TEXAS STATE UNIVERSITY SYSTEM REQUEST FOR PROPOSAL. BANK DEPOSITORY SERVICES July 27, 2009 TABLE OF CONTENTS

Transcription

1 TEXAS STATE UNIVERSITY SYSTEM REQUEST FOR PROPOSAL BANK DEPOSITORY SERVICES July 27, 2009 TABLE OF CONTENTS I. Introduction II. III. IV. Proposal Submission Instructions and Qualifications General Statement of Banking Services Required Financial Institution Qualifications V. Required Services VI. VII. Optional Services Bank Compensation Attachment A: Schedule of Proposed Fees Attachment B: Historical Earnings Rates

2 Texas State University System Austin, Texas Request for Proposal For Banking Services I. INTRODUCTION The Texas State University System (the System ) is requesting proposals for a three (3) year banking services contract to be awarded on or about November 20, 2009, with service to begin on January 1, 2010 and extend through December 31, 2013, with two possible one-year extensions if approved by the System Board of Regents. The banking services required by the System are relatively low volume but the System does require accuracy and timeliness in reporting as well as responsiveness to their needs. Through this contract the System intends to minimize banking costs, improve operational efficiency, and maximize investment capabilities. This Request for Proposal (RFP) details the System's goals and the banking services required. II. PROPOSAL SUBMISSION INSTRUCTIONS AND QUALIFICATIONS By submitting a proposal in response to this RFP, depositories will be deemed to agree to the mandatory contract and service provisions contained herein. This RFP and the proposal submitted will be incorporated into and form the basis of the final depository services contract. 1. Local Presence To assure a close working relationship, to facilitate available services, and to support local business, the System will give preference to those banks with full service capabilities within the downtown Austin. 2. Proposal Format In order to fully and equitably evaluate each bank s ability to meet the banking services need of the System, a standard reply format is required. Each proposal must include a response to each item in the RFP in the order given along with completion of Attachments A and B. Only proposals submitted in the prescribed format and using the exhibit forms provided will be evaluated for contract award. An electronic copy of this proposal is available upon request by to roland.smith@tsus.edu. Submission of the Proposal must however be in written form. 3. Schedule for Proposal Submission The System will make every effort to adhere to the following schedule. 07/27/09 Release of Request for Proposals 08/13/09 (10:00 a.m.) Deadline for all questions regarding Request for Proposal (by , page 3) 08/14/09 Responses to all submitted questions provided to all known proposers 08/31/09 (3:00 p.m.) Deadline for proposal submission (page 3) 11/20/09 Board meeting to award contract 01/01/10 Contract commencement Texas State University System Banking Services Request for Proposal

3 4. Proposal Submission To be eligible for consideration under this request, a total of three (3) complete copies of each proposal must be delivered by 3:00 pm CST on August 31, 2009 to the Texas State University System at the address indicated below. Proposals received after that time will not be accepted. All proposals become the property of the System. Proposals must set forth in writing accurate and complete information as required by this RFP. Oral instructions or offers will not be considered. Contact with Board Members regarding this RFP is expressly prohibited and will result in disqualification of your proposal. The proposal must be submitted in a sealed envelope or packet marked Proposal for Bank Depository Services. An accompanying transmittal letter must be signed by an individual authorized to bind the bank, state that the proposal is valid for 180 days from the submission date, state full agreement with the conditions and requirements of the RFP, and give full contact information regarding questions on the proposal. The three (3) proposals must be delivered by mail, express mail, or in person to: Roland Smith Vice Chancellor for Finance Texas State University System 200 East 10th Street - Suite 600 Austin, TX System contact information: Telephone Fax roland.smith@tsus.edu claire.jackson@tsus.edu Nellie.anderson@tsus.edu virginia.beversdorff@tsus.edu 5. Questions Regarding RFP Document There will not be any pre-proposal conference. Questions regarding this RFP, or the services requested in it, will be accepted only in form. Please send your questions(s) to all three addresses indicated above. Please enter as the subject line of your "Q&A RFP Banking Services". All questions should be received by 10:00 a.m. CST, August 13, 2009 and will be answered by August 14, Questions received after the August 7th deadline may not be answered. Anyone submitting a question will receive responses to all questions. If you do not intend to submit a question but would like to receive the questionanswer document please send us an and use the subject line "Q&A RFP Banking Services". 6. Selection Criteria The following criteria will be used by the System as the weighting basis for evaluation of the proposals and the award recommendation. 40 % - responsiveness, innovativeness, and ability to provide services required, 40 % - banking services costs, 10 % - potential earnings through demand and time deposits to maximize System income, and 10 % - creditworthiness and stability of the bank. Award may not be made to the bank submitting the lowest price proposal. The System will choose the bank submitting the best, most responsive overall proposal to satisfy its needs. 7. System Rights The System reserves the right to: - waive any defect, irregularity, technicality, or informality in the proposal or proposal procedures, - reject any and all proposals, Texas State University System Banking Services Request for Proposal

