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20 Fiscal PolicyCITY COUNCIL AGENDA ITEM BRIEFING SHEET Submitzal Date: Originating Department- Presented By: Agenda Item No.: 1-14-2009 Council Date: Finance Gene Anderson 20, 1-26-2009 RECOMMENDED MOTION: Move to approve a resolution authorizing a depository agreement with Liberty National Bank and authorizing the City Manager to negotiate and execute all necessary documents. PoLicY IssuE(s): Fiscal Policy The current City depository agreement expires February 28, 2009. The City published two bid notices in the Paris News requesting bids from interested banking institutians. In addition, the bid form was mailed to local banks that have expressed interest in bidding in the past. The City received two bids. When contacted after the bid closing, the non-bidding banks indicated either they were not soliciting government funds at this time or that the spreads on governmental deposits were too thin for them to bid. The other issue encountered was that one of the bids received was hand delivered 25 minutes after the deadline far bid submission. I confirmed with the City Attorney that the late bid could not be considered by the City. Therefore, it is recommended that the remaining bid from Liberty National Bank be accepted. The bid is a strong bid offering CD rates that significantly exceed our current rates. BOARD/COMMISSION RECOMMENDATION: NONE E XHIBITS: Liberty bid document and spreadsheet comparing current agreement to the recommended agreement. ACI'ION: BUDGET INFO: ❑ Financial Report ❑ Minute Order Expense $NA ❑ Departrnent Report ~ Resolution Budgeted Amt $NA ❑ Presentation ❑ Ordinance y'tD Actual $NA P bli i ❑ u c Hear ng ❑ Other Acct Name NA Acct Number NA FISCAL NOTES: None REVIEWED AND APPROVED BY: Z Administration [D City Clerk ❑ Community Development ❑ EMS/IT E Finance ❑ Fire ❑ Municipal Court Z Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities City of Paris Revised 2/04/08 O DRAFT attorney\Reswork\current\City Depository Res 2009 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, AWARDING THE BID FOR CITY DEPOSITORY FOR THE PERIOD BEGINNING MARCH 1, 2009 AND ENDING FEBRUARY 28, 2011; AUTHORIZING THE EXECUTION OF A COIVTRACT UPON THE TERMS A1VD CONDITIONS SET OUT IN THE INSTITUTION'S BID; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING A1V EFFECTIVE DATE. WHEREAS, the City of Paris, Texas, did heretofore advertise for bids in accordance with the laws of the State of Texas and the Charter of the City of Paris for a City Depository for the period beginning March 1, 2009, and ending February 28, 2011, which bids were received unti13:00 o'clock P.M., Monday, January 12, 2009; and, WHEREAS, the best bid for City Depository was made by Liberty National Bank in Paris, and it should be awarded the contract for such depository; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That the bid of the Liberty National Bank in Paris to act as City Depository for the period beginning March 1, 2009, and ending February 28, 2011, be, and the same is hereby, accepted. Section 3. That the Mayor be, and he is hereby, authorized and directed to execute, on behalf of the City of Paris, the contract with Liberty National Bank in Paris to act as City Depository for the City of Paris upon the terms and conditions set out in that institution's bid, attached hereto as Exhibit A. Section 4. That this resolution shall be effective from and after its date of passage. PASSED AND APPROVED this 26th day of January, 2009. Jesse James Freelen, Mayor ATTEST: Janice Ellis, City Clerk go ( "I ( ) I )1a~~1, APPROVED AS TO FORM: W. Kent McIlyar, City Attorney O O ( I I' ~ ~'i 4 NOTICE TO BANKING INSTITUTIUNS WITHIN THE CITY OF PARIS Notice is hereby given that Governing Body of the City of Paris, subject to the provision of Chapters 105 and 131 of the Texas Local Government Code, will receive bids and applications from all interested banking institutions within the Ciry of Paris to serve as prime depository of the City of Paris and maintain custody of the funds of the City for a period of two years from March 1, 2009 through February 28, 2011. Any such application shall be delivered to the office of the City Manager located in Ciry Hall prior to 3:00 P. M., Mondaj+ January 12, 2009. It is required that each bank bid by filling in al) blanks and agreeing to the following specifications: Bank will pay to City interest on time deposits in accordance with the following schedule: CERTIFICATES OF DEPOSIT UNDER $100,000 MATURITY RATE 7-13 days T-bill plus oaMb= 20 basis points 14-29 days T-bill plus orlffivW 30 basis points 30-59 days T-bill plus oOAMM 40 basis points 60-89 days 90-179 days T-bill plus or'MORW 70 basis points T-bill plus od0M=-T211_ basis points 180-365 days T-bill plus offla= 200 basis points CERTIFICATES OF DEPOSIT OVER $100,000 7-13 days T-bill plus or aMb= 30 basis