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HomeMy WebLinkAboutRes 06-48 Approving the Award of a Depository Bid with First Financial BankTOWN OF WESTLAKE RESOLUTION NO. 06-48 A RESOLUTION OF THE BOARD OF ALDERMEN OF THE TOWN OF WESTLAKE, TEXAS, APPROVING THE AWARD OF A DEPOSITORY BID WITH FIRST FINANCIAL BANK. WHEREAS, the Board of Aldermen desires to establish and maintain a competent and competitive depository agreement; and WHEREAS, the Board of Aldermen realizes the importance of identifying new revenue sources and containing costs where possible; WHEREAS, the Board of Aldermen finds that the procedures and requirements set forth in the Texas Local Government Code regarding competitive bidding requirements for the depository agreement were appropriately followed; and WHEREAS, the Board of Aldermen finds that the bid from First Financial Bank for the depository agreement, as attached Exhibit "A", is in the best interests of the Westlake citizens and will meet the public need. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: The above findings are hereby found to be true and correct and are incorporated herein in its entirety upon the date of passage. SECTION 2: The Board of Aldermen of the Town of Westlake, Texas, hereby approves the depository bid from First Financial Bank, attached hereto as Exhibit "A"; and further authorizes the Town Manager to award the bid on behalf of the Town of Westlake, Texas. PASSED AND APPROVED ON THIS 28TH DAY OF AUGUST, 2006. Scott Bradley, Mayor IEST: Lu-"� J Dwinnell, Town Secretary Trent O. Petty, To anager APPROVED AS TO L. TOWN OF WESTLAKE, TEXAS REQUEST FOR PROPOSAL BANK DEPOSITORY CONTRACT I. INTRODUCTION The Town of Westlake (hereafter, "Town") is requesting proposals from eligible financial institutions (hereafter, "Bank") to be designated as the depository for the Town. This includes the basic services of receiving deposits, paying items, wiring funds, stop payments, and other business banking activities. This agreement will not cover any investment transaction activities, as the Town plans to manage its own investment portfolio. The philosophy incorporated into this Request for Proposal (RFP) is to solicit comparable market charges for services provided and to pay for all services provided by the Bank. The Town also places importance on the interest paid on daily deposits above any minimum requirements. The contract period shall be three years beginning August 1, 2006, and thereafter until the successor depository shall have been duly selected and qualified according to state laws with an option to extend the contract for two additional one-year periods with tests in the market to determine if agreeable to both the Bank and the Town. At the outset, the Town wishes to communicate the primary objectives of the depository agreement, an important component of the overall treasury and debt management program of the Town of Westlake: A. To find a bank that is both capable of providing banking services and willing to be attentive to the Town's money matters; B. To maximize the total dollars earned by the Town on account balances in order to be prudent and effective custodians of the taxpayers' financial resources; C. To maintain a good working relationship with the depository Bank; D. To adequately compensate the depository Bank for services provided and to allow a reasonable profit to be earned, subject to competitive forces in the market place; E. To find a bank that supports the local business and residential community. This RFP is intended to serve as the proposal form for the depository contract. There are several sections that require specific information. Please provide such information on the RFP, or indicate on which attachment it may be found. Please clearly restate the question when supplying answers on any supplemental pages. Within this RFP are many statements as to the desire of the Town in regards to certain areas of banking services. If your Bank is not able to provide service as requested, please state "not available." It should be emphasized that the specifications on the attached official proposal form represent a preferred level of service from the Town's perspective. Proposers are instructed to clearly note on the official proposal form any exceptions or alternatives to the specifications. Clarifying information is required on all proposed exceptions or alternatives and should be provided as an addendum to the official proposal form. The language used should not be construed so as to preclude a proposer from presenting alternative features to the ones stated, either in terms of providing improved service to the Town, or more II. acceptable conditions to the Bank. The Town will evaluate all listed and described alternatives. All points outlined and materials requested should be incorporated into the proposer's reply to be considered for evaluation. The Town has designated Debbie Piper, as coordinator and contact person of the proposal process. She may be reached at (817) 490-5712 with any questions pertaining to this RFP. CALENDAR OF EVENTS Target Date Description of Events 6/9/06 & 6/16/2006 Advertise Bank Depository notices in the newspaper. 6/30/06 Receive proposals from interested banks (by 2:00 p.m. at Town Hall). 7/3/06 — 7/7/06 Staff review of proposals. 7/10/06-7/24/06 Make recommendations to Board of Aldermen. Award the contract. 