City of Placentia
Finance Department
Request for Proposals for
Banking Services
Issue Date: July 27, 2022
Due Date: August 24, 2022
TABLE OF CONTENTS
General Information 3
Proposal Process 3
Minimum Qualifications 5
Account Descriptions 5
Proposal Procedures 6
Required Services and Format of Proposal. 7
Exhibits to be Included in Proposal 12
Evaluation of Proposals 13
Final Comments 14
Attachment 1: Banking Services Pricing Form
Attachment 2: City of Placentia Wire Transfer Policy
Attachment 3: Sample Professional Services Agreement
2 GENERAL INFORMATION
The City of Placentia is seeking proposals from qualified public depositories as defined by Section 53635.2 of the California Government Code, to offer a variety of banking services. The City intends to select one qualified financial institution to provide all of the banking services outlined in this Request for Proposal (RFP). The City encourages financial institutions to submit the most comprehensive proposal possible, offering the highest quality of service including opportunities for implementing various technological advances that could help improve the current banking, cash management and customer services.
The City of Placentia is a Charter City in the State of California, located in Northern Orange County. The City was incorporated in December 1926 and operates under a Council/City Administrator form of government. The City provides a wide range of municipal services including public safety, fire, public works, planning, building, business license, and parks & recreation. The City's adopted FY 22-23 General Fund budget is $45 million, and the total City budget is $80 million. The City of Placentia occupies 7.2 square miles and has a population of 52,397.
It is the intent of the City of Placentia to award the contract with an initial term of three (3) years with two (2), one (1) year renewals for a possible contract term of five (5) years.
PROPOSAL PROCESS
1. Schedule
The anticipated schedule for the proposal process is outlined below:
Issuance of RFP
Questions Related to the RFP Due
Proposal Submission
In-person Interviews with Finalists (if
needed)
City Council Award of Contract (Tentative)
Contract Beginning
July 27, 2022
July 10, 2022
August 24, 2022, 4:00 p.m.
September 12-15, 2022
October 4, 2022
January 1, 2023
In order to avoid any potential confusion, and to minimize the burden on City staff, the City requires that all questions concerning this RFP must be directed to Jennifer Lampman, Director of Finance in writing at [email protected]. 3 1. Proposal Submission
Proposals must be delivered electronically directly to the Finance Department no later than 4:00 n.m., Auaust 24. 2022. Please e-mail an electronic version of the proposal to Jennifer Lampman, Director of Finance at jlampman©placentia.org.
2. Proposal Review
A review committee will evaluate each proposal submitted. It is anticipated that the review process will be completed by September 8, 2022.
3. City Council Award of Contract
It is anticipated that a recommendation for the award of contract to the successful bidder will be brought before the City Council for approval on October 4, 2022.
4. Conversion Activities
The awarded bank will be required to coordinate with City staff all the activities necessary to ensure a smooth transition. Conversion activities will begin upon award by the City Council, with the selected bank assuming all responsibilities no later than January 1, 2023.
5. City Point of Contact
The point of contact regarding this RFP is Jennifer Lampman, Director of Finance.
Individuals or firms interested in submitting a proposal are asked not to contact other members of the City of Placentia staff or Councilmembers in connection with this RFP.
Any questions concerning this RFP must be submitted in writing.
The City will make every effort to administer the proposal process in accordance with the terms and dates discussed in this RFP. However, we reserve the right to modify the proposal process and dates as deemed necessary.
4 MINIMUM QUALIFICATIONS
To be considered for selection, proposing banks must have at least the following qualifications:
• Be a Federally or State of California chartered financial institution. • Be a member of the Federal Reserve System and have access to all services. • Be a member of the Federal Deposit Insurance Corporation (FDIC). • Be a qualified State of California depository for public funds (includes being a LAIF depository) and meet all California government code requirements related to providing banking services to a public entity.
