthly average of cash deposits (Currency & Coin) ranges from $30,000 to $50,000 ($32,295). The City is currently looking at adding a courier service for deposits.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

2. REMOTE DEPOSIT CAPTURE – The City expects remote deposit capture services for electronically preparing and submitting deposits. The City is currently utilizing this service and uses two (2) scanners provided by the current depository, with plans to add two more locations soon. If needed, will your institution provide scanners for the City to use?

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

3. CONSUMER BILL PAY PROCESSING - The City expects this service (often referred to as E-Lockbox) for receipts of utility and other payments generated from personal customer bank bill pay applications. The remittance data and payment amount captured during processing must be transmitted to the City daily for the update of the accounts receivable file.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

4. CONSUMER BILL PAY PROCESSING NETWORKS – It is understood that there are more than seventy providers for bill payment services. Which of the following Bill Pay providers are included in your bank network for capture:

Primary Depository Services RFA Page 20

|_| ACI

|_| CheckFree |_| Fiserv

|_| FIS

|_| iPay

|_| IPP

|_| Mastercard RPPS |_| MoneyGram

|_| ORCC

|_| Payveris |_| Western Union |_| Yodlee |_| Others (Please list in comments)

5. RETURNED CHECK REPROCESSING – The City requires deposited checks to be processed for collection at least twice before charging back the item and making the check images available for download by the City within two business days of the final rejected presentment. The City requires same-day notification of all returned items and electronic delivery of the returned item image.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Fraud Protection Services

1. POSITIVE PAY AND ACCOUNT RECONCILIATION SERVICE – The City expects positive pay with optional full/partial account reconciliation service on designated accounts from which checks are issued. The City electronically transmits the issued check files to the institution. Minimum payment verification criteria shall be the payee’s name, date, check number, and amount. The City may approve and make pay/no pay decisions on any exception items.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

2. AUTOMATIC STALE DATING OF CHECKS – The City prefers the option of checks automatically becoming stale-dated after a set period, based on the issue date in the Positive Pay system. Does your institution offer this feature, and if so, how does the institution handle items presented after they are stale?

|_| Yes, stale dating is offered. |_| No, stale dating is not offered as described.

Comment:

3. POST NO CHECKS – The City expects the fraud protection feature or service that prevents checks being presented for payment to be posted to the accounts from which checks are not issued.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

4. ACH POSITIVE PAY / ACH FRAUD FILTER – The City expects ACH positive pay/filter capabilities on its accounts, with the ability to selectively permit specified ACH debits on certain accounts and restrict all ACH debits from certain accounts.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

Miscellaneous

1. EMPLOYEE CHECK CASHING – The City expects the institution to cash checks issued to employees (with proper identification) without service charges or fees to the employee or the City, and without requiring the employee to open an account with the institution.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

2. ACCOUNT STATEMENTS – The City expects that statements be rendered within five (5) working days after the close of the calendar month. Monthly cutoff of statements must occur on the last calendar day of each month. Bank will notify City before inactive accounts are placed in dormant status for inactivity. The statement shall include debits and credits made on the last day of the period and the detail items. Bank statements must be received monthly, even if there is no activity for the account. The City expects to have access to online bank statements with images for at least the previous twelve months of statements.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

3. ACCOUNT ANALYSIS – The City expects account analysis statements by individual account and at group level, reflecting average ledger balance, average uncollected funds, average collected balance, reserve requirement, average available balance, rate and amount of earnings credit, detail of services provided with quantities and unit fees for each, and total service cost, delivered to the City on a monthly basis. This requirement applies to “No Fee” or “Fee Waiver” applications.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

4. PAYMENT FOR SERVICES and ACCOUNT SETTLEMENT – The City expects to pay for all services provided by the earnings credit amount generated by account balances, or by direct payment, or a combination of both. If deficient, settlement is to be made by direct debit to the City’s designated account.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

5. Balance ASSESSMENT – State how the institution will treat any Balance Assessment or balance-based fee applicable to the City (i.e., Deposit Supervisory Fee, Premium Assessment Fee, etc.). Please indicate if the assessment will be for all depository balances or non-interest-bearing balances only. (Also, please reflect treatment on the attached Fee Schedule)

|_| Fees apply to only non-interest-bearing balances.

|_| Fees to be waived.

|_| Fees to be partially waived.

|_| Fee to be passed in full to the City.