4 - accept any proposal or portion thereof most advantageous to System, - request additional information or require a meeting with bank representatives for clarification, - cancel, revise, and/or reissue this request for proposal, - negotiate with proposers, - modify deadlines, and - select any proposal deemed to be in its best interest as determined by the System. 8. Bank Compensation The System reserves the right to utilize either a fee basis or compensating balance basis (or a combination of each) for payment of services under the contract. The intention is to use a fee basis but in low interest environments compensating balances will normally be used. The System reserves the right to change the payment methodology during the contract period upon no less than 30 days written notice to the bank with the change commencing the first of the following month in order to react to changing interest rate environments. The System does not currently sweep balances, but does attempt to equalize the earnings credit on available balances to manage fees charged. The System wants the ability to utilize a daily sweep to a SEC registered money market fund or to an indexed account, if proposed by bank as an alternative. Without a sweep the System wants carry over settlement on charges on a semi-annual basis. - When a compensating balance payment basis with a sweep is used, all accounts will be swept to their compensating balance. Fees will be paid directly. - When a fee basis with a sweep is used, all accounts will be swept to zero. Within five business days after receipt of the monthly account analysis (and approval of those fees by the System) the bank may direct debit the designated account for fees due. A complete account analysis will be required monthly regardless of the payment basis. All item and account charges will remain at the proposal price quoted for the duration of the contract period regardless of changes in service volumes during the period. Should new services be required during the contract period not contemplated by this RFP, those services will be provided at fees not more than the bank s then-current published rate and approved by the System. III. FINANCIAL OVERVIEW The Vice Chancellor for Finance is responsible for all banking, treasury, and investment activities as well as accounts receivable, accounts payable, payroll and financial reporting functions. The Vice Chancellor reports to the Chancellor and the System Board of Regents. The System has a simple banking account structure and low volume activity but requires fully automated accounting and reporting in their goal towards elimination of paper and manual handling. The average ledger balance is $201,718. The System currently maintains three demand deposit accounts. Avg. Mo Description Ledger Type Designated $ 112,883 Interest bearing Interest and Sinking (I & S) $ 393 Interest bearing Foundation Inc. $ 88,441 Interest Bearing The System receives and consolidates all debt payments for the Universities of the System using Texpool. The structure of the accounts may change under this contract and System may add or delete accounts during the period. Texas State University System Banking Services Request for Proposal

5 Most bank activity occurs in the Designated account as payables. Most payroll transactions are handled through the State payroll and not through these accounts. The System office currently has 17 employees. The System processes approximately $100,000 monthly in payables from the designated account. The payables cycle occurs weekly or more frequently as needed. All payroll transactions are processed through the State of Texas payroll system. The payroll cycle is monthly. All employees utilize direct deposit. Deposits are prepared by financial staff in the System office and couriered to the bank by System staff. The System usually makes one delivery per week. Any or all System funds may be maintained and invested by the System outside this contract. The System will be under no obligation to maintain funds in the bank except under a compensating balance situation. The Vice Chancellor of Finance will be responsible for administering the agreement. IV. GENERAL STATEMENT OF BANKING SERVICES REQUIRED The banking services described in this RFP are directed toward four major goals: -100% utilization of idle funds, -safety of System funds and securities, -efficient utilization of available banking services, and -minimization of banking costs for the System. As a public entity the safety of the funds and assets of the System are paramount. The use of technology to minimize manual or time-consuming operations will be a continuing effort and the bank will be expected to bring applicable new technologies to the System's attention throughout the contract period. The System also intends to earn the best yield available on its funds. The System requires a depository that is fiscally strong and able to provide the required services on an uninterrupted basis. System funds are public funds and fall under provisions of the Public Funds Investment Act and the Public Funds Collateral Act (Texas Government Code Chapters 2256 and 2257). If funds are, for any reason not swept, all time and demand funds above FDIC insurance coverage must be collateralized at 102% margin as authorized by the System. V. REQUIRED FINANCIAL INSTITUTION INFORMATION To be considered the proposal must include a response to each question in this Section in the order asked. 1. In order to fulfill the System s fiduciary responsibility to protect public funds, each bank, submitting a proposal shall provide, in response to this item: a. an audited annual financial statement for the most recent fiscal year, - The bank will be required to submit an audited statement annually during the contract. 2. Describe the bank's philosophy and approach to satisfying the System s banking and customer service requirements. a. What is distinctive about the bank's approach to customer service for small clients? b. Is the bank offering any transition incentive? Texas State University System Banking Services Request for Proposal

6 3. List references from at least three of the bank s current, comparable governmental clients. Include the length of time under contract, a client contact, title, and telephone number. 4. Provide the bank s most recent Sheshunoff, Veribanc or comparable bank rating from an independent rating service. If not available, provide the dual ratings of senior and subordinate holding company debt. The bank will be responsible for notifying the System within thirty (30) days of any change in these ratings during the entire contract period. 5. Provide a copy of all agreements (even if not directly referenced or required in this RFP) which will be required to be executed under the contract for services rendered (including depository and collateral agreements). Any changes required on the agreements will be made and agreed upon before award of the contract is made by System Board of Regents. VI. REQUIRED BANKING SERVICES To be considered, the proposal must include a response to each of the questions in this Section in order and all associated fees must be detailed on Attachment A. All fees for all services anticipated must be detailed on the Attachment. 1. Consolidated Account Structure with Sweep Mechanism The System is interested in assuring that all funds are earning the best available interest rates at all times. The System currently does not sweep account balances but will consider use of money market accounts or an automated, daily sweep to a money market mutual fund (or bank alternative if applicable and competitive) in order to reach its full investment goal. An SEC registered government, or enhanced government, money market fund would be used for the sweep. If the bank has a valid alternative to a SEC money market fund, it should be presented. A repurchase agreement with the bank is not acceptable as a sweep investment vehicle. The bank shall clearly stipulate and describe the bank's most cost effective account structure. a. Fully describe the proposed structure with or without a sweep focusing on the bank's most cost effective structure. How does the bank expect this to change as rates rise during the contract period? b. If a sweep, are funds swept same day or next day? If swept next day, how are funds collateralized and interest applied? c. If the bank is proposing an alternative to a sweep detail and describe fully. c. If an SEC registered money market fund is utilized for a sweep proposal, provide the full name and identifying cusip of the fund along with a copy of the prospectus. Any minimum investment amounts should be detailed. d. If a sweep is not used confirm that the System will have carry-over settlement on a semiannual basis. e. Describe your bank s account-authorization process. Are there any instances in which the Board-of-Regents is required to approve changes to an account s authorized signatories or styling? The System may be required or may desire to open additional accounts, or change account types during the contract period. If this occurs the new accounts and their services shall be provided with the same features and be charged at the same contracted amount as the accounts described in this request for proposals. Texas State University System Banking Services Request for Proposal

