THE BOROUGH OF PHOENIXVILLE REQUEST FOR PROPOSALS (RFP) To Provide BANKING SERVICES. For. Borough of Phoenixville, Chester County, Pennsylvania

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1 THE BOROUGH OF PHOENIXVILLE REQUEST FOR PROPOSALS (RFP) To Provide BANKING SERVICES For, Chester County, Pennsylvania June 27, 2016

2 SECTION I: INTRODUCTION SUMMARY The is requesting sealed proposals for banking services. The proposals will be accepted by the (the Customer ), Monica Koza-Lubinsky, Finance Director, 351 Bridge Street 2 nd Floor, Phoenixville, PA 19460, Wednesday, JULY 27, 2016 at 11:0 0 a.m. prevailing time. The sealed proposals must be in the possession of the Finance Director by that time. Please forward any questions for clarification to Monica Koza-Lubinsky at ext. 211; , mlubinsky@phoenixville.org, or Jennifer Logan ext. 112; , jlogan@phoenixville.org. BACKGROUND AND OBJECTIVES The governing body for the is the Phoenixville Borough Council. The objectives of this Request for Proposal are to identify a banking institution ( the bank ) that is most qualified to offer a comprehensive banking package, thus, maximizing quality and service while minimizing expenditures from the Customer. The Customer s interest is based on procuring the most amicable relationship and assembly of services tailored to meet our specific requirements. An important aspect of this proposal is to obtain market rates (federal funds rate) of interest on all funds held in our accounts with limited associated risks. The Customer requires that the bank represents, warrants and covenants that, at all times, the assets pledged by the Bank as Collateral will comply with Act 72 and will also comply with the following additional requirements: Collateral will be marked to market once per week with market value equal to 102% OF THE Applicable Public Deposits Collateral will consist solely of either full faith and credit obligations of the United States Government or fixed rate obligations of agencies or instrumentalities of the United States Government. A monthly report shall be provided to the Customer regarding the aggregate Applicable Public Deposits being secured by the Collateral, a listing of the Collateral, and the market value of the Collateral. LENGTH OF RELATIONSHIP It is the intent of the Customer to select a bank that is capable of providing the required services at the most reasonable cost. It is the objective of the Customer to maintain a three (3) year relationship with the depository. The customer may elect to extend the relationship based on an optional renewal clause, for an additional two (2) years under the identical terms and conditions as hereby outlined in the original scope of this proposal. The provision exists that the Customer reserves the right to terminate the relationship at any time with a 30 day 2

3 written notice. The Customer reserves the right to terminate the relationship immediately should it be determined that the creditworthiness of the bank is deteriorating or there are adversarial amendments to the portfolio collateralizing the customers funds held by the bank. SELECTION CRITERIA MINIMUM BANK QUALIFICATIONS The Customer will weigh each bank proposal received on the established benchmarks below: Creditworthiness ( Must submit Agency Rating) The bank must provide proof of authorization to do business in the state of Pennsylvania Geographic proximity to the Borough (Within 3-5 Miles of Municipal Building) Deposit Interest Rate Schedule, Fee Schedule and Flexibility of Services Ability to Provide Services Efficiently and Effectively through Automation Funds Deposited and Collateralized in Accordance with all Federal, State and Local Laws, and in accordance with the further limitations in this request as they relate to collateralization requirements Industry experience with governmental organizations (references to be supplied) TERMS AND CONDITIONS Please be mindful that this is in no way to be construed as a competitive bid for services, rather, this is a request for professional services. Therefore, it is not a requirement that the Customer adhere to governance in accordance with competitive bidding laws. The terms and conditions of this proposal process are as follows: 1. The Customer reserves the right to reject any or all proposals; 2. The Customer may waive any irregularities or informalities and select the best proposal in the opinion of the Customer; 3. The Customer reserves the right to render a proposal invalid due to unauthorized modifications of specifications or terms. SECTION II: RFP TIMETABLE RFP will be distributed to interested institutions by or after June 27, All proposals are due and will be opened on July 27th. Final selection is intended to occur after review and approval by the Borough Council. Service implementation will be scheduled to begin within 60 days of Borough Council approval. 3

