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HomeMy WebLinkAbout2001-109 Council ResolutionCouncil Member O'Donnell introduced the following resolution and moved its adoption: CITY OF LINO LAKES RESOLUTION NO. 01-109 RESOLUTION TO ACCEPT A PROPOSAL FOR BANKING SERVICES FROM LINO LAKES STATE BANK WHEREAS, the Lino Lakes City Council currently utilizes Firstar Bank for its main depository, checking account and day-to-day services; and, WHEREAS, the City Council is desirous of obtaining information from area banks with the intent of obtaining the best possible array of banking services at the lowest reasonable costs; and, WHEREAS, the city staff issued Requests for Proposals for Banking Services (RFPs) to area banks to obtain such information, including financial data of the institution, services available and estimated costs; and, WHEREAS, staff has received and evaluated replies from the area banks receiving RFPs from the City; and, WHEREAS, staff recommends Lino Lakes State Bank as the institution which best fits the needs of the City at the present time. THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes that: 1. City of Lino Lakes accepts the proposal for banking services from Lino Lakes State along with all the terms and conditions listed in the Request for Proposal, attached as Exhibit A. 2. Such designation shall continue for a three-year period commencing September 1, 2001, or as soon thereafter as practicable, through December 31, 2004, with the ability of the City Council to extend such term for an additional three years. ADOPTED by the Lino Lakes City Council this 23rd day of July, 2001. er1 Deputy City John J. Bergeson, Mayor The motion for adoption of the foregoing resolution was duly seconded by Council Member Carlson and upon vote being taken thereon, the following voted in favor thereof: Bergeson, Carlson, Dahl, Reinert and O'Donnell The following voted against same: None. Whereupon said resolution was duly passed and adopted. AGENDA ITEM 3A STAFF ORIGNINATOR: Al Rolek MEETING DATE: July 23, 2001 TOPIC: Consider Resolution 01-109 Accepting Banking Proposal VOTE REQUIRED: 3/5 BACKGROUND: For some time it has been the intent of staff, at the direction of the City Council, to evaluate the banking opportunities in the City. The purpose of this evaluation is to establish a banking relationship with the institution which best fits the banking needs of the City. In May of this year staff mailed Requests for Proposals for Banking Services (RFP) to each bank within the City, Firstar Bank, Community National Bank and Lino Lakes State Bank. The City received responses from each of these institutions. Upon comparing and evaluating the responses, staff found that all banks met the basic criteria and had the ability to deliver the services requested in the RFP. Two of the institutions, Lino Lakes State Bank and Community State Bank, offered the best package of services and costs and were virtually identical in this regard. Other criteria of a more intangible nature, such as customer service orientation, community involvement, etc., were also considered in the evaluation. Again, both institutions have a high emphasis on customer relations and are involved in community events and service. At present the City maintains one checking account, which is quite adequate for our needs. It has been suggested that perhaps the City could split its accounts between the institutions. While this may sound like a good solution on the surface it would result in twice the time and work the staff would have to dedicate to this area in terms of record keeping, reconciliations, etc. A better solution might be to consider the institutions not designated as the depository for outside financing, negotiated notes and special needs the City would have from time to time. This would afford them the opportunity to participate in the City's overall financial goals. In addition, the City will revisit the RFP process in three years, at which time it is anticipated that all banks will be again invited to submit proposals. Given these factors and the results of the RFP, staff recommends that the City Council adopt Resolution No. 109-01 accepting the proposal from Lino Lakes State Bank for banking services for a three-year term extending through December 31, 2004. Should you have any questions relative to this matter, please feel free to call me at your discretion. OPTIONS: 1. Adopt Resolution No. 01-109 2. Deny Resolution No. 01-109 3. Return to Staff for further review. RECOMMENDATIONS: Option 1. REQUEST FOR PROPOSAL FOR BANKING SERVICES CITY OF LINO LAKES, MINNESOTA Proposals due by 4:30 p.m. Friday, June 15, 2001 SECTION I II III IV V VI INDEX DESCRIPTION Introduction and Background Financial Activity Statistics Proposal Terms for Services Instructions on Submitting