Comment:

6. RESERVE REQUIREMENT FOR EARNINGS CREDIT CALCULATION – Applicant must indicate whether or not a reserve requirement on balances used in calculating earnings credit is required.

|_| Yes |_| No Reserve Requirement %

Comment:

7. RESERVE REQUIREMENT FOR INTEREST CALCULATIONS – Applicant must indicate whether or not a reserve requirement on balances used in calculating hard interest to be paid on balances.

|_| Yes |_| No Reserve Requirement %

Comment:

8. EARNINGS CREDIT RATE – The institution must state the current ECR, rate formula, and rate floor being proposed:

Comment:

9. INTEREST RATE OPTION – Please state the current rate, rate bases, and floor being proposed, and the type of account for the two accounts currently using the investment sweep option:

Comments/additional info if desired to clarify the determination of interest rate:

10. OPTION TO FORGO ECR? – If the interest rate offered by the bank is higher than the ECR, can the City forgo earnings credit and earn interest on all balances and pay the service fees on a monthly basis?

|_| Yes |_| No

Comment:

11. Will interest earned on interest bearing accounts be charged as an expense on the account analysis?

|_| Yes, interest will be charged as an expense on the account analysis statement.

|_| No, interest will NOT be charged as an expense on the account analysis statement.

SAFEKEEPING OF CITY OWNED SECURITIES

The Public Funds Investment Act in conjunction with the City’s Investment Policy shall govern the City’s investment activity and the successful applicant shall be expected to provide services within the constraints of both. ☐

The City requests that the institution provide safekeeping services for the securities owned by the City or offer an alternative option for safekeeping services.

The institution will act as a securities clearing agent for all security purchases made by the City and for sales of securities from the investment portfolio and will provide the necessary wire transfer and delivery services required to support investment activities. All securities will be handled on a Delivery Versus Payment (DVP) basis as they are cleared into and out of the City’s account. Necessary controls will be negotiated with the institution. Confirmation of trades must be provided to the City within one (1) business day.

Security clearance and safekeeping services shall be governed by a "Safekeeping Agreement” or similar contract executed between the City and the Institution. All interest payments on securities held are to be posted on the due date or on the next business day in the event the due date falls on a weekend or bank holiday. The City must be notified within seven (7) days of a call date notice for any securities being called prior to maturity.

The City prefers a web-based safekeeping transaction monitoring and reporting mechanism.

Please provide a schedule of securities safekeeping fees with the required Response Attachments.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

SERVICES UNDER CONSIDERATION

1. INVESTMENT SWEEP – The City may consider an investment sweep option and expects the option of a Texas Public Funds Investment Act (PFIA) compliant investment sweep option. Does your bank offer a similar type of investment option for the City’s balances?

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

2. ACCOUNT VALIDATION SERVICES – Can your bank verify account status and account ownership of accounts for outgoing payments using the Early Warning System?

|_| Yes, can provide as described. |_| No, cannot provide as described.

Comment:

3. APPLICATION PROGRAM INTERFACE (API) – Does your bank offer APIs to assist with the following:

|_| Establish connectivity to wire payment services through our ERP system |_| Initiate Payment transactions (via wire or ACH) |_| Transmit positive pay files to bank |_| Obtain status of wire transfers |_| Obtain account balance, transaction activity, charges, etc. for internal reporting purposes

Please use the section below to provide additional information regarding how your APIs can add efficiency to our treasury management operations. Please provide details on the specific API call types supported (web services, REST, etc.…) and what authentication methods you support for connecting to those.

Comment:

4. REAL-TIME PAYMENTS (RTP) – The City may be interested in using RTPs to immediately send and receive funds directly to and from U.S. demand deposit accounts at participating financial institutions. Does your bank offer this service?

|_| Yes, can provide as described. |_| No, cannot provide as described.

Comment:

5. LOCKBOX PROCESSING – The City may consider lockbox processing services for remittances of Utility Billing payments.

|_| Our bank offers and manages our lockbox in-house, located in |_| Our bank offers lockbox through a third-party vendor , located in |_| Our bank does not offer lockbox.