4 SECTION III: SCOPE OF BANKING SERVICES Below is a brief description of the scope of services desired by the Customer. This section describes the services the Customer intends to use as a bank customer. There are questions embedded in this section that are repeated in the proposal instructions. The Customer transports daily deposits to the bank via Customer staff. The customer offers and utilizes direct deposit of payroll, utilizes internet banking for checking accounts and ACH for various account deposits. The customer is interested in check protection, remote deposit, coin counting on premise, and the use of sweep accounts so that the customer may maximize any interest earnings. The Customer may use additional services if the Customer deems it to be a beneficial relationship. If there are any additional services that the bank provides and are not outlined within this Request for Proposal, or there are any innovative or alternative approaches not mentioned herewith that would enhance the operational efficiency of the customer, please include those services and denote whether they are fee based or complimentary. Be advised that a list of contact names, numbers and location of said individual, relating to the services provided, will be required by the Borough. COLLECTION SERVICES Collection services are those services related to the acceleration of the availability of funds for investment or disbursement. REMOTE DEPOSIT Although we, the Customer do not at this time utilize remote/desktop electronic deposit of checks received, we may at a future date require this option. Include in your proposal costs any on-going fees for providing and installing necessary equipment, instruction on use and any on-going fees for this service. A desired function would be to utilize one desktop location to accommodate the ability to select between the various accounts that will be maintained by the Customer. There are accounts the Customer deposits into, the Borough General Fund and one or two other accounts. All items will be processed as ACH unless specifically identified. An electronic download of the scanned file with check number, payment amount, and the customer account number from the payment stub would be required. Download must be in Excel format or compatible. WIRE TRANSFERS The Customer uses wire transfers to interchange funds between the Customer s financial institutions for investment and debt service purposes. It is the intent to notify the Bank, prior to noon, via 4

5 telephone by a designated Borough employee of any wire transfers on a specific day. It is the intent of the customer to consider the incoming wire transfers as available for investment either by the Customer or by the bank through the concentration account investment vehicle. Wire transfers ordered by noon and not received by the destination party by 2:00 p.m. will be traced from origin to destination to ascertain the party responsible for delaying the transfer. If deemed necessary, adjustments will be made for any lost interest or charges from a fail to consummate an investment transaction. The bank must have adequate backup systems in place in the event of a computer or other failure. Please describe the following: Policy on daylight overdrafts, including wire deadlines Ability to initiate and monitor wire transfers on line Ability to create and store repetitive wire instructions Ability to create and store future-dated wire instructions Security measures for wire initiation and approval ACH The Customer receives various deposits through ACH funding from the state, the county, and our customers (franchise fees, loans, etc.). The Customer needs to be able to initiate ACH debits to our customers accounts and to other accounts in other banks. All deposits received via ACH should require no prior notification of the bank and should be available for withdrawal immediately. The Customer may in the future make payments of federal and state withholding taxes with ACH Debits from the general fund checking account. In addition, other outside organizations will debit funds on a regular basis from other checking accounts. The Customer requires the ability to block certain ACH Debits and to set some accounts to notify and receive approval for all attempted debits. In the proposals, Banks should include the following information regarding ACH: Methods of transmission Cut-off times Security features related to processing direct deposits Pre-notification policy and cost Re-presentment of checks through ACH on a specific date Security measures for ACH origination and reception ( filters and blocks) OVER THE COUNTER DEPOSITS The Customer provides various amenities for which cash and checks are received for payment. Generally, a daily deposit is prepared and taken to the depository, or as needed. Check clearing time is vital in an effective cash management system. Uncollected funds are unavailable for immediate investment, given the understanding that most checks that the customer is in receipt of are drawn on local banking institutions. The customer requires same day availability of 5

6 all local checks. Please provide your check-clearing method and policy for checks that are drawn on banks other than the awarded bank to identify the time it will take for the deposited funds to become collected and available for investment. If your bank does not provide same day availability on On Us and local checks, please detail the policy in your response. COIN COUNTING One source of the Boroughs revenues stems from metered parking. Employees, on a weekly basis, collect the coins from these meters. The coins will then be transported to the Bank for counting and deposit into the appropriate fund. It is imperative that the Banking Institution have a coin counter onsite to complete this process. Please provide details and any fees associated with this process. OVERDRAFT SERVICES While the Borough makes every attempt to minimize overdraft situations, an overdraft may occur. This has not been the circumstance in the past with the Customer. It is the expectation of the Customer, that the bank verbally notify the Customer to remedy the fund balance in an expedient manner. Additionally, it is the expectation of the customer, that the bank include a description of the overdraft processing services provided, including but not limited to: rate basis for overdrafts, and whether the accounts are aggregated for calculation / fee purposes. STOP PAYMENT SERVICES This is a mandatory request on behalf of the customer. Herewith, please describe the stop payment process, including: online stop payment services, confirmation requirements, the duration of a stop payment ( i.e. one month, three months, six months) and the fees associated with this service. DISBURSEMENT SERVICES Disbursement services are those relating to the disbursement of funds from the bank. If the customer makes payments of federal and state withholding taxes with ACH Debits from the general fund checking account or debits funds from other outside organization checking accounts, the customer would require the ability to block certain ACH debits and to set some accounts to a notify and receive approve status. Please identify that this service is available and any fees associated with this service. BETWEEN FUND TRANSFERS 6

