ATTACHMENT A



ATTACHMENT ARFP 19-PR-CFO-17SCOPE OF SERVICESA.1EXECUTIVE SUMMARYThe District of Columbia Water and Sewer Authority (“DC Water” or “the Authority”) is soliciting proposals from qualified banks, with offices located in the District of Columbia, to provide banking services as set forth in this solicitation.The Authority intends to award a contract to one bank to perform the required services. The Authority seeks a one year (1) base period commitment, subject to evaluation, with options to extend the contract for four additional one (1) year periods. The Authority anticipates Board approval of a recommended bank, with offices located in the District of Columbia, in June 2019; execution of a contract in July 2019; automated system conversions (if applicable) completed by October 31, 2019 and commencement of services beginning December 1, 2019. ??????????????A.2? ???BACKGROUND OF AUTHORITYDC Water is a multi-jurisdictional regional utility that provides drinking water, wastewater collection and wastewater treatment to more than 700,000 residential, commercial and governmental customers in the District of Columbia, and also collects and treats wastewater for 1.6 million customers in neighboring jurisdictions.? Approximately 1,200 employees work at various facilities throughout the District.? DC Water delivers water to over 124,938 locations in Washington, DC, and provides nearly 100 million gallons of drinking water a day (mgd) for use by individuals and businesses.? To collect wastewater, DC Water operates approximately 1,800 miles of sanitary and combined sewers.? DC Water operates the Blue Plains Advanced Wastewater Treatment Plant, which is the largest advanced wastewater treatment facility in the world.The District of Columbia Water and Sewer Authority (commonly referred to as “DC Water”) is an independent authority of the District of Columbia government. DC Water was established in April 1996 under and pursuant to the Water and Sewer Authority Establishment and Department of Public Works Reorganization Act of 1996, D.C. Law 11111, as amended and supplemented, and the District of Columbia Water and Sewer Authority Act of 1996, Pub.?L. No. 104-184.DC Water provides retail water and wastewater treatment services to the District of Columbia and wholesale wastewater conveyance and treatment services to the user jurisdictions of Montgomery and Prince George’s Counties in Maryland and Fairfax and Loudoun Counties in Virginia. The Authority is governed by a Board of Directors consisting of 11 principal and 11 alternate members. Six principal members are District residents appointed by the Mayor of the District with advice and consent of the Council of the District of Columbia. Five principal members are appointed by the Mayor on the recommendations of the user jurisdictions.A.3?????? BACKGROUND OF DC WATER’S?BANKING ??????????????? 3.1?? DC WATER’S BANKING RELATIONSHIPS??????????????? DC Water currently maintains a direct financial services relationship with one financial institution.? Within this bank, DC Water currently utilizes a total of nine (9) accounts consisting of:Combined Sewer Overflow (CSO) Escrow: depository for grants to fund combined sewer overflow projects, etc;Lockbox: payments received thru P.O. Box, zero balance account, swept to concentration account;Payroll: disbursement of all payroll checks, (payroll and tax service provided by 3rd party);Concentration: main depository for all funds;Miscellaneous Receipts: payments received at Blue Plains location, zero balance account, swept to concentration account;DC Reserves: account maintained for worker’s compensation required by the District of Columbia stating DC Water must maintain self-insured carrier status at a minimum of $1,000,000.00;Rate Stabilization Fund: depository for funds set aside to lessen impact of rate increases, when necessary;Stormwater Permit Compliance Fund: depository for future stormwater activities;Fleet Relocation: restricted account maintained for the construction of DC Water’s Fleet services; andPending - Permit Construction Deposits: restricted liability account maintained for future reimbursable construction deposits after construction is complete (bank account has not been created yet, but may open in the future).Pending - Lead Service Line Fund: restricted account maintained for future lead service line replacements in accordance to Memorandum of Understanding (MOU) with the District of Columbia (bank account has not been created but may opened in the future).??????????????? 