Notice Requesting Proposals for BANK AND MERCHANT SERVICES

Transcription

1 735 Pacific Street Monterey, CA Notice Requesting Proposals for BANK AND MERCHANT SERVICES The City of Monterey is requesting proposals for Banking and Credit Card Merchant Services for its bank accounts, related depository, cash management and merchant card services in accordance with this Request for Proposal. All proposals must be received by the Finance Department at 735 Pacific Street, Suite A, Monterey, CA by Tuesday, January 6, 2015 at 12:00 PM. Proposals received after said time will not be considered. Contact: Carol Bouchard Finance Department City of Monterey, California

2 TABLE OF CONTENTS A. Description of Work 1 B. General Terms and Conditions Proposal Requirements 3 Contract Award and Execution 3 C. Special Terms and Conditions Proposal Content 5 Proposal Evaluation and Selection 19 Proposal Review and Award Schedule 19 Other Terms and Conditions 19 D. Sample Agreement 21 PROPOSAL SUBMITTAL FORMS Appendix A: Banking services bid form Attachment 1: Listing of current credit card merchant accounts Attachment 2: Monthly Account Activity

3 A. DESCRIPTION OF WORK The City of Monterey is seeking proposals from qualified public depositories (a state or national bank located in California, as defined by Section of California Government code) to provide a variety of commercial banking services. The bank must have access and full rights to the Federal Reserve System, be a federal or State of California chartered financial institution, and be in good standing among other comparable banks. The respondents must be adequately capitalized to accommodate the City s cash and investment management needs. The City strongly prefers to select a financial institution with a physical branch within the City limits of Monterey. However, the City will also consider proposals from banks that have a branch within Monterey County. A respondent who does not have a physical branch in the City of Monterey must specify in detail throughout its RFP response how services that might normally be handled in-branch would be accommodated (e.g. change purchases, cash and check deposits, petty cash replenishments, cashiers checks, etc.). It is in the intent of the City to award the contract for an initial 5 year period with the option to renew it up to a maximum of 10 years at the sole discretion of the City. The City desires fixed pricing for the initial 5-year period with a clear delineation within the RFP response of how prices in years 6-10 would be determined. Background. The City of Monterey was incorporated in 1850 and has a current estimated population of 28,381. The City occupies a land area of 8.67 square miles. The City operates under the council-manager form of government. Policy-making and legislative authority are vested in a City Council consisting of the mayor and four council members. The City provides a broad range of services, including police and fire protection; sewer and storm water collection; construction and maintenance of streets, roads and infrastructure; planning and zoning; parks and recreation; general administrative and support services as well as parking structures, a marina, two wharves and other related visitor-oriented facilities. The City also contracts for fire protection services with neighboring cities, Carmel & Pacific Grove and the Monterey Airport. The City's estimated total operating budget for Fiscal Year is $108.1 million, and total estimated operating revenue is $108.6 million. The City currently uses Tyler s Eden Financial Accounting software for its general ledger, payroll, accounts payable, budgeting and accounts receivable. The City utilizes Progressive Solutions, Inc. software for its cash receipting, including parking receipts, business and dog licensing. In addition, departments utilize specialized software, including International (Parking), Vermont Systems RecTrac/WebTrac through Plug n Play gateway (Sports Center/Recreation), Infor Hansen, Permits Plus (both Planning), and SMR Utility Manager Pro/Data Track (PG&E payments). These systems interface with merchant services and/or create an ACH file that is transmitted to the bank. The City of Monterey currently maintains a primary commercial banking relationship with a depository institution. The City currently holds the following accounts: General Account used for all deposits and miscellaneous ACH payments. Funds ZBA accounts. Accounts Payable (ZBA) used to pay vendors Payroll Account (ZBA) used to pay payroll Sports Center (ZBA) used to receive electronic funds transfers Flex Benefits used by contractor to pay employees from flexible spending accounts The City has determined that a review of these services offered by qualifying institutions is appropriate at this time. It is the City s preference to maintain all commercial banking services with one financial -1-

4 A. DESCRIPTION OF WORK institution to maximize cash flow and minimize administrative costs. The City also owns securities held in a custodial account; this custodial account is not part of this request for proposals. The City encourages financial institutions to submit the most comprehensive proposal possible offering the highest quality of service while providing opportunities for improving the current management of cash flow. The City is also interested in various technological advances that could improve banking, cash management, and customer service capabilities. The City will administer the proposal process in accordance with the terms and dates outlined in this RFP; however, the City reserves the right to modify the activities, time line, or any other aspect of the process at any time, as deemed necessary. By requesting proposals, the City is in no way obligated to award a contract or pay the expenses of the proposing banks in connection with the preparation or submission of a proposal. The award of any contract shall be contingent on the requisite staff and Council approvals. Further information about the Monterey community, organization and fiscal situation is available on the City web site at -2-