7 The Customer makes frequent transfers between funds through the online banking system. If the accounts are set up as zero balance accounts, the system must allow for an override and not deny the transaction based on the zero balance. PAYROLL SERVICES The Customer pays its employees on a bi-weekly basis The Customer s payroll is generated in-house then sent to an outside vendor The Customer pays most employees via direct deposit. Presently 85% of our employees participate in the direct deposit program. New employees are required to provide direct deposit information upon hire, however, the first check is usually drawn on the Borough Account. The Customer requires the following for direct deposit: No funds may be withdrawn from the account prior to the effective date. Please indicate the communication methods and technology necessary for the Customer to transmit direct deposit information to the bank. CUSTOMER UTILITY PAYMENTS The Customer currently utilizes Xpress Bill Pay for its Water, Sewer and Trash Payments. The Customer goes to the Borough website and if the payment is by Credit Card, the payment, which goes to the Xpress Bill Pay bank, has a 2 day lag time. For E checks and ACH payments, there is a 1 week lag time and a Borough employee physically makes the electronic transfer to our bank. Indicate the communication methods and technology necessary for the transmission of this electronic data. ZERO-BALANCE SWEEP ACCOUNTS The Customer desires the use of a zero-balance account structure to provide the mechanism to have the total amount of our float fully invested at all times. It is extremely important that our funds continue to be fully invested at market rates. This overnight investment rate is generally based on the current federal funds rate. A bank balance disregarding the sweep transactions must be available for purposes of balancing each individual account to a non-zero balance. This balance / statement must be available to the Customer electronically. LOCKBOX The Customer currently utilizes a lockbox system. The necessary compliancy is the ability to read OCR Code and not processing exceptions ( i.e. mail the exceptions to the Borough). OPTIONAL SERVICES As denoted, the Customer is requesting information regarding other services, such as, but not limited to, Vault Services Safekeeping Services 7

8 Employee Banking, such as free checking with no minimum balance requirement MONTHLY REPORTING The financial institution will, on a monthly basis, provide the Customer with a detailed statement of activity, both paper and electronic, listing each transaction, deposits and withdrawals with detail and the amount of interest earned on interest bearing accounts. The Customer should receive these reports no later than the fifth (5 th ) business day of the following month with an end of month cutoff. If these statements are delivered electronically, please describe the method of delivery. The Customer also requires an Account Analysis Report including all per item fees and earnings credit calculations on a monthly basis. This report should be delivered electronically. In summary, the following summarizes the requirements: Numeric check sorting by the bank Imaging of cancelled checks (front and back) If the bank has a standard reconciliation product, please include a detailed description as well as any differentiating characteristics setting it apart from other institutions. Provide all possible communication modes with all the banks products; capabilities available to reduce cost and time; prevent and fraudulent check activity; and, simplify data presentation. ELECTRONIC/INTERNET BANKING SERVICES In addition to addressing all services previously described, the Customer wishes to evaluate how business may be conducted through the bank via electronic services. Please describe your financial institution s ability to provide the following services via a secure internet site: Previous day and historical balance and transaction reporting Current day reporting of all electronic transactions (wire and ACH) and check presentment reports on a Controlled Disbursement Account Reporting on returned deposits, returned ACHs, returned wires and Notification of Charges (NOCs) Initiation of book transfer, repetitive Fed wire, and non-repetitive Fed wires Maintenance of repetitive book and Fed wire instructions Submission of stop payment Review of previous day or historical check images Bank Automated Interchange (BAI) or other file type downloads of paid checks View all account activity Remote check deposit Inter-account transfers and wire transfers Include all associated fees and pricing for said services. The Customer anticipates a significant savings on stop payment and transaction initiation may be achieved by utilizing such systems. 8

