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HomeMy WebLinkAbout1995-12-05; City Council; 13410; ADOPTION OF BANKING AND CUSTODIAL CONTRACT WITH FIRST INTERSTATE BANK APPROVAL OF SIGNATORIES FOR GENERAL CHECKING ACCOUNT3 D aki 2 2 0 E u 4 g 0 v ADOPTION OF BANKING AND CUSTODIAL CONTRACT APPROVAL OF SIGNATORIES FOR GENERAL CHECKING ACCOUNT AB# 97, qlf3. MTG. 12/05/95 WITH FIRST INTERSTATE BANK DEPT. TRS RECOMMENDED ACTION: Adopt Resolution No. 95- 33/' Bank to provide banking services and custodial services to the City of Carlsbad. Adopt Resolution No. 9 5 - 3 3 a , giving the City Treasurer and certain staff personnel the authority to sign checks drawn on the City's general checking account within certain limitations. ITEM EXPLANATIIOJ: Bank and Custodial Services - First Interstate Bank provides banking services and is the custodian of the City's investment instruments. In January 1996, the current contract with First Interstate Bank will expire. In preparation, an ad hoc committee chaired by the City Treasurer developed a Request for Proposals. The RFP was then sent to financial institutions with branch operations within the City of Carlsbad. Of 14 financial institutions invited to participate, 5 submitted proposals to provide banking services ;and custodial services. First Interstate Bank proposed keeping its current transaction rates unchanged for a period of two years. This resulted in its proposal having the lowest overall cost for banking services and custodial services. Together with the excellent service received under the current contract, the ad hoc committee selected the First Interstate proposal to be the most responsive proposal. The Investment Review Committee concurred with this selection. Based on the criteria of the Federal Reserve System, First Interstate Bank is rated "we1 I capitalized .I' The City Treasurer recommends that a contract be awarded to First Interstate Bank to provide banking services and custodial services in accordance with the terms and conditions in its proposal. The proposed contract will commence on February 1, 1996 and be for a period of 3 years with an optional extension of 2 additional years. During the analysis of the RFP's, the Treasurer and staff recognized that low cost banking services were available that would reduce current manual processes, Le., computer reconciliation of accounts payable and payroll checks which will soon be implemented. Other processes and procedures are also being investigated. Checking Siqninci for Manual Checks - Occasionally, the Accounts Payable section in the Finance Department finds it necessary to issue a check before the normal weekly check run. After authorizations are approved, a hand check is typed. Approximately five to ten manual checks, totalling an estimate of $1 000, are issued , awarding a contract to First Interstate @ I Page 2 of Agenda B RI 0. J3 9 / 0 per week. In addition, a manual check in the amount of approximately $85,000 is issued bi-weekly to the Credit Union. Under the current procedure for signing a hand check, either the Finance Director or the Assistant Finance Director removes a signature stamp from a locked cabinet. The stamp has a facsimile signature of both the Mayor arid Treasurer and is utilized to sign a manual check. In order to strengthen internal controls, the Finance Director is requesting Council approval for the Treasurer and certain staff personnel to manually sign hand checks. Authorized signers would be the City Treasurer, Assistant City Manager, Financial Management Director, Finance Director and Assistant Finance Director. For checks under $1000, any one signature would be required; for checks issued in excess of $1 000, any two signatures are required. The elimination 01 the hand stamp and requiring two signatures on larger manual checks will further strengthen the City's internal controls for check approvals and disbursements. No additional internal controls are necessary for the non-manual checks produced from the Accounts Payable system. FISCAL IMPACT: First Interstate Bank transaction rates will remain unchanged from current rates. Based on the projected number of transactions, the annual expenditure for the contract is estimated at $54,600. The cost of banking services is estimated at $48,000 plus $6,600 for custodial services associated with City investments. EXHIBITS: 1. Resolution No. 9 5 -33/ , Banking and Custodial Services Contract 2. Resolution No. 95 - ,33* , Signatories for Checks Drawn on Account \ V (Attachments C, D Er E are on file in the City Clerk's Office. . -4 V 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 0 RESOLUTION NO. 95 - 331 IRESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE CONTRACT IFOR BANKING AND CUSTODIAL SERVICES WITH THE !FIRST INTERSTATE BANK 'A'HEREAS, the City of Carlsbad's contract with First Interstate Bank for banking services and custodial services will expire in January 1996; and 'WHEREAS, the City Treasurer solicited proposals (Attachment "E') from 14 financial institutions with branch operations within the City of Carlsbad to provide banking services and custodial services to the City of Carlsbad; and 'WHEREAS, the City Treasurer received competitive proposals from five banking institutions to provide banking services and custodial services to the City of Carkbad; and WHEREAS, the proposals were analyzed and reviewed by an ad hoc committee and the Investment Review Committee; and WHEREAS, both committees concurred that the Banking Services Proposal (Attachment "Cll) and the Institutional Custody Services Proposal (Attachment "D") submitted by First Interstate Bank were the best overall for banking services and custodial services; and I WHEREAS, First Interstate Bank has provided the City with excellent service since merging with San Diego Trust & Savings Bank in April 1994. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California as follows: 1. That the above recitations are true and correct. 2. The City Council will offer a three-year contract with an optional two-year extension to First Interstate Bank to provide banking services and custodial services. The contract will commence of February 1, 1996. .. 'w 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 e 0 3. That the City Treasurer is hereby authorized to sign the attached Agreement for Banking Services, Attachment "A," and Custodial Agreement, Attachment "13," as well as any other agreement necessary to secure the contract with First Interstate Bank. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the 5th day of DECEMBER , 1995, by the following vote, to wit: AYES: Council Members Lewis, Nygaard, Finnila, Hall NOES: None ABSENT: Council Member ATTEST: &&36$%jmz (SEAL) UKEN R. KUNDTZ, sistant City Clerk - (B 0 * CITY OF CARLSBAD Agreement for Banking Services Attachment "A" - I) 0 c CITY OF CARLSBAD AGREEMENT FOR BANKING SERVICES THIS AGREEMAT, made and entered into this 5<e day of 4 @ee~d . pd 995 , by and between the City of Carlsbad, a municipal corporation, hereinafter referred to as “City” and FIRST INTERSTATE BANK OF CALIFORNIA, hereinafter referred to as “Bank.” I. RECITALS The City is desirous of hiring the services of Bank as the depository of certain City funds and for other banking services in accordance with the terms and conditions hereinafter set forth, and Bank is desirous of providing such services. 11. SCOPE OF SERVICES Bank shall provide the services set forth inclusive in its pricing proposal to City dated July 3 I, 1995, a copy of which is attached hereto as Exhibit “A.” This proposal was submitted by Bank to City in response to the City’s Request for Proposal dated June 1995, which is attached hereto as Exhibit “B.” The City Treasurer may elect to delete any of the services set forth in the above designated portion of Exhibit “A,” subject to the notice requirements contained in the Product Agreements described below. Bank may provide additional services under the terms of this Agreement upon the mutual agreement of Bank and City. 111. PRODUCT AGREEMENTS Bank shall provide the services set forth in the above designated portion of E’xhibit “A” as mor( specifically described in the “Cash Management Terms and Conditions” to be executed by City concurrentl! herewith, a copy of which is attached hereto and incorporated herein by this reference. Any hture Bad services not currently the subject hereof will be reflected by Product Agreements for such services to bf executed by the parties and incorporated herein if not already covered in the “Cash Management Terms an( Conditions.,’ In the event of any inconsistency between the provisions of this Agreement, Exhibit “A,” an( the “Cash Management Teims and Conditions,” the terms of this Agreement and Exhibit “A” shall prevail. I - e e w IV. COMPENSATION Compensation to Bank for the services provided pursuant to this Agreement shall be as set forth in the pricing provisions in the attached Exhibit “A,” said provisions of which are incorporated herein by this reference. Any revisions to the compensation hereunder shall be mutually agreed upon by the City and the Bank. Pricing as quoted by Bank in Section I1 of Exhibit “A” shall remain in effect until June 30, 1997, unless otherwise agreed to by City and Bank. Any other services utilized by City shall be priced according to Bank’s prevailing “Fee Schedule - Business Accounts.” The Bank shall reserve the right to pass on any and all direct costs associated with any Federal and State Regulations, including but not limited to Federal Deposit Insurance Corporation and Federal Reserve charges. V. METHOD OF PAYMENT Bank shall be paid for its services hereunder pursuant to the relevant provisions of its proposal se forth in Exhibit “A,” which provisions are incorporated herein by this reference. The City may compensatt the Bank with fees, compensating balances, or a combination of the two. Any fees not covered bj compensating balances shall be due and payable by the City on a quarterly basis. Any net quarterly fees ca~ be paid by auto debit to the City’s primary checking account or paid to the Bank by check. VI. TERM This Agreement shall commence upon execution and shall remain and continue in effect for three (3 years and may be automa,tically renewed for an additional two (2) years. Time is of the essence in thc performance of this Agreement. Services provided by any third party vendors, such as armored carrier deposit courier, messenger, or check printers, are not covered by this agreement. 2 - (B 0 ‘c VII. EXTENSION The term of this Agreement may be extended by City and Bank by agreement in writing with respec to each such extension at least thirty (30) calendar days prior to the date on which this Agreement or ar extension thereof would otherwise have terminated. The terms and conditions of the agreement as sc extended shall be as set forth herein except that modifications in the compensation designated in Section I1 E‘uhibit “A” may be made effective for the period of any extension as mutually determined by Bank and thc City in writing as a part of the agreement for the extension of this Agreement, subject to the approval of thc City. VIII. TERMINATION Any other provision herein to the contrary notwithstanding, and in addition to other methods c termination provided for herein or available under the laws of the State of California, it is agreed that thi Agreement shall terminate sixty (60) days after written notice of termination, which may be given by eithf party to the other party to this Agreement with or without cause. After the expiration of such sixty (60) da period, Bank shall immediately cease all services hereunder except as may be specifically approved by th City. Bank shall be entitled to compensation for all services rendered prior to the termination and for an services authorized by City thereafter in accordance with the aforementioned section regarding compensatior 3 c @ 0 ‘1 IX. NOTICES Any notice required to be given hereunder’shall be in writing with copies as directed herein and shall be personally served or given by mail. All notices by mail shall be deemed to have been given when received by the party to be served. Mail notices are to be sent by United States mail, certified and postage prepaid, addressed to the party to be served as follows: TO CITY: City of Carlsbad Mr. James Stanton City Treasurer 1200 Carlsbad Village Drive Carlsbad, CA 92008 First Interstate Bank of California Ms. Barbara Mathias Manager Carlsbad Office 3 150 El Camino Real, Suite A Carlsbad, CA 92008 TO BANK: and First Interstate Bank of California Ms. Susan Cotton Vice President & Manager Government Services Group 5000 Birch Street, Suite 10,000 Newport Beach, CA 92660 Either party may change its address by notifying the other party of the change of address in writing Notice shall be deemed communicated when received by the party to be served if served as provided in thi section. X. ATTORNEYS’ FEES In the event that either party hereto fails to comply with any of the terms of this Agreement and th other party commences legal proceedings to enforce any of the terms of this Agreement or to terminate th~ Agreement, the prevailing party in such suit shall receive from the other a reasonable sum includm attorneys’ fees and costs aj may be established by the Court or Jury. 4 L e e I XI. EXTENT OF AGREEMENT This document, Exhibit “A” incorporated herein by reference, and the “Cash Management Terms and Conditions” represent the entire integrated Agreement between City and Bank and supersede all prior negotiations, representations or agreements, either written or oral. This Agreement and Exhibit “A” may be amended only by written instrument signed by both City and Bank. The “Cash Management Terms and Conditions” may be amended only as provided therein. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date statec above. CIT CARLSBAD FIRST INTERSTATE BANK OF CALIFORNIA B. & M!k By ?:![!($, Tit Fq e: T-- Title: f- / --$ r( JLc2fl~ li 1 By: Title$ KdL p zr td? .k ATT%sT+ S;/& City of Carlsbad KAREN R. KUNDTZ, Assistant City Clerk APPROVED AS TO FORM: L Q6-w City Attorney of the 12; o /59$* City of Carlsbad 5 L 4B e w CITY OF CARLSBAD Custodial Agreement Attachment "B" s 8 0 * > City of Carlsbad CUSTODIAL AGREEMENT Institutional Custody Services FIRST lNTERSTATE BANKOF CAUFORNIA /nstitutional Trust and investments Division October 1995 - e 0 * I TABLE OF CONTENTS I ARTICLE I: APPOINTMENT OF BANK AS CUSTODIAN ................................................. 1 ARTICLE 11: AUTHORITY AND RESPONSIBILITY OF CUSTODIAN ................................ 1 ARTICLE Ill: IbIVESTMENT OF CUSTODIAL ACCOUNT .................................................. 4 ARTICLE IV: AUTHORIZED REPRESENTATIVES ................................................................ 5 ARTICLE V: CUSTODIAN INSTRUCTIONS ....................................................................... 6 ARTICLE VI: COMPENSATION AND EXPENSES OF THE BANK ....................................... 6 ARTICLE VII: ADVANCES AND OVERDRAFTS ................................................................... 6 ARTICLE VIII: RECORDS AND ACCOUNTS ......................................................................... 7 ARTICLE IX: AMENDMENTS AND TERMINATIONS ......................................................... 8 ARTICLE X: CONCERNING THE CUSTODIAN ................................................................. 8 ARTICLE XI: MISCELLANEOUS ........................................................................................... 9 - INSTITUTIONAL CUSTODY - e 0 m City of Carlsbad In the event the Bank fails to actually receive any monies which have been credited to the Custodial Account and/or DDA as hlereinabove described, the Bank shall notify the Principal within twenty four (24) hours thereof, shall reverse out such credit and shall be entitled to interest at a fair and reasonable rate, as mutually determined by the Bank and Principal, from the date of credit to the Custodial Account until the date such credit is reversed. Section 2.03. The Bank shall use its best efforts to collect, on behalf of the Principal, monies which are due and owing to the Principal upon the maturity, redemption, principal payments, or sale of securities or other property held in the Custodial Account, or at the dates of their calls for payment of which the Bank has actual notice from the reporting services to which the Bank subscribes, and proceeds of property so received shall be held in the Custodial Account, or forwarded upon the direction of the Principal. The Bank shall not be obligated to institute or participate in any legal proceedings to make such collection. Whenever the Bank has been unable to make a collection pursuant to this section, it will notify the Principal of its inability to make such collection, and the reasons therefor, insofar as such reasons are known to the Bank. Section 2.04. The Bank will notify the Principal of any voluntary offering with respect to the securities held in the Custodial Account and will forward to the Principal, upon request, such literature and reports as may be received by the Bank pertaining to any securities held hereunder. The Bank, absent directions, is under no duty to take any action with respect to any securities held in the Custodial Account. The Bank will execute proxies with respect to Custodial Assets held in its name or in its nominee name and forward the proxies to the Principal without having voted the proxies. Section 2.05. The Bank shall disburse cash and other property then held in the Custodial Account and/or DDA in accordance with the instructions of the Principal. The Bank shall have no responsibility to determine whether any such disbursements are in accordance with applicable law, regulations, or any agreement other than this Agreement. Section 2.06. Notwithstanding any other provision of this Agreement, all or any of the monies or securities of the Custodial Account may be held in the Bank's own custody or in the custody of one or more sub-custodians (ie: Federal Reserve and Depository Trust Company) appointed by the Bank. In addition, the Bank is authorized to cause securities to be registered in the name of and to maintain such securities on deposit with, any registered securities depository or the Federal Reserve Book Entry System. Section 2.07. (a) The Principal hereby authorizes the Bank on a continuous and on-going basis to deposit in the Federal Reserveflreasury Book-Entry System (the "Book-Entry System") and/or The Depository Trust Company and/or The Participants Trust Company (the "Depositories") all securities eligible for deposit therein and to utilize the Book-Entry System and the Depositories to the extent possible in connection with settlements of purchases and sales of securities, and other deliveries and returns of securities. I: \~li.+iii~~\111/7 tkw 2 0 0 L City of Carlsbad (b) Where securities eligible for deposit in the Book-Entry System and/or the Depositories are transferired to the Custodial Account, the Bank shall identify as belonging to the Principal a quantity of Securities in a fungible bulk of securities shown on the Bank’s account on the books of the Book-Entry System or the Depositories. Securities and monies of the Principal deposited in either the Book-Entry System or the Depositories will be represented in accounts which include only assets held by the Bank of customers, including but not limited to accounts in which the Bank acts in a fiduciary or agency capacity. Section 2.08. The Bank may hold any of the Custodial Assets in the name of a nominee of the Bank or in book entry form. Section 2.09. The Bank is authorized to deliver any instrument or document necessary to register the securities in the Custodial Account, or to complete any sales or deliveries of them. The Bank may execute on the Principal’s behalf any declarations, affidavits, certificates of ownership or other documents required to service the Custodial Account and guarantee that such documents have been executed by the Principal. The Principal shall furnish the Bank with all documents, authorizations, representations, or powers of attorney as may be reasonably required by the Bank to carry out its obligations hereunder, but no such document, authorization, representation, or power of attorney shall be construed to authorize the Bank to take any action not authorized by this Agreement. Section 2.10. (a) Promptly after each purchase of securities by the Principal, the Principal shall deliver to the Bank Instructions, specifying with respect to each purchase: (i) the name of the issuer and the title of the securities, including CUSlP number, if any, (ii) the principal amount purchased, (iii) the date of purchase and date of settlement, (iv) the purchase price per unit (if necessary or desirable), (v) the total amount payable upon such purchase, and (vi) the name of the person or institution from whom, or the broker through whom the purchase was made. The Bank shall upon contractual slettlement date debit the Custodial Account and/or DDA the total amount payable for the purchase of the securities. (b) Promptly after each sale of securities by the Principal, the Principal shall deliver to the Bank Instructions, specifying with respect to each sale: (i) the name of the issuer and the title of the securities, including CUSIP number, if any, (ii) the principal amount sold, (iii) the date of sale and date of settlement, (iv) the sale price per unit (if necessary or desirable), (v) the total amount payable to the Principal upon such sale, and (vi) the name of the person or institution to whom, or the broker through whom the sale was made. The Bank shall deliver the securities in accordance with generally accepted street practices (i.e., subject to count and verification). If the Principal’s Instructions are received by the Bank in a timely manner and the securities which are sold are in good deliverable form, the Bank will crediit the Custodial Account with the proceeds of such sale provided, however, that the Bank shall not be obligated to credit the Custodial Account and/or DDA with such proceeds if a failure to deliver the securities is not caused by the Bank (e.g., late instructions, incorrect instructions, and/or securities out on transfer). In any event, the Bank will be entitled to reverse any credits previously made where monies are not finally collected. I: \tl1~iii*.