3.2 OVERVIEW OF DC WATER’S BILLING AND COLLECTION SYSTEM??????????????? DC Water is responsible for providing water/sewer services to all District of Columbia residents.? The Customer Service Department renders water and sewer bills, collects water and sewer revenues, and provides customer service in response to all inquiries. ??????????????? Payment may be in the form of check, money order, wire transfer, Automated Clearing House (ACH), Electronic Funds Transfer (EFT) or credit/debit cards displaying the VISA/MasterCard/Discover Card logo, only). DC Water reserves the right to add American Express as another payment option in the future. Cash or debit card transactions may be processed at walk-in authorized locations only.? DC Water presently utilizes a merchant card processor for credit card payments.? Deposits are made each business day by the processor to the concentration account at the bank.? ???????????????3.3 CURRENT LOCKBOX SERVICES??????????? Presently, one local bank provides lockbox and data capture services related to the collection of payments for water and sewer bills.? Bills are sent to DC Water customers monthly.??????????? A general description of the services currently provided is as follows:Initial Processing of Payments??????????????? At least once each business day, the bank collects the payment envelopes from a local post office box that has been established in the name of DC Water.Group Bill payments cannot be processed by the Bank/Lockbox.? If a payment is clearly?marked as “Group Bill”, it must be returned to DC Water’s Cashiering Office (within 24 hours) for processing.? This could result in an extra delivery to DC Water outside of the normal delivery schedule.Based on resource availability or business need, an additional pickup from the DC Water Accounts Receivable department (to Lockbox) may be required for large volumes of non-conforming payments (received over the counter or through FedEx/USPS/etc.) that need to be processed through Lockbox.? Non-conforming payments could include, but not be limited to a check and list, multiple checks/one payment stub, or multiple payment stubs/one check.Open Envelopes, Examine Contents and Process??????????????????????? The bank goes through a processing routine that includes a general review of the contents of each envelope, matches the payment with the coupon and insures that all required information is present.? Bills without payment, incorrect payment amounts and all correspondence are forwarded to DC Water, Accounts Receivable Office, 1385 Canal Street, SE, Washington, DC? 20003 for further processing.Deposit of Payments??????????????? The bank accepts, on behalf of DC Water, payments from mailed remittances.? Payments are in the form of personal checks and certified funds.? If cash is received, the bank is required to take prudent action to protect the receipt of actual cash.? Before the close of each business day, the bank is required to deposit into a depository account maintained in the name of DC Water, all payments received each day.? By 8:00 a.m. each business day, the bank is further required to have available for withdrawal the funds collected on the preceding business day.ReportingOn a daily basis, the bank furnishes DC Water a daily bank account statement, an electronic file of all processed payments and processed payment coupons – either hard copy or via image processing.? An account analysis is furnished monthly and collateral reports are to be furnished daily to designated officials.? Reports can be sent by mail to DC Water or made available on-line each day.Other ServicesPLEASE NOTE:? DC Water does not require or desire to have the depository bank receive or process over-the-counter payments from customers.On a daily basis, deposits from DC Water, Accounts Receivable Office, 1385 Canal Street, SE, Washington, DC? 20003 are sent via remote deposit to the bank for credit to DC Water’s depository account.? Any cash deposits received from Headquarters at 1385 Canal Street, SE, Washington, DC? 20003 are sent to the bank for credit.? Deposits consist of checks and money orders. If cash is received from a customer, DC Water’s Finance office will deliver funds to the selected bank.The bank depository cashes imprest fund checks payable to DC Water at its branch offices (certain branches may be designated for this).? Imprest fund cash is for petty cash purposes.The bank provides on-line access to daily bank statements and on-line wire transfer of?funds – repetitive, non-repetitive and book transfer.In addition, other services include, but are not limited to:? (1) bank’s ability to access DC Water’s system for customer account look-up capabilities; (2) suspense of unidentified remittances; (3) data capture and payment processing of DC Water’s SPLASH contributions and change of address changes; (4) online access to image archiving for checks and remittances; (5) Remote Deposit Services; (6) Electronic Returns for Account Receivable Conversion (ARC), ACH and paper items; and (7) ARC with opt-out host services, (8) check verification terminal for walk-in Permit construction center ; and (9) Straight Through Processing (STP) with the ability for the bank to capture all detailed cash transactions from DC Water’s 3rd party vendors files to include items such as date of transaction, amount of payment, unique