5 B. GENERAL TERMS AND CONDITIONS PROPOSAL REQUIREMENTS 1. Requirement to Meet All Provisions. Each individual or firm submitting a proposal (Proposer) shall meet all of the terms, and conditions of the Request for Proposals (RFP) package. By virtue of its proposal submittal, the Proposer acknowledges agreement with and acceptance of all provisions of the RFP specifications. 2. Proposal Submittal. Each proposal must be submitted on the form(s) provided in the specifications and accompanied by any other required submittals or supplemental materials. One copy of the proposal should be submitted in a binder format and one electronic copy included on CD-Rom or sent by to porter@monterey.org. Please answer the questions in section tabs (A-T) using the number sequence shown. Do not include any extraneous or marketing information. If a service requirement or section of the proposal cannot be met by a proposer, then No Proposal should be indicated on the relevant section of the proposal. An alternative equivalent service may be offered. 3. Insurance Certificate. Each proposal must include a certificate of insurance showing: a. The insurance carrier and its A.M. Best rating. b. Scope of coverage and limits. c. Deductibles and self-insured retention. The purpose of this submittal is to generally assess the adequacy of the Proposer s insurance coverage during proposal evaluation; as discussed under paragraph 11 below, endorsements are not required until contract award. The City s insurance requirements are detailed in Section D (Sample Agreement). 4. Proposal Cost. The cost quoted by the Proposer must be entered in figures in the space provided on the Banking Services Bid Form, Appendix A. 5. Proposal Withdrawal and Opening. A Proposer may withdraw its proposal, without prejudice prior to the time specified for the proposal opening, by submitting a written request to the Assistant Director of Finance for its withdrawal. No proposal received after the time specified or at any place other than that stated in the "Notice Requesting Proposals" will be considered. All proposals are public information and will be made available upon request after contract award. 6. Submittal of One Proposal Only. No individual or business entity of any kind shall be allowed to make or file, or to be interested in more than one proposal, except an alternative proposal when specifically requested; however, an individual or business entity that has submitted a subproposal to a Proposer submitting a proposal, or who has quoted prices on materials to such Proposer, is not thereby disqualified from submitting a sub-proposal or from quoting prices to other Proposers submitting proposals. 7. Communications. All timely requests for information submitted in writing will receive a written response from the City. Telephone communications with City staff are not encouraged, but will be permitted. However, any such oral communication shall not be binding on the City. CONTRACT AWARD AND EXECUTION -3-

6 B. GENERAL TERMS AND CONDITIONS 8. Proposal Retention and Award. The City reserves the right to retain all proposals for a period of 60 days for examination and comparison. The City also reserves the right to waive non-substantial irregularities in any proposal, to reject any or all proposals, to reject or delete one part of a proposal and accept the other, except to the extent that proposals are qualified by specific limitations. See the "special terms and conditions" in Section C of these specifications for proposal evaluation and contract award criteria. 9. Competency and Responsibility of Proposer. The City reserves full discretion to determine the competence and responsibility, professionally and/or financially, of Proposers. Proposers will provide, in a timely manner, all information that the City deems necessary to make such a decision. 10. Contract Requirement. The Proposer to whom award is made (Consultant) shall execute a written contract with the City within ten (10) calendar days after notice of the award has been sent by mail to it at the address given in its proposal. The contract shall be made in the form adopted by the City and incorporated in these specifications. Please refer to Section D for a standard form of professional services agreement for all contractual requirements including insurance and indemnification. Proposers should consider the cost of carrying the insurance required by the attached agreement. Any exceptions to the form of agreement must be included in the response. 11. Insurance Requirements. The Consultant shall provide proof of insurance in the form, coverages and amounts specified in Section D of these specifications within 10 (ten) calendar days after notice of contract award as a precondition to contract execution. 12. Business License and Tax. The Consultant must have a valid City of Monterey business license and tax certificate before execution of the contract. Additional information regarding the City's business license and tax program may be obtained by calling , or on the City s website at -4-