• Be a full-service bank in good standing among other comparable banks and have a service location within fifteen (151 miles of the City of Placentia, City Hall. • Be capable of providing the services sought by the City, including a wide range of electronic payment and deposit services.
• Agree to assign experienced and dedicated staff committed and capable of servicing the City's accounts.
• Be in compliance and good standing with the Community Reinvestment Act, having a minimum "Outstanding" CRA rating.
• Be sufficiently capitalized to accommodate the City's cash/investment management needs.
• Be able to meet Government Code Section 53652(a) collateralized balances requirement.
• Must disclose their 2016 Dodd -Frank Act stress test rating.
PROJECT SCOPE OF WORK
GENERAL BANKING SERVICES
The City's general business requires the establishment of the following accounts:
1. General Checking Account (ZBA Master)
2. Accounts Payable (ZBA Sub)
3. Payroll Account (ZBA Sub)
4. Workman's Comp (ZBA Sub)
5. Successor Agency to the Redevelopment Agency of the City of Placentia
6. Placentia Enhanced Infrastructure Public Financing Authority
7. Emergency Operations (optional)
All of the accounts roll up into a parent group for account analysis billing purposes.
The City has implemented a Zero Balance Account (ZBA) cash concentration structure with the General Checking Account as the master ZBA account for all demand accounts. 5 The City currently processes credit cards with two machines at City Hall. These machines are serviced by the City's current bank. It is the City's intent to "bundle" all banking services.
Deposits
Most checks received are deposited through remote deposit capture. Approximately 500 checks are deposited using a desktop scanner each month. The City is encouraging respondents to offer solutions that will help the City expand initiatives to automate collection processing to offer convenient, cost-effective alternative for constituents. On average the City makes 49 deposits a month either through desktop deposits or with a local bank averaging $1,040,000 a month.
Online access to deposited item images is required for up to seven (7) years. Deposits at local branches are solely for daily cash and coin collected.
Disbursements
The City disburses approximately 275 checks for accounts payable, 22 payroll checks and 60 workman's comp checks per month. Payee Positive Pay is utilized for all demand checks issued.
There are approximately 251 City employees who receive their pay on a bi-weekly basis. Nearly all are paid by direct deposit and a small number of employees elect to receive paper checks.
Payroll ACH files are typically released on Wednesday by close of business with Friday effective dates.
Accounts payable disbursements follow a weekly cycle with disbursements on Wednesdays.
Below are average monthly disbursements total Accounts payable.
Payment Type ___________Monthly Number of W Average Monthly Dollar Transactions Amou
Checks issued
ACH
Purchasing Card
350
40 210
$2,650,000
$2,200,000
$38,000
Checks issued by the City expire 90 days after issuance. The City is interested in automated solutions for the selected bank to void stale dated checks through the positive pay process.
City Checks are currently printed and mailed in-house.
Merchant Card Processing
The City currently is a Level 4 PCI entity processing $1.5 million in credit card transactions. The City has two main terminals that are used to process various card types. The City is interested in having additional mobile terminals that may be utilized at events.
PROPOSAL PROCEDURES
To facilitate a fair and efficient review, all proposals must follow the format found in this RFP.
Responses that do not follow this format will be scored accordingly and may be subject to 6 rejection. Only electronic proposals will be accepted.
Responses should be direct and to the point, providing enough detail so that they can be understood, but without excessive marketing and banking jargon.
Tabs/Headers must be utilized to separate the sections noted in this RFP. Proposals for requested services must be presented in the same order as they are noted in this RFP.
Any transaction or currency volumes noted in this RFP or on the Banking Services Pricing Form are approximations. The volumes should not be altered, but rather, the bank may note any desired adjustments on the form.
REQUIRED SERVICES AND FORMAT OF PROPOSAL
In order for the City to adequately compare and evaluate proposals objectively, all proposals must be submitted in accordance with this format:
Title Page/Cover: It should include the name of the proposing bank, its principal business address where the relationship will be managed, and the branch address that can meet the daily banking needs of the City and its employees.