Proposals Proposal Form Questionnaire I. INTRODUCTION The purpose of this request for proposal is to generate bids from banking institutions for banking services for the City of Lino Lakes. The City desires increased services while obtaining competitive fees for its banking needs. Background The City of Lino Lakes is a growing community in the southeast corner of Anoka County and is located approximately 20 miles north of Minneapolis. As a part of the seven -county Minneapolis/St. Paul metropolitan area, Lino Lakes is within the jurisdiction of the Metropolitan Council. The City of Lino Lakes is a community of approximately 17,000 residents. The City currently maintains one bank for one account for regular checking and daily deposits. The City uses various brokerage firms and financial institutions for its investments. The City of Lino Lakes generates daily deposits originating from City Hall and includes revenues from utility bills, building permits, recreation services and other city services. The City receives monies transferred into its regular checking account from Anoka County, State of Minnesota and the City's various brokerage firms. The City uses ACH debit system for the deposit of federal and state payroll taxes and Minnesota State sales taxes and the ACH credit system for direct deposit of payroll. There is also the possibility of expanding our use of electronic funds transfer to extend the ability for our utility customers to pay their utility bills via electronic funds transfer. In addition, the City accepts credit card payments for recreation program registration. The City also maintains a major corporate credit card to facilitate transactions and purchases made over the phone, interne or for use during the travel for City employees. Objectives The objective of this competitive bidding process will be primarily to reduce monthly banking fees while increasing interest earnings and obtaining additional banking services. II. FINANCE ACTIVITY STATISTICS 1. Average number of transactions per month: Checks Written 325 Deposits 38 Checks Included in Deposits 1,420 Wire Transfers 2 Returned Checks 2 Average Collected Balance Average Ledger Balance $96,294 $113,964 III. PROPOSED TERMS FOR CHECKING SERVICE AGREEMENT 1. Checking account services shall be provided free of charge when the City maintains a compensating balance in the amount specified in the financial institution's proposal. In the event a daily balance is less than the required compensating balance, the City will increase the next day's balance above the required amount so that the average balance for the month equals the required compensating balance. An occasional overdraft balance will be allowed. A monthly service charge as outlined in the institution's proposal may be paid in lieu of maintaining a specified compensating balance amount. 2. The financial institution shall provide the following reports: a) Daily verbal report of the current balance in the checking account. b) By the third of each month, a monthly checking account statement with written confirmation for all transactions enclosed. c) Monthly account analysis report listing transactions processed and average balances. 3. The financial institution shall pledge collateral of a type and in the amounts as required by Minnesota State Law. 4. The financial institution shall provide the City free of charge checking account deposit slips. 5. The financial institution shall provide the City free of charge deposit endorsement stamps. 6. The financial institution shall provide the City free of charge two safe deposit boxes that measure 10" x 5" x 21", or with a volume equal to this. The safe deposit boxes shall be located at the financial institution's office in Lino Lakes. 7. The financial institution shall provide same day credit for all deposits received prior to 3 p.m. on weekdays (except holidays). 8. The financial institution shall provide free wire transfer services. Wire transfers shall be promptly processed and not delayed until wire transfers -in are confirmed. The financial institution shall send to the City written confirmation of all wire transfers within 24 hours. The City must be permitted to wire transfer funds into and out of any of its accounts via personal contact, telephone instruction or fax. The City will keep the bank informed, in writing, of the names of employees authorized to initiate wire transfers. The financial institution shall compensate the City for any loss or cost incurred as a result of wires not completed on time. 9. The financial institution shall return canceled checks sorted in numerical order. 10. The financial institution shall provide 24 hour electronic funds transfer by ACH debit option and payroll direct deposit. 11. The financial institution shall have the ability and availability to use sweep accounts and/or repurchase agreements for over -night investment of funds. 