7 C. SPECIAL TERMS AND CONDITIONS 1. Proposal Content. Proposals must include the following information: A. Cover Letter The cover letter should designate the proposing bank, the address of the bank office where the relationship will be domiciled, the address of the local branch, if different, and be signed by an authorized bank officer. The cover letter should also include the primary contact for this Request for Proposal. No pricing information should be included in the cover letter. B. Minimum Qualifications 1. Is your institution a State or National bank as defined in California Government code ? 2. Do you have established offices within the City of Monterey or County of Monterey? Please list branch locations within the City or County of Monterey when applicable. If the bank does not have a physical branch in the City of Monterey, please specify in detail through the RFP response how services might normally be handled in-branch would be accommodated (e.g. change purchases, cash and check deposits, petty cash replenishments, etc). 3. Is your bank a member of the Federal Reserve System with access to all Federal Reserve services? 4. Is your bank insured by the Federal Deposit Insurance Corporation (FDIC)? If not insured by the FDIC, please disclose your association and how you are insured. 5. Is your financial institution a qualified depository of funds in compliance with Sections and of the California Government Code? Is your institution capable of collateralizing public fund deposits exceeding $10 million? Disclose what your institution s current level of public funds deposits and related collateral. Disclose how you will collateralize the City s deposits. C. Bank Overview 1. Banking Overview Please provide an overview of bank, governmental client service philosophy, and corporate organization including identification of the government services unit, location of corporate, processing center, and branches. Please provide any relevant information regarding a correspondent bank relationship, including a list of the financial institution s holidays. 2. Experience Describe the bank s direct experience in servicing public sector clients. Please include: the number of public agency clients, the dollar amount of public funds on deposit, and the bank s knowledge of and adherence to the California Government Code and other applicable laws. Will the bank be able to comply with transaction confirmations and respond to other requests for data as needed from the City s auditors? 3. Relationship Management Identify the size and scope of your public banking unit, bank officers responsible for the City s accounts, what each person s role and responsibilities will be, and the relevant credentials and experience of each person on the relationship -5-

8 C. SPECIAL TERMS AND CONDITIONS management team. Please specify the name and title of the representative(s) who will be designated as the bank s relationship manager for the City. 4. Differentiation Please describe what sets the bank s government banking unit apart from others. Does the bank provide a toll-free number for customer service? What is the average wait time when contacting this number? What is the average resolution time for issues presented to this number? 5. Customer Service The expected time to return calls will be one hour or less. Can your bank commit to this time requirement? What are the hours that a designated team or staff member is available to the City? 6. Merchant Services Please describe your experience providing merchant services for local governments. What differentiates your merchant services? If these services are provided by a vendor other than the responding bank, how long has the relationship been in effect and how is the relationship between the bank and merchant services provider managed? 7. Strength Please provide key measures of your bank s fiscal strength, including total assets, market capitalization, and bank s ratings from Standard and Poor s and Moody s. Include a copy of the bank s most recent audited financial statements in Section T. 8. Third Party Liability If there are third party services identified in any of the responses, will the bank interface directly with, and assume full responsibility for, any and all thirdparty service providers, such as armored carriers and merchant service providers? D. Community Investment and Social Responsibility 1. CRA Rating Provide the bank s Community Reinvestment Act (CRA) rating and describe in detail, specific projects and community involvement activity in Monterey County. 2. Are donations or in-kind contributions made to local organizations? If so, please give examples of recent contributions. 3. What provisions will your bank make for employees to cash their checks if they do not have an account with your bank? E. References 1. References Please provide three (3) local government or client references that are of similar size and scope of service utilization as the City. Including the following information for each reference: Customer name Contact name and title address Telephone number Street address, State, Zip Code Number of years as a customer -6-

9 C. SPECIAL TERMS AND CONDITIONS Description of services provided including contract amount, when provided and project outcome The City reserves the right to contact each of the references listed for additional information regarding your bank s qualifications. Describe fully the last three contracts performed by your bank that have been terminated with or without cause. Please include the following information: Customer name Contact name and title address Telephone number Street address, State, Zip Code Description of services provided Explanation for contract termination 2. Statement of Past Contract Disqualifications the Financial Institution shall state whether it, or any of its officers or employees who have a proprietary interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of the violation of law, a safety regulation, or for any other reason, including but not limited to financial difficulties, project delays, or disputes regarding work or product quality, and if so, explain the circumstances. 3. Pending Litigation Does your bank have any pending litigation with any California government agency clients regarding banking services? If so, please describe the instance. F. Check processing The City currently issues around 300 accounts payable checks semi-monthly, of which approximately 9% are paid electronically through ACH. The City also processes payroll checks in-house. Approximately 85% of the 741 semi-monthly payroll checks are paid through direct deposit. The City contracts for administration of its flexible benefit account, which issues approximately 34 remittances (checks or debit cards) monthly. 1. Can the City establish Zero Balance Accounts (ZBAs) that are funded from our main operating account with a daily transfer? Are there any limitations to the type of ZBA? 2. How is detail of checks paid from ZBAs reported? Is check detail posted to the main operating account or available on reports for the ZBAs? Is the information available online and can it be exported to a csv or Excel file? 3. Do you utilize check truncation, with substitute check images (front and bank) transmitted to the City? 4. Are the images also available online? For how long? Are the images also available by mail or fax? How soon after a check has been cashed is the image available? How long is electronic archiving available and is there a fee for retrieving archived items? -7-