8/1/06 New contract period begins. III. CRITERIA FOR EVALUATION Town staff shall review the submitted proposals. The recommendations shall be based on the proposal determined to be best on behalf of the Town and the taxpayers. A. Considerations. As an indication of what will be considered in the evaluation of proposals other than the ability to perform the requested services, the following areas are listed: 1. Ability to provide sufficient and legal collateral for deposits and a third party safekeeping agreement relative to such collateral (see VI.). 2. Agreement to points outlined in this RFP. 3. Financial and management stability of the Bank: SIC rating or brief history with summary statement of condition. 4. Demonstrated commitment to the support of local businesses through the provision of credit and demonstrated intent relative to community reinvestment. 5. Cost of banking services. 6. Rates paid on interest bearing accounts. 7. Safekeeping agreements accepted. 8. Quality of all reports requested. The Town reserves the right to reject any or all proposals and to waive any non -material irregularities or information in the proposal. B. Bank Information. Each proposal shall provide: 1. The amount of paid-up capital stock and permanent surplus of the Bank. 2. A copy of the most recent quarterly call. 3. A copy of the annual financial reports to shareholders for the past two years. 4. A list of the Bank's officers. A list of the Bank's directors. In order to be considered, a bank must be a federal or Texas -chartered. C. Questions about the Bank. Additionally, please answer the following questions: Is the Bank insured by the FDIC or other Federal Insurance Corporation? Yes the bank is insured by the FDIC 2. Is the Bank audited annually by an independent CPA firm? If yes, by whom? Yes the bank is audited annually y Ernst & Young. How does the Bank define non-performing loans and what percent of current loans are so classified? The Bank follows OCC guidelines for categorizing rig a loan as non-performing. Currently the Bank has $3,750,000, or 11.4% of coital in non-performingloans. oans. 4. Does the Bank have any significant problems noted by regulatory agencies in the past twenty- four months? If "yes", please explain. No the Bank has not had any problems noted by regulatory agencies in the past 24 months. 5. With what money center Bank does the Bank have its primary correspondent agreement? The Bank uses First Financial Bank of Abilene as the primary monetary correspondent. First Financial Bank of Abilene has an agreement with JP Morgan Chase. 6. Name the Bank Holding Company with which the Bank is associated (if applicable) and describe the legal and financial relationship between the Bank and the Bank Holding Company. First Financial Bank N.A. is 100% owned by First Financial Bankshares, Inc. First Financial Bankshares Inc is a financial holding company headquartered in Abilene, Texaswith consolidated assets of $2.7 billion as of December 31, 2005. First Financial Bankshares Inc operates 10 affiliate banks which provide services from 44 full-service locations in the Center West and High Plains regions of Texas. The Companyalso operates a trust company and a technology services company. The common stock of First Financial Bankshares Inc is beneficially held by approximately 5,300 shareholders and is listed on the NASDAQ Stock Market under the symbol FFIN. 7. Is the Bank a branch bank or will it soon become a branch bank? If so, please indicate which services will be provided from the branch locations and which will be provided from the main Bank. Also, please indicate service location throughout the proposal where applicable. The main office of First Financial Bank N A is located at 3205 East Hwy 114 Southlake, Texas 76092. There are also two full service branch locations that are close to the Town of Westlake: 95 Trophy Club Drive Trophy Club Texas 76262 891 Keller Parkway Keller, Texas 76248 8. Indicate the Bank's capital to assets ratio for the last five years. 2005 7.04% 2004 8.20% 2003 8.87% 2002 9.02% 2001 9.20% 9. What was the Bank's return on assets for 2005? 1.02% 10. Please describe the process by which service problems can be resolved. What person or organizational unit is available for complaint or problem resolution? Service Problems can be resolved by contacting any Bank Officer at any of our locations. The main contacts for the Town of Westlake's accounts will be: Patti Daniel Branch Manager of Trophy Club 817-329-8602 Sean Shope Sr Vice President of Trophy Club 817-329-8603 11. What is the Bank's Community Reinvestment Act rating? Which of your banks does this rating cover? Please attach documentation to support this rating. Please provide information supporting your investment in the Westlake community and commitment to designated community reinvestment zones in Westlake. Identify specific loan (mortgage and rehabilitation), grant, or assistance programs that the Bank can provide to the Westlake residential community in these designated reinvestment zones. First Financial Bank has received a satisfactory CRA rating. Our last CRA audit covered all 6 of our locations. The Bank currently does not have any CRA investments in the Westlake community, however, we would be interested to hear about anyopportunity to invest in the Westlake community. The Bank offers a full range of mortgage and other loans that are available to any Westlake residential owner who qualifies. Please see attachment in section 25. 