New Treasurers Seminar December Mitzi Baker Midland County Treasurer

Transcription

1 New Treasurers Seminar December 2018 Mitzi Baker Midland County Treasurer

2 Where is the law on establishing a Depository? Approaching the RFP process Building a timeline Collecting and providing information The evaluation process Approval process Securities for funds held in depository

3 Texas Local Government Code Chapter 116 for County Public Funds Texas Local Government Code Chapter 117 for Trust Funds and Registry Funds

4 LENGTH OF CONTRACT Contract 2 years w/extension of 2 years Contract 4 years w/extension of 2 years Negotiate terms of extension by Commissioners Court and approved by an authorized representative of the bank Commissioners Court must approve Who will negotiate? The Treasurer? You must give yourself time to go out for a new bid if negotiation fails

5 BUILDING A TIMELINE Establish when the new contract must begin and work backwards Commissioners Court authorizes the advertisement for bids in regular court session Information is collected on all bank balances including registry accounts Bid packets are ed or mailed to prospective banks and possibly at the same time

6 BUILDING A TIMELINE continued..notice is placed in the newspaper that the Commissioners Court intends to receive applications from which to select a depository bank. It must be ran once each week for at least 20 days BEFORE the date to submit an application. A notice shall also be posted at the courthouse door of the county

7 BUILDING A TIMELINE continued. Establish a deadline to accept questions from bidders. Establish when sealed bid packets are due. ( states no later than 60 th day before expiration of existing depository contract) Giving time to evaluate, set approval date in regular court session

8 BUILDING A TIMELINE continued. Establish 15 day deadline Bond must be filed and securities provided by bank depository (e) Give yourself time to get signature cards done and checks and deposit slips ordered New contract begins with depository

9 JANUARY 23, C. COURT AUTHORIZES ADVERTISING FEBRUARY 17, 2017 BANK BALANCES DUE FROM DEPTS. MARCH 3, 2017 PACKETS ARE MAILED AND 1 ST NOTICE MARCH 10, ND NOTICE MARCH 17, RD NOTICE MARCH 20, 2017 QUESTIONS DUE FROM BIDDERS MARCH 31, 2017 BID PACKETS DUE APRIL 10, 2017 APPROVAL OF DEPOSITORY IN C. COURT APRIL 25, DAY DEADLINE FOR SECURITIES JUNE 1, 2017 NEW CONTRACT BEGINS WITH DEPOSITORY

10 Treasurer Auditor Purchasing Agent/Manager Attorney INTERNAL TEAM Consultant Tax Assessor County Clerk District Clerk Any office that is legally allowed to have a bank account OPTIONAL

11 GENERAL REQUIREMENTS OF THE BID Define exactly what you expect to receive from the bidder including the Good Faith Guarantee and Resolution from the Board of Directors Define exactly when and where you expect to receive the bid Define how they will be evaluated Define the laws that will govern the contract Identify the PFIA, the PFCA and what you accept as collateral in your investment policy Give them the general specifications of the contract Define the security and collateral requirements

12 SERVICE REQUIREMENTS Define who you require as a contact person/persons daily Define services you require and request for costs Online Services Analysis Report Statements Payroll Direct Deposit ACH Transactions/Wire Transfers Positive Pay Disbursements/Deposits/Overdrafts Computerized Output

13 SERVICE REQUIREMENTS continued.. Expense Allowance incurred due to changing depository banks ATM Services Other services ie: locked bags, checks & deposit slips, endorsement stamps, coin wrappers, currency straps Ask the bank for other unspecified services that they may provide Ask for their agreement with audit procedures and bank confirmations Ask for no minimum balance requirements (Trust/Registry Funds)

14 SERVICE REQUIREMENTS continued.. List your Structure of Accounts: # and current $ of Non-Interest Bearing Checking # and current $ of Interest Bearing Checking # and current $ of Interest Bearing Savings # and current $ of CD s for Trust/Registry Funds # and current $ of Money Market or CD accounts at current depository

15 SERVICE REQUIREMENTS continued.. Optional: Provide a bid worksheet whereby using your current balances and number of transactions (from a current bank analysis sheet) they provide THEIR costs for those services. This is an excellent tool for the evaluation process.