10 C. SPECIAL TERMS AND CONDITIONS 5. Do you offer full and partial account reconcilement? Please describe the bank s reconciliation services and reports. Do you provide an outstanding check list? 6. Currently the City records cleared checks automatically, using an electronic file interfaced with our current financial system. Does your bank have the ability to provide an electronic file to include the following fields: Check Number Cleared Date Amount 7. What methods do you provide for stop payment orders, and how do you confirm them? Can the request be input online? If input online, is the confirmation immediate? Is there a stop payment report? 8. Within what time frame (hours) does the stop payment order take effect? 9. How long do stop payment orders remain in effect? Do you have different duration options, such as 6 months, 1 year, or 2 years, without the need to implement extensions? Is the cost different for each option? 10. In the case of stale dated checks, will the bank agree to not honor any checks that have been outstanding (based on the date of the check) for 180 days or more? Is there a cost to the City for reviewing and returning stale dated checks? 11. How does the bank compensate the City for checks that are cashed after a stop is placed or if stale dated, and how many days does it take for the bank to reimburse the City? 12. Does the bank have a safeguard mechanism to detect fraudulent checks that are not issued by the City or signed by authorized signers? Describe the bank s notification procedure within the banking system and to city contacts. 13. Will the bank guarantee that items drawn on the City accounts be paid regardless of the balance in the funding account? What is the charge for covering these items? Please be comprehensive in your response. 14. Describe the bank s policies concerning daylight overdrafts, and what, if any, impact these policies may have on the management of the City s accounts and compensating balances. G. Positive Pay The City would like to continue to use positive pay on our main checking account and our payroll checking account. Please provide information related to positive pay and fraud management. 1. What banking services do you offer besides Positive Pay that are designed to assist a company with managing fraud? -8-

11 C. SPECIAL TERMS AND CONDITIONS 2. Describe the bank s capabilities for Positive Pay and indicate what fields are currently included. How flexible is the bank s file format? 3. Do you offer name verification (payee verification) under Positive Pay? How restrictive are name specifications for the printed checks? Do you have restrictions on format (font size, bolding, etc)? Do you have high read rates? 4. Following a successful submission of the Positive Pay data, can the bank accept subsequent add/delete data to become effective immediately for manual or void checks? 5. How are exception items under Positive Pay reported to the city? Describe how the bank provides image viewing for exception items? 6. What is your procedure and timeline for paying or returning exception items? What is your default disposition if you do not receive the pay decision response by the deadline? H. Wires, ACH and Direct Deposit Payments The City processes payroll twice per month via ACH using the City s current bank s online functionality. Payroll is approximately $2.1 million with 625 ACH transactions and 115 physical checks. Taxes total $335,000 on average each payroll. Vendor payments are processed twice per month averaging $1.1 million with 25 ACH transactions and 260 physical checks. The City normally transmits the ACH files for direct deposit of payroll and vendor payments 1 to 2 banking days prior to the required funding date. The City also uses ACH for payroll tax remittances and ACH or wire for other time-sensitive payments. 1. Is your bank both a sending and receiving bank of the National Automated Clearing House Association (NACHA)? 2. What are your file transmission options for electronic transfers? Are there any restrictions on the software we should know about in order to prepare our payroll and vendor payments to be compatible with your direct deposit service? Can transmissions be initiated and monitored online? 3. What assistance do you provide in establishing a new ACH transmission? Do you provide access to a database of ACH member institutions and ABA transit routing codes? 4. What is the cut-off time in Pacific Standard Time for initiating ACH and when does the recipient account receive the funds? Are there fees associated with missing the standard deadline? Are fees different if the direct deposit files are delivered prior to deadline dates? 5. Describe the bank s online wire transfer capabilities and process for creating and approving new wire templates, modifying existing templates, and approving wire transfers. What is the cut-off time (Pacific Standard Time) for initiating wire transfers to ensure same-day execution? 6. Describe the acknowledgement you provide and timeline when (a) you receive file transmission, and (b) when a file transmission fails? -9-

