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1257300114300INLAND EMPIRE UTILITIES AGENCYREQUEST FOR PROPOSALBanking ServicesRFP-KB-09-041Proposal Due Date October 27, 20094:00 p.m.INLAND EMPIRE UTILITIES AGENCYREQUEST FOR PROPOSAL BANKING SERVICESTABLE OF CONTENTSI. INTRODUCTION1II. CONDITIONS QUALIFYING A BANKING INSTITUTION TO PROPOSE 1III. RESPONSE GUIDELINES2IV. CONTRACT TERMS4V. DESCRIPTION OF OPERATING SYSTEM5VI. REQUIRED SERVICES1. Deposit Services72. Electronic Fund Transfers/Online Banking Services83. Positive Pay84. Stop Payments85. Processing of Returned Items96. Purchasing Card97. Sweep Service98. Daylight Overdraft Protection99. Payroll Direct Deposit910. Free Checking1011. Trustee Services1012. Check Imaging – CD ROM1013. Account Maintenance1014. Issuance of Credit Cards1115. Training and Support1116. Other Innovations, Services, and/or Enhancements11i INLAND EMPIRE UTILITIES AGENCYREQUEST FOR PROPOSAL BANKING SERVICESTABLE OF CONTENTSVII. PROPOSAL FORMAT AND CONTENT111. Executive Summary122. Banking Institution Identification123. Client References124. Banking Institution Qualification125. Strategic Approach126. Calculation of Bank Compensation137. Conversion Plan138. Resource Personnel149. Backup, Emergency and Disaster Recovery1410. Cost Proposal14 VIII.PROPOSAL EVALUATION AND CRITERIA 14Attachment A – Cost Proposal15iiI. INTRODUCTIONInland Empire Utilities Agency (IEUA) is requesting proposals from qualified banking institutions to establish a contract for Banking Services. The primary objective of this proposal is to obtain the most efficient, high quality services at the most reasonable cost. The Agency is also interested in various technological advances and pilots that could improve our banking and cash management processes. Currently the Agency maintains a commercial banking relationship with three banking institutions. IEUA was formed on June 6, 1950 under the Municipal Water Agency Act of 1911, as a municipal corporation, with a mission to supply supplemental imported water to the Chino Basin. Since then, IEUA has expanded its mission from a supplemental water supplier to a regional wastewater treatment agency with domestic and industrial disposal systems, and energy/production facilities. In addition, IEUA has also become a recycled water supplier, a biosolids/compost provider, and continuing its leading role in water quality management and environmental protection. The Agency's service area encompasses approximately 242 square miles in the western portion of San Bernardino County, in area most commonly referred to as the Inland Empire. The service area includes the Cities of Chino, Chino Hills, Fontana, Montclair, Ontario, Rancho Cucamonga, and Upland, as well as the Monte Vista and Cucamonga Valley Water Districts and services approximately 823,000 residents.Additionally, the Agency provides administrative and operation services to two joint powers authorities (JPA): Inland Empire Regional Composting Authority (IERCA) and the Chino Basin Desalter Authority (CDA). The purpose of the IERCA is to provide for the operation of a regional nuisance-free, fully enclosed composting facility to produce high grade compost for local agriculture and/or horticulture markets. The function of the CDA is to operate two desalination facilities in Chino that provide potable water to the southern region of the Chino Basin. The administration of the CDA is anticipated to transfer from the Agency to one of the CDA partner agencies as early as July 2010. The new agency may choose to change the banking services for the JPA at that time.II.CONDITIONS QUALIFYING A BANKING INSTITUTION TO PROPOSE To be considered for selection, the proposing banking institution must have the following qualifications: 1. The banking institution must be a qualified public depository, as defined by California General Statutes, and must perform its obligation under this proposal in compliance with all applicable federal and state laws and regulations, as well as statutes and policies. The banking institution must be able to offer the full range of banking services required by this request for proposal (RFP) throughout the duration of the contract with the Agency.The banking institution must be Federal or State of California chartered. The bank is required to collateralize public funds deposits under the California Government Code, Sections 53651 and 53652. Copies of the reports filed with the State of California shall be made available to the Agency upon request. The banking institution must either:(a) Be at least three (3) years old; have total assets in excess of ten (10) billion dollars; and a core capital/asset ratio of 5% or better; or(b) Have total assets in excess of two billion dollars; and a core capital/asset ratio of 6% or better.The banking institution has been evaluated by an independent rating service as “Outstanding” or “Satisfactory” for the last eight consecutive quarters.The banking institution must be in compliance and good standing with the Community Reinvestment Act.The