\11177ck~ 3 1) 0 - City of Carlsbad ARlICLE Ill: INVESTMENT OF CUSTODIAL ACCOUNT Section 3.01. The assets of the Custodial Account shall be invested and reinvested in accordance with Instructions of the Principal, unless the Principal delegates investment responsibility and authority for all or a portion of the Custodial Account to one or more authorized representatives. In addition to the powers and duties described in Article II, the Bank shall have the following powers and duties which it shall exercise and perform only upon the Instructions of the Principal or its authorized representative!;: (a) to pay for all securities which have been purchased upon receipt of such securities by or for the Bamk. (b) to deliver securities which have been sold in accordance with generally accepted street practices or any special directions of the Principal or its authorized representatives, including but not limited to, the free delivery of securities. In acting upon instructions (on which the Bank is authorized to rely) to deliver securities against payment, the Bank is authorized, in accordance with customary securities processing practices, to deliver such securities to the purchaser thereof or dealer therefor (including to an agent for any such purchaser or dealer) against a receipt, with the expectation of collection payment from the dealer, purchaser or agent to whom the securities were so delivered before the close of business on the same day. When the Bank delivers securities against a receipt in accordance with the preceding sentence, the Bank shall not bear the risk associated with such securities processing practice, provided that the Bank did not select the party to which such securities were delivered. (c) to convert, surrender, tender or exchange securities. Section 3.02. (a) Notwithstanding any other provision of this Agreement, if at any time there is insufficient cash or securities in the Custodial Account and/or DDA with which to carry out the instructions of the Principal or its authorized representatives, the Bank shall notify the party giving the instructions of such insufficiency as soon as practicable after receiving the Instructions and shall have no further responsibility for complying therewith until it receives sufficient cash or securities. (b) Principal agrees that all investments executed through a broker-dealer will be in compliance with all applicable laws and regulations and that sufficient cash will be available in the Custodial Account to pay for any securities purchased without consideration given to the proceeds from the sale of the same securities. Principal acknowledges that Bank will not pay for the purchase of securities with the proceeds from the sale of the same securities. Section 3.03. The Bank shall have no duty or responsibility: (a) to supervise the investment of, or make recommendations with respect to the purchase, retention or sale of, securities or other property relating to the Custodial Account. R \d~~iiiw\11177tL* 4 e 0 . City of Carlsbad , (b) for any loss occasioned by delay in the actual receipt of notice by the Bank of any payment, redemption or other transaction in respect to which the Bank is authorized to take some action pursuant to this Agreement, unless due to negligence or an intentional act of the Bank. (c) for any act or omission, or for the solvency or notice to Principal of the solvency, of any broker or dealer which is selected by Principal or any other person other than the Bank officers, employees or agents, to effect any transaction for the Custodial Account. Section 3.04. Principal may direct Bank to invest a portion or all of the Custodial Assets in shares of one or more registered investment companies ("Funds") made available by Bank to its customers. Bank or its affiliates may receive fees for services provided to the Funds. Bank shall provide to Principal copies of the prospectuses of the Funds and disclosures of the fees received by Bank and its affiliates. E'ank shall have no investment authority over those assets of the Custodial Account so invested or the Funds' which have been purchased with such assets, nor shall the Bank have any responsibility with respect to investment performance of the Funds or to make any recommendations with respect to the purchase or sale of such shares. ARTICLE IV AUTHORIZED REPRESENTATIVES The Principal may appoint in writing one or more authorized representatives for the Custodial Account and shall contemporaneously give written notice of said appointment or appointments to the Bank and shall instruct the Bank in writing with respect thereto. Selection of an authorized representative shall be in the sole and absolute discretion of the Principal. The Bank shall follow the instructions of the authorized representatives in exercising the powers granted the Bank under Articles II and Ill. ARTICLE V CUSTODIAN INSTRUCTIONS Section 5.01. Except as hereafter provided, any directions, instructions or notices which the Principal, or any other person designated by the Principal is required or permitted to give to the Bank under this Agreement (the "Instructions") shall be in writing; provided, however, that the Bank in its discretion may act upon oral instructions if it believes them to be genuine, but the Bank shall not be required to do so. All oral instructions are to be confirmed in writing. The Bank is authorized to record any telephonic communications between authorized representatives and the Bank. Section 5.02. The transmission of the Instructions by photostatic teletransmission with duplicate or facsimile signatures or by affirmation via the national institutional delivery system shall be authorized methods of communication until the Bank is notified by the Principal to the contrary. Section 5.03. The Bank shall as promptly as possible comply with any direction given by the Principal or any authorizied representative. a \~l~.~#~w\lll77 &x 5 (I) 0 - , City of Carlsbad ARTlCLlE VI: COMPENSATION AND EXPENSES OF THE BANK The Bank shall receive reimbursement for any expenses incurred by it in connection with the Agreement and compensation for its customary and ordinary services in accordance with a written schedule of fees agreed upon from time to time between the Bank and the Principal. To the extent such fees and expenses are not paid by the Principal, within thirty (30) days following delivery by the Bank to the Principal of the Bank's statement of such fees and expenses, the Bank may charge interest on such unpaid balances. To the extent such fees and expenses remain unpaid for 90 days by the Principal, the Bank, upon notice to the Principal, may deduct such fees and expenses from the Custodial Account. In addition, the Bank shall be entitled to reasonable compensation for any extraordinary services which it is requested or deems necessary to perform hereunder. It is understood that all pricing provided is firm for the period of one (1) year, subject to negotiation but any increase or decrease will not exceed 5% each year. ARTICLE VII: ADVANCES AND OVERDRAFTS Section 7.01. In the event that (1) the amount on deposit in the Custodial Account, DDA and/or any sub-account is insufficient to pay the total amount due upon the purchase or delivery of securities therefor, or (2) ain amount otherwise drawn against the Custodial Account, DDA and/or any sub-account is in excess of the available balance on deposit therein, the Bank may, if practicable, elect to advance funds to the Custodial Account, DDA and/or any sub-account in an amount necessary to cover any resulting overdraft on such account. Section 7.02. If the Bank should advance funds to or on behalf of the Custodial Account or any sub-account to cover such overdraft or for any other reason, the amount so advanced by the Bank (less any amount deposited by the Bank to the Custodial Account or sub-account in lieu of monies which have not been collected by the Bank on behalf of the Custodial Account or sub- account when due because of the failure of the Bank to make timely presentment or demand for payment) shall constitute a Loan hereunder. Each such Loan shall be payable on demand. Any Loan not repaid by the Bank's close of business on the day of disbursement shall bear interest for each day until payment in full at a irate per annum equal to 3 percent over the Bank's prime commercial lending rate in effect from time to time, such rate to be adjusted on the effective date of any change in such rate but in no event rihould the rate payable be less than six percent per annum. Interest on the Loans shall be computed on the basis of a 360-day year and actual days elapsed and shall accrue from and including the day of disbursement to but excluding the date of payment. The Bank will notify the Principal of any interest owed due to a Loan prior to recovering the principal and accrued interest of any Loan made to the Custodial Account by the Bank hereunder. Section 7.03. In order to secure the repayment of the principal and interest of any Loan to the Custodial Account or any sub-account, the Principal hereby agrees that the Bank shall have a continuing lien and security interest in and to any property specifically allocated to and held by the Custodial Account or any sub-account to which such Loan is deemed to have been made. In this regard, the Bank shall be (entitled to all the rights and remedies of a pledgee under common law and a secured party under the California Commercial Code as then in effect. I: \ili.+tsr.\IH77 ILx 6 aD 0 City of Carlsbad ARTICLE VIII: RECORDS AND ACCOUNTS Section 8.01. The Bank shall keep accurate records and accounts with respect to all cash and other assets held by it in the Custodial Account, and all receipts and disbursements and other transactions involving such cash, securities and other assets. The Principal shall have access to all such accounts, books and records at all reasonable times. All such accounts, books and records shall be open for inspection and audit at all reasonable times by the Principal or by any person or persons duly authorized by the Principal. Section 8.02. The Bank shall furnish the Principal and the Principal authorized representatives with montlhly reports in the usual and customary manner and form, setting forth all receipts, disbursements and transactions effected with respect to the Custodial Account. Section 8.03. Upon agreement of the parties, the Bank shall monthly determine the market value of the assets held in the Custodial Account. Market value for the purposes of this Agreement means with respect to marketable securities the market price of each such security at the close of business of the day as of which the valuation is being made, and in the case of all other assets the market value shall be deerned to be cost. In determining the market value of marketable securities, the Bank may utilize any one or more sources of information deemed by the Bank to be reliable, including, but not limited to, a pricing service, standard financial periodicals or publications, newspapers of general circulation, records of and information from securities exchanges and brokerage firms. AftTICLE IX: AMENDMENTS AND TERMINATIONS Section 9-01. This Agreement may be modified at any time by a writing signed by the Principal and the Bank, and may be terminated at any time upon thirty (30) days’ written notice delivered by any party to the other, provided, however, that this Agreement shall continue thereafter for such period as may be necessary for the complete divestiture of all cash, securities, and other instruments held hereunder by the Bank, but solely to the extent necessary to effect such complete divestiture. Section 9.02. The Bank shall, immediately upon the receipt or transmittal notice of termination, as the case rriay be, commence and prosecute diligently to completion the transfer of all cash and the delivery of all securities and other instruments, duly endorsed, to the successor of the Bank. The Principal shall select such successor within thirty (30) days after the receipt or transmittal of such notice of terminatiion, as the case may be, and shall forthwith notify the Bank of the selection of such successor. In the event the Principal has not timely notified the Bank of the selection of a successor, the Bank, in its discretion, may deliver to the Principal all securities and other instruments, duly endorsed, and all cash. g \~IMMM \In77 &x 7 4D e * City of Carlsbad Upon delivery to the Principal or successor of the cash, securities and other instruments held by it hereunder, the Bank shall have no further liability or responsibility under this Agreement or otherwise, or for any act or omission of the Principal or the successor. Section 9.03. Upon termination of this Agreement and either after payment to the Bank of all fees owed pursuant to this Agreement or the holding of sufficient funds or assets equal to any fees in question, all monies, seclurities and other assets of every kind and nature held in the Custodial Account shall be paid over, delivered or surrendered upon a written order or receipt signed by the Principal or its appointed successor. ARTICLE X: CONCERNING THE CUSTODIAN Section 10.01. The parties agree that the Bank is a bailee for hire, and as such must exercise reasonable care in operating under this Agreement. The Principal indemnifies and holds harmless the Bank, its directors, officers, employees and agents from and against all liabilities, losses, expenses and claims (including reasonable attorney's fees and costs of defense) arising out of the Principal's or its authorized representatives' actions or omissions with respect to the Custodial Account, or arising out of or relating to any ac:tion, suit or proceeding to which the Bank is a party or otherwise involved by reason of its serving as Custodian pursuant to this Agreement and complying with its terms, except where the Bank has been1 found to have been negligent or to have breached its duties under this Agreement by a final judgment of a Court of competent jurisdiction. This indemnity shall be a continuing obligation of the Principal, its successors and assigns, notwithstanding the termination of this Agreement. The Bank shall have no obligation hereunder for costs, expenses, damages, liabilities or claims (including attorney's fees) sustained or incurred by reason of any action or inaction by the Federal Book-Entry System, any registered securities depository, or their respective successors or nominees, unless such action or inaction is caused by the negligence or willful misconduct of the Bank. Section 10.02. The Bank shall not be liable for any delay or failure to act as may be required hereunder when such delay or failure is due to fire, earthquake, any act of God, interruption or suspension of any communication or wire facilities or services, war, emergency conditions or other circumstances beyond its control provided it exercises such diligence as the circumstances may reasonably require. ARTICLE XI: MISCELLANEOUS Section 11-01. Subject to any laws of the United States which may be applicable, this Agreement shall be governed, construed, regulated and administered under the laws of the State of Cali forn ia. g \~h.+~w\1l177 ck" a I 0 0 City of Carlsbad Section 11.02. It is not the intention of any party to this Agreement to violate any statute, regulation, ruling, judicial decision, or other legal provision applicable to this Agreement or the performance thereof. If any term of this Agreement, or any act or omission in the performance thereof, is or becomes violative of any such provision, such term, act or omission shall be of no force or effect and any such term shall be severed from this Agreement. Any such invalid term, act or omission shall not affect the validity of any other term of this Agreement that is otherwise valid, nor the validity of any otherwise valid act or omission in the performance thereof, unless such invalidity prevents accomplishment of the objectives and purposes of this Agreement. In the event any such term, act or omission is determined to be illegal or otherwise invalid, the necessary steps to remedy such illegality or invalidity shall be taken immediately by the parties. Section 11.03. Disclosure of Beneficial Owner Information Securities and Exchange Commission Rule #14b-1 (c), enables corporations to learn the identity of their security holders whose securities are held by Banks and registered in "nominee" or "street" name. According to the rule, the issuing company would be permitted to use your name and related information for "corporate communication" purposes on I y. [ J ] I do not want any name, address, and securities positions disclosed to all the companies in which I own securities that are registered in lhominee" or "street" name. or [ ] I want my name, (address and securities positions disclosed to all the companies in which I own securities that are registered in "nominee" or "street" name. Section 11.04. Any controversy or claim between the parties and any claim based on or arising from an alleged tort may be resolved by a court of competent jurisdiction or be determined by arbitration upon mutual agreement. The arbitration shall be conducted in accordance with the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law provision in this Agreement and under the Commercial Rules of the American Arbitration Association ("MA"). The arbitrator(s) shall resolve all claims and defenses or other matters in dispute in accordance with applicable law, including without limitation thereto, all statutes of limitation. Any controversy concerning whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the arbitration award may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of provisional or ancillary remedies shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. I: \~h~~.