12 C. SPECIAL TERMS AND CONDITIONS 7. Is there support available to assist if an electronic transfer fails? Which hours is customer service staffed? 8. What screening measures does the bank use to minimize errors on files sent to you i.e., pre-notes, ABA screening, etc? Do you recommend/require pre-notifications for every transaction prior to a transfer? 9. Describe how you handle returned pre-notifications and electronic payments. 10. If the City uses your service for making tax payments, do you guarantee the timing of the payment? If the payment has been made within your cut-off time, but is delayed, will you absorb any penalties and interest charges assessed by the tax authority? Describe any restrictions or limitations. 11. Is the City s bank account made whole immediately when a wire or ACH transmission fails? 12. Does the City have the ability to change, add or delete an item after transmitting our ACH files to you? If yes, describe the procedure and cut-off times. 13. Describe your system security in general and explain how it will guard against unauthorized ACH debits to the City s accounts. If unauthorized ACH transactions post to the City s account, describe how the transaction would be resolved. 14. Describe the protocol for initiating wires over the phone (oral wire transfers). What security measures are required to process an oral wire transfer? 15. What safeguards and security measures does the bank have in place to protect the City, especially against unauthorized use of the system? Are there daily limits on wire transfers? Include a description or sample of the bank s fund transfer agreement. 16. With regards to your ACH and wire services, what are the bank s contingency plans in the event of a system failure? Do you offer these services by means other than a computer system? Do you have a backup process if internet/transmission lines are unavailable? Will the City be immediately notified of any changes or problems and the ability to re-send a file or delete a file? 17. Does the bank offer a pay card or stored value card as an option for employee paychecks? If so, please describe the service and all associated fees. I. E-payables or Electronic Payment Services The City currently processes a small percentage of payables using ACH services and is interested in further exploring electronic bill payment services for regular accounts payable transactions. Please describe the bank s electronic bill payment, EFT and ACH services, as they relate to Accounts Payable. 1. What hardware, software, and special programming are required for the implementation of an ACH credit program for payments to City vendors? -10-

13 C. SPECIAL TERMS AND CONDITIONS 2. Do you offer any electronic vendor payment services or electronic payment card solutions that provide the City with a rebate of merchant transaction fees? Do you offer rewards for using these payment services? Please describe the services and how they could benefit the City s accounts payable process. 3. What help do you provide with transferring all of our current vendor payment relationships to an e-payable or electronic payment service? Has the bank worked with any users of Eden software to implement electronic payables? 4. Please detail all costs associated with any electronic payment services described above. J. Deposit Activity Armored car services are utilized to pick up deposits from four locations each business day: Finance Administration Monterey Sports Center Downtown Parking Main Office Cannery Row Parking Garage 1. Describe the bank s required preparation and packaging criteria for cash deposits, currency, coins, and checks. Are coins required to be rolled? Is currency required to be strapped? Are there different fees for accepting unrolled coin/unstrapped currency? 2. Is a specific type of deposit bag required? Are these available from the bank and at what cost? 3. Are deposits delivered to a vault? Where is the closest vault located? Describe reporting available for deposits, and how quickly are deposits verified and how timely is information available? 4. Describe how the bank handles deposit adjustments. How will you notify the City s Finance Department? What supporting documents are provided for deposit adjustments? 5. Are copies of deposit slips and adjustments available online? 6. What evidence materials (i.e. logs, video tapes) will the bank make available to the City in the event of a deposit investigation? How long does the bank archive such materials for retrieval and use in investigations? 7. Describe timing of funds availability (i.e. when they become ledger credit) and cut-off times for: a. Cash deposits b. Scanned check deposits c. Checks drawn on the same bank d. Checks drawn on other banks e. In-coming ACH direct deposit and incoming wires f. Do you guarantee immediate credit (same day funds credit) on all incoming wire transfers and U.S. Treasury and State of California checks upon receipt? -11-

14 C. SPECIAL TERMS AND CONDITIONS 8. Are your availability policies different from the Federal Reserve Bank s availability schedule? Will the City receive same day availability of funds for all images and check deposits drawn on the bank? 9. What is the same-day ledger cut-off for direct local branch deposits? If the bank does not have a physical branch in the City of Monterey, please specify in detail how deposit services that might normally be handled in-branch would be accommodated. 10. The City requires that all returned deposit items be redeposited at least once. Is there is a NSF check fee for the first and/or second return on the same deposit? 11. Describe your return procedures for checks. If the original check is deposited, will you return it? How long does it take for returned items to be sent to the City? Can you provide an internet based returned-check list with images both front and back? 12. Does the bank offer electronic check conversion? Will the bank supply the City with desktop scanners for this service and if so, what is the cost to lease or purchase the requisite equipment? Please describe the functionality of the electronic check conversion and the operation of the scanners and any applicable fees. K. Electronic Deposits On a monthly basis the Sports Center initiates a transfer into its account from customers credit cards and bank accounts. The bank transfer is preceded by a prenote. There are about 1,400 credit card charges totaling approximately $85,000 and about 300 draws from customers bank accounts totaling approximately $18, Please describe how you will support these electronic deposits. Please detail all costs and processes. 2. The City is considering expanding its use of electronic deposits to include other recurring receipts, such as parking permit payments and rent. If the volume of electronic deposits increases, will that change the fees or processes? 3. Does the bank have any program (e-receivables) to actively assist the City in collection through ACH for customers or ongoing repetitive citizen payments? 4. Please describe how you will help us maintain PCI compliance for these deposits. L. Direct Deposit Relationships State of California The City transacts with the State of California Local Agency Investment Fund (LAIF) and receives tax apportionments on a regular basis. On average the City keeps $5 million in LAIF. The City also keeps $60 million on average in other investments. Please provide the following information on your experience with LAIF. 1. Is the bank an approved State of California depository? 2. What is the charge per transfer to LAIF? From LAIF? -12-