12. The financial institution shall provide a major corporate credit card with a credit limit of at least $10,000 with no annual fee. 13. The financial institution shall provide free on-line access to the City's account and free on-line banking services. 14. The preceding terms shall be agreed to in writing and commence when a new supply of printed checks becomes available in September, 2001. 15. Failure of the financial institution to follow the terms of this agreement shall constitute grounds for the City to unilaterally cancel the agreement immediately. 16. Uncollected or insufficient checks will be presented twice before being charged against the City's account. 17. The financial institution will make available copies of debit and credit entries to the City on a daily basis. 18. Verbal stop payment orders will be accepted from designated City personnel. The City will forward a written or fax confirmation of the order within three working days. IV. INSTRUCTIONS ON SUBMITTING PROPOSALS 1. Proposals must be submitted by 4:30 p.m. , Friday, June 22, 2001 to: Alan J. Rolek, Finance Director City of Lino Lakes 600 Town Center Parkway Lino Lakes, MN 55014 2. The proposal should include the following: a) Completed pages of Section V (A & B) — Proposal for Financial Services and Section VI — Questionnaire from this RFP; b) A sample of a monthly account analysis report; and c) A copy of your financial institution's most recent annual audited financial statements. 3. Standard Terms and Conditions Each proposal must be accompanied by a consolidated report of condition and a consolidated balance sheet. Each proposal must be accompanied by 3 references for similarly -sized government/business clients. The City reserves the right to reject any or all proposals. 4. Proposal Selection Criteria Each proposal will be evaluated based on the following: • Financial strength of the institution • Costs of services • Interest rates offered • Additional services offered 5. Minimum Qualifications The successful proposing financial institution will be conveniently located to the City of Lino Lakes City Hall, a member of FDIC, licensed in the State of Minnesota, a qualified depository of public funds, and a member of ACH with a sound financial history. V. PROPOSAL FOR FINANCIAL SERVICES A. Checking Account Services. 1. It is hereby proposed to provide the financial services in accordance with the terms outlined in Section II of the RFP, except for the following conditions: 2. These terms will be effective starting in September, 2001 for a period of 3 years, with the option for the City to extend for another three years. 3. The cost of the above services may be paid for in any of the following methods: (Check those that apply) [ ] Monthly service charge as itemized in Section V, Part B. [ J Compensating uncollected balance in a checking account in the amount of [ 1 Other (Explain) 4. If actual account balances (per history) are kept lower, would this change the above? If so, please explain. B. Monthly Service Charges for Checking Account Services to be Assessed as follows: Approximate Units per Month Unit Cost Monthly Service Charge 1. Deposits 38 $ $ 2. Checks included in Deposits 1,420 3. Returned Checks 2 4. Checks and other Debits 325 5. Wire Transfers — In 2 6. Wire Transfers — Out 1 7. Daily verbal balance reporting 21 8. Sequencing of canceled checks 325 9. Account maintenance 1 10. Direct deposit of payroll checks 150 11. Automated debits for payments By utility customers 40 12. Other charges (explain) 13. Total estimated monthly service charges $ 14. Earnings credit — explain how it would be calculated: 15. Will earnings credit in excess of service charges be paid to the City? The preceding terms are hereby agreed to by: Signature Date Title Telephone No. Financial Institution VI. QUESTIONNAIRE 1. Will the City be allowed to wire transfer out uncollected funds in its account? 2. How soon will the city receive credit for collected funds in its account for deposits of checks from Anoka County and/or the State of Minnesota? For other checks? 3. How quickly can it be determined whether a specific check issued by the City has cleared our account? Will there be a service charge when we make these requests? 4. Do you pay interest on uncollected funds in an interest bearing account? 5. How are overdrafts handled? What is the maximum number the City would be allowed per month before service charges are applied? 6. Describe aspects of your financial services that distinguish your services from your competitors. 7. Are there other optional services ( e.g. controlled disbursement) that your institution could provide that would be beneficial to the City? Please describe and include costs for these services.