Transmittal Letter: The letter should describe the bank's understanding of the services to be provided, address the bank's willingness and commitment, if selected, to provide services to the City, and why the bank believes it is best qualified to perform those services. The letter should be addressed to Damien Arrula, City Administrator, and must be signed by the individual(s) authorized to negotiate with the City and sign contracts on the bank's behalf.
Bank and Staff Profile: Please respond to the following sections:
Overview: Provide a corporate overview of the bank. How long has the bank been in existence? State whether it is a local, national or international entity, and whether it is a parent, a subsidiary of a corporation, or other ownership type. Identify the number of branches within the City of Placentia and surrounding areas, and the location of the nearest full-service branch that can assist with the City's banking needs.
Experience: Describe the bank's experience in providing services to the public sector. Provide a municipal client list. Include a description of exclusive resources dedicated for the public sector, the number of governmental clients in California, types of services offered, and bank's knowledge of and adherence to the California Government Code.
Customer Service Philosophy: A clear dedication to outstanding customer service is a critical component of the City's evaluation process in selecting a bank. Describe the bank's customer service philosophy, with specific emphasis on levels of support provided to clients, the bank's escalation strategy for initially unresolved issues, and what point(s) of contact will be provided to the City to address any issues experienced with the bank's systems and/or services. 7 Relationship Management: Describe the team that will be assigned to service the relationship. Provide the name, title, experience and qualifications of each individual team member, and describe their roles and responsibilities as they relate to services to be provided to the City of Placentia. Provide an organizational chart for the personnel who will be assigned to manage the City's services, indicating the roles of each individual and illustrating the relationships among those personnel.
Compliance and Exceptions: Include a statement to confirm the bank's compliance to the specific minimum qualifications, listing any exceptions to required services.
References: Please provide five (5) references. Both long-standing and recent customers should be included among the bank's references. Include the following information for each reference:
• Contact name and title
• Name of customer (agency)
• Address
• Telephone number
• Number of years as a customer
• Services provided and how often.
Deposit Processing: The City currently makes deposits each business day at its current bank's local branch. Deposits are comprised solely of currency and coin.
Describe how the bank would accommodate the City's deposit activity. Indicate deposit options, including remote deposit and cash vault centers. The bank should have a centralized cash vault operation that can accommodate the security and deposit volume associated with City accounts. Indicate the cut-off time for deposits at the operations center to ensure same-day ledger credit. Describe the bank's adjustment procedures for any deposit discrepancies.
Provide information on the bank's procedures for processing change/currency orders placed by the City.
Account Reconcilement & Positive Pay: The bank must provide monthly account reconcilement reports, bank statements (both paper and electronic copies), account analysis statements, confirmations and other report -related features. The bank must be able to provide various reports and statements in an electronic format via download from the online portal and also provide specialized reports, where feasible, as needed. Describe the account reconciliation and positive pay services offered by the bank whereby the City can view check images for daily exception items prior to making a pay or no/pay decision.
Required services include:
1. Provide payee positive pay services with online transmission of check details,
2. Provide positive pay exception item review and correction online,
3. Provide online stop payment services,
4. Provide electronic archival of cleared checks (images of front and back), and 8 5. Provide access to up to 7 -years of cashed check images.
Also describe the bank's check truncation services with check image availability over the internet, including estimated savings if used.
Armored Transport Service: The City currently does not use an armored transport service.
Describe what the bank offers for armored transport services and include pricing on the Banking Services Bid Form. Indicate whether the cost can be included in Analysis.
Remote Deposit: The City currently uses this service to deposit checks. Provide information on the bank's capability to provide a scanner for remote deposit, including the cost of any equipment required. The City currently uses a scanner with a typical volume of fifty (50) checks per day processed. Also, advise if the bank can provide a device at the City Hall to deposit cash and checks for immediate credit. Provide a general overview of your remote deposit capabilities and processes.