payment identification numbers, etc.Payroll Account: Payroll and tax services are provided by a 3rd party contractor (Ceridian).? Payroll is prepared bi-weekly.? A direct deposit file is created and sent to the bank for processing.? There are approximately 110 checks and 4,960 direct deposits each month. The bank provides full account reconciliation and imaging of paid checks on PDF file each month. Stop payments are placed either through on-line services or by a telephone call to the bank.Ability to use ACH controlled disbursements for processing refund files from Business to Consumers (B2C). Currently, DC Water does not have this feature, but would like to begin automating retail customer refunds along with any Permit construction refunds, via ACH disbursements.SECTION B:???????? STATEMENT OF WORKB.1.?? SCOPE OF WORKThe Scope of Work for this RFP includes performance of banking services that specifically include, but are not be limited to: General Services; Lockbox Processing; Deposit Remittances; Reporting Requirements; Supervision, Communications and Controls; Collateral Requirements; and Account Maintenance Services???? B.2. ?SCOPE OF SERVICES???????? B.2.1? GENERAL SERVICESDC Water is seeking banking services to include the following:2.1.1Establish demand deposit accounts, as may be necessary, to meet the banking requirements of DC Water.? Maintain accurate electronic and paper records of activity in those accounts.2.1.2Provide automated balance reporting services for all DC Water accounts.? Available information must include as a minimum:? closing ledger, closing collected, opening collected, float, previous day debit and credit detail, ACH credit detail and ACH debit detail.2.1.3Provide automated stop payment - not to pay a check when presented.? The term of stop payment should be at least six (6) months.2.1.4Collateralize all deposits, including ledger balances daily at 102%, as per the collateral requirements stated in DC Water Statement of Investment Policy (Exhibit 3).2.1.5Accept and process cash, check, money order, ACH and credit/debit card deposits.? A third-party merchant card processor will transfer receipts to the DC Water concentration account daily.2.1.6Lockbox processing for the receipt of revenues from approximately 900,000 mailed-in water and sewer remittances annually.2.1.7Deposit Remittances.??All remittances collected must be deposited the same business day of collection. 2.1.8Non-Sufficient Fund (NSF) File automation.?? The qualified bank/lockbox provider should possess the ability to automatically import return/NSF information and provide a daily report for DC Water’s Cashier’s Department.2.1.9Monthly lockbox error report file.? The qualified bank/lockbox provider will provide a monthly lockbox error report to DC Water’s Cashier Office detailing operator errors.? The error report will be used by DC Water to identify areas of improvement within the business environment or to explore training opportunities that enhance service level delivery to DC Water customers.2.1.10Straight Through Processing (STP) with the ability for the bank to capture all detailed cash transactions from DC Water’s 3rd party vendor files to include items such as date of transaction, amount of payment, unique identification numbers, etc. for automated reconciliation with DC Water’s Billing and Collection System. Additionally, bank will provide automated receivable processing to include the receipt of customer payments by ACH, wire transfer, or other automated systems for inclusion in the customer payment file to be sent to DC Water each day.Automatic reconciliation of concentration, disbursement and payroll accounts monthly, including imaging of checks for each account on PDF or other recommended format.Automated file of checks paid for payroll accounts daily.Positive pay feature on selected accounts. ACH services to provide customers the ability to have their bank accounts debited by DC Water.? DC Water billing vendor will provide an electronic file of bank accounts to be debited for customer payments each day.Same Day ACH provides the ability for DC Water to process payments by ACH within the same day via National Automated Clearing House Association (NACHA) guidelines.On-line wire transfers to include repetitive, non-repetitive and book transfers. See Exhibit 1 Monthly Average Bank Balances - (Feb 2018-Jan 2019).???????? B.2.2???????LOCKBOX PROCESSINGDC Water’s expected annual lockbox collections are approximately $200 million.? The selected bank shall process the anticipated volume and deposit all funds into an account, which shall be opened and maintained by DC Water.? The selected bank shall process all DC Water payments in accordance with the following definitions:Conforming Payments - Conforming payments contain a DC Water customer account number(s) on the payment instrument and are defined as a single remittance with a single check or multiple payments being paid by