\lI~77 tks 9 e 0 City of Carlsbad IN WITNESS WHEREOF, this Agreement is executed inef, O~d~~~~, State of California, as of the date first above written. City of Carlsbad First Interstate Bank of California By: Lpm/ & By: wpM David Colv51le , Title: q 7L-m Title: &F fle-S(&-M,- By: By: Title: Assistant Vice President Title: Tax Identification No. 25- mq393 IO , .I,1,,,,1~Il~/'I~* Ti' I- \- , 0 e CITY OF CARLSBAD Banking Services Proposal Submitted By: First Interstate Bank Attachment "C" (Exhibit "A" As Referenced in First Interstate Bank Document) v * City of Carlsbad Elanking Services Proposal Subrnitted By: First Interstate Bank July 31,1995 Book 1 of 3 a 0 TABLE OF CONTENTS City of Carlsbad Book 1 Banking Services Proposal Cover Letter Section I. Banking Services Proposal Required Services Additional Services Bank Procedures and Policies Section II. Exhibit A Pricing Pro Forma Fee Schedule - Business Accounts Section m. Sample Account Analysis Statement Sample Bank Statement Sample ACTION Reports Computer Specifications Section IV. Bank Staff Resumes Section V. Bank Financial Highlights How First Interstate Safeguards Depositors’ Funds Book 2 Custody Proposal Book 3 Bank Financial Reports (One Copy Only) a 9 July 31,1995 Mr. James M. Stanton City Treasurer City of Carisbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 Dear Mr. Stanton: First Interstate Bank of CaIifornia is pleased to be granted this opportunity to present the City of Carlsbad (“City”) with a comprehensive proposal for banking services. In making its banking decision, we would like to present some points we think the City should consider: * First Interstate Bank values the City’s relationship and will continue to offer the City’s its current reduced pricing through June 1997. In addition? by remaining at First Interstate Bank, the City will avoid the considerable cost and effort of a bank conversion. Both of these items will provide considerable savings to the City. First Interstate Bank will continue to actively work with the City to improve its banking relationship. First Interstate Bank’s philosophy focuses on total relationship management. Our Bank officers are dedicated professionals committed to developing and maintaining strong, long-term relationships. First Interstate Bank prides itself on adding value by working closely with our customers to meet their funds management goals. First Interstate Bank is committed to supporting the local branches in meeting their customers needs. This means that the City’s account will continue to be managed locally from the Carlsbad branch. Barbara Mathias, in serving the City of Carlsbad, will be supported by the Government Services Group and Cash Management. In addition to our Carlsbad branch, First Interstate Bank has numerous, full-service branches in San Diego County which can serve the banking needs of both the City and its employees. First Interstate Bank will continue to offer City employees on direct deposit a special employee banking package described in the proposal at no cost to the City. First Interstate Bank is an “approved depository” for the State of California and, as such, maintains a direct banking relationship with the State. The Bank has the ability to accept direct deposits to our public agency customers’ accounts from the State for various payments? as well as handle all Local Agency Investment Fund (LAIF) activity directly. First Interstate Bank will continue to fully collateralize collected funds in the City’s account pursuant to the California Government Code. For this purpose, First Interstate maintains two collateral pools for our public funds customers - a securities pool and a real estate note pool. * * * e 1 0 e We trust that this proposd is comprehensive and constructive. Thank you for banking at First Interstate Bank. Please do not hesitate to call with any questions or requests for additional information. Yours sincerely, Barbara Mathias Christa Muth Richard Babbe Manager Vice President Assistant Vice President Carlsbad Office Cash Management Sales Government Services Group 2 Banking Services Proposal 0 CONFIDENTIAL e CITY OF CARLSBAD REQUIRED SERVICES What follows is a brief presentation on services that First Interstate Bank recommends for the City’s consideration. Please refer to Section 11. for pricing. DEMAND DEPOSIT ACCOUNTSKOMPENSATION First Interstate can provide the City with non-interest bearing or interest bearing demand deposit accounts (DDAs) to accommodate the City’s deposit and disbursement activity. First Interstate Bank recommends the City continue using non-interest bearing demand deposit accounts for its General, Payroll, Insurance, Workman’s Comp, and Library accounts. Non-interest bearing demand deposit accounts will earn a monthly Earnings Credit Rate that will be applied to your available balances (ledger balances less float and reserves). The Earnings Credit Rate will generate an earnings allowance which can be used to cover monthly account activity and is based on the prior month’s average 9 1 -day T-Bill discount rate. The Earnings Credit Rates for the past twelve months are outlined below: July, 1995 5.51% January, 1995 5.65% June, 1995 5.70% December, 1994 5.27% April, 1995 5.75% October, 1994 4.63% March, 1995 5.79% September, 1994 4.50% February, 1995 5.79% August, 1994 4.36% May, 1995 5.68% November, 1994 4.94% The required level of collected balances to support service charges can fluctuate monthly based on the interest rate environment, specifically T-Bill rates. For example, higher interest rates and a higher earnings credit rate would result in a lower level of required balances with the Bank. The City can compensate for services with balances, fees, or a combination of the two. First Interstate Bank will agree to keep the City’s accounts on quarterly deferral, whereby any account analysis surpluses or deficiencies can be carried forward or backward within each calendar quarter. Please refer to Section 11. for compensating balance calculations. The City may also elect to use Super NOW accounts, which are interest bearing demand deposit accounts. The interest earned would be credited to your accounts monthly, and any service charges related to cash management services utilized would be debited directly from your accounts. Super NOW accounts are not available in conjunction with Sweep Accounts or Zero Balance Accounts. The current interest rate for the Super NOW account is 1.01%. First Interstate recommends that the City continue utilizing the Bank’s non-interest bearing account for its primary operating accounts. The reason is that the earnings credit rate on a non-interest bearing account is sigmficantly higher than the interest rate paid on the Super Now account. First Interstate Bank 1-1 Banking Services Proposal 0 CITY OF CARLSBA b CONFIDENTIAL Bank StaternentdAccount Analysis The City will receive its bank statements within approximately ten (10) business days after month-end. The bank statement will provide a listing of checks cleared, the date checks cleared, date and amount of deposits, as well as a summary of beginning cash balances, deposits/credits, checkddebits, and ending cash balances. Please refer to Section 111. for a sample bank statement. First Interstate will also provide the City with a monthly Account Analysis statement for its demand deposit accounts within approximately ten (10) to fifteen (15) business days after month-end. This statement will recap all cash management activity by product category and serve as a useful tool for tracking service utilization and balances. Please refer to Section 111. for a sample Account Analysis statement and compensating balance calculations. ZERO BALANCE ACCOUNTS The Bank’s Zero Balance Account (ZBA) service simplifies the concentration of funds for customers with multiple deposit and disbursement accounts. The ZBA service automatically concentrates a11 of the designated accounts’ activity into a single account daily. (This sewice may be utilized with non-interest bearing DDAs only..) The Bank recommends the City continue using ZBAs for the City’s Payroll, Workman’s Comp, and Insurance accounts. The following features will simplify the City’s funds movement among accounts: 0 Centralizes cash control since funds are moved from the concentration account only when they are needed to fund disbursements. Reduces staff work load since fhds are transferred automatically, saving both the and money. Facilitates earning of interest and investment income on the concentrated balance. Provides detailed descriptions of account transactions and funds transfers. Can establish maximum per-day dollar limits or per-check limits on each disbursement. Target balance levels can be established in each subsidiary account. 0 0 0 0 0 First Interstate 8 an k 1-2 Banking Services Proposal 0 CITY OF CARLSBA b CONFIDENTIAL MARKET INTEREST ACCOUNT First Interstate offers a Market Interest Account (MIA) to our public fimds customers for surplus balances and for very low activity accounts. First Interstate Bank recommends the City continue utilizing MIAs for the City’s two Housing Authority accounts. The MIA acts as a savings vehicle whle also providing our customers with market rates, liquidity, and flexibility. Withdrawals from MIAs are limited by law to six transfers a month, three of which may be checks. A standing wire could be established to automatically transfer funds from your checking account to a Market Interest Account, so that all of your operational and investment needs are being met. Representative rates for Market Interest accounts as of July 20, 1995 are as follows: $0 - 999 1.01% $1,000 - 9,999 2.40% $10,000 - 99,999 2.53% $100,000 -and over 3.50% DEPOSITORY SERVICES Daily deposits can be made directly to First Interstate Bank’s Carlsbad branch or to the Bank’s Operations Center in San Diego via armored carrier. We recommend that the City continue using an armored carrier to transport its daily receipts to First Interstate’s Operations Center rather than to the local branch for faster, more secure, and more efficient processing. The Carlsbad branch is available to handle any deposits or transactions that fall outside of the armored pickups. In addition, a Night Drop Depository is available at the Carlsbad branch to accept after hours deposits. Upon receipt of the deposits at our Operations Center, manifests are signed by the Operations Center staff, and duplicate deposit tickets can be provided. The City receives same-day ledger credit for all deposits made to the Operations Center as long as the deposits reach our facility by the deposit deadline and are packaged according to the Bank’s specifications. First Interstate Bank commits to verifymg your deposits within 24 hours of ledger credit and providing our customers with immediate telephone notification of any adjustments over $50. Customers are provided with mailed notifications of all adjustments. At First Interstate, we are committed to quality processing in our Operations Center. We have established quality goals across the Territory and consistently monitor our performance. Our centers are continuing to enhance and further automate operations so that we can continue to provide the highest quality Operations Center services available. Change orders can be facilitated by using Tele-Entry, First Interstate Bank’s touch-tone service whereby the City can request change orders on a regular or as-needed basis. The change orders will be delivered to you by armored carrier when it picks up the daily deposits. First Interstate Bank 1 -3 Banlung Services Proposal a CITY OF CARLSBA d, CONFl DENTIAL When the City uses First Interstate Bank’s Operations Center for deposits and change orders, it will benefit from: State-of-the-art computer system for accuracy and speed in processing the City I s deposits and change orders. Stringent procedures to ensure the integrity of deposits, from receipt to teller assignment, verification under dual custody, and posting to your accounts. The latest in security equipment to protect your deposits. Qualified, experienced customer service representatives to respond to inquiries and to advise you of any deposit adjustments. 0 * 0 BALANCE REPORTING INFORMATION First Interstate Bank’s in-house balance reporting system, ACTION, acts as a window between the City and the Bank. ACTION is a two-way communication system that will provide the City with summary andor detail fields of information via terminal, touch-tone telephone, or fax by approximately 6:OO a.m. each day. Summary items include: opening ledger, collected, and available balances, one- and two-day float, total debits, and total credits. Detail debit or credit information is also available, whereby you can identify individual debits and credits that have posted to your accounts. All information can be delivered to the City on a previous-day or intraday (real time) basis. Information is one of the most critical components of effective cash management. With this in mind, ACTION has been designed to assist the City in acheving these fimdamental goals: 0 0 0 Reducing dormant balances; 0 Maximizing cash available for investment; Compensating banks for services and credit commitments; Initiating hnds transfer instructions for Automated Clearing House (ACH) and wire transfer services; and Reporting and initiating on-line ACH transaction information -- including deletions, reversals and returned items. 0 Utilizing ACTION via terminal for balance reporting will continue to provide the City with a time and cost-effective tool to inquire as to the status of issued checks, issue stop payment instructions to the Bank, and request photocopies of paid items. ACTION can also be tailored to meet the City’s specific needs. First Interstate Bank 1-4 Banking Services Proposal e CONFl DENTIAL 0 CITY OF CARLSBAD STOP PAYMENTS First Interstate recommends that the City initiate stop payment requests through the aforementioned ACTION system for cost-effective processing. Through ACTION, you can inquire about the status of an issued check, place stop payments, cancel a stop payment, and receive on-line confirmation of all functions performed through a personal computer. ACTION Stop Payment provides two levels of security, ensuring only authorized access, and the service is easy to use. Any stop payment orders that are not issued through ACTION can be handled by the local branch. ACCOUNT RECONCILEMENT First Interstate Bank’s Account Reconcilement Program (ARP) can provide the City with a computerized business service as well as save your staff time and money. ARP allows our large volume check customers to automatically update their check ledgers, The ARP service produces reports for traclung items issued, paid, canceled, and deposited. ARP truly benefits the customer who issues a large volume of checks each month and wishes to improve internal accounting controls or streamline operations. The City will receive its ARP statements within approximately ten (1 0) business days after the end of the preceding month. First Interstate Bank’s account reconcilement program provides the City with a variety of ways to reconcile bank account information and reduce City time and expense in performing many basic accounting activities. The City is currently using Partial ARP for its General and Payroll accounts. Partial ARP - No issue information is submitted by the City. The Bank provides you with a bank statement and output transmission or diskette at the end of the reconciliation period which includes checks paid data. This data can then be run against your own reconcilement system to match paid items against issued items. The City is currently receiving only a paper ARP report. However, the City can receive this information via computer transmission for an additional $25/account/month or $35/account/month for computer diskette. The check sorting service requires the City use either Full or Partial ARP. First Interstate Bank can also provide the City with Full ARP and PC - Based Reconcilement services. Full ARP - The City provides the Bank with checks issued information in the form of tape input, data transmission, or diskette. An outstanding check file is created, and as checks pay against the City’s accounts, the Bank matches them against the issue file. The Bank provides the City with the checking account statement with checks listed in serial number order and reports that detail of checks paid, checks outstanding, and exceptions. First Interstate Bank 1-5 Banking Services Proposal e CONFIDENTIAL e CITY OF CARLSBAD PC - Based Reconcilement - First Interstate offers ACCURET , an inexpensive reconcilement service that is best utilized for monthly check volumes of under 5,000 and for users who wish to use a personal computer for check ledger reconciliation, rather than a mini-computer or mainframe computer. ACCURET’s key features are as follows: 0 Reconciles your checking account up to 20 times faster than by hand with complete accuracy. Checks every dollar amount, check number, and date. Finds and reports all discrepancies and errors for your review, and ACCWT will even suggest ways to correct the error. Reads accounting records in most formats straight from your computer, so there is no need to type in your data again. Prints comprehensive reports to fully document your reconciliation on any type of printer. The ACCURET diskette is mailed to you at the same time as your bank statement. With ACCURET you will be able to obtain full reconciliation and establish an audit trail. The cost of ACCURET is just KO8 per item reconciled, with no monthly maintenance or transmission charges. 0 0 0 0 0 WIRE TRANSFERS First Interstate Bank’s wire transfer system offers a convenient way for the City to handle its wire needs. Customers can initiate outgoing wires via telephone or terminal and receive notification of incoming wires by telephone, terminal, or fax. Telephone Wires - For initiating internal and external outgoing wires, First Interstate recommends that the City continue utilizing TeleTransfer, which: 0 0 0 0 0 0 0 Keys all requests directly into the wire transfer system while you are on the phone. Is less expensive and more convenient than branch wires. Assigns caller identification numbers and dollar limits to authorized individuals. Confirms authorization of each wire by callback. Uses templates for securing wires, minimizing the time needed to key in information. Extends deadline to 2:30 p.m. PST for all Fed districts. Sets up wires in advance to ensure funds transfer on the exact date needed. The City will receive immediate credit on all incoming wire transfers upon receipt, and outgoing wires will be sent out the same day, provided the wire deadlines are met. First Interstate Bank 1-6 Banking Services Proposal 0 CONFIDENTIAL 0 CITY OF CARLSBAD Terminal Wires - Terminal wires are recommended for customers with monthly outgoing wire activity of at least ten wires. First Interstate’s PC-based system, ACTION, acts as the mode by which the City can initiate wire transfers, track incoming wires, receive daily controlled disbursement notifications, and retrieve balances and other account information. ACTION is easy to access, secure, reliable, and flexible. We provide an ACTION Helpline that you can call directly at any time to call for support. Through ACTION, all of the City’s wires can be initiated via PC directly to the Bank’s wire transfer system. This way, any errors are caught immediately, and no further errors are made through the re-keying of data. Caller ID numbers and test key codes ensure security, and a reference number is provided immediately after the transfer is completed to facilitate tracking in case any questions arise. Repetitive wires are built into the ACTION data base with a line code assigned to each one. DIRECT DEPOSIT OF PAYROLL First Interstate’s Direct Deposit of Payroll service electronically deposits your employees’ pay into their own checking accounts on payday. Direct deposit has proven to be a more cost-effective, convenient, and secure method of payment. The overall cost of payroll processing is reduced, and a tangible benefit is provided to your employees. Your staff will subsequently have more time on the job because they will not be standing in line at the bank on payday! The City will continue to benefit from the following advantages associated with Direct Deposit of Payroll: e Cost Savings: Customers save an average of $1.25 per payment when using Direct Deposit instead of checks and as much as $10 per payment when using Direct Deposit for expense reimbursement. Fewer Lost or Stolen Checks: Electronic payments eliminates the costs and effort resulting from the investigation, stop payment, and replacement of lost or stolen checks. Fewer Errors: Direct Deposit Payments require far less manual handling than checks, thereby significantly reducing errors. Reduced Fraud: Check fraud incidents such as counterfeited checks, fraudulent signatures, and other problems are eliminated with Direct Deposit. e e e First Interstate Bank’s state-of-the-art processing system provides timely and accurate electronic deposit of your payroll on payday, streamlining the process for the City and its employees. Direct Deposit information can be transmitted to the Bank by a payroll processor, magnetic tape, mainframe transmission, or PC. first Interstate Bank 1-7 - Banking Services Proposal a CONFl DENTlAL e CITY OF CARLSBAD EMPLOYEE BANKING First Interstate Bank will continue to offer City employees who participate in Direct Deposit of Payroll a special employee banking package (Bank at Work), as well as offer VISA or Mastercard credit cards, subject to credit approval, to key employees for business use. On average, an employee can save up to $160 during the first year by takmg advantage of the services offered by First Interstate. The Bank at Work program will provide the City’s employees certain First Interstate banking services at a discounted rate or with fee waivers. Bank at Work combines an extensive array of time-saving and money-saving benefits for you and your employees’ convenience. Your employees will benefit by utilizing the following program: Automatic Direct Deposit at no charge: A real time-saving and money-saving convenience. A Regular Checking Account: Free of the regular monthly service charge. There is no per-check charge, regardless of average balance maintained. Small Safe Deposit Box: Free of charge or a $15 credit toward the rental of a larger box for one year (subject to availability). Balance Plus (upon approval): Overdraft protection with no annual fee for the first year. AdvanceLine home equity line of cre&t with automatic payment. Initial Order of Personalized Designer Checks: Free of charge, Standard WSA or Mastercard (upon approval): With no annual fee the first year for new card members. 0 0 0 0 0 Loan Discounts (upon approval): Up to 112% off certain personal loans and 1/4% off 0 0 To be eligible for the Bank at Work program, the City employee must: 1) qualify for a checking account at First Interstate Bank; 2) sign up for and maintain direct deposit of payroll to a First Interstate checking account; and 3) be an active City employee. City employees can use this package at g First Interstate branch in California. PAYROLL TAX PAYMENTS First Interstate Bank is a qualified depository institution for federal and state payroll withholding taxes and recommends the utilization of FirsTax, a service which allows our customers to remit withholdings through the use of a touch-tone telephone. FirsTax saves time, is convenient, and maximizes efficiency. We offer this service at no charge (Federal payments only). First Interstate Bank offers additional optional FirsTax services (at an additional charge): o State Payroll Withholding Taxes: First Interstate’s FirsTax service enables our customers to remit state withholdings for a $2.00 charge per payment. FirsTax Quarterly Reports: First Interstate Bank’s time saving quarterly reports contain the required summary information for completing IRS forms for a $9.00 charge per quarter. Fax Receipts: First Interstate Bank will fax receipt of the tax payment at $4.00 each. o First Interstate Bank 1-8 Banking Services Proposal 0 CONFIDENTIAL e CITY OF CARLSBAD MERCHANT BANKCARD First Interstate Bank recommends the City continue utilizing Merchant Bankcard for handling any incoming payments that are made by customers using Mastercard or VISA. Discount fees will be charged on approximately the third business day following month end, and will be automatically debited from your checking account. The interchange rate charged to First Interstate by Mastercard and VISA is adjusted annually. Merchant rates may be adjusted at that time, and the Bank will provide the City with 60 days notice prior to any change in rates. First Interstate’s Merchant Bankcard service can provide the City the ability to: Accept Mastercard, VISA, American Express, Diners, Discover, JCB, and Check Guarantee Services credit and debit cards. Deposit Mastercard, VISA, American Express, Diners, Discover, and JCB sales drafts into your First Interstate account for immediate credit. 