15 C. SPECIAL TERMS AND CONDITIONS 3. Please describe the method the financial institution processes payments from the State of California and LAIF transfers. Are the transfers done by telephone, terminal (ACH), fax, wire transfer, etc.? 4. Does the bank have an office in Sacramento that maintains a direct DDA banking relationship with the State Treasurer s Office and the State Controller s Office? M. Cash Management, Reporting and Investment The City currently uses a web-based daily balance and detailed reporting information system. The City s Finance Department requires daily cash balance reporting information for all accounts, for both prior day and current day (intraday) information. The City utilizes the web-based system for transfers between the City accounts. In addition to daily transaction detail the City requires an online monthly bank statement showing summaries, reconcilements and relevant detail. The bank statements should be dated for the last banking day of each calendar month. 1. If done online, please describe your bank s online information reporting system including any costs associated with web-based reports. The City may request a demonstration of the online reporting system. 2. Describe or provide screen prints that show the information reports that the City can obtain from your system. a. Can the reports be custom-tailored for the end-user? Can they be exported to Excel or csv files? b. At what time is prior day information available for access by City staff? Is an intraday report available via the internet? How often is intra-day information updated and when? Please provide a sample of prior day and intra-day reports that would be the best example of the system s capabilities. Include the reports in this section. c. Is it possible to get online reports before the monthly statement is available? For example, if we need information from the 10 th of the month through the 20 th of the same month, is it possible to get that report online in real time? 3. What are the computer hardware and software specifications for the bank s online system? 4. Describe the systems security, including whether passwords, authentication, and/or encryption techniques are used to protect online data. 5. Does the online system have the ability to export information to third-party software or accept online files? 6. Provide a report showing system down time for the past year. Include types of services that were unavailable and how the system status was communicated to clients. Describe your backup procedures for times when the system is unavailable. What is the bank s contingency plan for providing this information in the event of unexpected bank systems problems or natural disasters? 7. How long is information maintained at the bank and online? Is historical data always accessible online? If not, describe the procedure for accessing the information and turnaround time. -13-

16 C. SPECIAL TERMS AND CONDITIONS 8. What other online or internet based systems are currently available to customers? 9. Provide the frequency and format of any other reports that you will provide to the City. Provide samples of typical reports. 10. The City does not currently use an automated, daily sweep due to low interest rates. When rates rise, is a sweep available to a SEC-registered money market fund or a bank internal account with comparable return and security? 11. In the event that the City decides or is required to open additional accounts or close/change accounts during the contract period, would there be any change to the fee structure? N. Bankcard Processing Merchant (Credit Card) Services The City currently accepts payment by Visa, Master Card, Discover Card and American Express (credit and debit cards) at approximately 25 locations throughout the City including several online portals. In addition, credit cards are accepted at 248 of the City s parking meters and 28 pay stations. Each location has a unique merchant ID number that is used for reporting/reconciling and invoicing purposes. Refer to Attachment 1 for a detailed list of merchant accounts and transaction volume. The City accepts credit cards for the following types of payments: Recreation fees and snack bar purchases Business licenses Parking permits, fees and fines Building permits and inspection services Public safety permits and inspection services Harbor/Marina fees Library fines and donations Other city services including police, fire, conference center 1. Please provide a detailed description of the entire merchant card process within your institution. If your program is housed through a third party vendor, please explain. Discuss the roles and responsibilities of the bank and vendor, if applicable. 2. Provide interchange passthrough pricing with a breakdown of all fees, including bank and association charges. Be clear on which rate or fee is being locked for the duration of the contract and which is subject to arbitrary charge (such as network rate and fees). How is the interchange fee determined for each transaction? 3. Some City locations have low volume of high-dollar transactions (e.g. Conference Center, licenses and permits) while other locations have a high volume of low-dollar transactions (e.g. parking meters and lots). What does the bank recommend to minimize fees? 4. What type of online reporting services do you provide? For example, (besides the Card Processing Statement), can you provide activity reports in total and by merchant ID location on a daily, monthly or other basis? What sort of detailed information is provided for auditing and reconciling purposes? 5. Can access to transactions and reports be organized by functional area? -14-