banking institution must have experience in providing banking services for the public sector. III. RESPONSE GUIDELINESAcceptable banking proposals should address all of the items identified in the Proposal Format and Content (Section VII), in the order that they appear. Deviation from these requirements may result in a reduced score in ranking. Each proposal package should contain one unbound original and five (5) bound copies of the proposal.Schedule (Dates are subject to change)Request for Proposal IssuedSeptember 24, 2009Mandatory Proposal ConferenceOctober 13, 2009Due Date for ProposalsOctober 27, 2009Interview with FinalistsNovember 17, 2009Finance Committee ApprovalDecember 9, 2009Board ApprovalDecember 16, 2009Selected Banking Institution NotifiedDecember 22, 2009Award of ContractJanuary 6, 2010Sign and Process ContractJanuary 20, 2010Notice to ProceedJanuary 25, 2010A Proposal Conference will be held on Tuesday, October 13, 2009 at 1:30 p.m. to answer any questions that prospective banking institutions may have regarding the Agency’s RFP at:Inland Empire Utilities Agency – Board Room6075 Kimball AvenueChino, CA 91708An addendum to the RFP will be issued, if necessary, following the Proposal Conference. Banking institution must attend the Proposal Conference in order to be considered eligible for the selection process. Proposals submitted only by the banking institutions attending the Proposal Conference will be evaluated. Any questions related to this RFP should be made in writing, submitted by no later than October 7, 2009 to Inland Empire Utilities Agency. Address all communications to Agency employee listed below. For Contract:Kathleen BaxterContracts and Procurement Department6075 Kimball AvenueChino, CA 91708(909) 993-1678 Voice (909) 993-1987 or (909) 993-9056 Faxkbaxter@To ensure that written requests are received and answered in a timely manner, e-mail correspondence is acceptable, but other forms of delivery, such as postal and courier services can also be used.The Agency is not responsible for oral statements made by any other Agency employees concerning this request for proposal. If the banking institution requires specific information, the banking institution must request it in writing to Contracts and Procurement Department or Financial Planning Department.6. All submitted proposals and information included therein or attached thereto shall become property of the Agency. Proposals and supporting materials will not be returned to the banking institutions.The banking institutions shall wholly absorb all costs incurred in the preparation of this proposal. Proposal packages shall be submitted in sealed envelopes clearly marked “BANKING SERVICES PROPOSAL” RFP No. RKB05019 to:Inland Empire Utilities AgencyAttn: Kathleen BaxterContracts and Procurement DepartmentP.O. Box 9020Chino Hills, CA 91709Proposals must be received by 4:00 P.M. on Tuesday, October 27, 2009.All proposals shall be firm for a period of ninety (90) days following the required date of submission.10.The proposing banking institution may withdraw its proposal subject to the time restrictions indicated below, only if the banking institution can establish to the Agency satisfaction, that a mistake was made in preparing the proposal.(a)The banking institution declaring a mistake must provide a written notice to the Agency within five (5) calendar days following the scheduled closing date, specifying in detail, how the mistake occurred, and how the mistake made the proposal materially different than it was intended.(b) Withdrawal of the proposal will only be permitted for mistakes made in the completion of the proposal. The banking institution who claims a mistake shall be prohibited from submitting further proposals on the banking services in which the mistake in proposal was claimed.11.The Agency reserves the right to accept or reject any or all proposals, or waive any irregularity in the best interest of the Agency.12.After a final decision is made, the successful banking institution will be notified to negotiate a contract with the Agency and remaining vendors will be notified in writing of their selection status. IV.CONTRACT TERMS1.The selected banking institution shall be designated as the Agency’s depository for an initial three-year term, with an option to extend the contract for an additional three (3) year period under the same terms and conditions. Service fees and interest rates may be renegotiated after the initial contract term.2. The depository contract shall provide that the Agency reserves the right to cancel any agreement at any time upon thirty (30) days prior written notice of its intent to terminate any agreement. The designated depository shall provide the Agency at least ninety (90) days prior written notice of its intent to terminate any agreement.V.DESCRIPTION OF OPERATING SYSTEM The Agency currently maintains bank accounts for each of the three entities: IEUA, IERCA and CDA. As mentioned in Section I Introduction, a change in the administration of the CDA as early as July 2010 may