one check, money order or multiple checks in payment of one bill.? Providing the transaction is in balance, conforming payments and in balance multiples received by 8:00 a.m., shall be processed and transmitted to DC Water on the day of receipt.Non-conforming Payments - Non-conforming payments DO NOT contain DC Water customer account number(s) on the payment instrument and are defined as any payment other than a single remittance with a single check.? Non-conforming payments also include out-of-balance multiples, which the bank will process and transmit to DC Water on the next business day after receipt.Exception Items and Mutilated Items, (as defined by DC Water) shall be forwarded to DC Water, Accounts Receivable Office, 1385 Canal Street, SE, Washington, DC? 20003.Initial Process – Lockbox CollectionsDC Water’s cut-off time for receiving remittance data is 3:00 P.M. Monday through Friday except holidays.? The selected bank shall:Collect the remittance envelopes from DC Water’s post office box, in accordance with a schedule that includes the latest pickup for same day transmission (deposit and ledger credit).? If your proposal necessitates a change in the location of the P.O. Box location, (i.e. city other than Washington, DC) please state in your proposal. The current mailing address is:DC Water and Sewer AuthorityCustomer Service DepartmentP.O. Box 97200Washington, DC 20090-7200??????????????????????????????? Open the remittance envelope and examine the contents to verify that a payment and bill are included for one of the following types of payments:Current Payment:? payment for water and sewer charges for which the payment is made on or before the due date for the bill.Full Payment:? payment for current water and sewer charges and arrears charges, which are included in the total amount of the bill.? This amount is shown on the line labeled “Amount Due Now”.Penalty Payment:? payment that is made subsequent to the due date of the bill and included in the current water and sewer charges plus a delinquency charge.? This is the amount shown on the line labeled “Amount due if paid after (date).”Over Payment: payment for water and sewer services which is greater than the amount stipulated on the bill.? (Some over payments from customers may include additional monies for DC Water’s Customer Assistance Program.? Customers will note in the space provided on the bill form the amount they are contributing to this fund.Partial Payment:? payment that is for a lesser amount than that which is stipulated on the bill.The selected bank shall process all remittances falling into the categories set forth in paragraphs a–e above.In the case of a partial payment (2.e.), the bank will process the remittance only if accompanied by a bill.? If the amount of the payment is not written on the bill, enter the amount of the payment on the bill in the space provided and process.The bank shall process multiple payments that are being paid by one check, money order, or multiple checks in payment of one bill, using established guidelines provided by DC Water.The bank shall not deposit remittances that are not accompanied by a bill, unless the DC Water account number is on the payment instrument.? These items shall be returned, attached to the envelopes, to the Accounts Receivable Office, 1385 Canal Street, SE, Washington, DC? 20003.All remittances collected must be deposited the same business day of collection.All remittances must be validated by a receipt to the customer for the amount of the collection (i.e. payment amount).Consolidate all deposits received from the lockbox and provide a consolidated report for the total dollars received for that day including ACH payments.In the event that the requirements of Section 2.2 are not met, and results in an unprocessed backlog, the bank shall notify designated DC Water officials by telephone as soon as possible, but in no event, later than 8:30 a.m. of the following business day.? Such notification shall include a description of the cause, the extent and the contemplated remedy for the backlog.? Unless otherwise advised by the Contract Administrator, the bank shall process any backlog, regardless of cause, the following business day.??????? B.2.3 ????DEPOSIT REMITTANCESThe selected bank shall perform services as follows:Accept payments in the form of checks, money orders, cash, or pre-authorized transfer (ACH).? If cash is received, write the word “cash” on the bill stub and process.? All other contents of the envelope shall be forwarded to DC Water’s Accounts Receivable Office, 1385 Canal Street, SE, Washington, DC? 20003.Stamp on the back of each payment the date the payment is received.Indicate on the bill stub the amount of the payment if it is different from the amount billed.Process/key payments received via ACH or mail from bill consolidators (i.e., PayPal, Bill Payer, etc.), and include such payments on daily electronic file.? The bank shall not