7 2. Automated Cash Management Information Access The System is interested in maintaining automated balance reporting and transactional capabilities. The System requires automated transactions and daily balance reporting for timely access to balance information and transaction detail. Minimum automated services should include: Prior-day summary and detail balance reporting on all accounts, including transaction detail and summary information, positive pay reporting and exception transactions, and initiation and monitoring of internal and wire transfers. a. Fully describe the bank s on-line service capabilities. List the system capabilities (i.e. balance reporting, wires, positive pay, stop pay, etc.). Are all services provided through one portal and included in the price of that portal access? b. Describe procedures to access the automated system. c. Does the system provide full trailer information on wires and ACH for identification purposes? d. Submit samples of major screens available. Provide a website (and sign-on information if required) for an on-line review of the system, if available. e. Describe your security features. Is security managed by the System Administrator? Are tokens or PINs used? How are security pin numbers assigned? 3. Standard Collection - Deposit Services Standard commercial deposit services are required. Deposits will consist of a very limited amount of coin and currency and checks. The System requires same bank day credit on all cash (coin and currency) deposits and on-us checks. All cleared deposits received by the bank's established deadline and in accordance with the published availability schedule must be processed for same day credit. The bank shall guarantee immediate credit on all incoming wire transfers, US Treasury checks, ACH transactions, on-us items, and U.S. government security maturities and coupon payments. The System makes its own deposits currently. Deposits are batched with tapes attached. The System does not encode checks. The System would like to use remote deposit if it proves cost effective. The System does not accept credit cards. a. What is the bank s daily cut-off time to assure same day credit? Will this vary by location (lobby, teller, vault)? b. How and when are credit/debit advices sent to the System? On-line notification, , or in paper form? c. What type deposit bags are required? d. State the bank s Availability Policy if it differs from the published Availability Schedule. e. Include a list of all the bank's deposit locations and alternatives. f. Does the bank offer remote deposit services? Describe fully including the costs involved. 4. Standard Disbursing Services Standard disbursing services are required. The System requires positive pay on its checking accounts. There are approximately 370 checks written by the System a year, 30 on the Designated Account and 5 on the Inc account. Payroll is primarily paid through the State of Texas and not from these accounts. a. Does the bank image all checks? How are check images made available on line? When are they available online? b. How long are check images maintained online? c. Is the System charged for each image as well as each image retrieved? Describe. Texas State University System Banking Services Request for Proposal

8 5. Positive Pay To safeguard against fraudulent checks, positive pay is required on the Designated and Inc. accounts since both currently issue paper checks. The positive pay process should be fully automated. a. Describe the data transfer requirements for computer-generated check runs (transmission requirements). b. Describe the transmission options for manual checks written. Is input online? c. How can check records be changed or deleted by the System, if necessary? d. At what time is exception information reported to the System? At what time are System exception elections required? e. Do you require any paper transactions on positive pay notification or exception decisions? f. Are all checks, including those received by the tellers and vault, verified against the positive pay file before processing? How often is teller information updated? 6. Wire Transfer Service The System currently generates an average of approximately 5 incoming each month and an occasional outgoing wire. Wires are currently used primarily for debt service payments. Incoming wire transfers must receive same day collected credit. Wire initiation should be available online. The System requires that wires be released the same business day if information is provided before the cutoff deadline. The System will require compensation for delays caused by bank errors at that day s Fed Funds rate. a. Describe the process of online wire initiation. What back-up is available to the on-line process? b. Is any paper follow-up transaction required for transfer transactions and wire initiation transactions? c. How will the bank notify the System of incoming wires? Online? ? When? d. Is future dating of wires available? How far in advance? e. State the bank s policy on the use of ledger balances for outgoing wires in anticipation of daily security activity or incoming wires. 7. Investment of Idle Funds and Safekeeping of System Securities The System currently has no need for safekeeping services but may require same during the contract period. The System has no obligation to invest its funds with or through the bank. All System investments are made on a competitive basis. The bank will be required to provide book entry safekeeping services if needed. All System investments will be made by the System and instructions for clearing and safekeeping will be provided to the bank in writing via or fax. Custody must be in the bank and not a brokerage subsidiary of the bank. All securities must be cleared on a delivery versus payment (DVP) basis and System ownership documented by original clearing confirmations and safe-keeping receipts provided within one business day of the transaction. All coupon payments and maturities must receive automated same day collected credit on the System designated account without requiring any additional System action. a. Is the bank a member of the Federal Reserve and DTC? If not, name the correspondent bank to be used for clearing and safekeeping. b. Describe any safekeeping arrangement proposed with a correspondent bank including processing requirements by the System. No delays or additional transactions are acceptable. The System may choose to purchase time deposits from the bank but all time deposits, like securities, will be competitively bid at the time of purchase and not be part of this contract except as regards collateral requirements. Texas State University System Banking Services Request for Proposal