0 First Interstate offers the following Merchant Bankcard services for the City’s consideration: Terminal Authorization and Electronic Data Capture: Terminal Authorization and Electronic Data Capture (EDC) is a direct deposit program for Mastercard, VISA, American Express, Diners, Discover, and JCB transactions. First Interstate Bank recommends the City continue using this service as it provides electronic authorization, capture, and direct deposit of credit card transactions. City personnel will have the ability to track all of the transaction activity. Standard Voice Authorization: Standard Voice offers customer authorizations for VISA and Mastercard transactions. A staff member would call a voice operator to obtain authorization. Prices for terminals are listed below along with lnformation on warranties and equipment options available to you. The City will have to use a dedicated phone line for each of the terminals to increase speed and efficiency. Costs for the phone lines are the customer’s responsibility. Set-Up Fee Add-on Programming $7.50 per terminal (American Express, Diners Club, Discover, and Carte Blanche) EQUIPMENT PURCHASE* RENTAL Verifone TR4NZ 3 3 0 $375.00 $20.00 per month (Electronic Terminal) Verifone 250 $225 .OO $15.00 per month (Roll Printer) * Plus sales tax. Full warranty on equipment as long as you are a First Interstate merchantkustomer. Maintenance $7.5 O/terminal/month $75 .OO per location (After initial installation) First Interstate Bank 1-9 Banking Services Proposal 0 CONFl DENTIAL * CITY OF CARLSBAD ADDITIONAL SERVICES What follows is a brief presentation on some of the many additional services that are available to the City through First Interstate Bank. First Interstate Bank would welcome the opportunity to meet with the City to discuss any of these services in more detail, including the wide variety of options and pricing available with each service. First Interstate Bank prides itself on adding value to our customers by working closely with them to meet their funds management goals. VISmSTERCARD BUSINESS CARD VISA or Mastercard credit cards can be provided to the City for its employees’ and administrators’ use. Issuance of credit cards is subject to the execution of required documentation and to credit approval by the Bank’s Credit Administration. The City will enjoy the added convenience and extra benefits of the First Interstate VISAMasterCard Business Card. Worldwide Acceptance: Accepted by over eight million merchants around the world - more than three times as many as American Express. A Comprehensive Package of Benefits: Including 24-hour toll-free customer service, medical and legal emergency service, travel emergency service, lost or stolen card replacement, guaranteed hotel reservations, travel accident insurance, and more. Auto Rental Insurance: Automatically provides coverage against collision, vehicle theft or damage caused by an accident during the rental period when VISAhlasterCard Business Card is used to rent a car (excess reimbursement insurance). This represents a savings of up to $12 a day. Purchase Protection and Warranty Extension: Automatically extends the warranty and insures most purchases against loss, theft, damage or fire (certain restrictions and exclusions apply). Tailored Spending Limits: Allows the customer to set a different credit limit for each card, helping you better manage employee expenses. Cash Access When Traveling: Cash advances at any participating financial institution and at over 24,000 cash machines (if approved by the customer). Corporate Liability Protection: Customers with ten or more Business Cards are automatically protected from card misuse by terminated employees (certain restrictions and exclusions apply). 0 e e e 0 e The First Interstate Business Card gives you the service and convenience you expect. The fee for Business Cards is as follows: Annual Fee: $40.00 per card Grace Period for Repayment of Balances: 25 days from purchase date first Interstate Bank 1-10 Banking Services Proposal 0 CONFl DENTIAL 0 CITY OF CARLSBAD POINT-OF-SALE SERVICE The City may want to consider First Interstate’s Point-of-Sale service to complement its merchant bankcard service. First Interstate Bank can provide merchant access to over 70% of the consumer debit cards in the West with access to INTERLINK, CACTUS, PULSE, and ACCEL. First Interstate can also provide access to debit cards beyond the West. Through a series of computer connections, the Bank is able to reach many other debit card point-of-sale (POS) networks in the rest of the country. And, First Interstate can process VISA and Mastercard transactions across the US. Because of the cash-back feature, Point- of-Sale can be an inexpensive, convenient, and safe alternative to an ATM or cash dispenser. By using First Interstate’s proven high quality POS service, you can access over 20 million debit cards throughout 18 states all through one connection. Connects can either be host-to-host or through a third party processor. POS uses the same equipment as outlined in the Merchant Bankcard section. The benefits of joining First Interstate’s rapidly expanding POS network include: Faster check-out lines; and Increasing the average sale via POS versus cash transactions; Reducing your cash and check processing costs; Instant response time and 99.7% real-time availability. Based upon the City’s volume projections and ticket size, the Bank can customize pricing options to fit your needs. INVESTMENT SERVICES First Interstate specializes in handling the investment needs of public agencies, and offers a wide array of investment alternatives. Safety, Liquidity, and Yield are the priorities for any sound investment of public funds, and First Interstate Bank can offer the City the following: Public Funds Market Interest Account -- First Interstate offers a Market Interest Account (MIA) to our public funds customers for surplus balances. An MIA acts as a savings vehicle while also providing our customers with market rates, liquidity, and flexibility. MIAs are covered by the FDIC, and are fully collateralized. Withdrawals from MIAs are limited by law to six transfers a month, three of which may be checks. Representative nominal rates, as of July 20, 1995, are as follows: $0 to $999.99 1 .OO% 1,000.00 - $9,999.99 2.40% 10,0000 - 99,999 2.53% 100,OO and over 3.50% First Interstate Bank 1-1 1 Banking Services Proposal e CONFIDENTIAL e CITY OF CARLSBAD Public Funds Certificates of Deposit -- Public Funds CD’s are covered by the FDIC and are collateralized to ensure the utmost safety while providing the City with a fair market rate of return. Representative nominal rates, as of July 14, 1995, are as follows: # of Daw Under $100.000 $100,000 and Over 7-29 2.40% 2.50% 30-59 3.30% 3.40% 60-89 3.40% 3.50% 90-179 4.05% 4.15% 180-364 4.65% 4.75% 3 65 4.80% 4.90% Sweep Account -- First Interstate Bank’s Sweep Account (tied to a non-interest bearing DDA) is a fidly automated same-day investment service and is available to customers who maintain at least $200,000 in investable balances. First Interstate Bank has recently upgraded its Sweep Account to significantly improve its ease of use. First Interstate recommends that a peg balance be used to maintain sufficient balances in the account to cover service activity fees to generate the best overall rate of return for the customer. All collected balances above the peg balance will be swept at the end of each business day. Customers have the option of investing in either a Mutual Fund Investment Option or a Commercial Paper Investment Option. In addition, to ensure all funds are invested, customers must select a Government Sponsored Investment. Sweep investments are not covered by the FDIC and are not collateralized. Representative rates for Sweep investments as of June 30, 1995 are as follows: Amount Invested ($000’~) - 400 100-499 500-999 >1,000 Government Agencies 4.73% 4.98% 5.58% 5.83% Commercial Paper 5.03% 5.28% 5.88% 6.13% Mutual Funds: Pacifica Gov’t M/M 4.81% Dreyfus Gov’t. C/M 5.56% Dreyfus Treasury Prime C/M 5.16% In addition to a monthly statement listing all account activity, a daily confirmation notice of each day’s activity will be mailed to you the following business day. Further activity can be monitored through ACTION Balance Reporting. First fnterstate Bank 1-12 Banking Services Proposal 0 CONFIDENTIAL 0 CITY OF CARLSBAD Securities Trading -- First Interstate Bank’s own Security Sales & Trading Department can purchase a wide array of investment instruments on the City’s behalf such as: Government Securities (Bills, Notes, and Bonds); Agencies (overnight and term); Bankers’ Acceptances; 0 Municipal Securities; Corporate Debt; and Mortgage-Backed Securities. Commercial Paper (overnight and term); We have a staff that is dedicated to and knowledgeable about the public funds segment, and our representatives can consult you about the appropriate investment choices. Investments are not covered by the FDIC and are not collateralized. Investment Management -- If the City opts to have all or part of its investment portfoiio managed by an expert outsider manager, First Interstate Bank can custom-tailor an investment management strategy for you through our Capital Management division. PURCHASING CARD First Interstate Bank offers a Purchasing Card program from Mastercard to streamline your invoice payment process. The First Interstate Purchasing Card decreases processing time and transaction costs. Our card allows the City to participate in a full range of business expense conveniences, while reducing administrative time and increasing monitoring capabilities. Issuance of credit cards is subject to the execution of required documentation and credit approval by the Bank‘s Credit Adrmnistration. The City will enjoy the added convenience and extra benefits of the First Interstate Mastercard Purchasing Card. Administrative Cost Savings: Streamlines admimstrative complications and decreases manual invoicing by utilizing a unified payment device. Reduces overhead expenses associated with processing invoices, cash advances and reimbursement checks, providing a savings of up to $120.00 per transaction. Increased Monitoring Capabilities: The City may choose from a variety of authorization parameters, including transaction and credit limits as well as multiple approval methods. Adequate and efficient levels of control are available for authorizing specific transaction activity helping you better manage employee expenses. Management In formation Reporting: These reports will facilitate accurate expense reporting and help the City plan, track, and analyze purchasing activities. They will assist in vendor negotiations, policy compliance, and budget and variance control. Flexible Payment Options: Credit card payments can be made through electronic payments or direct billing. Payments are accepted in the form of check, wire transfer or ACH debit. 0 0 0 First lnterstate Bank 1-13 Banking Services Proposal 0 CITY OF CARLSBA b CON F I DE NTl AL Worldwide Acceptance: Accepted by over twelve million merchants around the world - more than three times as many as American Express. A Comprehensive Package of Benefits: Including 24-hour toll-free customer service and lost or stolen card replacement. Corporate Liability Protection: Customers with two or more Purchasing Cards are automatically protected from card misuse by terminated employees (certain restrictions and exclusions apply). The First Interstate Mastercard Purchasing Card gives you the service and convenience you expect. The fees for Purchasing Cards are as follows: Annual Fee: $40.00 per card Grace Period for Repayment: Monthly Minimum Payment: Minimum Line: $500.00 per card Not less than 25 days for purchases Payment in Full The First Interstate Purchasing Card is clearly a competitive business product with worldwide acceptance, superior benefits, and management reporting capabilities. ELECTRONIC PAYMENT SYSTEMS First Interstate Bank’s Automated Clearing House (ACH) service enables customers to make or collect payments electronically. ACH payment instructions are submitted to the Bank in a standard format established by the National Automated Clearing House Association (NACHA), and the transfer activity is authorized by your employees, customers, or suppliers. The Bank processes these transactions through the ACH for either one- or two-day settlement, offering ACH service applications as follows: Direct Deposit ofpayroll: Offers the ability to automatically deposit employees’ pay directly to their checking or savings accounts. Automated Expense Offers direct deposit of employees’ expense claims to their bank account, Reimbursement: eliminating the need to issue, deliver, and reconcile checks. Direct Debit Program: Allows for the collection of regularly recurring payments such as water, utility, license, or tax payments. Direct Credit Program: Enables you to make electronic rebate, refund, or vendor payments to customers or suppliers. Cash Concentration: Provides funds consolidation capabilities, electronically moving funds from other departments / entities into a single concentration account. FirsTax allows customers to make electronic tax payments to federal and state tax authorities via touch-tone telephone. Payroll Tax Payments: First Interstate Bank 1-14 Banking Services Proposal 0 CONFIDENTIAL 0 CITY OF CARLSBAD First Interstate Bank’s state-of-the-art on-line delivery of ACH transaction information is critical to meeting daily operational and treasury objectives. Through ACTION, the Bank’s mformation reporting and transaction initiation system, customers receive on-line: 0 Same-day ACH transaction reporting; Same-day ACH return reporting; 0 Returned item information; and ACH delete and reversal request and confirmation; ACH risk management and control options. First Interstate Bank’s ACH service offers the following benefits: Time and Cost Savings: Electronic payments are less expensive and less time-consuming to initiate, deliver, and reconcile than checks or warrants. Increased Funds Control: The exact date fimds are to be transferred is predetermined and allows for more precise cash forecasting. Flexibility: ACH transactions can be initiated by a variety of input methods -- mainframe or PC transmission or magnetic tape. Joint Marketing: We work closely with our customers in developing and implementing marketing programs to enhance program participation. Quality Servicing: First Interstate Bank has been offering ACH services since 1968 and is one of the largest ACH banks in the country. Our experience and commitment to quality translates to sophisticated ACH services and excellent customer service. 0 0 0 First Interstate is the tcvelfth largest ACH processor in the country with over 25 million transactions originated and 30 million transactions received annually. We provide high quality ACH services to over 5 , 000 customers. ELECTRONIC DATA INTERCHANGE (EDI) First Interstate Bank introduced ED1 services in the 1980’s and is the leading west coast provider as a result. Using EDI, the City can send and receive intercompany business documents and payments in a standard format which is both computer readable and processable. This electronic exchange of information replaces conventional, time-consuming paper document processes and automates business transactions. Computer readable ED1 messages offer numerous advantages over paper equivalents and provide several customer benefits: Greater Speed and Productivity: ED1 eliminates manual documentation and postal delays, thus reducing processing time. Productivity is increased and overall service is improved. Lower Cost: The City can realize substantial savings by streamlining and automating its information exchange processes. Th~s will improve cash flows and offer significant flexibility in trading partner relationshps. First Interstate Bank 1-15 Banking Services Proposal 0 CONFIDENTIAL 0 CITY OF CARLSBAD 0 Increased Accuracy: ED1 reduces repetitive keyboard tasks, reducing errors lnherent in manual data entry routines. Greater Flexibility and Capability: Regardless of the state of automation of your trading partners and their banks, First Interstate’s ACTION ED1 service allows you to implement the payment related EDI function. The Bank’s systems can automatically translate between various formats, including ANSI, NACHA, BAI, and custom standards. First Interstate supports over a thousand trading partners on its ED1 service today. We deal with a variety of industries, including aerospace, defense, energy, hospitals, and manufacturing. First Interstate was AT&T’s first bank to establish an ED1 program to process thousands of invoices and create payments (financial EDI). First Interstate has learned that various trading partners are very different in their technological sophistication and readiness to engage in EDI. Our experience has led us to develop a “Rungs on the Ladder” approach so we can facilitate ED1 at any stage. “Rungs on the Ladder” While some of the options we offer are far from pure EDI, they meet very real, in some cases pressing, client needs and often serve as a more easily implemented client’s first step toward full financial EDI. “Our Rungs on the Ladder” allow a company to: 1. Send an ANSI ASC 820, 835 or custom format payment file to effect the transfer of payments by check or ACH. 2. Transfer payment related information by paper, FAX, customer formatted transmissions, proprietary standards or public standards. 3. Create CTX payments with an 80 character NACHA addenda descriptor field using a module of our ACTION balance reporting system. 4. Use an ED1 PC product to send invoice data and payments. 5. Receive payment information in standard or custom formats. 6. Receive payment and remittance information by FAX, E-Mail, paper or ACTION PC. 7. Automatically merge remittance data with lockbox transmissions or reports. 8. Distribute remittance reports separately, using multiple methods simultaneously. 0 We envision this system as an ice-breaker for customers who are indifferent about the format of their outbound payment and payment-related information traffic. For customers receiving payments, the application allows for the merger of electronic and paper payments and reporting in a wide range of media and formats. First Interstate has now engineered an alternative specifically tailored to the needs of customers at all points of the payment technology spectrum. First Interstate Bank 1-16 Banking Services Proposal 0 CON FI DE NTI AL 0 CITY OF CARLSBAD CONTROLLED DISBURSEMENT First Interstate Bank’s Controlled Disbursement service will allow the City to optimize its cash position and forecast its funding needs. Each morning before you make any investment or borrowing decisions, the Bank’s Information Reporting System notifies the City of the checks that will be presented against your account that day. This early notification can allow the City to optimize its investment opportunities, eliminate any uncertainty about funding, and reduce the potential for idle balances or overdrafts. A hndamental objective of an effective cash management system is to synchronize the funding of bank accounts with the actual payment of checks drawn against those accounts. Controlled Disbursement eliminates the need to rely on manual disbursement mformation. If collected balances are insufficient to cover the total daily presentment, the City would be required to cover the difference by either a wire transfer from another bank or by book transfer from another account at First Interstate. Please note that a daylight overdraft line of credit must be approved by the Bank’s Credit Administration prior to the implementation of Controlled Disbursement. First Interstate’s Controlled Disbursement service provides timely reporting and superior customer service, both essential ingredients in an effective cash management system. First Interstate offers controlled disbursement points in California, Texas, & on the East Coast. Based on the City’s specific disbursement needs, we will propose a controlled disbursement point for your consideration. Companion features such as terminal-initiated stop payments, check safekeeping, and account reconciliation services are also available with Controlled Disbursement. POSITIVE PAY In order to reduce the problems related to check fraud, we recommend that the City consider our “Positive Pay” service. First Interstate’s Positive Pay system receives immediate check issue data from the City for matching against checks presented for payment. The Bank runs a matchup file as part of its posting routine and notifies the City of “suspect” items which may be returned the same day. The City enhances its security and control and reduces the time it currently spends in daily audits. Positive Pay is an excellent service for the City because almost all of the clean up work is done by the Bank and only the actual questionable (paid-no-issue) items need to be resolved by the City. If you Ike, we can provide a paper Daily Paid Listing which is available for courier pickup. In addition, we can make available a paper report whch is used internally to balance the Daily Change Listing. Controlled Disbursement coupled with Positive Pay would be a superb enhancement. This would combine real time notification of presentment totals to be funded (Controlled Disbursement) with the effective fraud prevention benefits of Positive Pay. First Interstate offers a California Controlled Disbursement drawee bank where we provide all of the reconcilement services in our own shop. The combination of services would provide the security required by the Controller and the timely knowledge required by the City Treasurer to perfect funding techniques and free up idle dollars for investment. Positive Pay with Controlled Disbursement maximizes both security and investment potential. First Interstate Bank 1-17 Banking Services Proposal e CONFl DENT1 AL 0 CITY OF CARLSBAD BANK POLICIES AND PROCEDURES CONTRACTUAL ARRANGEMENTS As part of any contract, which is subject to approval by the Bank’s legal counsel, the Bank will provide banlung services under any agreed-upon terms and conditions throughout the contract period, with pricing reviewed annually, each July. Standard cash management agreements are required to be executed prior to the implementation of services. The proposed terms and pricing are good for a period of 90 days after submission. If at the end of 90 days the City has not accepted the Bank’s bid, then the terms and pricing are subject to change. All pricing shall be held in strict confidence by the City. If selected, First Interstate Bank will provide the City with the following price concessions: We will agree to fix the City’s current pricing from the date of any agreement to June 30, 1997 with further increases limited to a mutually acceptable index; and We will agree to keep the City’s accounts on quarterly deferral, whereby any account analysis surpluses or deficiencies can be carried forward or backward within each calendar quarter. 