Comment:

6. INTEGRATED DISBURSEMENT SERVICES – The City is interested in considering different levels of outsourcing for its disbursement function including, but not necessarily limited to, check printing and distribution, ACH, and Virtual Cards.

|_| Yes, can provide. |_| No, cannot provide.

INCENTIVES / ENHANCEMENTS OFFERED

1. TAMPERPROOF DEPOSIT BAGS – Will the institution provide tamper-proof bags at no charge?

|_| Yes, can provide as requested. |_| No, cannot provide as requested.

Comment:

2. ENDORSEMENT STAMPS & DEPOSIT SLIPS – Will the institution provide endorsement stamps and deposit slips at no charge?

|_| Yes, can provide as requested. |_| No, cannot provide as requested.

Comment:

3. REMOTE DEPOSIT SCANNERS – Is the institution offering a scanner(s) to the City at no additional cost?

|_| Yes, institution is offering the following:

|_| No, institution is not offering a free scanner with the response.

4. INCENTIVE FEE WAIVER – If your institution is offering a waiver of monthly service fees during a specific timeframe, please provide the following information for clarity of the terms of your offer.

|_| Zero-pricing waiver (no fees assessed) during the timeframe of the offer and interest can be earned on balances during this time

Comment:

|_| No waivers - Institution is not offering a waiver of fees

5. CASH TRANSITION ALLOWANCE / RETENTION BONUS/OFFER – If the institution is offering a cash amount to offset the cost of the transition, please provide that amount.

OTHER STIPULATIONS

1. TERMS VALID FOR 180 DAYS – The responding bank agrees that the terms in the application will be valid for 180 days from the submission date.

|_| Agreed Comment:

2. RIGHT TO CANCEL UNDER FEDERAL OR STATE LAW RULINGS – In the event it would be ruled illegal under the provisions of any Federal or State laws or regulations for the successful institution to comply with the requirements of the contract, then the City expressly reserves the right and privilege to cancel the contract and to re-solicit applications.

|_| Agreed Comment:

3. RIGHT TO OPEN & MAINTAIN OTHER ACCOUNTS – The City shall have the right, at its sole discretion, to direct, open and maintain accounts at other institutions.

|_| Agreed Comment:

4. RIGHT TO TERMINATE – The City expressly reserves the right to terminate the contract with or without cause at any time by providing ninety (90) days written notice to the successful institution to close its accounts and terminate services.

|_| Agreed Comment:

5. TERMS FIXED – All fees, rate formulas (not the rates, just the formulas), and conditions shall be fixed for the entire contract period, including any and all continuations.

|_| Agreed Comment:

6. SEMI-ANNUAL MEETING – The City expects a review meeting at least once every six months to evaluate the working relationship between the City and the successful institution. The objective shall be to address any problems and to seek solutions as well as keeping abreast of changes, new services, or new requirements.

|_| Agreed Comment:

7. FORMAL CONTRACT REQUIRED – The final appointment of the successful institution shall be made by the City Council. The successful institution shall be required to enter into a contract that incorporates all of the requirements of their official response to this RFA, along with the accompanying related schedules and materials as called for in this RFA. The formal agreements should include: a primary depository services contract, a collateral custodial agreement, and a FIRREA compliant resolution of certification (see reference under the Collateral Requirements). A sample of the proposed contract is attached.

|_| Agreed Comment:

8. OVERDRAFT NOTIFICATION – In the event a check or checks shall be presented for payment where there are insufficient funds in City’s collective accounts, the successful institution agrees to promptly notify the City’s Finance Director or other signatory person, by telephone or other means, of the overdraft condition, and to provide the City a period not exceeding one business day to respond and rectify the condition.

|_| Agreed

Comment:

9. RESEARCH – The City expects that all research requests are responded to within three business days of the request.

|_| Agreed Comment:

10. BANK ERRORS – Bank errors resulting in lost interest or incorrect service fees to the City must be reimbursed by the bank to the City, utilizing a mutually agreed upon method of reimbursement.

|_| Agreed

Comment:

11. AUDIT CONFIRMATIONS – Successful institution must provide account balance audit confirmations to the City’s audit firm annually at no charge.

|_| Agreed Comment:

12. ONE RELATIONSHIP OFFICER – The City requests one relationship manager to coordinate the successful institution’s efforts and remain directly responsible for facilitating all City/Institution interaction.