12. Provide examples of your Bank's commitment to local businesses in other municipalities where your Bank serves as the municipal depository. We currently serve as the municipal depository Bank for the Town of Trophy Club, the City of Haslet the City of Boyd and also Wise County. The Bank is very committed to donating money and volunteers to many non-profit organizations within these communities as well as many others. 13. Provide a list of references. The list should include contact names and phone numbers. Town of Trophy Club Lisa Ramsey Town SecretM (682) 831-4600 City of Haslet Diane Rasor, City Secretary (940) 439-5931 Cily of Boyd Joy Patterson City Secretary (940) 433-5166 Wise County Monte Shaw Tax Collector (940) 627-3304 IV. ACCOUNT ACTIVITIES AND BANK CHARGES A. Accounts. The Town currently uses controlled disbursement accounts only to deposit funds. However, the Town is interested in comparing the cost of controlled disbursement for the operating and payroll accounts with the money market operating account and zero balance payroll accounts currently used. Please provide pricing both on a fee based and balance required basis for the following bank accounts: ACCOUNT NAME General Fund Municipal Court Water Sewer Fund Westlake Insurance Trust Westlake Academy TYPE Master Account Controlled Disbursement Controlled Disbursement Master Account Master Account Additionally, the Town reserves the right to open or close other accounts as necessary to the municipal and Westlake Academy operation. The Town will make deposits to accounts at various times during the business day and will require the Bank to give same day ledger credit on deposits the Bank receives before 3:00 p.m. or the close of the business day for the Bank. This closing time should be specified. First Financial Bank's business day ends at 3:OOpm. The General Fund Account will constitute almost all of the Town's banking business with the Town making daily deposits to this account. Intra -bank transfers to reimburse money to other Town accounts and wire transactions will occur in this account. This account will be set up to clear all operational checks for the Town. It will have one check stock clearing through the account for general disbursements. The Town's payroll is released every other week on Friday by 10 a.m. B. Questions About Service Please address the following questions regarding banking service: Controlled Disbursement: 1. What measures are you willing to take to minimize or eliminate any potential exposure arising as a result of using an affiliate or correspondent? First Financial Bank does not use an affiliate or correspondent. How will you handle over-the-counter check presentments after the notification of the cut-off hour? First Financial Bank's cut-off hour is 3.00pm Over-the-counter check presentments after 3.00pm will be treated as next -business day items. 3. Please specify days on which the disbursing location would be closed or would not receive cash letters. First Financial Bank will be closed on all Federal Reserve Holidays. 2006 Dates: January 2, 2006 January 16, 2006 February 20, 2006 May 29, 2006 July 4, 2006 September 4, 2006 October 9, 2006 November 23, 2006 December 25, 2006 4. Please provide an estimate of the disbursing Bank's clearing times from the most current survey available. N/A What options for notification and funding exist? The Bank offers a free online service. Through this service we have the ability to `memo post' upcoming debits by 1.30pm The Town could then see all upcoming debits and adjust their daily deposit to cover. 6. What factors might have a significant impact on the controlled disbursement service over the next two or three years? There are no factors that we are aware of that would have a significant impact on the Bank's controlled disbursement service 7. Are damaged and/or rejected items reentered into the system the same day? Yes damaged and/or rejected items are reentered into the system the same day. What back-up arrangements for check processing exist in case of any system failures? First Financial Bank has a formal Disaster Recovery Plan in place. All of our check processing sites are prepared to handle system failure Depending on the severity of the failure checks may be transported to another company processing site. All processing sites have contracts for back-up processing There will be little impact experienced by our customers. 9. How many times has the Bank(s) that will be handling the Town's activities (Branch and main Bank) missed notification deadlines and by how much in a recent 90 -day period? The Bank has not missed any notification deadlines. 10. Attach any specific controlled disbursement agreement in keeping with the nature ofthis request for proposal that the Town would be asked to sign. See attachment, Section #8 11. Please describe the Partial Reconcilement Service offered by the Bank and attach a sample reconcilement statement. Partial Reconcilement is offered through our Online Cash Management system. Transaction information can easily be exported into a spreadsheet for use with third party financial gpplication. See attachment, Section #3. 12. Does the Bank have an established maximum dollar value limit that may not be exceeded by an individual check? Are there any other restrictions regarding individual check amounts? First Financial Bank does not have any established maximum dollar value limit for an individual check There are no other restrictions regarding individual check amounts. 