result in a change in the banking services for the JPA. 1.Description of Bank Accounts General Accounts – These accounts are each Agency’s general operating accounts. Receipt of revenues can be in the form of checks and cash (mostly checks), wire transfers, and ACH receipts. Disbursements are made by checks, wire transfers, ACH payments, and EFT transactions set up by phone for payroll taxes, retirement and healthcare obligations. Computer-prepared check disbursements are made through these accounts. Currently, checks are prepared on Wednesday and Thursday of each week and released by the end of the next working day. A predetermined minimum amount is maintained in each general account. Funds are transferred from the overnight investment SWEEP account to cover daily disbursements not covered by deposits, (see SWEEP account description below) Payroll Account – The Agency’s payroll account supports 26 bi-weekly payrolls per year. Agency’s employees are paid through a combination of automatic direct deposit and check. All deposits are from the General Account. Only IEUA maintains a payroll account.SWEEP Account – This account serves as an overnight interest earning investment account for balances in the general account that exceed a minimum targeted base amount. Collateral of 110% minimum of the account balances must be provided by the banking institution in the form of treasuries or government agencies.Money Market / Short Term Investment Accounts – This account provides each entity a liquid short term investment option with competitive yield in interest and flexibility.Trustee Accounts – Custodial accounts are established to safe keep and clear securities on a delivery versus payment basis and report investments to ensure the protection of its security interest in portfolio investments. Workers’ Compensation Account – This account is used to pay workers’ compensation claims. Disbursements are made by check. This account is only for the IEUA entity.Gym Membership Account – This account is used to pay employees' monthly membership fees to 24 Hour Fitness. Monthly fees are drawn by 24 Hour Fitness. This is a benefit provided under the current employee contract due to expire on June 30, 2010.2.Bank Account TransactionsDuring a fiscal year, on a consolidated basis (IEUA, CDA, and IERCA), approximately $150 million in electronic fund transfers, checks, and cash are deposited to the general accounts. The accounts payable disbursements are about $165 million through electronic fund transfers and checks. The amount of payroll direct deposit to employees and payroll taxes per payroll biweekly average $690,000 and $360,000, respectively. The custodial account balance for the investment portfolio is approximately $70 million. The number of transactions indicated in this RFP is average activity of the Agency’s bank accounts. Minimum and maximum transactions will vary based on the operational needs. The average monthly volume of activity for the major accounts per entity is as follow:General AccountAverage MonthlyVolumeDescriptionIEUAIERCACDACombinedNumber of Checks Paid7504238830Number of Checks Deposited1564010206Incoming Wires 2301538Outgoing Wires2301538ACH Receipts6118ACH Payments711678 Payroll Account (IEUA Only)DescriptionAverage MonthlyVolumeDirect Deposit Payments750Number of Checks Paid58 VI. REQUIRED SERVICES The services required to accommodate the Agency’s current and anticipated banking needs are as follows:Deposit ServicesThe banking institution must furnish the Agency with separate checking accounts for each entity. Deposits are normally made once a day and disbursements are also made through these accounts. The Agency currently replaced a courier service that picked up deposits on a daily basis with an automated electronic deposit system which allows the Agency to submit scanned checks electronically to banking institution for each entity on a daily basis. Original checks are retained by the Agency on site for minimum of 30 days and subsequently destroyed. The Agency is to be given credit as collected funds for all items that are deposited on the same day as the deposit is made. Items deposited that clear at institutions located within the district of Federal Reserve Bank of San Francisco will be considered collected funds within one business day as a maximum. The banking institution will credit the Agency’s account for incoming wire transfers and ACH deposits on the day received regardless of the time of receipt during the day.Electronic Fund Transfers/Online Banking ServicesThe Agency currently utilizes Internet banking to initiate wire transfers, ACH transactions, and transfers between accounts when necessary. Notification of wire and ACH transfers is provided online. The Agency desires to continue using these types of services. In addition, the Agency is interested in setting up more electronic fund transfers (EFT) to make vendor payments such that an accounts payable file can be submitted electronically to the bank to process payments. The banking institution must provide