17 C. SPECIAL TERMS AND CONDITIONS 6. Discuss security features, including account number encryption and purging policy. 7. Describe payment Card Industry (PCI) data security standard compliance and liability, and what assistance you can provide the City with PCI compliance. 8. Describe your chargeback policy, including the bank s role in this process. How is chargeback information provided to the City, and how quickly? Is it available online? 9. Besides the traditional credit card acceptance (in person/card swipe), do you support any new platforms such as our customers using smartphones or web portals to initiate credit card, debit, and/or electronic check transactions? Can you offer solutions for accepting payments in the field (e.g. inspection fees, donations)? If yes, describe and state additional costs. 10. The City currently owns the majority of stand-alone terminals, printers and PIN pads, as listed on Attachment 1. If they are not compatible with the bank s services, will the bank supply the City with terminals, printers and PIN pads, and if so, what is the cost to lease or purchase the requisite equipment which would be compatible with chip and PIN technology by October, When and how will the City receive funds for each day s transactions? Discuss clearing time between deposit and posting to the City s main checking account. Is settlement by ACH or Fed Wire? Are settlement amounts listed by merchant ID on the bank statement or will they appear as one lump sum? 12. Who manages the bankcard merchant services relationship? Please briefly describe the structure of this area. What is your timeline for resolving disputes? 13. How does your bank support online merchant services? Can you provide secure sites to facilitate online payments? O. Online Banking Information Systems, Security, Integration and Disaster Contingency. 1. Describe your bank s online capabilities and security. In addition to your description, please also include the following items: a. Use of the internet in providing services to your municipal customers. b. Capability to upload or download electronic data from the bank to the City or from the City to the bank, or to an outside third party such as the State of California? c. Availability of reports that can be exported to Microsoft products (excel). d. Ability to place currency order online. e. Security for user access administration of online business banking and ability to set limits (access to specific accounts, functions and dollar limits). f. How often the City s data will be backed up. g. How much system down time can the City expect to experience. 2. Describe your bank s security systems. In addition to your description, please also include the following items: a. Describe, in detail, the bank s compliance with State and Federal regulations pertaining to this area. -15-

18 C. SPECIAL TERMS AND CONDITIONS b. Specify the security procedures that are in place to minimize the risk of unauthorized transactions (e.g. encryption/authentication). c. Describe procedures for using an industry standard electronically secure data connection, using point-to-point data encryption, which allows the City to transmit account information. d. Describe the controls that are in place to protect against lost files and duplication of transmissions, and how it will establish and maintain security safeguards and procedures to guarantee the confidentiality of all data obtained from the City. 3. Please describe the bank s procedures pertaining to cyber security laws AB1149 and SB Please describe testing of core service applications and systems that assure information backup, anti-intrusion, and other privacy requirements. 5. Describe the bank s disaster contingency plans, contacts and backup systems for continued city operations in the event of a system failure, natural disaster and other emergencies. Include information such as: when was the plan last reviewed and actually tested, the general location of alternate work sites, recovery time required, the point at which you would notify the City, and the effect moving to a backup site would have on fund availability and processing capacity. P. Conversion Process and Training In the event that your bank is selected, key branch and bank staff assigned to the City may be asked to participate in an on-site review of City finances and other existing banking and credit card practices. The bank may also be expected to make a written report to the Finance Department of its findings and recommendations and develop a conversion plan based on the review. 1. Describe the overall plan your financial institution would coordinate to ensure a smooth transition from the current provider. 2. Identify your staff responsible for implementation and provide background of key implementation staff including their experience in implementing the requested services. If a conversion team is used, how will our account be transitioned to the on-going client service team? 3. Provide a typical conversion timeframe and indicate what factors would alter the conversion period. In addition, provide a sample conversion timetable/schedule. 4. Describe the onsite and/or on-line training to the City s staff for the operation and use of the financial institution s services and automated systems for areas of service. 5. Will the conversion be at no cost to the City? If not, provide information on the conversion costs. Will the bank provide a conversion allowance to the city? If so, how much? 6. Will the bank take the lead and responsibility for conversion progress, with weekly updates of progress to staff? -16-