13. When is a check considered to be stale -dated? How are stale -dated checks that are presented handled? A check is considered to be stale -dated after 6 months. If a stale -dated check is presented the Bank will pay the item unless notified otherwise by the Town of Westlake The Bank suggests that the Town place a stop payment on all outstanding checks after 6 months. 14. How long are stop payment orders effective? What measures is the Bank willing to take to minimize or eliminate any potential exposure as a result of a) the Bank reporting that checks have not cleared when in reality they have and the Town has issued a replacement check, and b) when checks that have a stop payment request on file have been subsequently honored by the Bank? Ston Payments are effective for 6 months or until after the item has been presented. Stop Payments may be presented to the Bank in person online, by fax, and by mail. The Bank has many internal controls in place to eliminate any potential problems with Stop Payments In the unlikely event that a stop payment is accepted and the item is paid the Bank will assume all liability for the funds. 15. How many encoding errors per month do you consider reasonable? What action will be taken to ensure that errors will be kept to this maximum acceptable amount? What procedures must be taken to correct encoding errors that flow through to the Town's account? The Bank considers encoding errors of less than '/2% of presented items to be within a reasonable amount The Bank has many ystems in place to ensure that encoding errors are kept to an absolute minimum However, in the event of an encoding error, the Town would only need to notify the Bank and corrections will be made immediately. C. Required Services. Volume. The volume estimates listed in this section are based on activity of the consolidated and controlled disbursement accounts. The services requested to be made available to the Town include but are not limited to the following: Required Proposed Price Estimated Estimated Estimated Services Each Monthly Monthly Charge BalaRequnce red Checking Services: Account $0.00 Maintenance 5-6 accounts Debits Posted 150 $0.00 Credits Posted 30 $0.00 Return Items: Large 0 $0.00 Standard 2 $0.00 Re -Clears 10 $0.00 Special 0 $0.00 Handling Overdraft - $0.00 Charges Stop Pay - $0.00 On -Line 1 Account Reconciliation Services: On-line $0.00 Account Maintenance 3 Paid List $0.00 Reconcile Diskette or CD- 1 $0.00 Rom of Monthly Transactions Funds Transfer: Account T $0.00 Maintenance 10 ACH Services: Support/Maintenance Per 1 $0.00 Account Transmission 30 $0.00 ACH Reporting 0 $0.00 - Return ACH Receiving 0 $0.00 - Addenda ACH Reporting 0 $0.00 -Fax Lobby Services: Branch Per $0.00 Deposit 35 Information Reporting: Balance $0.00 reporting (daily report listing Operating Account previous day balances, debits, credits, averages, and check resentments) Previous Day $0.00 Items Other: Coin Wrappers $0.00 Cost of $1,500,000 — $0.00 Collateral highest for General Pledged by the Fund Bank (quote cost per $350,000 average million) for General Fund and Utility Fund FDIC Insurance All accounts $0.00 Printed Checks 10 Printed Deposit Slips 35 Cashier's $0.00 Checks 0 Photo Copies 0 $0.00 List any other applicable bank charges. All service fees will be waived for the Town of Westlake. The Town uses a web -based program for the transmission of daily reporting information, wire transfers, ACH transfers (most of these are done through electronic transmission), and other services. Please provide information about these services. Include a price list detailing the costs for various modules and describe the services provided by each. All service fees will be waived for the Town of Westlake. Please see attachment. Section #21 Please describe the services you provide for returned checks and include a price list. The Bank will handle returned checks in the manner requested by the Town. There will be no charges associated for this service or returned items. The Town currently requires secondary authorization of outgoing wires by an authorized employee (a list will be provided) not placing the wire. Additionally, the Town requires notification to the Town Manager if a single wire order of over $500,000 is placed. First Financial Bank's online system can easily handle the Town's request for proper authorization on all outgoing, wires Each employee can be set up with any access requested by the Town. For example: Town employees can be set up with a wire limit of $499,999.99. The Town Manager can be set up with an unlimited wire limit. All wires will require two employees user Ids and Passwords before they will be accepted by the system. 4. Statements. For reconciliation of the Town's bank accounts the following will be required: a. Monthly statements on all accounts showing overall activity shall be provided within 5 working days after the close of the calendar month. Statements shall include deposits made on the last day of the period. Account statements should include checks and debit/credit advises. Along with the bank statement on the operating and payroll accounts, the Town requires a report reflecting all items paid in serial number sequence, which is balanced to the bank statement (partial account reconciliation). b. Daily ledger balances and securities pledged. Statements are available the day after the end of the month through the online cash management system Statements are also mailed the same day. Resource Personnel. The Bank shall identify personnel who are available to answer questions pertaining to transactions, which require detailed explanation and a Banking officer(s) with overall responsibility for the account. Please provide biographies of account officers, cash management sales representatives, and customer service representatives who would be assigned to the account, as well as their back-ups. The Bank shall be responsible for communicating the terms of this contract to Bank employees. The main account officer will be Patti Daniel Branch Manager of Trophy Club. Sean Shope, Sr Vice President of Trophy Club will also be assigned to the Town's accounts. Kelly Jones, Vice President of Treasury Management will work with the Town to set up and train on all Cash Management Services. 