9 8. ACH Services The System expects to move toward increased use of ACH. a. Describe the batch transmission requirements for ACH transactions. b. Is the System able to initiate individual ACH transactions on line? c. What filters and blocks are available on System accounts for ACH transactions? d. Are ACH addenda shown in their entirety as a transaction detail on-line and on all reports? 9. Collateralization of Deposits The bank must agree to obtain and maintain acceptable collateral sufficient to cover all time and demand deposits above FDIC coverage at all times during the contract period. The proposal must state agreement and compliance to the following terms and conditions. If the bank offers a voluntary collateral pooling arrangement the System will review the program and make an informed decision based on perceived risk and cost effectiveness. All collateral pledged to the System must be held in an independent, third party bank outside the bank s holding company. A tri-party safekeeping agreement shall be executed between the System, the depository, and the safekeeping bank for custody of pledged securities in full compliance with FIRREA requiring a bank resolution by the bank board or loan committee. (Or completion of Circular 7 Pledgee Agreement for the Federal Reserve as custodian.) All time and demand deposits will be collateralized at a minimum of a 102% margin on principal plus accrued interest at all times, net of FDIC insurance. The bank will be contractually liable for the continuous monitoring and maintaining of collateral at the System's required margin level of 102%. Pledged collateral will be evidenced by original safekeeping receipts/report sent directly to the System by the custodian within one business day of settlement. The Custodian shall send a monthly report of collateral pledged directly to the System. Substitution rights will be granted if the bank obtains the System s prior written approval and if substituting securities are received before previously pledged securities are removed from safekeeping. Collateral will be provided three days prior to initial deposits being made. Authorized collateral includes only: o Obligations of the United States or its agencies and instrumentalities including mortgage backed securities which pass the bank test, without maturity limitation. a. State the bank s acceptance of the collateral conditions above. b. Will FDIC assessments be applied to the accounts? What is the current FDIC assessment percentage? 11. Account Analysis Monthly account analysis reports must be provided for each account and on a consolidated account basis each month. Within five business days of receipt of the monthly account analysis (and subsequent approval of the fees by the System) the bank may direct debit the designated account for fees due if compensation is being calculated on a straight fee basis. A complete account analysis will be required monthly regardless of the payment basis. a. Provide a sample account analysis including calculation bases. b. When is the analysis available each month? c. Is the account analysis available online? When are they available online? How long are they maintained online? Texas State University System Banking Services Request for Proposal

10 12. Monthly Statements The bank must provide monthly account statements on all accounts with complete supporting documentation. All accounts must be on a calendar month cycle. Timeliness of statements is critical and non-performance will be grounds for termination of contract. a. Provide a sample monthly statement. b. State when monthly statements will be available each month. c. Is the monthly statement available online? If so, when and how long? Are the statements on a monthly imaged CD-Rom? 13. Overdrafts Every effort will be made to eliminate intra-day and inter-day overdrafts. However, should this situation arise, state the bank s policy regarding account and total account overdrafts and detail rates and fees, if any, to be charged on a per event or per account basis. a. Are all accounts aggregated for overdraft calculation purposes or do accounts stand-alone? b. State the fee charged per overdraft occurrence. c. State the rate basis for intra-day and inter-day overdrafts. 14. Stop Payments The System rarely has stop pays however an automated stop pay process is required, if cost effective. a. What are the options available for stop pays and extended stop pays? b. What is the deadline for same day action on stop pays? c. Can stop pay orders be initiated on-line? Is there any paper follow-up document required? d. What information on current and expiring stop pays is available on-line? 15. Company Banking The System is interested in giving its employees the opportunity for enhanced banking services. a. Does the bank have a banking services program available for System employees? b. List services provided under this program with applicable discounts or fees to the System or employee. c. Is availability of the program based on use of direct deposit or System employment? VII. BANK COMPENSATION The System will take into account all costs and earnings potential as part of the evaluation of each proposal. It is critical that the Attachments A and B be completed in their entirety. Attachment A has been provided for the detailing of all fees. If the Attachment does not detail line item fees required for a particular service, the fee description and cost per identified unit should be added to the Attachment. Bundled fees should be clearly delineated especially regarding on-line services to assure accurate evaluation. Space has been provided for any necessary explanation on costs. The System reserves the right to utilize either a direct fee basis or a compensating balance basis (or a combination of each) for payment of services under the contract. The System reserves the right to change the fee methodology during the contract period upon no less than 30 days written notice to the bank with the change commencing the beginning of the following month. This will enable the System to take advantage of changing interest rate environments. Texas State University System Banking Services Request for Proposal

11 If fees are used with a sweep as the basis for compensation, fees will be paid as a direct debit to a designated account after a five day System review and approval of the account analysis charges. If a compensating balance basis with a sweep is used for the basis of compensation, the System requires carry-over of balances with semi-annual net settlement. Regardless of the payment methodology a monthly account analysis will be required. This is a three (3) year service agreement with two one-year extension options. Fees and service charges included in the successful proposal shall remain in effect for the initial three-year period; however any Federal Reserve or FDIC service charge increase may be passed through upon 30-day written notice. Any changes in fees for the two extension periods will be negotiated and must be approved by the System in writing. In no instance will the rate increases in extension periods exceed the Texas CPI increases during the same periods as reported by the Bureau of Labor Statistics. Should new services be required during the contract period not contemplated by this RFP, those services will be provided at fees not more than the bank s then-current published rate. THANK YOU FOR YOUR INTEREST IN OUR BANKING ACTIVITIES TEXAS STATE UNIVERSITY SYSTEM 200 East 10th Street Suite 600 Austin, Texas Texas State University System Banking Services Request for Proposal