web based online banking service which also includes such services as electronic download of transactions, image inquiry, information reporting, business statements, stop payments, positive pay, account balance inquiry, transaction inquiry, deposit history and other online web applications that can provide added convenience and cost savings.The electronic download of transactions should include all items posted to the general account(s) the prior business day and comply with Bank Administration Institute (BAI) format and compatible with the Agency’s ERP system (SAP).Positive PayThe Agency currently utilizes positive pay services on the general accounts. Files are submitted to the current bank on the same day the check is issued. The proposed banking institution will provide this service to include such services as payment of matching checks by check number, vendor name and check amount, exception reports, return instructions, and holdover exceptions. Notification of file uploads and exceptions will be provided electronically via email or fax, where available.The positive pay should enable the Agency to perform the following tasks on-line: monitoring debit, credit, or both types of transactions, reviewing of incoming ACH transactions not previously authorized, and pay and return the transactions. The above service transactions can only be accessed by the Agency's authorized staff.Stop PaymentsThe banking institution will provide online confirmations of stop payments. Stop payments shall be given same day notification. Backup procedures (via phone and fax), forms and contacts shall be designated in the event of system failure or emergency. The banking institution will provide hard copy confirmations.Processing of Returned ItemsThe banking institution must redeposit returned items due to “non-sufficient funds”. Items returned a second time should be forwarded to the Agency on a daily basis. Purchasing CardsThe Agency is utilizing the CalCard purchasing cards program through U.S. Bank to streamline small dollar disbursements and reduce transaction processing costs. The purchasing card system must be compatible with the Agency’s ERP system (SAP), and include software and reports that allow the Agency to properly account for all authorized purchases by vendor. The system should provide detailed purchase records and allow for the allocation of costs to multiple general ledger accounts. Specifically, the Agency is looking for software which will interface with Agency software (SAP) for file importing/downloading purchasing card transactions directly into the Agency’s computer system. The banking institution must describe the service in detail and indicate the cost to the Agency for the service.Current annual volume is estimated at approximately $100,000, using 10 cards. We anticipate expanding this program within a year to process between 25-50 cards with estimated annual expenditures ranging from $100,000 to $200,000.Sweep ServiceThe Agency utilizes the sweep investment service to sweep excess funds between the general account and the SWEEP account in order to maintain the minimum target balance designated for the deposit account. Currently, the target balance for the deposit accounts for IEUA and CDA are $700,000 and $50,000, respectively. The Agency anticipates the use of this service for all three entities.Daylight Overdraft ProtectionThe banking institution will provide a minimum of $5,000,000 daylight overdraft protection. The daylight overdraft protection will be provided at no additional cost to the Agency.Payroll Direct DepositThe banking institution must provide payroll direct deposit service to the Agency’s employees. The banking institution must guarantee direct deposit amounts are available in individual personal bank accounts on the Agency’s bi-weekly pay date on Friday. All payroll deposits must be available to the employee at the start of business on pay day.Free CheckingThe banking institution will provide a free, no minimum balance checking account that includes the first order of basic checks to any Agency’s employee using the banking institution as their depository for direct deposit.Trustee ServicesThe Agency requires an independent agent to safe keep and clear securities on a delivery versus payment basis and report investments to ensure the protection of its security interest in portfolio investments. The Agency requires the custodian to be thoroughly familiar with the public sector and the investment of public funds. Check Imaging – CD-ROMThe Agency currently utilizes check imaging technology. Paid checks are imaged on a CD-ROM, which is provided to the Agency once a month. The Agency is interested in further automating its account reconciliation process to integrate cancelled check data with the Agency computer system (SAP) for automatic clearing of cancelled checks. This should be part of the electronic download of prior business day transactions.Account MaintenanceThe banking institution shall furnish the following monthly account analysis, monthly bank statements, and annual/fiscal statements. These statements may be provided electronically or accessible through on line banking.