6. Printin . The Bank will offer checks and deposit slips printed in conformity with the Town's specifications. However, the Town reserves the right to purchase checks from an outside vendor if necessary. 7. Coin -currency. The Bank will process all coins and currency deposited by the Town. 8. Stop Pa ments. It is estimated that approximately two stop payments will be issued per month. The Bank will maintain stop payments for a period of at least six months. All stop payment requests will be made orally or electronically by the Finance Director or designated representative. 9. Insufficient Funds Checks. The Bank shall clear all insufficient fund checks twice before charging them to the applicable Town bank account and returning them to the Town. These items shall be charged to the Town in accordance with the applicable price schedule. Checks to be returned to the Town that are in an amount of $2,000 or more should not be debited to the account without prior notification to the Town from the bank. 10. Funds Availability. The Town expects to receive the best availability of funds available to an institutional client of the Bank. Attach the Bank's availability schedule and an explanation of funds credit. The Town recognizes that only collected funds may be used as available balances for placing outgoing wires. See attachment 44 11. Automatic Payroll Deposit. Automatic Payroll Deposit is a service the Town currently requires of its approximately 70 employees. The Bank would be required to produce bi-monthly transfers via electronic transmission in ACH format for transfer of funds directly to the employee bank, savings and loan, or credit union account. Please state the Bank's procedure for this service and list appropriate cut-off times that would apply. The Town's net payroll is approximately $140,000 monthly. State whether the Bank would offer any type of free special checking, money market, or loan account for Town employees. The Bank's cut-off time for ACH origination is 3.00PM one business day prior to effective date. See attachment #21. The bank will offer Free Checking to all Town Employees. There will be no minimum opening deposit and no monthly fee Overdraft Privilege will be available to those that qualify. The bank will also offer a free check card free online banking free 24 hour banking by phone, unlimited customer service free direct deposit and also a preferred loan rate discount to those that qualify. 12. Deposit corrections. The Town will deposit checks in batches with tapes run for each batch. If the teller or item processing discovers an error in the deposit, then the Town requires a credit or debit notice to be mailed to the Town immediately after the account has been adjusted with appropriate documentation attached to justify the correction. Appropriate documentation is considered to be a copy of the Town's tape with the item in question marked and a copy of the check in question. 13. Payment for Services. The Town intends to compensate the Bank either on a direct fee basis or compensated balance basis for all account services provided by the Bank as set forth in section IV -C. The Bank shall debit the appropriate accounts on a monthly basis. The Town shall require account analysis each month no later than 15 business days after the end of each calendar month which shall clearly show volume counts, fees charged, and total prices for servicing the account. The account analysis shall also show average ledger balances, average uncollected funds, average collected balances, interest rates and the amount of interest paid or credited to the account. Fees charged to the Town directly from the Bank are not subject to change for the length of this contract. Please attach a sample account analysis statement. The Town of Westlake will not be charged any fees by First Financial Bank. V. INTEREST ON MONEY MARKET CHECKING ACCOUNTS Please provide a detailed explanation of the Bank's policy and methodology used in the setting of rates paid on money market checking accounts. Specify whether there is a separate rate quoted on public funds versus the rate quoted for corporations and individuals, and if so, why. Also, provide a schedule of all rates paid on money market checking accounts since January 1, 2003. Specifically indicate if the rates are applied to the ledger balances or collected balances. Indicate when the rates change and ifthey are based on a market rate such as the T -Bill discount or yield rate. Indicate the basis used to compound and accrue interest. List minimum ledger and collected balances required to earn interest. Does the Bank offer a fixed rate of interest if the Town agrees to maintain a specified collected balance? Specify the minimum interest rate, which will be paid to the Town. How