COLLATERAL REQUIREMENTS

The institution shall pledge collateral to satisfy the requirements of the Public Funds Collateral Act, Chapter 2257, Government Code, and the City’s Investment Policy.

1. COLLATERAL AMOUNT – The maximum ledger balances could exceed $25,000,000 in the aggregate. Historically, the average balances are less than $15,000,000. Applicant must clearly explain any collateral limitations or fees. The City reserves the right to maximize or minimize bank balances regardless of historical patterns. The institution must monitor the collateral adequacy daily and provide additional collateral to secure balances as required. The City’s collateral requirement as stated in the approved investment policy is 102% for pledged securities and 100% for Letters of Credit.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

2. COLLATERAL CUSTODY – The pledged securities shall be held at an independent custodian acceptable to both the City and the institution.

Please provide the name of the proposed independent custodian as well as any related fees.

Name of Proposed Custodian:

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

3. LETTERS OF CREDIT or PLEDGED SECURITIES – How will your institution collateralize the City’s deposits:

|_| Letters of Credit |_| IntraFi Structure (or similar FDIC spreading program) |_| Pledged Securities

If Pledging Securities please respond to the following:

4. COLLATERAL LEVEL – The typical monthly maximum balance shall determine the total collateral level to be maintained each month in accordance with the City’s Investment Policy. This level may be adjusted monthly for seasonality based on historical patterns, but the City also requires daily monitoring of the City’s balances to ensure adequate collateral levels. If current collateral levels will be exceeded, the City will notify the bank the day before so that adequate collateral can be added.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

5. COLLATERAL SUBSTITUTION – The City prefers that any substitutions of the pledged securities in the total amount pledged shall be made only by and with the proper written authorization of an authorized City signatory. How does your institution handle substitutions?

|_| Substitutions will only be done with prior written authorization from the City

Substitutions will be done without prior written approval, but always for securities of equal or greater quality and with a market value greater than or equal to the securities being replaced. The City, at its sole discretion, has the right to request a different security if the substituted security is unacceptable.

Comment:

6. COLLATERAL REDUCTIONS – The City strongly prefers that any reduction of the total amount pledged shall be made only by and with the proper written authorization of an authorized City signatory. How does your institution handle collateral reductions?

|_| Reductions will only be done with prior written authorization from the City |_| Reductions MAY be done without prior written approval.

If the second option is the one your institution uses, will your bank agree to maintain a minimum threshold of collateral that will not be lowered without prior approval from the City?

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

7. COLLATERAL REPORT – The institution and the custodian shall provide City a monthly pledged securities report or additional reports at any time requested by City. The report must describe the total pledged securities by:

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

Comment:

8. ONLINE REPORTING - Is daily online access to the City’s collateral account available through the third-party custodian?

|_| Yes, can provide as requested. |_| No, cannot provide as requested.

Comment:

9. BOARD RESOLUTION – The Board of Directors or a designated committee of the institution will be required to provide a FIRREA-compliant resolution. The following is an excerpt of the FIRREA requirement from the FDIC Code:

e) AGREEMENTS AGAINST INTERESTS OF CORPORATION.--

(1) IN GENERAL.--No agreement which tends to diminish or defeat the interest of the Corporation in any asset acquired by it under this section or section 11, either as security for a loan or by purchase or as receiver of any insured depository institution, shall be valid against the Corporation unless such agreement--

(A) is in writing,

(B) was executed by the depository institution and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the depository institution,

(C) was approved by the board of directors of the depository institution or its loan committee, which approval shall be reflected in the minutes of said board or committee, and

(D) has been, continuously, from the time of its execution, an official record of the depository institution.

|_| Yes, can provide as expected. |_| No, cannot provide as expected.