12 ATTACHMENT A - SCHEDULE OF FEES Please complete all applicable fee categories required to provide the particular service at your TEXAS STATE UNIVERSITY banking institution. The information below is a six month compilation (01/09-06/09). Avg Vol Avg Vol Avg Vol Avg Vol Designated I&S Inc All Proposed Service Unit Basis Fund Acct Acct Accts Fee Notes, if applicable AFP Account Services Average Ledger Balance Service Fee Total Master Account Maintenance Fee Per account Subsidiary Account Maintenance Per account Money Market Account Maintenance Fee Per account Interest Bearing Accounts Maintenance Fee Per account Investment Sweep Per account/per Mo Dr/Cr Sweep Transaction Fee Checks/Debits Posted Branch Credits Posted Branch Deposit Immediate Verif Additional DDA Statements Telephone Inquiry Negative Collected Balance Fee Overdraft NSF Item Paid Automated Services - Balance & Detail Balance Reporting Maintenance (45 day retain) Per account/mo Daily Balance Reporting - Subscription Fee Per account Detail Daily Reporting (Client Maintenance) Per account/overall Previous day Reporting Per account Previous Day Dr/Cr Items Transactions Loaded Transactions Accessed Check Services Maintenance (PWS) Per account/overall Image Capture Per Item Image Retention Per Item Recon Reports/Statements Branch Deposits Commercial Account Maintenance Per account Banking Center Deposits OTC Per event Night Drop Deposits Per event Items Deposited Per deposit Items deposited On-us Items In District RCPC Local RCPC In District City Other 11th Fed RCPC Items National FRB Page 1 of 2

13 Avg Vol Avg Vol Avg Vol Avg Vol Designated I&S Inc All Proposed Service Unit Basis Fund Acct Acct Accts Fee Notes, if applicable Transit Item Clearing Encoding Charge Deposit Corrections ACH Processing ACH Maintenance Per month Debits Originated Credits Originated Debits Received Credits Received ACH Addenda Records ACH Return Items Return Items - Fax ACH File Processing Per Item Filter/Block Maintenance Per month Filter/Block Authorized ID Positive Pay without Reconciliation Services Positive Pay Item Reverse Positive Pay Exceptions Monthly Maintenance (Base) Fee* Per month Transmission - File Transmission Stop Pays Stop Pays - Automated Wires and Transfers Incoming - domestic Straight Incoming/Outgoing Repair Outgoing - repetitive - automated,domestic Outgoing - non-repetitive - automated,dom Funds Transfers Remote Deposit Monthly Maintenance Remote Capture Deposits On-Us Checks Non On-Us Checks Transit Clearing Image Capture - Remote Image Capture Credits Page 2 of 2

14 ATTACHMENT B - HISTORICAL RATES Texas State University System Bank Name Earnings Credit Rate (ECR) Month/Year Rate Notes, if applicable Jul % Aug % Sep % Oct % Nov % Dec % Jan % Feb % Mar % Apr % May % Jun % 0.00% Interest Bearing Accounts Month/Year Rate Notes, if applicable Jul % Aug % Sep % Oct % Nov % Dec % Jan % Feb % Mar % Apr % May % Jun % 0.00% Money Market Accounts Month/Year Rate Notes, if applicable Jul % Aug % Sep % Oct % Nov % Dec % Jan % Feb % Mar % Apr % May % Jun % 0.00% Sweep Alternative(s) Month/Year Rate Notes, if applicable Jul % Aug % Sep % Oct % Nov % Dec % Jan % Feb % Mar % Apr % May % Jun % 0.00%

15 TABLE 1 TEXAS STATE UNIVERSITY SYSTEM Revenue Financing System Pledged Revenues Available Pledged Revenues Not Including Fund Balances (1) 280,347, ,970, ,110, ,165, ,263,787 Pledgeable Unappropriated Funds and Reserve Balances (1 & 2) (2) (2) (2) (2) (2) Total Pledged Revenues 280,347, ,970, ,110, ,165, ,263,787 (1) The Available Pledged Revenues shown above consist of tuition, designated tuition, student center fees, and recovery of indirect costs for federal grants and contracts, federal pass-through grants from other agencies and state grants and contracts. Prior to 1997, certain pledged revenues were characterized as the "building use fee" of the University System. In The Texas Legislature passed legislation that characterized the "building use fee" as "tuition" (2) In addition to current year Pledged Revenues, any unappropriated or reserve fund balances remaining at year-end are available for payment of the subsequent year's debt service. Financial reporting changes adopted by the State of Texas beginning with FY2002 to comply with Governmental e Accounting Standards ds Board pronouncements ou e preclude the continuation o of this data element e e since it is no longer separately reported. Maximum Annual Debt Service Over Remaining Life of Parity Debt (A) 65,594,340 (A) Includes Prior Encumbered Obligations, Outstanding Parity Debt and the Bonds. 1