does the bank calculate earnings credit rates (ECR)? What have ECR's been for the past year? Describe what balance the earnings credit rate applies to. How will the current ECR and interest rate be continually communicated to the Town? First Financial Bank will offer the Town of Westlake interest on all checking accounts they open with the Bank There will not be a minimum or maximum ledger or collected balance required. Interest will be paid daily on the ledger balance based upon the Bank's daily Fed Funds Investment Rate minus 1.00%. As the Bank will not charge the Town any service fees there will not be any ECR on the Town's accounts. See Attachment #24 for rate information Does the Bank offer any type of sweep account where excess Town funds could be invested at a higher rate overnight than in a money market account arrangement? Does the Bank have money market funds consisting of treasuries, agencies, prime commercial paper, prime domestic bankers acceptances or collateralized or insured certificates of deposit that the Town could utilize daily as an investment alternative? If so, please explain the fund's parameters and interest earnings history or attach a separate prospectus. Yes the Bank does offer sweep/repurchase accounts. (Attachment #8) However, the Bank proposes to pay the maximum rate on all Town funds in the normal checking accounts. The Bank offers a full range of accounts that will be available at the Town's request, including money market and CDs CD rates will be tied to a like maturity US Treasury Bill discount rate on the date the CD is purchased. VI. COLLATERAL REQUIREMENTS A. Securities Pledged. As security for the deposits of the Town of Westlake, the Bank shall pledge to the Town securities equal to the largest total ledger balances the Town of Westlake maintains in the Bank, less the amount of coverage provided by the Federal Deposit Insurance Corporation (FDIC). (See the attached schedule for balance information.) The average level of collateral required is $800,000. At this time the Town does not have an ad valorem property tax. However, if one was implemented during the life of this contract, the ledger balance may reach over a $1 million during prime collection periods from December through February. Additionally, at times, the Town will maintain over $2 million in its account in anticipation of debt service payments which must be made by 10:00 a.m. on the due date. The securities comprising the pledge shall be valued at par or market, whichever is lower. Repurchase Agreements are not acceptable as collateral to the Town of Westlake. The Town shall accept the following securities as collateral: A bond, certificate of indebtedness, or Treasury Note of the United States, or other evidence of indebtedness of the United States that is guaranteed as to principal and interest by the United States. 2. Obligations, the principal of and interest on which are unconditionally guaranteed or insured by the State of Texas. 3. A bond of the State of Texas or of a county, city, and other political subdivisions of the State of Texas having been rated as investment grade (investment rating no less than "A" or its equivalent) by a nationally recognized rating agency with a remaining maturity of 10 years or less. B. Reporting Requirements. The Bank shall provide the Town a report of securities pledged at the end of each month or at any time requested by the Town's Finance Director or a designated representative. This report should reflect the following information at the end of each month: Total pledged securities itemized by: 1. Name. 2. Type/description/cusip number. 3. Par value. 4. Market value at month end. 5. Maturity date. 6. Moody's or Standard and Poor's rating (if applicable). If the market value of the pledged securities falls below the ledger balances of the total of all the Town's accounts at any time, the Bank shall immediately pledge additional securities to the Town so that the amount of pledged securities equals or exceeds the Town's ledger balance the same day. Collateral may be audited at least annually by the Town's independent auditors and may be audited by the Town at any time during normal business hours of the safekeeping bank. The audit of the collateral by the Town's independent accountant or the Town is to ascertain that Governmental Accounting Standards Board Statement #3 is adhered to and the financial institution is complying accordingly. C. Safekeeping. The securities pledged shall be held in safekeeping under the name of the depository Bank and pledged to the Town of Westlake. Safekeeping must be performed by an independent, non -affiliate bank or by the Federal Reserve Bank with a three -party agreement signed. The original copy of all security receipts shall be filed with the Finance Director of the Town of Westlake. The Town shall reimburse the depository Bank for all charges associated with pledged collateral at the fee rate specified by the Bank. Please submit a copy of the safekeeping agreement and the name of the trustee bank to be used in the event you are awarded the bank depository contract. The safekeeping agreement shall clearly state that the trustee is instructed to release the collateral to the Town of Westlake if the Town has determined that the Bank has failed to pay on any accounts, has been closed by a regulatory authority, or is in default of this contract, and if release has been formally requested by the Town Council by ordinance or resolution. The