REQUIRED DISCLOSURES

As defined in Section 105.015 (c), each applicant shall comply with the conflict-of-interest provision of Section 131.903 of the Texas Local Government Code in regard to the selection of the depositories: ☐

Sec. 131.903. CONFLICT OF INTEREST.

(a) A bank is not disqualified from serving as a depository for funds of a political subdivision if:

(1) an officer or employee of the political subdivision who does not have the duty to select the political subdivision's depository is an officer, director, or shareholder of the bank; or

(2) one or more officers or employees of the political subdivision who have the duty to select the political subdivision's depository are officers or directors of the bank or own or have a beneficial interest, individually or collectively, in 10 percent or less of the outstanding capital stock of the bank, if:

(A) a majority of the members of the board, commission, or other body of the political subdivision vote to select the bank as a depository; and

(B) the interested officer or employee does not vote or take part in the proceedings.

(b) This section may not be construed as changing or superseding a conflicting provision in the charter of a home-rule municipality.

In addition, the following disclosures apply:

Disclosure of interest: Pursuant to Chapter 176 of the Texas Local Government Code, a person, or agent of a person, who contracts or seeks to contract for the sale or purchase of property, goods, or services with the City of Hutto, Texas must file a completed conflict of interest questionnaire which is available at www.ethics.state.tx.us. The conflict-of-interest questionnaire must be filed with the City of Hutto, Texas no later than the seventh business day after the later of the date that the person or agent begins contract discussions or negotiations with the City or submits to the City an application, response to a request for proposal or bid, correspondence, or writing related to a potential agreement. An updated conflict of interest questionnaire must be filed in accordance with Chapter 176 of the Texas Local Government Code. An offense under Chapter 176 is a Class C misdemeanor.

Certificate of interested parties: Section 2252.908 of the Texas Government Code applies to all contracts entered into on or after January 1, 2016. The law states that a governmental entity may not enter into certain contracts with a business entity unless the business entity submits a disclosure of interested parties to the governmental entity at the time the business entity submits the signed contract to the governmental entity. The law applies, with a few exceptions, to all contracts/purchases of a governmental entity that require action or vote by the governing body of the entity. The electronic filing application process can be started on the Texas Ethics Commission website at www.ethics.state.tx.us. The City acknowledges that publicly traded business entities are exempt from this requirement.

In compliance with Chapter 2252 Subchapter F, of the Texas Government Code, prohibiting government contracts with a company doing business with Iran, Sudan or a foreign terrorist organization, the City of Hutto, Texas will not enter into a contract with a company reported on the LISTED COMPANIES per Section 2252.153.

REQUIRED CERTIFICATIONS

1. Certification Regarding Boycotting of Israel. Texas Government Code, Title 10, Subtitle F, Chapter 2271.002 - Provision Required in Contract. (a) This section applies only to a contract that:

(1) Is between a governmental entity and a company with 10 or more full-time employees; and

(2) Has a value of $100,000 or more that is to be paid wholly or partly from public funds of the government entity.

(b) A governmental entity may not enter into a contract with a company for goods or services unless the contract contains a written verification from the company that it:

(1) Does not boycott Israel; and

(2) Will not boycott Israel during the term of the contract.

|_| Agreed

2. Certification Regarding Boycotting of Certain Energy Companies. Texas Government Code, Title 10, Subtitle F, Chapter 2276.002 - Provision Required in Contract. (a) This section applies only to a contract that:

(1) Is between a governmental entity and a company with 10 or more full-time employees; and

(2) Has a value of $100,000 or more that is to be paid wholly or partly from public funds of the government entity.

(b) Except as provided in Subsection (c), a governmental entity may not enter into a contract with a company for goods or services unless the contract contains a written verification from the company that it:

(1) Does not boycott energy companies; and

(2) Will not boycott energy companies during the term of the contract.

(c) Subsection (b) does not apply to a governmental entity that determines the requirement of Subsection (b) are inconsistent with the governmental entity’s constitutional or statutory duties related to the issuance, incurrence, or management of debt obligations or the deposit, custody, management, borrowing, or investment of funds.

|_| Agreed Comment:

3. Certification Regarding Boycotting of Firearms Entity or Firearms Trade Association. Texas Government Code, Title 10, Subtitle F, Chapter 2274.002 - Provision Required in Contract. (a) This section applies only to a contract that:

(1) Is between a governmental entity and a company with at least 10 full-time employees; and

(2) Has a value of at least $100,000 that is paid wholly or partly from public funds of the government entity.