0 The above concessions represent significant savings to the City. FORMS AND SUPPLIES Standard supplies such as checks, deposit tickets, plastic deposit bags, and endorsement stamps can be provided to the City with the related charges passed through account analysis. IMPLEMENTATION/CUSTOMER SERVICE First Interstate Bank is dedicated to providing full implementation support and maintenance of services geared to the City’s specific needs. A Cash Management Representative, Christa Muth, and a Cash Management Support Specialist will be assigned to the City relationship. They will be responsible for the implementation and training of all cash management services. This ensures the hghest level of consistency and service possible throughout the implementation of any cash management services. Your account is also supported by a dedicated cash management customer service team which specializes in handling municipality relationships. First Interstate Bank 1-18 Banking Services Proposal 0 CONFl DENTI AL 0 CITY OF CARLSBAD CONTACT PERSONNEL The City relationship will be serviced by several departments within the Bank and will continue to be managed at First Interstate’s Carlsbad branch. Barbara Mathias, Branch Manager, will continue be the City’s primary contact and will work closely with Cash Management, Government Services, and other groups to coordinate all activity associated with the relationship. The individuals who are authorized to represent First Interstate Bank and who will have responsibility for the City relationship are hghlighted below: Barbara Mathias Shirley Good Assistant Vice President & Manager Carlsbad Office 3 150 El Camino Real Carlsbad, CA 92008 Senior Vice President & District Manager San Diego North District 1686 1 Bemardo Center Drive San Diego, CA 92128 (619) 434-3316 (619) 451-7237 Richard Babbe, CCM Christa Muth Assistant Vice President Vice President Government Services Group 3 150 El Camino Real, Suite AA Carlsbad, CA 92008 Cash Management Sales 5 3 0 Broadway, Suite 10 1 6 San Diego, CA 9210 1 (619) 434-1296 (619) 557-3033 BUSINESS RESUMPTION PLANNING First Interstate Bank recognizes the importance to our customers that interruptions in cash management services are not experienced, even during emergency situations. That is why First Interstate endeavors to meet or exceed all regulatory requirements established to address business resumption planning. The Bank’s plan is reviewed and updated on an annual basis, allowing First Interstate to be current should an emergency occur. The Bank maintains several back-up systems and various operational locations throughout the West to facilitate the Business Resumption Plan (BRP) in an emergency situation. Within California, the Los Angeles Operations Center and the Fremont Operations Center have fully redundant systems that support each other. First Interstate Bank’s corporate banking systems are housed in the Portland, Oregon facility and/or in the Tempe, Arizona facility. If a disaster occurs, First Interstate has the option to implement a “hot site” environment provided through Comdisco Disaster Recovery Services, Inc., the world’s leading provider of business continuity services. First Interstate has assembled well-trained professionals to coordinate the Bank’s response to any disaster which may impact the Bank’s ability to carry out its day-to-day activities. These individuals have proven their abilities to carry out hs fimction on two significant occasions - the 1992 Los Angeles riots and the 1988 fire at the Bank’s 707 Wilshire Tower. In both instances, First Interstate was prepared and able to return to its normal business activity quickly and without any sipficant impact to our customers. First Interstate Bank 1-19 0 a Exhibit A Page 1 of 5 City of Carlsbad Mr. James M. Stanton, City Treasurer City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 Banking Services Proposal Form We have read the City Treasurer’s request for Proposal and hlly understand its intent. We certify that we have adequate personnel, equipment and facilities to hlfill the requirements thereto. We understand that our ability to meet the criteria and provide the required services shall be judged solely by the City Treasurer’s office. We have attached the following: 1. Five (5) copies of completed proposal forms. 2. Call reports for the past two (2) years, 3. Annual financial reports for the past three (3) years. 4. Samples of standard reconciliation product and monthly statements. We hrther certifl that we have filed with the City Treasurer an affidavit of one of our officers of the amount of this institution’s capital stock and surplus. It is understood that the above information will be used as evidence of our ability to meet the capital structure requirements necessary to service this account. It is hrther understood that ail information included in, attached to, or required by the Request for Proposal shall become public record upon delivery to the City Treasurer. Submitted by: First Interstate Bank Barbara Mathias, Manager Richard Babbe, Assistant Vice President (6 19) 434-33 16 Telephone Date July31, 1995 0 e Exhibit A Page 2 of 5 Banking Services Consolidated Proposal Form (Revised) Bank Submitting Proposal: First Interstate Bank e 0 Exhibit A Page 3 of 5 Notes: 1 The unit pricing shown is the City's existing pricing. First Interstate Bank is offering to extend the City's current pricing through June 30, 1997. Please see the attached pricing pro forma which illustrates how the pricing would look on a monthly basis. In addition? we have attached a business fee schedule for pricing on services not shown. The volumes for Cash, Checks, and Coin are taken from the Addendum to Exhibit A. The unit prices indicated are the weighted average prices of the actual unit pricing for each deposit type computed using the distribution of the City's June deposits. Please see the attached pricing pro forma for the unit charges by deposit type. In addition to the per item charges, there is a $1.10 charge per operations center deposit ticket. The pricing is for returned items (NSF items received). The Bank automatically redeposits returned checks a second time, at which time the majority of the items clear. The cost of this service is $1.25/item. The charge for anNSF item drawn on the City's account is $12.00/item. The pricing shown is the per wire charges for the City's current TeleTran$fer service. The monthly maintenance charge for this service is $5.5O/rnonth. If the City anticipates sending more than 10 out-going wires a month, it can reduce its overall costs by using terminal wires. LAIF transfers are not wires. Pricing for LAIF transfer is $lO/outgoing transfer and no charge for incoming transfers. Daily Balance Reporting consists of two items: a monthly maintenance charge and per item charges. The City's current service has a monthly maintenance charge of $2O/account (for five accounts) and per item charges for items displayed $0.22 for summary items and $0.14 for detail items. First Interstate Bank offers a wide range of balance reporting options beginning with limited prior day reporting only at $40 for all five of the City's accounts (plus per item charges). First Interstate Bank also offers a same day service, that allows users to see current day items (wires). 2 3 4 5 0 0 Exhibit A Page 3B of 5 Notes (cont.): 6 There is no charge for receiving the Bank's standard Bank Statement and Account Analysis Statement. In addtion to the per unit charge shown, check sorting requires either full or partial account reconcilement. The pricing shown is the monthly maintenance charge for Partial ARP for the City's two accounts on account reconcilement. In addition, there is a $O.O7/item charge for items on Partial ARP accounts, Currently, the City is only receiving paper ARP reports. This information can also be provided to the City via computer transmission for an additional $25/account/month or by computer diskette for an additional $35/account/month. Pricing shown is for the City's current armored car service. The pricing is determined by the armored car provider. This item is charged through analysis as a service for our customers. Additional locations will be put out to bid as requested by the City. ACH Direct Deposit of Payroll consists of three main components: Account Maintenance at $135/month, transmission charges at $25/transmission, and per item charges at $0.08 for First Interstate Bank items or $0.14 for items on other banks. The account maintenance charge is $10/DDA. The City has a total of seven accounts. However, only five accounts are indicated, as two of the City's accounts are MIAs which do not have an account maintenance charge if the average monthly balance is in excess of $2,500. Typical Branch Deposit Charges are as follows: $1.35/deposit ticket, $O.lO/local check, and $0.1 I/non-local check. A night drop depository is available at the Carlsbad branch for after hours deposits. There is a $l.jO/deposit surcharge for night drop deposits. In addition, standard Operations Center deposit charges apply. Please see the attached fee schedule for other branch service charges. This is the City's current discount rate. In addition, there is a $7.50/ month maintenance charge per terminal. First Interstate Bank purchased the City's terminals at no costs to the City. First Interstate Bank offers a full range of cash management, investment, and trust services. 7 8 9 10 11 12 13 14 0 0 Exhibit A Page 4 of 5 Interest Earnings Proposal Interest bearing account proposal: Average Interest Basis for Type of Rate for the Month Determining For its Operating Account, the City should use a non-interest bearing DDA, which is given a “soft dollar” earnings credit allowance (5.51% in July), which can be used to offset account analysis charges. In conjunction with this account, the City can use a Sweep Account, which will pay the City “hard dollar” interest. The interest varies depending on the Sweep investment selected. Please see Section I. for a list of sweep investments. While not suitable for the City’s Operating Account, First Interstate Bank also offers Super NOW and Market Interest Accounts. Please see Section I. for hrther information on all of these account types and additional investment options. Account Account of July. 1995 Rate Operating Please identify the particular investment City hnds will be invested with if the Bank elects to provide an investment option not directly related to the Bank. The “external” investment needs to comply with the City’s Investment Policy regarding permitted investments. Please see Section I. Account Maintenance Information We agree to furnish the following account maintenance information at the time specified below. We understand that the times are general standards established by the City Treasurer and that any other time may be proposed for furnishing the information. Service Descrktion Suggested Standards ProDosed Daily Account Balance Reporting 6:OO a.m. Daily On-Line Statements 6:OO a.m. next banking day 6:OO a.m. Monthly Statements 10 business days Monthly Service Charge Analysis Report month 10 business days 6:OO a.m. next banking day 5 business days after end of month 10 business days after end of 500,000 750,000 1,000,000 1,250,000 1,500,000 1,750,000 2,000,000 N.A. $4.00 N.A. $4.00 N.A. $4.00 N. A. $4.00 N.A. $4.00 N.A. $4.00 N.A. $4.00 e City of Carlsbad Pricing Pro Forma BALANCE ANALYSIS (1) Average Ledger Balance 1,300,000 Less Ledger Adjustments 300,000 Average Collected Balance 1,000,000 Less: Legal Reserve Requirement (at 10%) 100,000 Average Investable Balance 900,000 Earnings Credit Rate 5.51% Days in Month 31 Earnings Credit 4,211.75 ESTIMATED MONTHLY BANK SERVICES ANALYSIS Unit Collected Account Services Volume (1) Price (2) Total Price Balance RQD Account Reconcilement (3) Partial Account Reconcilement 2 60.0000 120.00 28,492 Partial Account ReconcilementAtem 2,333 0.0700 163.31 38,775 Check Sorting 2,333 0.0500 116.65 27,696 30.00 7,123 Automated Stop Payment 5 6.0000 429.96 102,086 Subtotal DDA Services Account Maintenance (4) 5 10.0000 50.00 11,872 Debit Posting 2,463 0.1000 246.30 58,479 OverdraWNSF Item (5) 5 12.0000 60.00 14,246 Deposit - Operations Center (6) 77 1.1000 84.70 20,110 Deposit - Branch (7) 0 1.3500 0.00 0 Return Items (8) 5 3.0000 15.00 3,561 Redeposits (8) 25 1.2500 31.25 7,420 Subtotal 487.25 1 15,688 Operations Center Deposits (9) Check Clearing On-Us 8:31PM - 10:OOAM 157 0.0650 10.21 2,423 On-Us 10:01AM-8:30PM 111 0.0850 9.44 2,240 Local Clearing House 1,137 0.0850 96.65 22,947 FI Affiliate City 34 0.0850 2.89 686 Local Fed 81 7 0.0850 69.45 16,488 Other Transit 244 0.1100 26.84 6,373 Pre-Enc On-Us 8:31PM - 10:OOAM 962 0.0350 33.67 7,994 Pre-Enc On-Us 10:01AM-8:30PM 279 0.0550 15.35 3,643 Pre-Enc Local Clearing House 6,554 0.0300 196.62 46,684 Pre-Enc FI Affiliate City 94 0.0550 5.17 1,228 Pre-Enc Local Fed 5,190 0.0400 207.60 49,291 Pre-Enc Other Transit 92 1 0.0800 73.68 17,494 Branch Deposits (7) Check Deposited - Local 0 0.1000 0.00 0 Check Deposited - Non-Local 0 0.1100 0.00 0 Subtotal 747.55 177,490 Page 1 0 0 City of Carlsbad Pricing Pro Forma Unit Collected Account Services Volume Price (2) Total Price Balance RQD Cash Services Cash Vault Deposit Ticket (6) 69 1.1000 75.90 18,021 Coin Deposited/Non-Standard Bag 9 4.0000 36.00 8,548 Currency Deposited Standard/$lM (9) 13,640 0.0009 12.28 2,915 Currency Deposited Non-Standard61 M (9) 48,360 0.0012 58.03 13,779 Subtotal 182.21 43,262 Wire Transfer Account Mo. Maint. 1 5.5000 5.50 1,306 TeleTran$fer Wire - Outgoing 8 15.0000 120.00 28,492 Incoming Wire Transfer (Automated) 10 7.5000 75.00 17,807 Fax Advice (1 0) 10 5.0000 50.00 11,872 Money TransfersNVires Transfers From LAIF (11) 0 0.0000 0.00 0 Transfers To LAIF (11) 0 10.0000 0.00 0 Subtotal 250.50 59,476 1 ACH Electronic Funds Transfer ACH Mo. Maint 1 135.0000 ' 135.00 32,053 ACH Transmission 4 25.0000 100.00 23,743 ACH DebiVCredit (12) 287 0.1400 40.18 9,540 ACH DebiVCredit-On-Us (12) 255 0.0800 20.40 4,844 ACH Night Cycle Debit 0 0.1600 0.00 0 Subtotal 295.58 70,180 Zero Balance Accounting ZBA Account Maint. Master 1 35.0000 35.00 8,310 ZBA Sub Account Maintenance (1 3) 3 10.0000 30.00 7,123 Subtotal 65.00 15,433 Balance Reporting Account Maint. 5 20.0000 100.00 23,743 Previous Day Summary items (14) 478 0.2200 105.16 24,968 Subtotal 436.02 103,525 ACTION (Information Reporting) Previous Day Detail Items (14) 1,649 0.1400 230.86 5481 3 Miscellaneous Services FDIC Assessment per 1000 1,300 0.1600 208.00 49,386 Armored Car (1 5) 0 759.0000 759.00 180,210 FirsTax State EFT Payment -Audio (16) 4 2.0000 8.00 1,899 Subtotal 975.00 231,495 SERVICES TOTAL 3,869.06 918,635 FirsTax Federal Payment - Audio (16) 4 0.0000 0.00 0 CUSTOMER SUMMARY Earnings Credit $ 4,211.75 Available For Additional Services $ 342.69 Services Total $ 3,869.06 Page 2 e e City of Carlsbad Pricing Pro Forma NOTES: 1 2 The volumes indicated are from Exhibit A or from the Addendum to Exhibit A unless otherwise noted. The unit pricing shown is the City's existing pricing. First Interstate Bank is offering to extend the City's current pricing through June 30, 1997. Please see the attached business fee schedule for pricing on services not shown. The City is currently using Partial ARP on its General and Payroll Accounts. At present, the City is only receiving paper ARP reports. However, the City has the option receiving the ARP report via computer transmission for an additional $25/accounff month or by computer diskette for $35/account/month. The check sorting service requires the City use either Full or Partial ARP. As an alternative, if the City doesn't require check sorting, the City could use ACTION to order copies of individual checks, and the City could use ACCURET for account reconcilement. This alternative would significantly reduce the City's overall account reconcilement costs. The City has a total of seven accounts. However, only five accounts are indicated, as two of the City's accounts are MIAs which do not have an account maintenance charge if the average monthly balance is in excess of $2,500. No volume was given in the RFP for this item. However, the City's June volume was used to illustrate typical account charges. This item is the unit charge for processing each deposit. However, as no volume was given in the RFP, the City's June volume was used to illustrate typical account charges. No volume was given for these items in the RFP. The City, however, deposits a portion of its checks at the branch. The unit prices are shown, but no volumes are given to avoid double counting other deposit items. The RFP listed a monthly volume of 25 returned items. However, the Bank automatically redeposits these items a second time, at which time most clear. Only those items which are returned a second time are sent back to the City as a returned item. The City's June proportion of returned items to redeposits was used to illustrate typical account charges. The City's RFP volume of deposit items was distributed between the different deposit categories according to the City's June deposit activity. No volume for this item was in the RFP. However, the City currently receives a fax advice on all incoming wires. The cost was included to illustrate typical account charges. No volume for this item was given on Exhibit A. However, as the City makes LAlF transfers the unit price is shown. The City's RFP volume for direct deposits is used. However, the items were distributed between First Interstate Bank (On-Us) and other banks according to the City's June volume. No volume for this item is given in the RFP. However, three of the City's accounts are currently ZBAs. The City June volume for these items is used to illustrate typical account charges. The pricing shown is for the City's current armored car service. The price is determined by the armored car provider. This item is charged through analysis as a service for our customers. While the City does not currently use this service, First interstate Bank highly recommends its use by the City. Estimated volumes are used to illustrate typical account charges. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Page 3 Banking Services Proposal CITY OF CARLSBAD e OFFICER RESUMES Carlsbad Office Barbara Mathias, Assistant Vice President & Manager Barbara is responsible for managing all functions of the Carlsbad branch with emphasis on managing a customer driven sales and service environment. She plans, controls, and directs the activities of personnel toward attainment of branch goals, including sales, customer service, proper credit quality, and risk management. Barbara has over twenty-five years banking experience with First Interstate Bank. As manager of the Carlsbad branch, she is the primary contact officer for the City of Crrlsbad. Julie Rodriquez, Assistant Vice President & Financial Services Manager Julie manages the Financial Services Department of the Carlsbad branch, which supports both retail and business clientele. Julie has over twenty years of banking experience with First Interstate Bank. At a prior branch, Julie had extensive experience assisting the City of Escondido with its banking needs. Debra Fisher, Customer Service Manager Debra manages the customer service staff of the Carlsbad branch, which sevices both retail and commercial clients. Debra has been in her current position for three years, and has over fifteen years of banking experience concentrated in the areas of customer service and risk management. First Interstate Bank 1 CITY OF CARLSBAD 0 0 Banking Services Proposal Government Services Group Richard Babbe, CCM, Assistant Vice President Richard is a member of First Interstate Bank's Government Services Group, whch supports over 350 branches and commercial centers in California in maintaining and soliciting state, federal, and local agency relationships. Richard has over five years of banking and municipal finance expwience which includes cash management, underwriting, financial advisory services, and marketing. Richard earned his Certified Cash Manager designation in 1995, a special recognition by the Treasury Management Association. Richard graduated from the University of California, Berkeley, earning his B.A. degree in Architecture and was awarded his M.B.A. from the University of California, Los Angeles in finance ald real estate. Richard actively participates in the CMTA, CSMFO, CACTTC, CASBO, and GFOA. The Government Services Group supports these associations' efforts in keeping its members informcd and updated on the latest developments in banking and cash management. Cash Management Sales Christa Muth, Vice President Christa has been with First Interstate Bank for 21 years and has an extensive background in cash management, retail, and corporate banking. Prior to joining Cash Management Sales, Christa managed First Interstate's Lomas Santa Fe Office. Christa attended San Diego State Un.versity and has taken numerous banking courses to remain current on the many changes in the industry. First Interstate Bank 2 W 0 CITY OF CARLSBAD Custody Services Proposal Submitted By: First Interstate Bank Attachment ''D" e 0 Institutional Custody Services ,Proposal for City of Carlsbad . Y m city of Carlsbad PROPOSAL CONTENTS Subject Page Institutional Custody Services Administration Trust Operations and Systems Depository Facilities Securities Settlement Funds Payment Policies Market Valuation of Securities Cash Management insurance Coverage On-line On-Line Access Monthly Reporting Package Windows Workstation Automated Cash Management Sweep Transition Management Documentation Key Features and Benefits Summary Fee Schedule location of Facilities Other Information . First Infers fa fe Bank 3 g \dtanne\l685 doc e city of Carlsbad INSTITUTIONAL CUSTODY SERVICES Custody Services First Interstate's Institutional Custody Services (ICs) Department provides custody, recordkeeping, and securities lending services to more than 500 clients with assets in excess of $75 billion. These customers represent a broad range of industry segments including: municipalities, financial institutions, insurance companies, foundations, rrrutual funds, corporations, and health care organizations. We have a dedicated custody team assigned to the Public Funds Government Market. The Public Funds Team is located in Los Angeles and is staffed by senior account Dfficers, each averaging 13 years of experience in the securities industry. Accounts are assigned to an administrative team headed by a senior account officer. This team approach ensures that you have professional administrators who are familiar with your account and who are available from 600 a.m. to 6:OO p.m. P.S.T. These professionals have extensive knowledge of the government code regulations, as they apply to investments held by municipal governments or local agencies. Your team acts as the primary liaison between your investment staff, First interstate Bank's securities operations, and the brokers through whom you deal. As you may know, First Interstate Bank's custody services helps you stay in compliance with the Governmental Accounting Standards Board (CASB) Statement 3. The Cify of Carlsbad should receive a Risk Rating 1 by using our services. As Custodian for City of Carlsbad First Interstate Bank will: 0 0 0 0 0 0 0 0 0 Balance daily cash position 0 0 Take custody of all assets Collect income and credit to your account on payable date Receive trade instructions and transfer funds as directed Process purchases, sales, maturities, and redemptions Provide monthly reports reflecting all assets and transactions Provide 1 8 on-line reports including anticipated income, transactions, holdirgs, etc. Provide status on failed trades Conduct customer training on our on-line system Research inquiries and ensure appropriate response Notify customer of important activity (i.e., corporate actions, bond calls) . Y Firsf ln tersta te Bank 4 g:\dianne\l68S.&c e city of Carlsbad TRUST OPERATIONS AND SYSTEMS The Institutional Trust and Investments Division is supported by a dedicated Operations Center in Calabasas, California. This 100,000 square foot facility, staffed by over 200 employees, demonstrates First Interstate Bank's commitment to quality trust and custodial services. In addition to all securities processing activities, the facility rnaintains our data-entry, accounting, recordkeeping, statement production, fee and disbursement support units. First Interstate Bank's trust accounting system is processed on an IBM mainframe computer. The system includes a Securities Movement and Control System (SMAC) and a number of specialized reporting features. The system is well protected with back-up sysrems (hot and cold sites), information storage capabilities and disaster safeguards. Depository Facilities First Interstate Bank has the ability to receive, pay and deliver security trade!; through our on-line access to the New York Depository Trust Company (DTC), the Federal Reserve, and our New York Correspondent Bank. We settle all depository-eligible transactions through the automated depository facility of the Institutional Delivery System (ID). This system links institutions, investment managers, brokers and dealers, who are depository participants, creating a unified means of automating settlements. All U.S. Treasury and Federal Agency Securities are held in book-entry form in cur account at the Los Angeles Branch of the Federal Reserve Bank of San Francisco. Those securities not eligible for depository safekeeping and which are delivered in Los Angeles are held in our fully safeguarded securities vault in the basement of the Bank's headquarters in the First Interstate Tower at 707 Wilshire Boulevard, Los An:geles. Those depository ineligible securities delivered in New York are maintained in the vault of our New York correspondent. All registered depository ineligible securities received by First Interstate Bank are registered in the Bank's nominee name (Virg & Co.), except those securities domiciled in New York. Securities Settlement 7 Our staff is committed to timely trade settlements. To accomplish this, we have established two specific objectives: Firsf Infersfafe Bank 5 g\dlanne\1685 &x 0 City of Carfsbad Service is used as a supplement to IDS1 for obtaining corporate bond pric:es. Weekly and end-of-month market valuations are provided for corporate securities. .A Cash Management First interstate Bank offers an automated interface between the City of C'arlsbad Custody Account and your checking (demand deposit - I'DDAII) account. All postings to the Custody account are interfaced to the checking account on an item by item basis. This facility accommodates reporting of all debits and credits posting to the Custody account on the city's checking account statement. To ensure that all of your available cash is invested with optimum efficiency, we hive a short-term income fund into which we "sweep" cash balances from your account on a daily basis, This fund offers you a convenient alternative to depositing funds inio your checking account to pay for securities and offers daily liquidity. Your sale proceeds, income and maturities can also be automatically invested into the fund on a same-day hasis so that your cash is always invested. First interstate Bank makes available to the City of Carlsbad automatic (or discretionary) investment of principal and, or income cash posting to the Custody Account in shares of the Pacific American Fund. The Pacific American Fund is a no-load, diversified, open-ended money market mutual fund which maintains a stabilized price of $1.00 per share. Pacific American Fund is a registered investment company for which First interstate Bank investmer,t Services, inc. serves as investment advisor, and for which First interstate Bilnk of California serves as sub-investment advisor. Dreyfus Services Corporation serves as distributor and the Dreyfus Corporation is the sponsor and distributor of the Fund. The Pacific American Fund consists of two portfolios: the Money Market Portfolio and the U.S. Treasury Portfolio. First Interstate Bank 7 g:\dianm\l68s.da e city of Carlsbad The Pacific American Fund is a diversified management company, as defined in Section 23701m of the Revenue and Taxation Code, and invests in securities and obligations authorized by subdivisions (a) to (1 ) inclusive of Government Code Section 53601. First Interstate Bank charges no transaction fees on participation or withdrawals to the Pacific American Fund. The Fund pays interest monthly, credited on the first business day of the following month. The City of Carlsbad may elect to utilize either the Checking Account Sweep, lor the Pacific American Fund Sweep, or a combination of the two for their Custody Account. In our commitment to effective cash management, we also make certain that whenever trades are settled, securities mature, or income is due, your account is credited promptly and accurately. We dedicate both people and technology to meeting these objectives. Our securities processing staff is divided into specialized groups which are dedicated to income and corporate action servicing so that all special income and capital change characteristics regarding securities are recognized. First Interstate Bank's trust accounting system automatically credits all interest and dividends according to our funds payment policy. Insurance Coverage First Interstate has one of the most encompassing Bankers Blanket Bonds available in the industry today. The primary coverage for First Interstate Bank of California current bond is written on the London Market and totals $100,000,000, In addition to the Bankers Blanket Bond, First Interstate Bank has $200,000,000 "excess securities" coverage with insurance carriers of similar quality. All clauses are insured in equal amounts. On the premises, it covers losses including, but not limited to, robbery, burglary, larceny, false pretenses and disappearance. Our Bankers Blanket Bond protects all losses through any dishonest, fraudulent, or criminal acts of its employees. . 1 Firsf lnfersfafe Bank 8 g \dtanne\1685 doc 0 0 City of Carisbad ON-LINE SYSTEMS First Interstate Bank provides investment managers with our interactive cusfomer information access system, "On-line information Exchange" (The Exchange). The Exchange operates in an on-line, real-time environment. By linking the capabilities of this system with your investment managers, an entirely new set of electronic account management techniques are available. We believe this provides the ultimate in management reporting, for several reasons: 0 4 1 The Exchange is a fast, efficient, information delivery system that give clients immediate access to their account asset and transaction records. The Exchange allows clients to monitor daily transactions, view current cash balances, and project future cash balances, among other highly useful functions. The Exchange provides eighteen different reports which can be down-loaded for printing as well as viewed on-screen. The Exchange is user friendly, using menu-driven screens. & T 0 0 0 Using a personal computer (DOS or OS/2), a modem (2400 or 9600 Baud) and any one of the commonly used communications packages (e.g., Procomm, Procomrn Plus, Crosstalk, Smartcom) our clients and their investment managers can access The Exchange and download any of our reports to a PC. Tapes are also available for clients or their investment managers for any of the information carried on our accounting system. Other interfaces are available, depending on your computer configuration and exact data formats. There are no specific technical specifications that are needed to access our on-line systems. Any commonly available communications package will work. 0 0 The Exchange is available 24 hours a day, 7 days a week through the M,iilbox feature. We will provide access to The Exchange to you and your investment managers at a fee of $1,200 annually. On-Line Access On-Line information Exchange was designed to provide the customer with instant access ta account information. Through the On-Line system, you have the ability tcl view your daily, weekly or mo-nthly account activity anytime you want within the course of a business day. Also, if you do not have time to access the system, our unique "mailbox" feature will enable you to preprogram the reports you want and send them to your computer for a printed version, or download to a customized spreadsheet application. First Interstate Bank 9 . -< 1 g Wlanne\1685 &x e City of Carlsbad On-Line Information Exchange makes full use of menu-driven screens md instructions - making it easy to master. Additionally, the system maintains a 16-month account history, and has 18 different reports available, each with its own unique sort option capabilities. On-Line Information Exchange is accessed by utilizing an IBM or IBM-compatible pwsonal computer, coupled with any communications software package, On-Line Information Exchange has been designed to be easy to access and utilizes your existing equipment, but this should not be interpreted as a lack of security. In addition to requiring the operator to enter IDS and passwords, the system has been programmed to automatically log out users if no commands are entered within a specified ti ne. On-Line Reporting Package Examples of the Reports available through on-line access include: i - B roiectlons .. Projects an account‘s cash balance on a future date. Lists all scheduled activities, such as pending trade settlements, receipts and disbursements that will affect the cash balance within the specified timeframe. , . Identifies all the assets held by an account. It can be limited to a specified major asset or major industry class, very liquid asset classes only, or unique assets only. Tran- Shows all transactions made for an account within a specified date range. Options included: buys, sales, maturities, free receive/deliver, plus transactions by CUSIP. v Shows total values for an account’s holdings by major asset class or major industry class. n Dc&dKqmd Shows taxlot-level detail for a single asset position. Detail includes: CUSIP number, registration code, and location code. Identifies all or specified pending items for an account including: maturities, free receive/deliver. Bmty Schedule Sorts bond holdings (highest to lowest) according to a pre-selected rating system. Rating systems available include Moody’s and Standard and Poor!;. the book and market values, current price and annual income figures are included for each bond position. In addition, unrealized gain/loss is calculated by comparing tax cost to current market value. Ratings are updated as announced by the agencies. buys, sales, . Firsf Infersfafe Bank 10 g \dtanne\1685 doc 0 @ity of' Carlsbad Client Workstation We are developing one of the most powerful electronic delivery systems in the custody and trust services industry available on the market. Windows Workstation is a Windows based application that incorporates a relational data base with state-of-the-art communications and reporting tools. Windows Workstation incorporates all the performance features of our On- Line Information Exchange and also allows you to: 0 0 0 0 Change and modify reports to suit your specific requirements Sort and filter data in any format, selecting only those elements that you wish to transfer Import transactions from your current accounting system in order to eliminate the need to re-key the data Graph information without going outside Windows Workstation to third party applications such as Excel or Lotus 123 Schedule events such as data downloads or printing or reports. The Windows Workstation is scheduled for a 4th quarter 1995 delivery. We have been providing OLlE services since 1985. in the third quarter of this year, First Interstate Bank will make available the first phase of a state of the art Windows-based on-line information system. Our new Clieni Workstation technology will allow client access to data concerning their accounts 24 hours a day from anywhere in the world. The Client Workstafion is being developed by Open Information Systems (01s) in conjunction with SEI and First Interstate Bank. The Client Workstation will function as an intelligent workstation on a GI-aphical User interface (GUI) platform within the Microsoft Windows environment. The system offers a number of key features: ............................................................................................. I .................................................................................................................................. Security: I The system features full local security with client User IDS and i passwords that will be authenticated by the repository system ! prior to accessing - ................... information. ....................................................................................................... ................................................................................................ ............................................................ * .................................................................................................................................................................... Communications: i The Client Workstation features a built-in proprietary i communications program that will eliminate the need for other, i possibly non-compatible communications software and their i potential problems. 5.. i The system includes a scheduling facility thilt allows the i processing of inquiries and the printing of reporis even when ! the station is unattended. Clients can schedule .:imely tasks at i their convenience. ........................................................................................................................................................................................................................... -. .............................................................................................................. .................................................................................................................. Scheduling: ............................................................ - .................................................................................................................................................................... First lnfersfafe Bank 11 g'\dtanne\lbllS doc 0 city of Carlsbad ................................................................................................................................................................................................................................ Electronic Mail: I The electronic mail feature enables clients and bank personnel ............................................................ i ........................ to easily and quickly exchange correspondence arid messages. 5 - ................ ^.. .......................................................................................................... ..................................................................................... I ..... ^ .................................................................................................................................... Import/Export Database Management: i This feature allows clients to export data (securities holdings) i from the workstation and update their internal accounting i systems. The importing function allows the acceptance of data i from an external source, eliminating the need to enter it i manually. The data can then be transmitted to the repository I system in the form of pending trades or cash receipts and i disbursements. ..................................................................................................... -...-.-.- .................................................................................................................. The C/ient Worksfation features twelve basic reports in six categories: pending trade status, account positions, cash balances, cash projections, archived history transactions and security master file updates. Clients also have the ability to generate and design custom reports to meet their individual needs. Multiple users at a client site can manipulate the data in real time into formats of their choosing - all at the same time. in the second phase of the system (2nd quarter 1996), intra-day real-time updates will be allowed for pending trades, account positions, cash balances and projections, etc. Eventually, C/;ent Worksfafion will serve as a single point of entry into the entire First interstate Network. Many clients are diversified and need information services in the form of cash management, retail systems, securities lending and investments. 