(a)Monthly Account Analysis - This report should be provided within eight (8) working days following the end of each calendar month. This report shall include a monthly detailed analysis of the banking institution’s cost of operating the Agency’s account(s). Statement cycles shall be on a calendar month basis.(b)Monthly Bank Statements - Monthly statements shall be provided within ten (10) to fifteen (15) working days following the end of each month and must include a listing of the daily activity for deposits, withdrawals, and adjustments. A beginning and ending balance must be provided as well. (c) Annual/Fiscal Statements – On or before August 1st of each year or as needed, the banking institution shall provide comparative data by month and by major service cost category to be identified by the Agency. This information shall be “actual” data and shall include columns for units processed, and collected and ledger balances. The annual statement detailed analysis shall be prepared on a fiscal year basis (July 1 – June 30). This report shall be provided at no additional cost to the Agency.Issuance of Credit CardsThe banking institution may be required by the Agency to issue credit cards for business use by specific Agency employees. There should be no hidden or annual fees associated with issuance or use of the credit cards.Electronic monthly statements, similar to the Purchasing Card requirements as mentioned above, are also requested for credit card transactions. Training and SupportThe banking institution must provide training to all Agency staff that utilizes any of the services and/or systems provided. The banking institution must also provide support for all products and/or services provided to the Agency. Training operating manuals and on-going support are to be supplied by the banking institution for all services provided.Other Innovations, Services, and/or EnhancementsThe banking institution is encouraged to provide any pertinent information regarding additional services the banking institution may offer to the Agency. These services may not be specifically requested but of benefit to the Agency.VII.PROPOSAL FORMAT AND CONTENTAll proposals submitted shall conform to the following format requirements. The proposal shall include a dated cover letter which must be signed by a person authorized to negotiate and execute contracts on behalf of the banking institution and must be binding for a period of ninety (90) days.Cover LetterSection 1Proposal Executive SummarySection 2Banking Institution IdentificationSection 3Client ReferencesSection 4Banking Institution QualificationsSection 5Strategic Approach to Meeting the Agency’s RequirementsSection 6Calculation of Bank CompensationSection 7Conversion PlanSection 8Resource PersonnelSection 9Backup, Emergency and Disaster RecoverySection 10Cost Proposal1. Executive SummaryThe banking institution shall provide an executive summary to familiarize the Agency with the key elements and unique features of the proposal and briefly describe how the project will be implemented. This should at minimum:Summarize the overall approachDescribe business features and benefits of the solutionDiscuss the risks and concerns arising from the Agency’s RFPExplain what is needed by the Agency to begin the projectBanking Institution IdentificationProvide the name of the banking institution, the banking institution’s principal place of business, the name and telephone number of the contact person, and company tax identification information.Client ReferencesProvide a minimum of three (3) clients' references for services that have been provided within the last five (5) years. References should be California cities or other large public sector entities. Include the designated person's name, title, organization, address, telephone number, and the project(s) that were completed under that client’s direction. Clients currently using the procurement card and/or electronic download services would be very beneficial, particularly those utilizing SAP.Banking Institution Qualifications To be considered for selection, the banking institution must meet the qualifications indicated in Conditions Qualifying a Banking Institution to Propose (Section II) and provide documentation that demonstrates the qualifications are met. 5. Strategic ApproachThe proposal shall include a description of the banking institution’s strategic approach to address each task described in the Required Services (Section VI). The following reports are also required: Availability of Funds Schedule: Provide a copy of the banking institution’s availability schedule.Account Reconciliation: Include samples of all standard reports available as a part of the standard account reconciliation system.Monthly Statement and Account Analysis Report: Include samples of all monthly statement and account analysis report as well as user’s guide to the account analysis statement. Electronic Fund