(b) Except as provided by Subsection (c) and Section 2274.003, a governmental entity may not enter into a contract with a company for the purchase of goods or services unless the contract contains a written verification from the company that it:

(1) Does not have a practice, policy, guidance, or directive that discriminates against a firearm entity of firearm trade association; and

(2) Will not discriminate during the term of the contract against a firearm entity or firearm trade association.

(c) Subsection (b) does not apply to a governmental entity that:

(1) Contracts with a sole-source provider; or

(2) Does not receive any bids from a company that is able to provide the written verification required by that subsection.

|_| Agreed

APPLICATION SUBMITTED BY

This application is being submitted to the City by the following person duly authorized to act on behalf of this applicant.

Officer Signature _____________________________________________________________ The signature indicates respondent accepts the specifications, terms, and conditions of this RFA and that the applicant is not delinquent on any payment due to the City or involved in any lawsuit against the City.

Date:

SAMPLE DEPOSITORY SERVICES CONTRACT

THIS DEPOSITORY SERVICES CONTRACT, hereinafter called the “Contract”, is made and entered into on the date last herein written by and between the City of Hutto, Texas, hereinafter called the “City”, and ___________________ a banking association, organized under the law of the United States and authorized by law to do banking business in the State of Texas, hereinafter called the "Bank”, and provides as follows:

1. Designation of Depository. The City, through action of the City Council, on July 11, 2024, hereby designates the Bank as a primary depository bank for the period beginning September 30, 2024, and continuing through June 30, 2026, with the option for three (3) one-year extensions under the same terms and conditions.

2. General. All services rendered to the City by the Bank under this Contract shall be performed in accordance with commercially reasonable standards for public fund organizations and under the overall direction and instructions of the City pursuant to the Bank’s standard operations, policies, and procedures.

3. Scope of Services. The Bank agrees to provide those services as described in the City’s Request for Application for Depository Bank Services released on March 22, 2024, hereinafter referred to as the “RFA”. The RFA and the Bank’s response to the RFA, hereinafter referred to as the “Application”, are incorporated herein by reference. The Bank acknowledges that all services performed by the Bank are subject to the approval of the City. The Bank agrees to provide additional services as requested from time to time by the City and mutually agreed upon by the Bank.

4. City Representatives. During the term of this Contract, the City will, through appropriate action of its City Council, designate the officer, or officers, who singly or jointly will be authorized to represent and act on behalf of City in any and all matters of every kind arising under this Contract and to (a) appoint and designate, from time to time, a person or persons who may request withdrawals, orders for payment or transfer on behalf of the City in accordance with the electronic funds or funds transfer agreement and addenda, and (b) make withdrawals or transfer by written instrument.

5. Collateral Custodian. The City and the Bank, by execution of this Contract, hereby designate ______________ as custodian, hereinafter called the “Collateral custodian”, to hold in trust, according to the terms and conditions of this Contract, the collateral described and pledged by the Bank in accordance with the provisions of this Contract.

6. Custodial Fees. Any and all fees associated with the Collateral custodian’s holding of collateral for the benefit of the City shall be paid by the Bank, and the City will have no liability therefore.

7. Entire Agreement. The entire agreement between Bank and City shall consist of this Contract, the City’s RFA (except to the extent Bank took specific exceptions in the Bank’s Application), the Bank’s Application, the Collateral Agreement with the Collateral custodian, and other such bank service agreements, policies and documents as may be required and approved by the parties (together, the “Banking Agreements”), each incorporated by reference as they presently exist and each listed in governing order of precedence in the event of conflict among the documents. This Contract supersedes any and all prior representations, statements, and agreements, whether written or oral. The terms and provisions of this Contract may not be amended, altered, or waived except by mutual agreement evidenced by a written instrument signed by duly authorized representatives of both parties.