9 Also included should be a detailed description of recommended Customer technology necessary to utilize these services. Please also describe the bank s response time to upgrading online systems for compatibility with new versions of Windows, Internet Explorer and Google Chrome. INVESTMENT SERVICES An effective and efficient cash management system increases the receipt of funds, delays disbursement of funds, and minimizes idle cash balances. These objectives have been conversed about in detail, previously, within the section of the Request for Banking Services. Since banks have many different investments, please provide us with your detailed suggestions relating to the investment vehicle you will provide us. These suggestions must include the following information: 1. The method used to fully collateralize our account balance in excess of FDIC. 2. Explain the calculation of the daily interest rate including the specific interest index and source of information (i.e. Wall Street Journal). 3. Explain the calculation of interest earned on a monthly basis (i.e day basis, average daily balance, average monthly interest rate, calculated daily based on daily rate and daily balance). 4. Provide description of the amount of cash balance on which the interest calculation is based, such as collected funds and reserve amounts. 5. Any additional information you deem necessary for the Customer to fully understand your suggested investment vehicle. The Customer, by policy, is extremely conservative and adverse to risk. However, a well-administered cash management system can provide market rates of return without exposure to risk. PROCUREMENT CARD The Customer is exploring the opportunity of procurement charge cards for selected Customer personnel. Details are not definitive at this time and will follow. ESCROW ACCOUNTS The Customer maintains one (1) escrow account. The account is utilized to maintain developer deposits, maintenance bonds, etc. The interest income is paid to the Borough, not to the developer. Sub-accounts for each developer are maintained by the Borough to / from a master escrow account. However, the Borough may elect to proceed in a different manner in the future, thus, the option of the bank maintaining the escrow in the future is a possibility. SECTION IV: BANK CREDIT EVALUATION Although properly structured collateral offers the Customer very good insurance against financial institution credit problems, the Customer would be remiss in not evaluating the prospective bank s creditworthiness. Although this will not be the primary evaluating criteria, it will be used to include a financial institution in our proposal process. Please include your audited financial statements for our review. Additional requirements include: 9

10 A sample copy of the banking services agreement that incorporates the provisions as set forth in the RFP Confirmation that the bank currently does, and will continue to, adhere to the government s collateral policy The bank s current disaster recovery plan ( back-up systems and back-up sites) Description of the bank s dispute resolution and customer feedback process Any incentives offered by the bank for customer retention Designated account representation ( level of decision making authority within the bank in the event a dispute between said parties should arise, and, the level of understanding of the government s operations) Back-up bank personnel Three Business / Client references with similar service requirements, preferably municipalities or other governmental agencies Fee attachment listing for required services and optional services Historical rate attachment with a 12 month average for interest bearing accounts, money market accounts, and sweep rates Information regarding the banks community involvement within the Borough SECTION V: BANKING SERVICE FEES Banking services can be paid for by either the compensating balance or the direct charge methods. The Customer reserves the right on an annual basis to choose either the compensating balance or the direct charge method. Please include both methods in this proposal. It is understood that the direct service fees are fixed for the period of this proposal. Please provide us with per item cost and the annual cost for each service. Also, please provide us with your compensated balance calculations and your policies relating to the evaluation of this established balance. SECTION VI: WAIVER OF FORMALITIES The reserves the right to waive any formalities applicable to any provisions contained within the Request for Proposal Banking Services. BIDDER S ETHICS AN D COLLUSION Collusive Bidding: If a bank submits more than one proposal or if two or more banks converse and consent to fix their respective proposals in such a manner as to be awarded the contract, the bank(s) shall be disqualified from further consideration, and shall be subject to any applicable penalties under the law. Bribery: Any bank that attempts to influence a Customer official to award this contract to such bidder s banking institution by any such means ( i.e. gratuity, gift, or any other such coercion) in exchange for an assurance to award the contract to such banking institution shall be disqualified from further consideration and shall be subject to any applicable penalties under the law. Conflict of Interest: Any bank that knows of any Customer official having a material direct or indirect 10

11 financial interest in such bidder s banking institution shall be required to submit a written statement, along with the Form of Proposal, detailing such interest. Failure to disclose a known such financial interest shall result in the bank s disqualification from further consideration of award. The will review and evaluate all proposals, summarize all data and reserves the right to schedule a meeting with the contending banks. Those bank employees who will directly work with respective Customer employees must be in attendance. Borough employees will include the Borough Manager and various members of Borough Council. Written notification will be sent to all banks regarding the outcome of the review and contract award. The bank to which the contract is awarded will be required to coordinate with appropriate Customer staff to ensure a smooth transition. 11

12 ATTACHMENT A DATA SUBMISSION DOCUMENT Please note that information regarding the financial statements of the Borough can be found on the website at Phoenixville.org. THIS PROPOSAL, MUST BE RECEIVED IN THE The, 11:00 a.m. prevailing time July 27, 2016 TO THE ATTENTION OF: Monica Koza-Lubinsky Finance Director 351 Bridge Street 2 nd Floor Phoenixville, PA NAME OF BANK: CONTACT PERSON: STREET ADDRESS: CITY/STATE/ZIP: TELEPHONE NUMBER: FAX NUMBER: ADDRESS: 12