safekeeping agreement shall have signatories from the trustee bank, the depository Bank and the Town of Westlake. See attachment #7 D. Substitutions. Any substitutions of the securities or reductions in the total amount pledged shall be made only by and with the proper written authorization approved by the Finance Director or authorized representative. All securities to be pledged are subject to approval by the Town of Westlake. E. Wire Services. The third party safekeeping bank must be a subscriber to the Fed Security Wire System. F. Additional Pledaed Collateral. The Board of Aldermen may, by written resolution, require the Bank to pledge additional or other securities at any time the Board of Aldermen considers it advisable or considers it necessary for the protection of the Town. If the Bank fails for any reason to pledge the required securities within 5 days after the date the Bank is served with a copy of the resolution, the Board of Aldermen may select another bank. G. Maximum Amount Offered. Please state the maximum amount of pledged securities, which the Bank is willing or able to commit for collateralized money market accounts throughout the contract period. $ 2,500,000.00 H. Representations. The Bank represents to the Town: 1. That the Bank is the sole, legal, and actual owner of the securities collateralizing Town deposits. 2. That no other security interest has been, nor will be, granted in the securities collateralizing Town deposits. VII. SECURITIES CLEARANCE AND SAFEKEEPING OF TOWN INVESTMENTS The Town intends to continue managing its own investment portfolio, therefore, the Town reserves the right to withdraw, from time to time, any amount of funds of the Town that are deposited in any Town depository and to invest those funds in accordance with the Town's investment policy. VIII. OVERDRAFTS AND LOAN PROVISIONS A. Overdrafts Defined. The Town does not intend to have an overdraft position on any of its bank accounts singly or net throughout the course of the Depository contract. However, should an overdraft occur in the aggregate, the following stipulations shall apply: The maximum number of days the overdraft will be allowed before checks are returned is checks will not be returned 2. The maximum amount of the net overdraft to be allowed before checks are returned will be $ checks will not be returned The interest rate will be 0.00% * per annum computed on an actual day basis. * The Bank will not charge any fees or interest for the first 5 days of a negative account balance If an overdraft situation occurs longer than 5 business days, the Bank would charge the Town the same interest it would pay on a positive balance 4. In the event that a check or checks are presented for payment on any Town account where there are insufficient funds available for payment, the Town will require the depository Bank to pay said checks and promptly notify the Finance Director of the existence of the overdraft situation. The Town agrees to cover the overdraft within one business day. Define whether the Bank would consider an overdraft to be a negative balance in any individual Town account or as a negative balance in the all Town accounts collectively. Should an overdraft occur, what other stipulations would apply? First Financial Bank considers an overdraft to be a negative balance in an individual account. In the event of an overdraft the item will be paid and the Bank will notify the Finance Director. No overdraft fee will be charged to the Town for the payment of overdraft items. B. Short -Term Loans. The Bank agrees to loan funds to the Town on a short-term basis, if needed, for operational purposes or for capital expenditures. Specify the terms and conditions by which the Bank would loan funds to the Town on a short-term basis. The maximum number of days for the loan shall be 2. The maximum amount of the loan shall be $ 3. The interest rate shall be * per annum computed on an actual day basis. *First Financial Bank will provide short term loans to the Town as needed. Rates will be tied to the Bank's Daily Fed Funds Investment Rate minus 1.1 %. The term and amount ofthe loan would be dependent on the collateral (if any) and the borrowers financial condition at the time of the request. C. Daylight Overdrafts. The Town does not intend to have daylight overdrafts since it will be necessary for our depository Bank to send a wire transfer out upon the receipt of confirmation of an incoming wire transfer. However, should a daylight overdraft be required, what is your Bank's policy on such an event, and what charges, if any, would be made to the Town's account? What is the amount of the cap that limits daylight overdrafts for your Bank? First Financial Bank will pay any daylight overdrafts and waive any fees associated with the overdrafts There is no cap on daylight overdrafts for the Town of Westlake. IX. OTHER STIPULATIONS A. Right to Cancel Contract. In the event it would be ruled illegal under the provisions of any Federal Statute or regulation for the Bank to pay interest in the manner outlined in this RFP, then the Town expressly reserves the right and privilege to cancel the contract, withdraw the Town's funds therefrom, and re -propose the depository services. B. Periodic Review. The Town may require a review meeting with the Bank at Town Hall periodically to evaluate the working relationship between the Town and the Bank. The objective shall be to address any problems or operating procedures and to seek a