7'0 meet these needs, future phases of the workstation system will include linkage to Actim, DDA and Shaw systems. Automated Cash Management Sweep All uninvested cash balances will be swept to zero daily into First interstate's in-house money market fund, the Pacific American Fund. The Pacific American Fund is a no-load, open ended mutual fund con!;isting of &o portfolio's: the Money Market Portfolio and the U.S. Treasury Portfolio. The Money Market Portfolio invests in securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities, and in notes and other instruments collateralized or secured by such obligations; time deposits and certificates of deposit issued by domestic banks, foreign branches of domestic banks, and savings and loan associations chartered under federal or state law; bankers acceptances; repurchase agreements; and high- grade commercial paper. . The U.S. Treasury Portfolio invests only in obligations issued or guaranteed by the U.S. Treasury, and in notes and other instruments, including repurchase agreements, collateralized or secured by such obligations. This portfolio is rated "AAAml' by Standard & Poor's and "Aaa" by Moody's. The principal objective of the fund is to seek maximum safety and stability of principal with commensurate levels of current income. Firsf Infers fa fe Bank 12 g\d,anne\1685.dac e @ City of Carfsbad First Interstate Pacific American Funds - Performance Summary 1990 1991 1992 1993 1994 !J Money Market Portfolio 8.03% 5.85% 3.61 Yo 3.00% 3.88% us. Treasury Portfoiio 7.75% 5.62% 3.40% 2.79% 3.84% -_ s *a . I, i J First Interstate Bank 13 g\dianne\1685 doc 2 e city 01' Carlsbad TRANSITION MANAGEMENT At First interstate Bank, we have a team of securities specialists who develop and implement a timetable for delivery and entry of your securities on our accounting system. The team consists of the Operations Section Manager, Administration Services Supervisor, several operational support specialists, and your Primary Account Administrator. We call on our thorough understanding of securities movement and control to anticipate and avoid the potential problems that can surface during a transfer. The vital steps of asset transfer include: 0 Identifying all assets; 0 Verifying their locations; 0 Pricing all assets; 0 Establishing transfer dates; 0 Identifying income responsibility dates; 0 Establishing the method of transfer, which includes distinguishi ig between depository-eligible securities - transferred by book entry -- and those unique assets requiring close surveillance and foliow-up; and Verifying instructions and appropriate details, such as coordination of trade settlements for trades executed during the transition period. 0 We utilize book-entry transfers in all possible cases, maintaining the closest control possible with on-line, real-time terminal access to depositories and the Federal Reserve. Through direct transfer of depository-eligible securities and government securities, we accomplish the transfer of assets in the most secure and efficient manner available. In addition to closely monitoring activities such as income payments, tradini;, and actual asset deliveries, the transition staff will ensure asset postings on a same-day basis to our accounting records. With the expected cooperation of the current Custodian, a complete transfer of a11 your Trust assets will be accomplished, and an initial statement will be prepared and issued to you.. within 30 days from the initial date of transfer. c First Inferstate Bank 14 g \diam\1685 doc e ((tity of Carlsbad DOCUMENTATION To establish a custodian account and to begin accepting funds, the following documents are required: 0 Original executed copy of the custodian agreement; 0 Certificate of Incumbency with sample signatures of authorized individuals (form attached); and 0 Original or certified copy of a resolution (Public Agency Resolution) a,Dpointing First interstate Bank as Custodian. . Y Firsf lnfersfafe Bank 15 g\dianne\l685.doc e city of Carlsbad KEY FEATURES AND BENEFITS SUMMARY In summary, First Interstate Bank provides the following benefits and services to its clients: 0 California-domiciled administrative team. 0 0 0 0 Automated mortgage-backed payment system. 0 Extensive custody and safekeeping capabilities for book-entry and physical securities. Ability to settle trades anywhere in the world through an automated environment. Timely and accurate income collection. Experienced and committed securities processing staff to perform the required “assembly line” duties. Strong technical platform using IBM standard operating system. On-line, real-time access to your accounts. Automated interfaces to DTC, J.J. Kenny, Bond Buyer, Standard and Poors, Interactive Data Services, Federal Reserve and MerriII Lynch. Ability to retrieve reports in a variety of different sort options. Fully-automated put option and bond call monitoring feature. 0 0 0 0 0 . . .. First Interstate Bank 16 g\dianne\1685 doc 0 city of Carlsbad FEE SCHEDULE A. ce Fee ( $ 2 00.00 B. Transactions: * Book Entry (FBE, DTC) $ 12.00 (Purchase, Sale, Maturity Free Receipt/Delivery) Physical $ 23.00 (Purchase, Sale, Maturity Free Recei pt/Delivery) Paydown (P & I) $ 8 .OO (Mortgage Backed & Asset Backed) c. - Wire Transfer $ 1 2.00 Intra-ban k No Charge D. On-1 ine Accm: $ 100.00 (optional) E. SekupEe~ees: Waived F. -- As Billed . # Transaction types not listed will be charged according to a separa te fee schedultl Firsf infersfafe Bank 17 g\dsanne\1685 doc e &y of: Carlsbad LOCATION OF FACILITIES Administrative Facility is located at: 707 Wilshire Boulevard, Los Angeles, California 9001 7 Our Custody Operations Facility is located at: 2661 0 West Agoura Boulevard, Calabasas, California 91 302 I . Y First Interstate Bank 18 g \dianne\1685 doc 0 city of Carlsbad OTHER INFORMATION Other information which your institution believes to be pertinent to your proposal. We believe that the following highlights make First Interstate Bank the ideal commercial bank and custodian for the City of Carlsbad 0 First Interstate is financially strong. 0 First Interstate is a premier provider of trustee and custodial services. 0 Our experienced staff and advanced systems deliver personalized state-of-the-art services. At First Interstate, our commitment to a smooth and seamless transition has earned us a reputation as an industry leader. 0 i . " Firsf lntersfafe Bank 19 g*loanne\1685 doc 0 CITY OF CARLSBAD Request for Proposal Attachment "E" (Exhibit rrBrr As Referenced in First Interstate Bank Document) a L 0 0 - CITY OF CARLSBAD REQUEST FOR PROPOSALS FOR BANKING SERVICES AND CUSTODIAL SERVICES JUNE, 1995 I \ CITY OF CARLSBAD 1200 CARLSBAD VILLAGE DRIVE CARLSBAD, CA 92008 > i 0 e - TABLE OF CONTENTS Paae Banking Services and Custodial Services Request for Proposal Cadendar 1 Section 1 : Introduction 2 Section 2: Proposal instructions 4 Section 3: Bank Evaluation 6 Section 4: Scope of Banking Services 7 1. Contract Terms 7 Ii. Required Banking Services 7 111. Account Maintenance Services 10 Section 5: Scope of Custodial Services 12 Section 6: Proposal Forms 14 1 > d 0 0 - BANKING SERVICES AND CUSTODIAL SERVICES REQUEST FOR PROPOSAL CALENDAR - Date Event Description 06/23/95 RFP documents issued by the City Treasurer to interested banking institutions 07/06/95 Pre-proposal conference 07/31 /95 5:OO p.m. deadline for submission of proposals by financial institutions to the City Treasurer Evaluation of submitted proposals by Selciction Committee Review RFPs with the Investment Review Committee, including selection of a banking institution Notify selected institution and begin contrlact negotiations Awarding of banking institution contract by City Council Banking supplies ordered by Finance staff Bank services inaugural date 08/01 - 08/30/95 08/31 /95 09/01 - 09/30/95 1 0/17/95 1 1 /01/95 02/01 /96 6 1 I d 0 0 - BANKING SERVICES AND CUSTODIAL SERVICES REQUEST FOR PROPOSAL SECTION 1: INTRODUCTION 1. Backaround The City of Carlsbad (hereinafter referred to as “City”) is located about 35 miles north of the City of San Diego on the southern California coast. The City was established in 1952 as a general law city, with a five-member City Coimcil serving as the governing board of the City. The council members are elected to four-year terms, with the mayor elected by the voters every four years. The City has a staff of approximately 500 full-time employees, plus 225 part-time employees. The City covers about 42 square miles and has a population of 68,000. Industries in the area include a major regional shopping center, 18 auto dealers, 24 hotels and motels, aerospace manufacturing, electronics, golf apparel and equipiment manufacturers, several business and light industry parks, and numerous land developers building single and multi-family housing in a variety of community settings. The City provides the full range of services normally associateld with a municipality including police, fire, parks and recreation, library, planning and zoning, building and engineering, various maintenance services and administration. The City provides water services through the Carlsbad Municipal Water District, a subsidiary district of the City. City Council serves as the Board of Directors for the Carlsbad Municipal Water District. Solid waste collection is provided through a franchise arrangement with a local refuse collection service. In addition to the usual City services, Carlsbad offers a variety of programs to help local residents and businesses. The City operates a redevelopment agency that encompasses most of the downtown area, as well\,as a housing authority that provides low and moderate income families with housing assistance. The City’s literacy program, funded by the General Fund, provides adult education to local area residents. Older Carlsbad residents receive assistance through the City’s senior citizen programs. Also, the City provides major support for the Convention and Visitors Bureau operated in cooperation with the Carlsbad Chamber of Commerce. The City requests proposals and competitive quotations to purchase banking services as specified herein. Written proposals using the official forms provided will be accepted until 500 p.m. on July 31, 1995 at the City Treasurer‘s office, City of Carlsbad, 1200 Carlsbad Village Drive, Carlsbad, California 92008. Respondents to this Request for Proposal (RFP) must complete the forms in Section 6 of this document. Respondents may provide the same information in an alternate form but only as an addition to the Forms in Section 6. Financial institutions (“Bank”) wishing to submit proposals for optional services not part of the forms in Section 6 may do so provided the optional services demonstrate the financial institutions’ 2. General Requirements 2 r II 0 0 unique or innovative approach to today’s banking and custodial needs and to the rapidly changing demands of the banking industry and its clients. The City will not reimburse the respondents to this RFP for any costs involved in the preparation and submission of proposals or in the preparation for and attendance at interviews. Furthermore, this RFP does not obligate the City to accept or contract for any expressed or implied services. The City reserves the right to request any organization submitting a proposal to clarify its proposal or to supply additional material deemed necessary to assist in the selection of a financial institution, and to modify or alter any or all of the requirements herein. In the event that the proposal guidelines change materially, all respondents who submit a proposal will be given an opportunity to modify their proposal in the specific areas that are impacted. 3. Mandatow Conditions Durina the Contract Period a) Bank Charter: The proposer must be a Federal, State of California chartered bank with branch banking facilities located within the City c4 Carlsbad. A branch bank must be maintained within the City of Carlsbad throulgh the duration of the contract and must be able to offer the full range of banking services required by this RFP. The proposer must also be a member of the Federal Reserve System. b) Automated Clearing House Capabilities: The proposer milst have and maintain Automated Clearing House (ACH) originating bank capabilities. The proposer must conform with National Automated Clearing House Association (NACHA) and Uniform Commercial Code Article 4A (UCC4A) rules. c) On-Line Services: The proposer must be able to furnish daily on-line reports. d) Electronic Data Interchanae: The successful bank must have Electronic Data Interchange (EDI) capabilities as they are developed. The City expects technical support for ED1 at no additional cost to the City. e) Non-Discrimination: The City affirms, and will continue to comply with, Executive Order 11246 as amended by Executive order 11375; Section 111 of the 1968 Housing Act; and Title VI of the 1964 Civil Rights Act. It is City policy to maintain a positive program of equal employment opportunity fc~r all employees and applicants regardless of race, sex, creed, color, national origin or handicap. By signature on the proposal document, the proposing banking institute affirms the same. 3 I 6 0 e SECTION 2: PROPOSAL INSTRUCTIONS 1. Intent The intent of this Request for Proposal is to select one financial institution to provide both banking services and custodial services. However, the City may elect to award an agreement for ban king services and custodial services to separate financial institutions. 2. Proposal Form A proposer must use the forms in Section 6, or copies thereof, in submitting a proposal. "Exhibit AI must be completed for Banking Services, and "Exhibit B" for Custodial Services. Each exhibit must be completed int its entirety, If a service requirement cannot be met by a proposer, then tho term "No Proposal" should be entered on the proposal form for that specific requirement. In the case of a "No Proposal" remark, the proposer may offer an alternative equivalent service. A proposal must be submitted in an envelope or package bewing the title "City of Carlsbad Banking/Custodial Services" along with the prolposer's name and address. The proposer shall return five (5) copies of completedl propclsal forms and other pertinent information (call reports, annual financial reports, availability schedules, etc.) to the following address no later than 500 p.m., Friday, July 31, 1995: 3. No Proposal 4. Sealed Proposals City of Carlsbad Attn: City Treasurer 1200 Carlsbad Village Drive Carlsbad CA 92008 \ I It is the responsibility of the proposer to ensure that the proposal arrives on time at the right place. Any proposals received after the above time will be disqualified. 5. Public Information All submitted proposals and information included therein or attached thereto shall become public record upon their delivery to the City Treasurei?'s office. A proposer may submit written questions in order to clarify ariy matters relating to this RFP. The proposer's question and the City's answer will become public records and will be shared with all proposers to whom the RFP has been sent. 6. Responses to Proposer Questions 7. Contact Office The City Treasurer, James M. Stanton, shall be the only contac;t regarding this RFP. 4 I < e 0 8. Riaht to Re-iect Proposals and Waive Information The City reserves the right to reject any or all proposals, to waive any non-material irregularities or information in any RFP, and to accept or reject any item or combination of items. 9. Aareement An agreement will be negotiated with the banking institution submitting the most qualified proposal. If negotiations are not completed and an agreement reached within thirty (30) days after the banking institution is notified of selection, the City may give notice to the bank of the City’s intent to select the next most qualified proposing bank or call for new proposals. IO. Incorporation of RFP and ProDosal in Aqreement This RFP and the bank‘s response, including all promises, warranties, commitments and representations made in the successful proposal shall he binding and shall become contractual obligations, and will be incorporated by reference in the City’s agreement with the bank. ACH, wire transfer agreemerits and credit card agreements will be signed in conjunction with the execution of the banking services contract. 11. Amendments to Aqreement Parties hereto reserve the right to make amendments or modifications to the agreement by written amendment signed by both parties. No amendment shall be effective unless signed by both an authorized bank representative and the City Treasurer. I 5 r a 0 e SECTION 3: BANK EVALUATION 1. ReDort of Capital and SurDlus The bank selected to perform banking services shall maintain a capital structure in compliance with all current federal regulations. 2. Collateral for DeDosit of Collected Funds The selected provider of banking services is required to adhere to State of California Government Code Section 53652. - 3. Required Financial Information Each proposer shall submit copies of their quarterly call reports for the past two (2) years and their annual financial reports for the past three (3) years. If the proposing bank is owned by a holding company, submit financial statements for both proposing bank and holding company bank. Disclosure of any regulatory agreement a proposing institution is under is also required (e,g., Memorandum of Understanding, formal agreement or cease and desist olrder). 'These reports will be used by the City to determine the financial strength of the proposer. The successful proposer shall, during the duration of this contract, continue to furnish to the City updated issues of each report in a timely manner. Criteria for evaluation of proposals will include: a) financial strength and capacity of the banking institutions. b) adequacy and completeness of the proposal with regard to the RFP specifications. c) availability of services. d) ability to integrate banking services and custodial services. e), services proposed beyond RFP requirements. 9 least total cost to the City. \ Judgement criteria are not necessarily all inclusive or listed in priority order. The City Treasurer will lead a selection committee that will judge the merit of the proposals received. The sole objective of the evaluation will be to recommend the entity whose proposal is most responsive to the City's needs. The specifications of the RFP represent the minimum performance necessary for reslponse. Proposals for additional optional services will be considered during the final selection. 4. Criteria for Selection 5. Selection Committee 6 1 L 0 4) SECTION 4: SCOPE OF BANKING SERVICES 1. CONTRACT TERMS 1. Contract Period The selected institution shall be designated as the City's de!pository for an initial three (3) year term which is anticipated to commence FelDruary 1, 1996. The contract shall contain an automatic renewal clause which may be used for an additional two (2) year period under the same terrns and conditions, thereby providing for five (5) years of depository and banking services. It is understood that all pricing provided is firm for the period of one (1) year, subject to negotiation but any increase or decrease will riot exceed 5% each year. 2. Cancellation of Contract The contract shall provide that the City reserves the right to cancel the contract at any time upon ninety (90) days prior written notice. 11. REQUIRED BANKING SERVICES General Information The categories listed below are the basic required package [of banking services. Each proposer shall submit a comprehensive list of service prices by completing the service cost section in Exhibit A of the proposal form in Secticln 6. This list will be considered all-inclusive and the prices shown on the list shall be incorporated into the agreement and will be effective through the term of the agreement, subject to any negotiated annual price adjustments. In completing the "Interest Earnings Pfoposal" portion of Exhibit A, the "Basis for Determining Rate" section shall speclfy the money market instrument upon which proposed rate is based and the method to be used in calculating the rate (e.g., 90% of prime rate, etc.). Vague references to "managerial discretion" or "competition" are not acceptable. The City currently has seven (7) checking accounts at First Interstate Bank's Carlsbad branch. The City reserves the right to addl or reduce the number of accounts required to meet its banking services objectives. 1. General Ooeratina Account This account is the City's general operating checking account. It will be an interest-bearing demand account and it will receive rill revenues pertaining to the City. The City receives several state warrants each month from the State of California for a variety of apportionments. A courier service obtaining warrants from the State Revenue Department by your affiliatedl bank rnay be arranged and then wired directly to the City's general operating account. The courier service and resulting deposits will be at no cost to the City. 7 *. L a 0 All interest earnings are to be credited to this account. All investment activity via wire transfers will be conducted through the operating account. Also, if the City desires the use of the selected financial institution’s investment or safekeeping services, the interest earning operating account will be used for disbursement and receipt of investment activity. It is anticipated that there will be approximately 16,000 to 20,000 individual item deposits per month to this account. It is further anticipated that there will be 1,000 to 1,300 checks issued per month. By 6:OO a.m. every business day the bank shall have available to the City, through an on-line service, the previous day’s ending balance of available collected funds in the account. The level of available funds will be determined on the following schedule: a) Items on the depository, wire transfers, ACH deposits, and cash: SAME DAY b) Items on local institutions: NEXT DAY c) Other Items: FEDERAL RESERVE AVAILABILITY SCHEiDULE The above schedule shall be the maximum clearing sched&. If the bank can offer faster clearing services, they should be outlined in the proposal. If a proposer is using an availability schedule other than the Federal Reserve Schedule, a copy must be attached to the proposal. Interest shall be paid on all collected balances in the account at the end of the business day. Proposals shall include the type of accouni (i.e., Sweep, ZBA, Now, Super Now, etc.), the basis for determining interest rate and fee necessary to cover all services relating to general operating outlined blelow. Payroll checks are issued on bi-weekly Thursdays. Of the approximately 725 payroll checks distributed each payroll period, 250 are directly deposited by the bank to various financial institutions. The payroll account is a zero balance account. As the bank clears payroll checks, funds are transferred from the General account into the Payroll account. The City pays federal taxes by-weekly at the local bank branch office utilizing coupons. State taxes are paid bi-weekly through debit entries to the General operating account. A conversion to automated payments for federal taxes may be required in the future. Payroll direct deposit service can be processed via modem or tape. If the payroll processing is made by tape, the bank will be required to provide courier service from City Hall to the bank’s processing center at no cost to the City. ‘ 2. Pavroll Account 8 f L 0 0 3. Other Accounts: - a) Workers’ ComDensation Account is a zero balance account. The City of Carlsbad is self-insured for workers’ compensation. 