Transfers: Provide examples of the detail available for wire transfers, ACH transfers and other EFT transactions.Electronic Banking Services: – Provide a sample of an electronic download that includes BAI codes for each transaction type including: checks, EFT, ACH, fees, deposits, wire transfers, etc.Positive Pay Report: Include a sample of the positive pay report. Investment Report: Include samples of all standard reports on investment activity.Additionally, please include any hardware, software and any other requirements necessary for the implementation of the banking services.6.Calculation of Bank CompensationThe Agency may compensate the banking institution through direct fees, compensating balances, or a combination of the two. For direct fees method, provide the unit charge for each required service and annual charges based on the Agency’s estimated annual volume for each service (Attachment A). Any earnings credit occurring in the account will be used to offset fees. Earnings credit on collected balances in excess of those required to pay charges incurred in any month shall be carried forward to offset future bank charges. Interest earnings rate will be computed accordance with the negotiated rate agreed upon. This negotiated rate shall bear direct relationship to the Fed funds rate. For compensating balance payment, provide the bank’s earnings credit rate (ECR) and the method to calculate the rate. The Agency anticipates the ECR to tie closely to the Fed funds rate. The Agency may elect at any time to utilize a combination of fees and compensating balances to pay for banking services provided.7.Conversion PlanThe banking institution must provide a conversion plan for the operation and use of all of its banking services.Describe the process by which your institution would coordinate to ensure a smooth transition from the current provider.Provide a schedule for the conversion process. Discuss the training program that will be used to train the Agency staff in the use of your systems.8.Resource PersonnelThe selected banking institution must agree to assign experienced and dedicated staff that is committed and capable of servicing the Agency’s accounts. The banking institution shall identify personnel within its operations department who are available during normal banking hours to answer general questions and provide customer support. For those concerns pertaining to transactions, which require a more detailed explanation, the bank shall identify a local representative able to provide on-site assistance. These personnel shall be familiar with the Agency’s account(s) and the banking services contract.Provide a staffing plan giving the name and title of the key personnel that will be servicing the Agency’s account. Include a brief resume (no more than 2 pages) for the principal account officer.9.Backup, Emergency and Disaster RecoveryDescribe the banking institution’s backup, emergency and disaster recovery systems which would enable the Agency to continue operations in the event of a system breakdown or other emergency. Indicate how often these systems are tested and the hours for the technical support hotline. 10.Cost ProposalThe proposal shall include all services and their associated fees. See Attachment A.VIII. PROPOSAL EVALUATION CRITERIAProposals that meet the requirements specified in this RFP will be evaluated based on the following criteria:Completeness of response to all required itemsAbility to meet current and projected service requirements over the term of the banking agreementBest rate of interest paid on accountsOverall cost (although costs are important, pricing is not the sole factor in the evaluation of proposals)Capacity to provide numerous electronic banking servicesBAI code compliance and compatibility with SAPExperience and governmental knowledge of bank teamBest availability schedule for deposit itemsReliability and quality of customer serviceFinancial strengthThoroughness of the conversion planComprehensiveness of the training programReferencesIn addition to the proposal evaluation, there may be an interview and/or on-site demonstration of only those respondents achieving relatively high ranking determined by the evaluation criteria. Depending upon the number and content of responses, the Agency may select two to three banking institutions to be interviewed for this project.Attachment ABanking Services Cost ProposalIEUA?ESTIMATED?UNIT ?ANNUALSERVICEANNUAL UNITS?COST?COSTAccount Maintenance (Monthly): Checking12 Sweep Investment12 Workers Compensation12 Payroll26 Custodial Investment 49 Checks Deposited1870Deposited Items Return1Wire Transfers: Incoming62 Outgoing109ACH Deposits75Accounts Payable Checks 7000Accounts Payable ACH850Accounts Payable Wires Out141Payroll - EFT (Direct Deposit)9000Payroll Checks700Stop Payments 10Positive Pay9000Image Per Item9000Checking Imaging CD-ROM12Custodial Investment Trade15Custodial Investment Fee0Electronic Connection to the BankOther: (List)FDIC Fees ................
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