responsible solution. C. Extension. All deposits, time certificates of deposit, or loan services which have not elapsed on the termination date of the finally approved depository contract, shall remain on deposit with the same depository under the same terms and conditions in effect during said contract until the date such services have elapsed. D. Notices. The Bank will notify the Town in writing within ten (10) days of any changes in Federal or State regulations or laws that would thereafter affect this depository contract. The Bank shall also notify the Town of any additional services that become available to the Town throughout the contract period. E. Audit. The Bank's records relating to the Town of Westlake's accounts shall be open to review by either Town staff members or Town -appointed independent auditors during normal business hours. The Bank's records of Town transactions may be considered public records pursuant to the Texas Opens Records Act. F. Financial Reports. During the term of this contract, the Bank shall provide to the Town each quarterly call report (schedule RC only), each quarterly and annual financial report to the shareholders and any public information concerning changes in the ownership, management or financial position of the Bank or its parent. G. Town Attorney. This Request for Proposal has been reviewed by the Town Attorney and has been approved by him as to form. H. Merger. Not withstanding any other provision of this agreement which may be to the contrary, this agreement and the respective rights and obligations of the parties hereunder shall remain in full force and effect and not otherwise be affected by a merger of the Bank. I. Applicable Laws. This contract is governed by the laws of the State of Texas. Venue shall be exclusively in Tarrant County. J. Term. The term of the contract period shall be for three years beginning on August 1, 2006, and ending on July 30, 2009, or thereafter until a successor depository has been selected with an option to extend the contract for two additional one-year periods if agreeable to both the Bank and the Town. K. Conflict of Interest. The Bank agrees that during the contract period that the Bank and any of its associates and employees will have no interest nor acquire any interest, either direct or indirect, which will conflict in any manner with the performance of the services called for under the final contract. L. Errors. Bank errors resulting in lost interest to the Town will be reimbursed by the Bank to the Town at the amount that would have been earned had the error not occurred. X. PROPOSAL INSTRUCTIONS/REQUIREMENTS A. Sealed proposals clearly marked "Depository Proposal" shall be delivered to the office of the following person by 2:00 p.m., June 30, 2006: Debbie Piper Town of Westlake 2650 JT Ottinger Road Westlake, Texas 76262 ANY PROPOSAL RECEIVED AFTER 2:00 P.M. SHALL BE RETURNED UNOPENED. B. The proposing Bank shall use this RFP form as the Official Proposal Form to submit rates and to answer questions. Any alterations, changes or deletions to this RFP shall be grounds for the Town to disregard and reject the RFP and the proposal. C. The Town reserves the right to request additional information or to meet with representatives from proposing organizations to discuss points in the proposal before and after submission, any and all of which may be used in forming a recommendation. D. The Town reserves the right to reject any and all proposals and to re -advertise in order to serve the best interest of the Town of Westlake. E. The Proposer states that it is a banking institution chartered under laws of the United States or of the State of Texas. XI. MISCELLANEOUS A. The final appointment of a depository Bank shall be made by the Town of Westlake Board of Aldermen. The proposer may be required to enter into a contract that incorporates all of the obligatory points in this RFP. Otherwise, an ordinance shall be adopted accepting the Bank's completed RFP as the Official Proposal Form with accompanying related schedules and materials called for in this RFP. B. This Request for Proposal has been duly advertised. C. Upon being awarded the contract, the depository Bank shall designate an individual to be the official contact person for all correspondence. The Town of Westlake's official contact person is Debbie Piper (817) 490-5712. The Bank shall be responsible for training and communicating the terms of this contract to Bank employees. This proposal is submitted by the following person duly authorized to act on behalf of the Bank: Officer's Name and Title (Please Print) Officer's Signature Name of Bank Date Address City, State, Zip Telephone Number XII. SUBMISSION CHECKLIST A. This RFP form. B. Sample bank statement. _Mark L Jones, President & CEO ems- _First Financial Bank, N.A. ,-./�9 /a-(, _3205 East Highway 114 _Southlake, Texas 76092 C. Sample partial account reconciliation statement. D. Availability of funds schedule. 817-410-26� 11-),91 S E. Money Market Fund prospectus if applicable. F. Sample monthly collateral report. G. Sample safekeeping agreement for collateral. H. Sample controlled disbursement agreement. I. Sample wire agreement. J. Sample stop payment agreement. K. Sample account analysis statement. L. Annual financial statement of the Bank for the past two years along with the last quarterly FDIC call report. M. A list of the Bank's officers. N. A list of the Bank's directors. BANK BALANCES January 2005 thru December 2005