Electronic Money Transfers: Describe the bank's incoming and outgoing electronic money transfer services. Include safeguards and security measures offered by your service. Ideally, the City would prefer a bank that can meet the requirements of the City's Wire Transfer Policy (See Attachment 2). Provide a copy of the banks internal wire policy and updates to the City.
These safeguards are extremely important to the City of Placentia.
Online Information Reporting and Transaction Processing: The bank must have an online portal or internet-based system to allow the City to receive previous day balance and transaction information for each designated account and download/export data as needed as well as accessible digital images of deposits and checks. The City will use a personal computer and the internet to obtain a balance report each morning. Please state the current internet program and the version your system runs on. The system must have stop payment capability. Describe the balance reporting system of the bank, listing its features, including user-friendliness. Please include examples of the current day and prior day reports that would be the best example of the system's capabilities. Also, discuss the bank's contingency plan for providing information in the event of unexpected bank system problems or natural disasters.
Required services include:
1. Provide online balance reporting services,
2. Allow approximately 8 or more City employees with different levels of authorization to access the bank's online reporting system,
3. Provide current day and prior day reporting,
4. Provide partial account reconciliation services,
5. Provide online monthly activity statements and reports for all accounts by the third business day of the following month, and
6. Provide a detailed monthly account analysis statement for each individual account and a consolidated statement showing charges for all account services.
7. Provide ability to download/export transactions to excel. 9 Automated Clearing House (ACH) Service Requirements
ACH Direct Deposit of Payroll: The City utilizes direct deposit services for bi-weekly payroll (every other Thursday). Approximately 90% of the City's employees take advantage of this payment mechanism. Please include the following:
• Describe the bank's direct deposit services, including the software requirements and transmission options available.
• Discuss screening measures that the bank uses to minimize errors on files sent to the bank.
• Indicate the transmission deadlines for direct deposit ACH files, including date and time when the bank needs the input file from the City and when funds are debited from the City's account.
• Include ability for ACH blocks and filters.
ACH Vendor Payments: The City currently has a small number of vendors that are paid using ACH. Please describe the mechanism used by the bank to facilitate these type of vendor payments. Describe whether these payments can be made using the bank's online system, and if so, what measures are in place to provide a higher level of security.
Payroll Tax Processing: Describe the services available from the bank to accommodate the City's payment and reporting of payroll taxes. The City requires the ability to report and pay Federal and State tax withholdings automatically either by telephone or by PC (internet).
Business Credit (Procurement) Cards: The City currently has one procurement card account, with an existing credit line amount of $325,000 (combined limits) that can be used by any authorized employee. (Approximately 30 card holders. Current purchases via procurement card are approximately $30,000 per month.) Describe the bank's issuance of credit/procurement cards for travel and expenses. Does your system have the availability to issue cards, cancel cards and immediately adjust spending limits via an on-line system? Provide any information on rewards or incentive programs associated with a business procurement card account. Note any annual or recurring fees associated with the maintenance of a City procurement card account. Also, describe the availability, if any, to view and/or approve the procurement card statements online.
Merchant Services/Credit Card Processing: The City's average annual volume is approximately $1.5 million. The bank must be able to provide an electronic system, which will accommodate credit card authorizations. Describe the electronic system(s) available for processing credit card transactions. Describe how credit card machines can be secured so that no transactions can be processed after business hours. Describe how credit card machine operators are identified by the terminal. Provide pricing information, including any costs associated with acquiring necessary equipment and establishing merchant accounts. Describe how operators are identified by the terminal. Please also describe other payment options offered by the bank such as Applepay, PayPal or other alternative payment options.
Currently the City does not charge service fees to payers for using credit or debit cards. The City is considering implementing service fees for card transactions in the future, applied city- wide across most or all departments. Respondents are encouraged to offer solutions for 10 charging service fees for online and point -of -service card transactions, with service fees charged and settled separately from the base transaction amount.
