HomeMy WebLinkAbout1995-12-05; City Council; 13410; ADOPTION OF BANKING AND CUSTODIAL CONTRACT WITH FIRST INTERSTATE BANK APPROVAL OF SIGNATORIES FOR GENERAL CHECKING ACCOUNT3
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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
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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
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(Attachments C, D Er E are on file in the City Clerk's Office.
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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.
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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
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CITY OF CARLSBAD
Agreement for Banking Services
Attachment "A"
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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.
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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.
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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
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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.
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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
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CITY OF CARLSBAD
Custodial Agreement
Attachment "B"
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City of Carlsbad
CUSTODIAL AGREEMENT
Institutional Custody Services
FIRST lNTERSTATE BANKOF CAUFORNIA
/nstitutional Trust and investments Division
October 1995
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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
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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.
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(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.
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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.
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(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.
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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.
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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.
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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.
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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.
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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
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CITY OF CARLSBAD
Banking Services Proposal
Submitted By: First Interstate Bank
Attachment "C"
(Exhibit "A" As Referenced in First Interstate Bank Document)
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City of Carlsbad
Elanking Services Proposal
Subrnitted By: First Interstate Bank
July 31,1995
Book 1 of 3
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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.
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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
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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.
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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.
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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:
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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.
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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:
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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.
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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:
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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.
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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
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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.
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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.
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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.
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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).
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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.
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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.
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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.
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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.
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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
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Exhibit A
Page 2 of 5
Banking Services Consolidated Proposal Form (Revised)
Bank Submitting Proposal: First Interstate Bank
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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).
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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.
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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
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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
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City of Carlsbad
Pricing Pro Forma
NOTES:
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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.
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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
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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
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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:
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0
0
0
0
0
0 Balance daily cash position
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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) .
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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:
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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
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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.
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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:
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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.
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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.
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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
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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:
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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,
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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:
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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:
............................................................ - ....................................................................................................................................................................
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................................................................................................................................................................................................................................ 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.
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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%
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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.
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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.
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KEY FEATURES AND BENEFITS SUMMARY
In summary, First Interstate Bank provides the following benefits and services to its clients:
0 California-domiciled administrative team.
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0 Automated mortgage-backed payment system.
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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.
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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
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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.
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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)
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CITY OF CARLSBAD
REQUEST FOR PROPOSALS
FOR
BANKING SERVICES
AND
CUSTODIAL SERVICES
JUNE, 1995
I
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CITY OF CARLSBAD
1200 CARLSBAD VILLAGE DRIVE
CARLSBAD, CA 92008
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- 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
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- 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
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- 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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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2. Pavroll Account
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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)
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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)
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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.
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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
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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
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5. Wire Transfer Services
7. New Accounts
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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.
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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.
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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.
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SECTION 6: PROPOSAL FORMS
(See following pages)
14
.I . EXHIBIT A
Page 1 of 5
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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
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EXHIBIT A
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BANKING SERVICES CONSOLIDATED PROPOSAL FORM (REVISED)
BANK SUBMllTlNG PROPOSAL:
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EXHIBIT A
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BANKING SERVICES CONSOLIDATED PROPOSAL FORM (REVISED) contd. -
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EXHIBIT A
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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
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0 bDENDUNl TO EXHIBIT A Y "I
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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.
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EXHIBIT B
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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
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? 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
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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.
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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)