return these items to DC Water unless the customer’s account number is missing or incomplete.As requested by DC Water customers, electronically debit accounts for amount billed on bill due date based on an electronic file sent to the bank by DC Water’s billing vendor.Deposit all receipts collected into an account opened and maintained for DC Water before the close of business each day. DC Water will require the bank to track mail volumes and provide monthly reporting for all mail picked up and processed from DC Water’s dedicated POB located at the U. S. Post Office.Batch all payments and bill stubs in batches of up to three hundred (300) and attach a summary reflecting the total dollar amount represented by each batch.Prepare an electronic file, media to be specified, of DC Water accounts for each individual payment received, listed in the format indicated below. Such file must be available for downloading by DC Water staff no later than 3:00 p.m. EST each day, for payments processed that day. For data capture purposes, the scan line is located on the front side of each payment coupon (Exhibit 2). ?Have available for withdrawal by 8:00 a.m. each business day, the remittances collected the previous day.Present for collection twice, all checks, which are postdated, and those returned by the drawer’s bank due to insufficient funds.Have the ability to transmit and receive data in an electronic file format.B.2.4 REPORTING REQUIREMENTSThe selected bank shall:Not later than 10:00 a.m. EST of the business day following receipt of payments, deliver the following to:DC Water and Sewer AuthorityAccounts Receivable Office (5th floor)1385 Canal Street, SEWashington, DC? 20003Deposit summary reflecting the total funds deposited from mail receipt and over-the-counter payments for the same business day.All exception items, which could not be processed by the bank:? i.Multiple accounts being paid by one check and multiple checks paying one account;ii.All remittance envelopes received in which the bill(s), water and sewer account;number, service address or payment instrument is missing; iii. All correspondence; andiv. Mutilated items that do not contain the customer’s name and address or a valid ABA routing number.All checks returned twice by the drawees bank for insufficient funds will be sent to the following address:DC Water and Sewer AuthorityAccounts Receivable Office (5th floor)1385 Canal Street, SEWashington, DC? 20003B.2.5 SUPERVISION, COMMUNICATIONS AND CONTROLSThe selected bank shall:Provide their employees and any subcontractors with proper supervision, quality control and training to assure accurate, timely compliance with the requirements of the proposal.Reconcile billing for all services performed by any subcontractor.Coordinate changes and inquiries in writing among DC Water, the bank and any subcontractor.4.Control the flow of work between the source of receipt and the completion of the processes, including the flow to a subcontractor, if any.5.Identify liaison for bank and any subcontractor for technical or production concerns and a separate liaison at each facility for administrative matters.? DC Water will provide the equivalent liaisons for each area of concern.6.Assume full responsibility for the protection, security, and integrity of all funds of DC Water and shall indemnify DC Water for the full value of all such funds should they be lost, misdirected, or otherwise improperly handled.B.2.6 COLLATERAL REQUIREMENTSDC Water requires the provision of collateral for DC Water funds placed on deposit with local financial institutions. Such deposits shall be collateralized equal to 102 percent of these funds. See Statement of Investment Policy (Exhibit 3).B.2.7 ACCOUNT MAINTENANCE SERVICESAccount Activity ReportingThe selected bank shall provide the following reports described in this section:Daily Statement of Transfers and Account Balance - The bank shall provide on-line electronic access by 7:00 a.m., each business morning, to the previous and current day bank statement. Monthly Account Analysis - The analysis shall provide:Item/activity counts;Per item cost; andInformation on the funds available for investment, and interest earned on compensating balances, if used as means of payment.The bank shall prepare/process and submit the following reports:Detailed monthly bank statement for each DC Water account;Monthly automatic reconciliation of the concentration, payroll and disbursement accounts;Checks paid – an electronic file shall be made available daily of all checks paid from the disbursement and payroll accounts;PDF or other recommended format of paid checks for the disbursement and payroll accounts Monthly; andPDF or other recommended format of paid checks for the disbursement and payroll accounts monthly; andDetailed schedule of pledged collateral for each account at the close of business each banking day. ................
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