Required services include:
1. Provide Payment Card Industry Data Security Standard (PCI DSS) compliant merchant card services or contract with a third -party processor to do so
2. Process credit card payments (MasterCard, Visa, AMEX, Discover)
3. Process online payments
4. Process debit card transactions via swipe and PIN based methods
5. Support payment acceptance through an analog connection, at least on a temporary basis
6. Transfer funds to a designated City bank account on a next day basis
7. Provide robust online reporting tools and option of downloading transactions/report data
8. Provide detailed online monthly invoices for each individual merchant location and a consolidated statement showing charges for all account services
9. Clearly split out interchange and assessment fees on a monthly invoice through a pass- through pricing model
10. Provide reliable technical support for PCI DSS compliance efforts (ad hoc service, service provider relationship support) and detailed online compliance reporting tools.
Overnight Sweep Account Facility: Describe the overnight sweep account options offered by the bank. Include whether the funds meet the California Government Code for allowable investments, and any associated costs.
Service Enhancements: Based upon information presented in this RFP and the bank's knowledge of the public sector, describe any enhancements, technological or otherwise, that the City should consider improving operational or cash management efficiencies.
Conversion Plan: As part of any conversion the City requires a smooth and low- cost transition to a new bank and any waivers of implementation fees is welcome and appreciated. Because the City will be running accounts with two banks during the transition period, we also request a waiver of monthly bank fees during the first two months of the new bank relationship.
Please describe the plan the bank would follow to ensure a smooth, error free transition from the current provider. Include the following:
• Detail all costs associated with the conversion of all of the proposed services and the responsible party.
• Describe any on-site training to City personnel for the operation and use of the bank's services and automated systems for all areas of service. How is training structured? • Discuss any conversion allowance. Include what supplies the bank will provide at no cost to the City, such as deposit slips, endorsement stamps, cash vault supplies and other items. • Describe in detail how the bank will handle problem resolution, customer service, day- to-day contact, and ongoing maintenance after the conversion is completed.
Bank Compensation: The City has historically paid for bank services with compensating balances and settles with its current bank on a monthly basis. The City's monthly balances have averaged approximately $2,500,000 over the past 12 months. Please indicate the following in 11 this section:
• Can the City compensate the bank for services with compensating balances, hard - dollar fees, or a combination of the two at its own election? Is there a surcharge or a different price schedule if the City pays with hard -dollar fees?
• Can the City choose between paying for any analysis deficiencies by check, auto debit, or ACH credit?
• What is the bank's Earnings Credit Rate (ECR) based on, and how is it calculated each month?
• List the bank's actual ECR for each of the last six months. • Using the ECR for the most recently completed month, please calculate the level of compensating balances (after float and reserves) needed to offset one dollar of bank services. ($1 in services=$ in compensating balances.)
• What is the bank's settlement period for account analysis and billing purposes (monthly, quarterly, semiannually, and annually)? How long can any excess balances be carried forward to apply to charges in future billing periods? • For what period of time will the proposed pricing in the bank's proposal be fixed? Assuming the RFP is for a 5 -year contract, it is assumed that the depository and treasury services pricing is fixed for 5 years with increases in ECR as the market improves.
• Please detail which types of items and services can be applied against account analysis in addition to standard bank services, such as messenger service, armored carrier, check stock, supplies, custody services, etc.
• How does the bank charge for overdrafts? Does the bank charge for the use of uncollected funds? If so, how is the charge calculated? • When calculating average balances, are positive and negative balances netted? • Are account analysis reports available on-line? If so, is there a cost.
Collateralization: Please describe how the bank will collateralize all deposits in excess of FDIC insured balances in accordance with California Government Code Sections 53630- 53686.
Bank Balances: Balances have been used to cover bank charges, but the City is interested in having the option to choose to invest funds in a sweep or interest-bearing account.