16 RECOMMENDED ITEMS YOU MAY REQUIRE BE INCLUDED Amount of bank s paid-up capital stock and surplus List of references Quarterly Uniform Bank Performance Reports Call Reports Financial Reports Samples of analysis reports and statements

17 OK, THE RFP IS READY TO GET OUT THERE! Consider a pre-rfp meeting with potential bidders RFP Format: PDF vs DOC and EXCEL Once the RFP is released, contact with potential bidders is restricted If you get a question, get it in writing, then your response is to ALL bidders

18 In-house or Consultant Criteria should be for the best provider not necessarily the cheapest People do business with PEOPLE, not services, fee schedules or financial statements If unsure of a bidder s response, submit follow-up question(s) for clarification Optional: Consider inviting top candidates in for presentations

19 Interest-Bearing Checking Accnts Money Market Savings Accnts Interest Bearing Savings Accnts BANK #1 BANK #2 BANK #3 NOW rate +.25%/Floor of.70% current deposit sheet rates current deposit sheet rates.50% and tied to Fed Fund Target Rate changes.60% and tied to Fed Fund Target Rate changes.50% and tied to Fed Fund Target Rate changes Prior months avg T-Bill less 35 bps Prior months avg T-Bill less 25 bps The bank's published rate. EARNINGS CREDIT Current rate +.25% 0.75% T-Bill + 25 bps Less a Federal Reserve Requirement of 10% Locked or Sealable bags No Charge 20 free then $14 No charge One Safe Deposit Box No Charge Laser Checks Bank Retail Initial Free then Bank Retail 1st $3500 free, then Bank Retail Checks (in books or binders) Bank Retail Initial Free then Bank Retail 2nd $3500 free, then Bank Retail Deposit Slips No Charge Initial Free then Bank Retail 3rd $3500 free, then Bank Retail Endorsement Stamps No Charge Initial Free then $15 No Charge Coin Wrappers No Charge No Charge Bank cost Currency Straps No Charge No Charge Bank cost MASTER ACCOUNT MAINT FEE $10 per account $9.45 per account $20.00 per account PAYROLL DIRECT DEPOSIT YES YES YES ACH TRANSACTIONS $20 mo + $0.08 per item $20.25 mo + $ per item $15 mo + $0.15 per item WIRE TRANSFERS $20 ea. $11.25 ea. $25 ea. POSITIVE PAY $125 per account/no item chg $33.75 per + $0.036 per item $40 per account/no item chg REMOTE DEPOSIT SERVICE $100 + $0.10 per item $ $ per item $200 scanner/$0.07 per item STOP PAY $20 $6.75 $20 ETC. ETC. ETC.

20 SAMPLE BALANCE SUMMARY FROM LEDGER BALANCES GIVEN BANK #1 BANK #2 BANK #3 NOTES AVG LEDGER BALANCE $13,997, $13,997, $13,997,602.00CD's excluded LESS AVG UNCOLL FUNDS (FLOAT) -$213, $213, $213, AVG COLLECTED BALANCE $13,783, $13,783, $13,783, AVG NEGATIVE COLL BALANCE $0.00 $0.00 $0.00 AVG COLLECTED BALANCE $13,783, $13,783, $13,783, LESS INTEREST BEARING BALANCE -$11,053, AVG COLLECED BALANCE $13,783, $2,730, $13,783, LESS RESERVES REQUIRED (10%) $1,378, $0.00 $0.00 AVERAGE AVAILABLE BALANCE $12,405, $2,730, $13,783, Int bearing bal NOT excluded LESS BALANCE REQUIRED $0.00 $0.00 $0.00No balance required NET AVAILABLE BALANCE $12,405, $2,730, $13,783, EARNINGS CREDIT ALLOWANCE (0.5125%) $5, (.75%) $1, (.77%) $9, January 31, 2017 net of proposed LESS TOTAL SERVICE CHARGES -$2, $7, $9,154.08discount EXCESS OR DEFICIT $2, $5, $139.83

21 BANK #1 BANK #2 Bank #3 Banks financial strength Experience/ability to meet service requirements Responsiveness to County s needs and initiatives Value in terms of service and cost Net rate of return on county funds Electronic services offered and demonstrated Any additional bank services offered Convenience (ie. Location) Cost of switching banks TOTALS

22 Commissioners Court must have entered into the minutes of the Court all applications They must consider all applications Select the qualified applicant(s) that offer the most favorable terms and conditions Immediately return the certified checks for good-faith guarantee to the rejected applicants