19 C. SPECIAL TERMS AND CONDITIONS 7. Do you provide written user manuals for all services? How often are manuals updated? Are user manuals also available online? 8. Do you provide on-going training after implementation? Is training available on-site, off-site or online? 9. What types of transition incentives will you offer the city? 10. What are the hours for live support during and after the transition? Q. Payment for Services, Bank Compensation The City currently compensates for bank services through an earnings allowance based upon compensating balances. All ZBA accounts and other accounts are linked to the main operating account and fees are consolidated under the operating account. The City requires a monthly account analysis report with a summary page for all accounts. 1. Does the bank accept compensation in fees, balances, or a combination of the two? Is the price schedule the same either way? 2. The City will consider the methodology to be used for paying for services (fees or compensating balances) as part of the analysis of the proposals. If one methodology is selected, can it be changed during the term of the agreement and, if so, how much lead time is required? If direct payment is selected, how is the account analysis provided for review in advance of payment? 3. List the bank s Earning Credit Rate (ECR) and how it is calculated and applied. Is it based on ledger balances or funds available? In calculating compensating balances, does the bank have a reserve requirement? If so, is it willing to waive that requirement for the City? What accounts are taken into consideration? 4. List the bank s ECR for the past 24 months. 5. What ECR is the bank willing to offer the City for the life of the contract? Please be specific about any rate floor, guarantee, and/or basis point differential about the bank s base rate that you are offering to the City. 6. Can excess earnings credit be carried over to a subsequent billing period? If so, how many periods? 7. Please explain in detail how and when any deposit insurance fees are computed and charged? 8. What procedure is used to make any adjustments to Account Analysis Statements and how long does it take for adjustments to take effect? 9. Please state the negative collected balance charge that the City will pay and, in detail, explain how that charge is computed. Is the rate quoted in this proposal good for the term of the contract? Please provide escalation clauses, and list your actual negative collected funds rate for each of the last 12 months. 10. Please provide a sample Account Analysis statement. -17-

20 C. SPECIAL TERMS AND CONDITIONS 11. Are Treasury Management Association (TMA) codes included in the Account Analysis Statement? 12. How is the statement delivered and how quickly can we expect delivery? Is the Account Analysis Statement available online? 13. Does the bank have any special charges not specified in the pricing schedule that relate to operations of the bank account? 14. Will your bank guarantee the prices in this proposal for the contract period? If not, how will future price increases be calculated? R. Armored Car Services The City currently contracts for armored car services separately from banking services. If you provide armored car services as part of your banking agreement, please provide a description of fees and services. Does your bank have any requirements relating to delivery of deposits by armored vehicle? S. Service Enhancements Based on the information provided in the RFP and your bank s knowledge of the public sector, please describe any services or technological enhancements not previously mentioned, that may be considered for further improving the effectiveness of the City s treasury management operations. T. Supplementary Information 1. Insurance Certificate. Each proposal must include a certificate of insurance showing: a. The insurance carrier and its A.M. Best rating. b. Scope of coverage and limits. c. Deductibles and self-insured retention. 2. Banking services bid form Please complete the form, Appendix A. 3. Please include copies or samples of all agreements, contracts and all other relevant documents that will need to be signed to begin a banking relationship with your institution. 4. Standard Fee Schedule for Government/Corporate Clients 5. Bank credit and CRA ratings 6. Most current Annual Report 7. Statement of Auditing Standards (SAS) 70 Covering Operating Controls 8. Sample Account Analysis Statement and User s Guide 9. Sample Account Reconcilement Reports, Account Statements, and any Positive Pay Reports -18-

21 C. SPECIAL TERMS AND CONDITIONS 10. Documentation of PCI compliance Proposal Evaluation and Selection. Proposals will be evaluated by a review committee based on the following criteria: Understanding of the needs and operation requirements of the City The experience, resources, and qualifications of the financial institution and individuals assigned to this account Relevant experience managing similar account relationships with public institutions and similar clients Bank and branch locations Availability schedule Scope of services offered including degree of automation Financial strength and capitalization Adequacy of financial controls and protection against loss Quality and scope of conversion plan The value of any new product or service suggestions or other new ideas and enhancements Compliance with the requirements of this RFP and quality of proposals Proposed fees and compensation As reflected above, contract award will not be based solely on price, but on a combination of factors as determined to be in the best interest of the City. After evaluating the proposals and discussing them further with the finalists or the tentatively selected Consultant, the City reserves the right to further negotiate the proposed work and/or method and amount of compensation. 1. Proposal Review and Award Schedule. The following is an outline of the anticipated schedule for proposal review and contract award: a. Issue RFP 11/24/14 b. Deadline to receive questions 12/19/2014 c. Receive proposals 1/06/15 d. Schedule/conduct vendor finalist interviews 1/12-1/23/15 e. Finalize staff recommendation selected bank notified 1/30/15 f. Presentation to City Council, contract award 2/17/15 g. Execute contract and start work 3/01/15 h. Conversion completed 5/01/15 2. Ownership of Materials. All original drawings, plan documents and other materials prepared by or in possession of the Consultant as part of the work or services under these specifications shall become the permanent property of the City, and shall be delivered to the City upon request. 3. Release of Reports and Information. Any reports, information, data, or other material given to, prepared by or assembled by the Consultant as part of the work or services under these specifications shall be the property of City and shall not be made available to any individual or organization by the Consultant without the prior written approval of the City. -19-