Required Services include:
1. Provide a competitive earnings credit rate for uninvested balances
2. Provide an overnight investment service (sweep) and/or interest-bearing account for excess cash balances in the demand deposit accounts
3. Collateralize all collected balances, in excess of balances insured by the FDIC, as pre collateral requirements of the State of California.
EXHIBITS TO BE INCLUDED IN PROPOSAL
12 Banking Services Pricing Form: Complete the form with pricing information. Any additional information should be included on the form if possible.
Financial Statements and Ratings: Provide pages as necessary. Provide the most recent audited financial statements or annual report for the bank. Also include the bank's most current Standard & Poors and Moody's credit ratings.
Account Analysis: Provide pages as necessary. Provide a sample of the bank's account analysis and a user guide for the account analysis.
Pro Forma: Provide a proforma account analysis statement using volumes provided on the Banking Services Pricing Form.
CRA Exhibit: Provide the latest Community Reinvestment Act Rating.
Records Retention: Describe how long the City's records will be retained and how records will be delivered to the City upon request (media type used). Describe any policy you have on notifying clients before deleting any records.
EVALUATION OF PROPOSALS
The evaluation criteria will include the following:
• Proper Submission of Proposal- Receipt of proposal by due date as outlined in this RFP and presented according to our specifications. Late submissions or delivery via hard copy will not be considered.
• Comprehensiveness of Services Provided- Capability of the bank to meet the required service levels described in this RFP.
• Public Sector Experience and Resources- The bank's experience in providing services to the public sector, particularly to local government entities similar in size and requiring equivalent services to the City of Placentia. • Customer Service Philosophy - The bank's customer service philosophy and commitment to addressing client issues in a timely and appropriate manner through the allocation of an appropriate level of bank resources. • Strength and Stability of Bank- The bank's financial standing among its peers and the associated credit quality ratings, in addition to its ability to sufficiently protect and collateralize City deposits.
• Assigned Relationship Manager/Team - The credentials and experience of the person(s) assigned to the relationship. Describe how you will notify the City when personnel changes are made, and relationship team members are replaced. 13 • Cost of Services - The amount of proposed charges and ability to guarantee pricing for contract period.
Service Enhancements - The bank's efforts to understand the City's banking needs and goals, and the creativity the bank shows in introducing new technologies and efficiencies to improve our current practices and procedures. • Location of Bank Offices - The bank offices should be in close enough proximity to the City for the City's convenience.
CRA Rating- Disclose the banks CRA rating.
Other Factors- Any other factors that we believe would be in the City's best interest to consider which were not previously described. COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF A BANKING FIRM.
FINAL COMMENTS
The City reserves the right to reject any and all proposals, cancel all or part of this RFP, and waive any minor irregularities and to request additional information from proposing banks. By requesting proposals, the City is in no way obligated to award a contract or pay expenses of the proposing banks in connection with the preparation or submission of a proposal. The City's decision to award a contract will be based on many factors including but not limited to service, cost, financial strength, and innovation. No single factor, such as cost, will determine the final decision to award.
The City appreciates the efforts all the banks and their respective staffs have put forth in responding to this Banking Services Request for Proposals. 14 CITY OF PLACENTIA BANKING SERVICES RFP
BANKING SERVICES PRICING FORM
All of the services listed below must be included with the pricing commitments from the proposing Bank. Pricing should be clearly separated into two categories. The first category of fees is those that are one-time fees and set up fees for all services. Second, are the monthly and activity -based fees.
1. Positive pay system for the operating account
2. Currency deposits
3. Check deposits
4. Deposit error corrections
5. Online system access to all account activity
6. On-line stop payments
7. NSF/Returned Item (two attempts to clear)
8. Wire transfers (in and out)
9. Courier services (weekly)
10. Account reconciliations
11. Access to cleared checks/imaging
12. ACH processing
13. ACH return information
14. Federal and State tax payments by phone or on-line system
15. Direct deposit for employee payroll
16. Payroll tax payments
17. Remote Deposit
18. Procurement Cards
19. FDIC Insurance
15