14 third party adminis- trator issues checks to injured employees on the Workers’ Compensation Account. Approximately 30 checks are issued each week. As the bank clears the checks, funds are transferred from the General account into the Workers’ Compensation Account. b) Northwestern National Life Insurance (NWNL) ACCOL@ is a zero balance account. The City is self-insured for health insurance. A third party administrator has authority to debit the NWNL Insurance account as reimbursement for their health insurance payments. Each week, the third party administrator will make one debit memo to the account. As the bank clears debit entries, funds are transferred from the General account into the NWNL Insurance account. c). Housina-HUD and Housina-HUD Reserve Accounts. The City has separate checking accounts for repository of funds received frorn the federal Housing and Urban Development program. The two (2) accounts are interest earning checking accounts. The City transfers funds from these accounts into the General account. The City may issue warrants from these accounts at a future date. Library Account is a non-interest bearing petty cash account for the City’s two (2) library branches. Each month approximately 15 checks are issued by authorized library personnel with periodic deposit:s to restore the petty cash fund. d) I 4. Depositow Services: a) Baas and Niaht Drop Services: i. The bank shall provide the appropriate number of adequately sized locking depository bags at no cost. for those departments receiving revenues during the weekend. ii. The bank shall provide night depository services as needed by the City b) Wire Transfers: It is estimated that the City will have approximately 5 to 10 outgoing and 8 to 12 incoming wire transfers per month. StoD Pavments: It is estimated that 0 to 5 stop payments will be issued per month. d) Traveler’s Checks and Cashier’s Checks: The bank will provide traveler’s checks and cashier’s checks for use on City busineas for City employees at no cost to the City. c) 9 I 1 0 0 e) Printinq: The City will provide checks and the bank is to supply deposit slips printed in conformity with City specifications at no additional cost to the City. Approximately 10 to 15 deposit slip books Iln duplicate form ill be needed. Courier Service: Deposits in the form of cash, coin and checks will be deposited to the bank on a daily basis. Courier service is to be provided at three (3) City locations at no cost. Presently, the lolcations are City Hall, Water District, and Community Development. The City may require courier service to additional locations at a future date. Propoalers are requested to submit the monthly cost of a daily courier service to add one or more additional locations. Credit Card Processing: The City processes credit card transactions at five (5) City locations, including City Hall and four (4) Recreation sites. The transactions are processed via electronic draft debits and credits to the City’s General account. All necessary training and equipment for credit card processing are to be provided at no cost to the City. Credit card transactions totaling approximately $300,000 per year are processed at an average charge of $100. The City may add additional credit card process- ing sites at a future date at no additional cost to the City. The proposer is to submit the discount rate charged for credit card transactions. h) Account Reconciliation: For the Operating Account the City requires, at a minimum, for the bank to provide a paid check listing in a format accept- able to the City within five (5) business days after the month-end cut-off. If the proposing banks have a standard reconciliation product, please provide a detailed description as well as any differentiating characteristics. Also, product and any enhancements that are available to reduce time and/or costs, improve check fraud prevention, streamline data presentation, etc. This information should be submitted as a separate acidendurn to Section 6. Numerical check sorting is to be completed by the banking staff. Other: Proposers are requested to list any other services that will be provided at no cost to the City. 9 g) I provide the full range of modes of communication possible with your i) 111. ACCOUNT MAINTENANCE SERVICES General Information Each proposal shall include specific times when the information and material requested below will be provided to the City Treasurer. The City Treasurer has established suggested standards which are set forth in Exhibit A. However, proposers may suggest earlier times. 1. Dailv On-Line Reports The daily ending balance in the General Account must be available to the City Treasurer’s staff by 6:OO a.m. on the morning of the next banking day. The 10 0 report must show all credit and debit transactions, with identifying information such as check numbers. The City shall not be charged or penalized if gn overdraft results because of the account balance information not being available at the specified time. Monthly statements for all accounts are to be provided to the City Treasurer with documentation supporting all entries on the statement within five (5) business days after the last calendar day of each month. Canceled checks shall be sorted in numerical order and returned in boxes suitable for storage. The statement shall have checks listed in numerical order with any breaks in the order noted. A monthly analysis report showing overall activity in the City accounts shall also be provided to the City Treasurer within ten (10) business days after the end of each calendar month. This report shall include a monthly analysis of the bank’s cost of operating the City accounts. The bank shall identify a principal representative in its operations department who is available to answer questions pertaining to transactions which require more detailed explanation, and has the ability to commit substantial periods of time to the City’s accounts if requested. Qualifications and experience must be listed for the principal representative. The City shall be advised immediately of a change in representatives. The bank shall credit all deposits received by 300 p.m. as good ledger balance , funds for the same day. The bank should also identify the time and branch(es) where final daily deposit(s) will be accepted. The bank shall maintain wire transfer facilities to the Federal Reserve Bank for investment purchases or sales and other transactions and payments with commercial banks as required. 6. Access to Records and Cooperation The bank shall, upon authorization from the City Treasurer or the City’s Finance Director, allow reasonable access to bank records by the City’s Staff, the City’s independent auditors, and where state and federal assistance is involved, to state and federal auditors, to examine records relating to the use of funds. The bank shall also cooperate in any prosecution for misluse of checks and misappropriation of funds. If the City develops a need for additional accounts or services during the life of the depository agreement, those new accounts or services shall be provided with the same conditions as apply to existing accounts at the time. If the Federal 2. Monthlv Statements 3. Resource Personnel 4. Deposit Services \ 5. Wire Transfer Services 7. New Accounts 11 ' 0 0 Reserve, or oiher regulatory bodies provide for the establishment of new accounts or other regulations which are favorable to the City the bank shall make those new services available to the City. SECTION 5: SCOPE OF CUSTODIAL SERVICES A proposer may submit a proposal for custodial services without submitting a proposal for banking services. However, since the goal is to obtain the most efficient solution for the City regarding banking and custodial services, the City desires to have the same institution provide both the banking services and the custodial sewices. Nonetheless, the custodial services may be granted to a different financial institution if there is a clear benefit to the City. Respondents with a proposal to provide custodial services must complete Exhibit B in Section 6. The City is soliciting proposals from banks interested in providing safekeeping, clearance and reporting services for securities purchased and sold by the City for its own portfolio. The selected bank shall control the securities through its own safeikeeping department. All proposals should identify where safekeeping facilities will be located and what banks are used as correspondent banks. Proposals shall clearly spmfy services to be performed and the cost on a monthly basis. The objective of the City is to obtain a category 1 GASB audit rating for investments held by third parties, 1. Pumose: The City will need to establish independent safekeeping, clearing and reporting services in order to insure protection of its security interest in portfolio investments, standardize safekeeping of portfolio investments and simplify the reconciliation of safekeeping accounts. Accordingly, prospective respondents are advised that upon implementation with the selected Bank for these services requested herein, the Bank shall be restricted from acting as counterpart with the City on any investment transaction for the purchase of investments. Banking institutions responding to this proposal should be capable of clearing and safekeeping the following: a) Obligations of, or obligations insured or guaranteed by, the United States or any agency or instrumentality of the United States. b) Corporate bonds and notes. c) Prime commercial paper c) Banker's acceptances eligible for purchase by the Federal1 Reserve System. e) Negotiable certificates of deposit. 9 Repurchase agreements. 12 L 0 0 2. Service Requirements: The City shall have the right, exercisable directly or through its auditors, to examine and audit securities and cash held by the Bank for the City arid records pertaining thereto during the Bank’s normal business hours without notice. The Bank providing safekeeping, clearance, and reporting services must: a) Be a member of the Federal Reserve Bank and be a State of California or Federally chartered commercial bank having insurance of ;accounts through the appropriate federal insuring agency of the United States. b) Safekeep and clear securities as agent for the City on a delivery versus payment basis. However, upon implementation of the services, seciirities already owned by the City will be delivered into safekeeping on a free delivery basis. c) Provide confirmation documentation to the City for each receipt and delivery of securities or funds as they occur, identifying asset description, purchase, sale, maturity, call or transfer date, accrued interest, total cost, par value, cou- pon/basis, and purchased yield as may be applicable to the transaction. Confirmations must be postmarked no later than one (1) working day following transaction occurrence. d) Provide a monthly statement of assets and cash receipts and disbursements, detailing each transaction during the month and describing each asset completely. Assets shall be reported at cost and market value as of the end of each month. Preliminary monthly statements must be received by the City on or before the second business day of the month (by fax). Final monthly statements must be postmarked no later than five (5) working days following month’s end. e) Promptly notify the City by telephone no later than I1 :30 am. Pacific Standard Time or Pacific Daylight Savings Time (whichever is appropriate) of any failure to deliver or failure to receive securities or funds in connection with any transaction. Collect and receive interest income, maturity and sale proceeds from the securities held by the Bank in safekeeping and transfer funds to the general operating account on the same day. g) Wire transfer and receive funds by wire transfer in accordance with instructions from the City. h) Maintain all City investments in the appropriate nominee name for the benefit of the City in the Bank’s vault, the Bank’s account at the Federal Reserve, or a correspondent depository acceptable to the City. ’ 9 13 1 0 0 3. Response Data: Ig order to facilitate a fair and equitable evaliuation and selection of the most responsive proposal, all respondents must provide the following information: a) A statement of the Bank’s experience and capability to provide security safekeeping, clearance and reporting services similar in nature and activity volume to the City. The statement must be signed by an officer of the Bank authorized to bind the Bank to all commitments made in the proposal. b) The name and title of the person who will be responsible For the City’s account and transactions and a brief description of that person s qualifications and experience relative to the services required by the City. c) Cut-off times for the transaction of business, stated in Pacific Standard Time or Pacific Daylight Savings Time, whichever is appropriate. d) A minimum of two (2) references of municipal customers currently receiving safekeeping, clearance and reporting services similar in nature and volume to those required by the City. e) The name and location of the place where each type of security will be held. 9 Samples of transaction confirmations or safekeeping and clearance receipts and monthly statements. g) Description of the Bank’s policy regarding failed transactions and methodology for compensation. Include a description of the formula of the method used to determine compensation. h) Custodial service fees should be segregated as shown in Exhibit B. 4. Contract Period: The term of this agreement will coincide with the banking services contract. I SECTION 6: PROPOSAL FORMS (See following pages) 14 .I . EXHIBIT A Page 1 of 5 0 0 - City of Carlsbad James M. Stanton, City Treasurer 1200 Carlsbad Village Dr. Carlsbad CA 92008 BANKING SERVICES PROPOSAL FORM We have read the City Treasurer’s Request for Proposal and fully understand its intent. We certify that we have adequate personnel, equipment and facilities to fulfill the requirements thereto. We understand that our ability to meet the criteria and provide the required services shall be judged solely by the City Treasurer’s office. We have attached the following: 1. 2. 3. 4. Five (5) copies of completed proposal forms. Call reports for the past two (2) years. Annual financial reports for the past three (3) years. Samples of standard reconciliation product and monthly statements. We further certify that we have filed with the City Treasurer an alfidavit of one of our officers of the amount of this institution’s capital stock and surplus. It is understood that the above information will be used as evidence of our ability to meet the cqpital structure requirements necessary to service this account. It is further understood that all information included in, attached tlo, or required by the Request for Proposal shall become public record upon their delivery to the City Treasurer. Submitted by: Bank Authorized Signaturepitle Authorized Signalure/Title Telephone Date 15 EXHIBIT A Page 2 of 5 e 0 *** - - BANKING SERVICES CONSOLIDATED PROPOSAL FORM (REVISED) BANK SUBMllTlNG PROPOSAL: 16 EXHIBIT A Page 3 of 5 a 0 4.- - - BANKING SERVICES CONSOLIDATED PROPOSAL FORM (REVISED) contd. - I 17 EXHIBIT A Page 4 of 5 e 4 >- - - INTEREST EARNINGS PROPOSAL Interest bearing account proposals: Average Interest Basis for Type of Rate for the Month Determining Account Account of Julv. 1995 Rate* Operating Please identify the particular investment City funds will be invested with if the Bank elects to provide an investment option not directly related to the Bank. The "external" investment needs to comply with the City's Investment Policy regarding permitted investments. * Le. percent of federal funds rate, percent of Prime, percent of T-EM, discount rate, etc. ACCOUNT MAINTENANCE INFORMATION We agree to furnish the following account maintenance information at the time specified below. We understand that the times are general standards established by the City Treasurer and that any other time may be proposed for furnishing the information. Service Suggested Description Standards Proposed Daily Account Balance Reporting Daily On-Line Statements Monthly Statements Monthly Service Charge Analysis Report end of month 6:OO a.m. next banking day 6:OO a.m. next banking day 5 business days after end 01 month 10 business days after 18 0 bDENDUNl TO EXHIBIT A Y "I - Ledaer Balances (Monthlv Averaae) Total $1,300,0001 Uncollected Balance 300,000 Co I lected Balance 1,000,000 Deposits (Monthlv Averaael Cash $62,000 Checks Units Value b Coded 14,000 $1,800,000 b Uncoded 2,500 3,000,000 Bag s/Coi ns (Non-Std) 9 $1,000 Courier Service Pick-Up Locations: City Hall Water District Community Development 1200 Carlsbad Village Drive Carlsbad CA 92008 Carlsbad CA 92008 Cairlsbad CA 92009 5950 El Camino Real 2075 Las Palmas Note: One pick-up per day from each location. Pick-up not beiore 11:OO a.m. and , deposit in time to count as a good ledger balance for that day. 20 EXHIBIT B Page 1 of 2 e * =i ’3 - City of Carlsbad - James M. Stanton, City Treasurer 1200 Carlsbad Village Dr. Carlsbad CA 92008 CUSTODIAL SERVICES PROPOSAL FORM We have read the City of Carlsbad Treasurer’s Request for Proposal and fully understand its intent. We certify that we have adequate personnel, equipment and facilities to fulfill the requirements thereto. We understand that our ability to meet the criteria and provide the required services shall be judged solely by the City Treasurer’:; office. We have attached the following: 1. 2. Uniform Bank Performance Report. 3. Annual financial reports. 4. 5. Statement of experience. 6. References. 7. Other information requested. Five (5) copies of completed proposal form. Samples of monthly statements, transaction conlirmations, etc. We further certify that we have filed with the City Treasurer an alfidavit of one of our officers of the amount of this institution’s capital stock and surplus. It is understood that the above information will be used as evidence of our ability to meet the capital structure requirements necessary to service this account. It is further understood that all information included in, attached to, or required by the Request for Proposal shall become public record upon their deiivery to the City Treasurer. Submitted by: Bank Authorized Signaturenitle Authorized Signaturemtle Telephone Date 21 ? I Per Item Cost Account Maintenance Fee: Monthly Basic Service Fee Monthly Statement Included Safekeeping Charges: Book Entry Physical Clearance Charges: Receive Book Entry Asset Receive Physical Asset Deliver Book Entry Asset Deliver Physical Asset Redeem Book Entry Asset Wire Transfer Fees: 1 Incoming Outgoing 0 @DENDUM TO EXHIBIT B .< 'A # Value of Portfolio $1 05,000,000 Average Monthly Transactions 10 I 23 1 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 e a RESOLUTION NO. 9 5 - 3 3 2 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE CITY TREASURER AND STAFF PERSONNEL TO APPROVE MANUAL CHECKS WHEREAS, the City Council desires to further increase internal controls for check approvals and disbursements; and WHEREAS, it is necessary from time to time to issue manual checks in advance of normal check processing; and WHEREAS, Crty Council has the authority to designate certain persons to act on behalf of the Council with respect to approving check disbursements from budgeted funds. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California as follows: 1. That the above recitations are true and correct. 2. That the following persons are duly authorized to act on behalf of the Council and manually sign checks issued on the accounts payable and payroll accounts: City Treasurer Assistant Crty Manager Financial Management Director Finance Director Assistant Finance Director 3. That any one signature of the above named persons is required for checks in the amount of $loo0 or less. I// /I/ //I I ‘I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 0 * 4. That any two signatures of the above named persons are required for checks in the amount of over $1000. PASSED, APPROVED AND ADOPTED at a regular meeting of the Clty Council on the 5th day of DECEMBER , 1995, by the following vote, to wit: Council Members Lewis, Nygaard, Finnila, Hall AYES: NOES: None ABSENT: Council Member Kul TLY I , Mayor ATTEST: &&&iNz, KAREN R. KUNDTZ, ssistant city Clerk City Clerk (SEAL)