16 TABLE II TEXAS STATE UNIVERSITY SYSTEM Debt Service Requirements Outstanding Total Fiscal Debt The Bonds (2) Annual Debt Year Service (1) Principal Interest Total Service ,463 32,965,001 24,611,496 57,576,497 58,184, ,688 36,820,000 28,162,652 64,982,652 65,594, ,763 33,565,000 30,728,384 64,293,384 64,907, ,200 33,320,000 29,093,816 62,413,816 63,028, ,950 32,755,000 27,596,829 60,351,829 60,534, ,075 33,670,000 26,000,422 59,670,422 59,853, ,125 34,810,000 24,434,698 59,244,698 59,422, ,025 34,265,000 22,770,985 57,035,985 57,219, ,700 34,340,000 21,047,085 55,387,085 55,569, ,795,000 19,353,186 55,148,186 55,148, ,600,000 17,566,774 55,166,774 55,166, ,165,000 15,699,367 47,864,367 47,864, ,800,000, 14,087,275, 47,887,275, 47,887,275, ,410,000 12,398,675 45,808,675 45,808, ,055,000 10,759,012 44,814,012 44,814, ,715,000 9,112,819 33,827,819 33,827, ,235,000 7,877,913 30,112,913 30,112, ,375,000 6,751,700 30,126,700 30,126, ,540,000 5,567,600 30,107,600 30,107, ,165,000 4,324,375 25,489,375 25,489, ,225,000 3,233,750 25,458,750 25,458, ,055,000 2,122,500 11,177,500 11,177, ,515,000 1,669,750 11,184,750 11,184, ,985,000 1,194,000 11,179,000 11,179, ,385, ,750 6,079,750 6,079, ,730, ,500 5,155,500 5,155, ,780, ,000 3,969,000 3,969,000 Total 3,357, ,040, ,474,313 1,061,514,314 1,064,872,301 (1) Texas State University - San Marcos, Series 1986 (Housing) and Series 1996 (Utility System). Excludes the Refunded Bonds and Taxable Refunded Bonds. (2) Texas State University System Series 1998A, 1998B, 1998 Taxable, 2000, 2001, 2002, 2002A, 2003, 2004, 2005, 2006, 2006A and

17 TABLE A-1 TEXAS STATE UNIVERSITY SYSTEM Headcount Enrollment For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007* Fall 2008* Angelo State University 6,137 6,156 6,218 Lamar University - Beaumont 10,804 10,595 9,906 10,213 13,280 Lamar Institute of Technology 2,543 2,711 2,416 2,590 2,885 Lamar State College - Orange 2,047 2,143 2,409 2,003 2,147 Lamar State College - Port Arthur 2,423 2,509 2,009 2,325 1,985 Sam Houston State University 14,335 15,357 15,903 16,416 16,612 Sul Ross State University 1,967 1,918 1,829 1,774 1,841 Sul Ross State University - Rio Grande College 1,056 1, Texas State University - San Marcos 26,799 27,129 27,503 28,132 29,105 Total 68,111 69,524 69,141 64,411 68,794 * These columns exclude Angelo State University (ASU). The Texas Legislature 3

18 TABLE A-2 TEXAS STATE UNIVERSITY SYSTEM Graduate Headcount Enrollment For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007* Fall 2008* Angelo State University N/A N/A Lamar University - Beaumont 1,683 1,444 1,442 1,854 4,919 Lamar State College - Orange A A A A A Lamar State College - Port Arthur A A A A A Lamar Institute of Technology A A A A A Sam Houston State University 2,038 2,127 2,136 2,269 2,313 Sul Ross State University Sul Ross State University - Rio Grande College Texas State University - San Marcos 4,384 4,149 3,923 4,084 4,302 Total 9,572 9,079 8,785 9,016 12,333 A - These are freshman and sophomore level institutions. They offer no graduate programs. * These columns exclude Angelo State University (ASU). The Texas Legislature transferred ASU to the Texas Tech University System effective 09/01/

19 TABLE A-3 TEXAS STATE UNIVERSITY SYSTEM Full-Time Equivalent Enrollment For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007* Fall 2008* Angelo State University 5,213 5,294 5,164 N/A N/A Lamar University - Beaumont 8,138 8,094 7,670 7,817 9,146 Lamar State College - Orange 1,321 1,316 1,262 1,274 1,359 Lamar State College - Port Arthur 1,515 1,492 1,466 1,410 1,245 Lamar Institute of Technology 1,785 1,920 1,743 1,871 2,075 Sam Houston State University 11,691 12,721 13,177 13,479 13,656 Sul Ross State University 1,563 1,516 1,410 1,319 1,403 Sul Ross State University - Rio Grande College Texas State University - San Marcos 21,356 21,706 22,006 22,869 23,494 Total 53,174 54,620 54,408 50,554 52,901 Note: Undergraduate Full-Time Load - 15 Hours, Graduate Full-Time Load - 9 Hours. * These columns exclude Angelo State University (ASU). The Texas Legislature transferred ASU to the Texas Tech University System effective 09/01/

20 TABLE A-4 TEXAS STATE UNIVERSITY SYSTEM Headcount Enrollment by Residency Status For the Most Recent Five Fall Semesters Fall 2004 Fall 2005 Fall 2006 Fall 2007(1) Fall 2008(1) Texas Residents 65,450 66,995 67,535 61,994 66,203 Non-Texas Residents 1,235 1,364 1,313 1,153 1,354 Non-US Residents 1,426 1,165 1,244 1,182 1,237 Total 68,111 69,524 70,092 64,329 68,794 (1) These columns exclude Angelo State University 6