23 Immediately notify the selected applicant, and within 15 days, the selected applicant must file a bond or other security as approved by the Commissioners Court (e) Return the GFG check to the successful applicant when they have executed and filed a bond or other security that is approved by the Commissioners Court

24 Within 15 days after the new bank has been selected, the bank must qualify as the depository by providing security for the funds to be deposited by the county by Personal bond; surety bond; bonds, notes, and other securities; first mortgages on real property; real property; CD s, or a combination of these methods, as provided by this subchapter; or Investment securities or interests in them as provided by law IN THE NEXT CLASS, WE WILL FURTHER DISCUSS SECURITIES/COLLATERAL AND SAFEKEEPING SERVICES

25 Use this opportunity to fully understand the banking system for your County. You re the Treasurer! Be the Go To Person for banking in your County

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27 New Treasurers Orientation December 2018 Mitzi Baker Midland County Treasurer

28 Review Collateralization Rules and Regulations and Where to Find Them Outline Collateral Documentation Outline Required Documents Highlight Security Settlement Procedures Discuss Safekeeping Services

29 Public Funds Investment Act (PFIA) CHAPTER 2256 TEXAS GOVERNMENT CODE Public Funds Collateral Act (PFCA) CHAPTER 2257 TEXAS GOVERNMENT CODE Chapters 116 and 117 TEXAS LOCAL GOVERNMENT CODE

30 (a) (4) obligations fully guaranteed or insured by the FDIC or by the explicit full faith and credit of the United States (a) (7) guaranteed or insured by the FDIC and NCUSIF (a) (8) or if deposits are invested through (A) (i) Broker main or branch office in this state (A) (ii) Depository main or branch office in this state (B) Spreads to insured depositories (C) Full amount of Principal and interest insured by the US (D) Appoints Custodian

31 (a) Certificates of Deposit Guaranteed or insured by the FDIC or NCUSIF Collateralized by obligations described by Follows PFCA (b) (1) Additional Certificates of Deposit (A) Broker main or branch office in Texas (B) Depository main or branch office in Texas (b) (2) Spreads to Insured Depositories (b) (3) Fully Insured Principal and accrued interest of each of the CD S is insured by the US or an instrumentality of the US (b) (4) Appoints Custodian

32 Collateral Required-Public Funds SHALL be secured in the manner required Amount of Collateral (a) (1)(2) not less than principal and interest, LESS the amount FDIC insures the deposit (c) The value of a surety bond is its face value (d) The value of an investment security is its market value BEST PRACTICE IS NOT LESS THAN 102% OF DEPOSITS. YOU WANT TO COVER YOURSELF FOR UNFORESEEN LARGE DEPOSITS.

33 Collateral Policy (written may include) Security of the institution that holds an investment security Substitution or release of an investment security Method by which an investment security used to secure a deposit of public funds is valued (Market Value) Contract for Securing (a) A public entity may contract with a bank that has its main office or a branch office in this state to secure a deposit of public funds. Possession of the collateral Substitution or release of an investment security Ownership of the securities of the bank used to secure Method by which an investment security used to secure a deposit of public funds is valued (Market Value)

34 Records of Depository Change in Amount or Activity of Deposits of Public Funds Deposit of Securities with Custodian State or National Bank Texas Treasury Safekeeping Trust Company Federal Reserve Bank Federal Home Loan Bank Comptroller Designated

35 Receipt of Security by Custodian Shall immediately identify on its books the pledge of the security to the public entity Issue and deliver a receipt either to the entity or to the depository Books and Records of Custodian; Inspection Maintain a separate, accurate, and complete record for each pledged security Provide a complete current list of all securities when the entity asks for it During audit, they SHALL examine and verify pledged investment securities and records maintained

36 Commissioners Court and Bank must sign a Collateral Agreement Bank Board or Committee Minutes giving authority to make the Agreement LOC or Custodial Agreement with Safekeeping Entity Collateral Receipt Check Investment Policy Collateral Language

37 Delivery Versus Payment at Third Party Safest Way Required by PFIA Check Independence

38 Public Entity Safekeeping Agreement Safekeeping Bank Commit to Transaction Securities Transfer Federal Reserve or Depository Trust Company Funds Released On Acceptance Broker/Dealer Clearing Agreement Clearing Bank 38

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