8. Collateralization. All funds on deposit with the Bank to the credit of the City shall be secured by collateral as provided for in the Public Funds Investment Act (Chapter 2256 of the Texas Government Code as amended), the Public Funds Collateral Act (Chapter 2257 of the Texas Government Code), the City’s Investment Policy, and the Bank’s Application. The City agrees to promptly provide to the Bank any changes to its Investment Policy. The Depositor agrees that it shall only direct the Bank in writing to make investments authorized pursuant to the foregoing.

If marketable securities are pledged by the Bank as collateral, the total market value of the securities securing such deposits shall be in an amount at least equal to the minimum required amount as per the City’s Investment Policy. The market value of any pledged securities (collateral) must be obtained from non-Bank-affiliated sources. The Bank shall monitor and maintain the required collateral margins and levels at all times.

The Bank has heretofore, or will immediately hereafter, deliver to the Custodian collateral of the kind and character above mentioned of sufficient amount and market value to provide adequate collateral for the funds of the City deposited with the Bank. The Custodian shall accept said collateral and hold the same in trust for the purposes herein stated. Said collateral or substitute collateral, as hereinafter provided for, shall be kept and retained by the Custodian in trust so long as deposits of the City remain with the Bank. The Bank hereby grants a security interest in such collateral to City.

If at any time the collateral in the hands of Custodian shall have a market value in excess of the required balances, the City may authorize the withdrawal of a specified amount of collateral, and the Custodian shall deliver this amount of collateral (and no more) to the Bank.

If the Bank shall desire to sell or otherwise dispose of any one or more of said securities so deposited with the Custodian, the Bank may substitute for any one or more of such securities other securities of the same market value and of the character authorized herein. Such right of substitution shall remain in full force and may be exercised by the Bank as often as it may desire; provided, however, that the aggregate market value of all collateral pledged hereunder, shall be at least equal to the amount of collateral required hereunder. If at any time, the aggregate market value of such collateral so deposited with the Custodian be less than the total sum of the City’s funds on deposit with the Bank, the Bank shall immediately deposit with the Custodian such additional collateral as may be necessary to cause the market value of such collateral to equal the total amount of required collateral. The Bank shall be entitled to income on securities held by the Custodian, and the Custodian may dispose of such income as directed by the Bank without approval of the City.

If surety bonds or letters of credit are utilized, the City shall agree as to the issuer and form of contract prior to pledge. The amount of surety bonds or letters of credit will be at least equal to the minimum required amount as per the City’s Investment Policy.

9. Pledge Receipts. The Custodian shall promptly forward to the City copies of pledge receipts covering all such collateral held for the City, including substitute collateral as provided for herein.

10. Default. Should the Bank fail at any time to pay and satisfy, when due, any check, draft, or voucher lawfully drawn against any deposits and the interest on such deposits or in any manner breach the Banking Agreements with the City, the City shall give written notice of such failure or breach to the Bank, and the Bank shall have one (1) business day to cure such failure or breach. In the event the Bank shall fail to cure any such failure or breach within one (1) business day or should the Bank be declared insolvent by a Federal banking regulatory agency, it shall be the duty of the Custodian, upon demand of the City, to surrender the above-described collateral to the City, or it shall be the duty of the surety bond or letter of credit provider to perform under the terms of their respective contract.

The City may sell any part of such collateral, or receive all or any part of a surety bond or letter of credit settlement, and out of the proceeds thereof, pay the City all damages and losses sustained by it, together with all reasonable and documented expenses of any and every kind incurred by it on account of such failure or insolvency, or sale, and account to the Bank for the remainder, if any, of said proceeds or collateral remaining unsold.

11. Sale of Seized Collateral. Any sale of such seized collateral, or any part thereof, made by the City hereunder may be either at public or private sale, provided however, it shall give both the Custodian and the Bank two (2) hours’ prior written notice of the time and place where such sale shall take place, and such sale shall be to the highest bidder therefore for cash. The City and the Bank shall have the right to bid at such sale.

12. Release of Collateral. When the relationship of the City and the Bank shall have ceased and when the Bank shall have properly paid out all deposits of the City, it shall be the duty of the City to give the Custodian notice to that effect; whereupon the Custodian shall, with the approval of the City, redeliver to the Bank all collateral then in its possession belonging to Bank.