21 TABLE A-5 TEXAS STATE UNIVERSITY SYSTEM Admissions and Matriculation Information (1) For the Most Recent Five Fiscal Years 2004(1) 2005 (2) 2006(2) 2007(2)(3) 2008(2)(3) Applications Submitted 58,524 56,140 54,287 53,590 53,345 Applications Accepted 47,675 39,929 40,760 37,596 35,525 Matriculations 27,430 23,790 24,115 22,000 20,263 % Accepted 81.46% 71.12% 75.08% 70.15% 66.59% % Matriculated 57.54% 59.58% 44.42% 41.05% 37.98% (1) These columns reflect only admissions and matriculation data for undergraduates for Angelo State University, Lamar University, Sam Houston State University, Sul Ross State University, and Texas State University-San Marcos. This information is inclusive of the fall, spring and summer sessions of the respective fiscal years. Admissions and matriculation numbers of the type set forth above were not routinely or consistently kept for the Lamar Institute of Technology, Lamar State College - Orange, Lamar State College - Port Arthur, and Sul Ross State University - Rio Grande College. (2) These columns include admissions and matriculation information for all components of the Texas State University System. (3) These columns exclude Angelo State University. 7

22 TABLE A-8 TEXAS STATE UNIVERSITY SYSTEM Combined Statement of Current Funds Revenues and Expenditures FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 Current Funds Revenues Tuition 48,800,936 51,543,403 55,288,713 58,633,271 63,187,933 Designated Tuition (General Use Fees) 25,675,763 27,585,605 32,930,098 37,806,768 43,191,988 Student Service Fees 14,601,684 14,677,776 15,840,077 16,821,144 17,359,347 Other Fees 25,510,430 26,327,429 29,097,070 33,473,021 38,776,355 Tuition Remissions and Exemptions 7,703,859 7,611,896 7,423,144 7,552,091 8,223,283 State Appropriations-General Revenue 173,981, ,924, ,414, ,466, ,520,995 State Appropriations-H.E.A.F. 32,650,104 32,650,104 32,650,104 32,650,104 34,950,547 Federal Grants and Contracts 36,608,120 39,517,051 44,958,438 45,698,575 49,929,300 Federal Pass-Through Grants from Other State Agencies 2,592,105 2,613,174 4,332,308 3,537,422 5,651,964 State Grants and Contracts 1,242,536 1,938,385 1,472,619 5,080,346 3,843,308 State Pass-Through Grants from Other State Agencies 2,314,405 3,768,302 1,509,353 5,323,178 6,696,736 Local Gifts, Grants, and Contracts 529, ,389 1,722 94, ,468 Private Gifts, Grants and Contracts 7,820,408 7,603,064 9,063,383 10,464,191 17,907,984 Net Increase/(Decrease) in the Fair Value of Investments 2,202,104 (67,976) (22,562) 714,829 Investment Income 4,718,881 5,676,508 6,266,292 8,192,649 9,768,565 Endowment Income 4,149,618 4,354,297 5,055,013 5,025,445 4,952,735 Sales and Services: Educational Activities 9,705,017 11,287,355 11,532,321 13,495,014 13,324,834 Research Activities 720, , ,991 Auxiliary Enterprises 55,505, ,923, ,615, ,402,921 62,745, Other Interest Income 948,199 1,304,750 1,598,990 1,989,008 1,087,358 Realized Gains/Losses on Investments Other Sources 6,189,946 9,049,819 11,155,404 7,679,702 7,287,597 Total Current Funds Revenues 461,968, ,219, ,862, ,363, ,292,730 Current Funds Expenditures Educational and General Instruction 151,574, ,087, ,739, ,123, ,039,398 Research 12,129,771 11,243,864 11,817,940 15,290,999 16,368,490 Public Service 14,807,048 16,848,301 19,933,220 20,232,040 19,467,071 Academic Support 27,548,929 27,349,956 30,307,520 33,698,508 38,037,865 Student Services 14,776,212 14,843,639 16,141,665 18,465,835 18,151,518 Institutional Support 38,319,342 43,759,305 47,994,208 55,508,429 68,903,180 Operation and Maintenance of Plant 33,063,620 36,493,038 36,407,131 38,618,291 42,731,682 Scholarship and Fellowships 39,244,430 43,506,480 44,173,728 49,477,836 57,336,884 Total Educational and General Expenditures 331,463, ,131, ,515, ,415, ,036,088 Auxiliary Enterprises Expenditures 75,005,323 77,281,479 80,770,604 85,550,398 88,873,791 Total Current Funds Expenditures 406,469, ,413, ,285, ,965, ,909,879 Mandatory Current Funds Transfers (Net) (15,891,558) (15,638,609) (18,947,222) (26,207,689) (26,501,464) Excess Current Funds Revenues to Current Funds Expenditures and Mandatory Transfers 39,607,733 46,167,591 44,629,638 58,190,427 44,881,387 Note A: The financial statements for FY2002 were prepared using the economic resources measurement focus and accrual basis of accounting as prescribed by Governmental Accounting Standards Board Statements 34/35. This reporting model is significantly different from the previous model. (See fiscal years 1997 through For that reason, comparative numbers are not possible. The new reporting format will be presented in future years with another year added each year until a 5 year comparison is in place. This table will continue to be reported until five years of the new format are in place. The new table will be named Table A-8(A). 8

23 TABLE A-8(A) TEXAS STATE UNIVERSITY SYSTEM Combined Statement of Revenues and Expenses and Changes in Net Assets For the Most Recent Four Fiscal Years FY 2005 FY 2006 FY 2007 FY 2008 OPERATING REVENUES Sales of Goods and Services (PR-Chgs for Services) Net Tuition and Fees 240,988, ,814, ,587, ,878, Net Hospitals Net Professional Fees Net Auxiliary Enterprises 72,205, ,281, ,224, ,196, Net Other Sales of Goods and Services 12,744, ,243, ,283, ,545, Premium Revenue (PR-Chgs for Services) Interest and Investment Income (PR-Chgs for Services) 247, , , , Interest and Investment Income (PR-OP Grants/Contributions) Interest and Investment Income (GR) 93, , , , Net Increase (Decrease) Fair Value (PR-OP Grants/Contributions) Net Increase (Decrease) Fair Value (GR) Federal Revenue-Operating (PR-OP Grants/Contributions) 74,161, ,549, ,636, ,684, Federal Pass Through Revenue (PR-OP Grants/Contributions) 11,325, ,849, ,517, ,542, State Grant Revenue (PR-OP Grants/Contributions) 6,708, ,495, ,687, ,077, State Grant Pass Through Revenue (PR-OP Grants/Contributions) 16,685, ,468, ,912, ,463, Other Grants and Contracts-Operating (PR-OP Grants/Contributions) 8,256, ,204, ,263, ,470, Land Income (PR-Chgs for Services) Contributions to Retirement Systems (PR-Chgs for Services) Other Operating Revenues (GR) 11,636, ,036, ,710, ,569, Other Operating Revenues (PR-Chgs for Services) 82, , , Total Operating Revenues 455,136, ,404, ,680, ,046, OPERATING EXPENSES Instruction 238,948, ,261, ,217, ,103, Research 18,492, ,916, ,070, ,178, Public Service 34,203, ,808, ,192, ,900, Academic Support 55,039, ,643, ,929, ,372, Student Services 26,738, ,418, ,436, ,125, Institutional Support 84,285, ,655, ,007, ,715, Operation and Maintenance of Plant 57,005, ,739, ,365, ,527, Scholarship and Fellowships 50,367, ,387, ,109, ,554, Auxiliary Enterprise Expenditures 103,617, ,384, ,507, ,677, Depreciation and Amortization 28,457, ,341, ,906, ,862, Total Operating Expenses 697,157, ,558, ,743, ,017, Operating Income (Loss) (242,021,064.93) (259,154,130.65) (286,062,999.46) (238,971,020.08) 9

24 TABLE A-8(A) TEXAS STATE UNIVERSITY SYSTEM Combined Statement of Revenues and Expenses and Changes in Net Assets For the Most Recent Four Fiscal Years FY 2005 FY 2006 FY 2007 FY 2008 Legislative Revenue (GR) 204,439, ,808, ,413, ,210, Additional Appropriations (GR) 43,880, ,161, ,546, ,873, HEAF Appropriation Revenue (GR) 34,950, Federal Revenue Non-Operating (PR-OP Grants/Contributions) 12, Gifts (PR-OP Grants/Contributions) 12,305, ,493, ,471, ,724, Investment Income (PR-OP Grants/Contributions) 8,008, ,119, ,097, ,817, Investment Income (GR) 5,345, , ,197, ,876, Loan Premium/Fees on Securities Lending (PR-OP Grants/Contributions) Investing Activities Expense (80,191.85) (1,804,713.05) (395,255.34) (1,611,009.73) Interest Expense and Fiscal Charges (16,650,146.89) (12,249,595.34) (23,533,582.58) (14,153,006.46) Borrower Rebates and Agent Fees Gain (Loss) on Sale of Capital Assets (GR) (211,888.89) 13,205, (274,913.52) Net Increase (Decrease) in Fair Value of Investments (PR-OP Grants/Contributions) 5,124, (234,783.82) 2,812, (2,171,377.54) Net Increase (Decrease) in Fair Value of Investments (GR) 1,088, ,316, (2,797,258.46) Settlement of Claims (PR-Chgs for Services) (34,604.67) (133,507.35) (86,680.35) (134,886.05) Settlement of Claims (GR) (136,035.94) (127,021.99) (136,854.45) (121,134.27) Other Nonoperating Revenues (Expenses) (PR-Chgs for Services) 1,555, ,709, ,117, ,472, Other Nonoperating Revenues (Expenses) (GR) 97, (935,724.12) (329,817.27) 43, Total Nonoperating Revenues (Expenses) 298,806, ,744, ,695, ,755, Income (Loss) before Other Revenues, Expenses, 56,785, ,590, ,632, ,784, Gains, Losses and Transfers OTHER REVENUES, EXPENSES, GAINS, LOSSES AND TRANSFERS Capital Contributions 13, (664,024.66) (354,562.05) Capital Contributions (HEAF) 32,827, ,827, ,654, Additions to Permanent and Term Endowments 5,371, ,035, , (647,425.02) Special Items 25, (38,898,403.00) Extraordinary Items Increase Interagency Transfer Capital Assets 52, Decrease Interagency Transfer Capital Assets (3,709.50) Transfers-Ins 703, (39,530.57) 1,783, Transfers-Out (1,434,357.67) (2,579,236.47) (3,100,028.88) (219,869,592.90) Legislative Transfers-In 4,125, Legislative Transfers-Out (116,771.92) Legislative Appropriations Lapsed (139,024.92) (12,290.96) (101,309.38) CHANGE IN NET ASSETS 61,347, ,132, ,577, (127,220,593.81) Net Assets, Beginning 858,228, ,712, ,125, ,687, Restatements (61,863,310.26) 267, (15,951.81) (22,100.08) Net Assets, Beginning as Restated 796,365, ,980, ,109, ,665, NET ASSETS, ENDING 857,712, ,113, ,687, ,444,