points 14-29 days T-bill plus or AMM 40 basis points 30-59 days T-bill plus or ARW 50 basis points 60-89 days T-bill plus or dMM 80 basis points 90-179 days T-bill plus or aM= 130 basis points 180-365 days ' T-bill plus or 1 111"11 210 basis points All investment services offered ta other bank customers will be available to the City. Thc City will acccpt bids only on thc busis Iicrcin :►ftcr dcscribecl. Each day, the Wall Street Journal publishes the 26 week treasury-bill yield based on the results of the most recent treasury-bilt auclion. Rates for certificates oFdeposit undcr this contract must be tied to this 26 week treasury-bill yield. The rates should be quoted either plus or minus a given number of basis points from this 26 week treasury-bill yield. Using the Wall Street Journal dated the same day as the certificate of deposit is purchased, the certificate of deposit rate will be the 26 week T-bill rate published that day in the Wall Street Journal plus or minus the basis points listed above. E?CNEBIT.L . UO0(r8() CHARGES List below any service charges that will be levied against the City: NONE In addition to the normal services and supplies furnished by the depository bank, the following services are standard and common to most depository contracts. They are to be fumished to the City at no charge: deposit slips one large safe deposit box coin wrappers night depository service including bags and keys traveler=s and cashier=s checks daily balance on each account money orders stop payment orders wire services checking and savings accounts all bank accounts will be interest bearing accounts on line banking checking and savings accounts overdraft protection U(1U(.)~ i Bidders are requested to submit a list of any further concessions or services in the space provided below which they may want to offer to the City of Paris and make any comment as further consideration in selecting the City's depository. If needed, please add additional pages. Bank will pay interest on City's Consolidated Cash Account at a rate equivalent to the auction rate for 26-week Treasury bills plus 68 basis points. The rate will be changed each calendar quarter and calculated using the most recent Treasury bill auction. Using the Treasury bill auction of January 5, 2009 a rate of 1.0Z would result. IIpon notification to Bank, city would have the option to bring other City transaction accounts under a rate plan paying the auction rate for 26-week Treasury bills plus 18 basis points. Using the Treasury bill auction of January 5, 2009 a rate of .50Z would result. Bank will originate City's ACH payments, both debits and credits without charge. Bank will furnish to City without charge at the end of each year CD's containing a summary of each transaction account activity. All monies which are deposited into the depository under the provisions of this proposal shall be continuously secured, in accordance with the laws of the State of Texas applicable thereto, by a valid pledge of par, exclusive of accrued interest, at all times at least equal to 102% of the amount of money on deposit in said several funds on deposit in the depository. All time deposits or certificates of deposits which have not elapsed on the termination date of the finally approved depository contract, shall remain on deposit with the same depository under the same terms and conditions in effect during said contract until the date such time deposits have elapsed. Funds from Bond sales may be deposited in the City depository or placed in outside investments. The City of Paris reserves the right to accept or reject any or all bids, to waive formalities, and to accept the bid the City considers the most advantageous. The City also reserves the right to place or invest part or all of its surplus or excess funds outside the designated depository, in any manner permitted by law, from time to time throughout the term of the contract. The undersigned bank official represents that he is authorized by the Bank's Board of Directors to sign this document and legally obligate iiie Bar~k ta tl,e tenr~s stated in this agreement. NAME OF BA,~NK The Liberty National Bank in Paris ~ BY: ip R. Cec 1 431 TITLE: Chairman of the Board DATE: 01-09-2009 ■ 1'8 ~1) Depository Agreement Comparison Certificates of Deposit Under $100,000. Maturitv Rate Current Proposed T-bill plus basis points 7-13 days 10 20 14-29 days 30 30 30-59 days 40 40 60-89 days 45 70 90-179 days 50 120 180-365 days 55 200 Certificates of Deposit Over $100,000. 7-13 days 10 30 14-29 days 30 40 30-59 days 40 50 60-89 days 45 80 90-179 days 50 130 180-365 days 55 210 Service Charges none none Interest rate on Consolidated Cash Account 12 68 w (A)MM Bank Depository Bid List Michael Rhodes Lamar National Bank 200 S. Collegiate Drive Paris, Texas 75460 Rhodes@lamarnational.com Phillip Cecil Liberty National Bank 305 Lamar Avenue Paris, Texas 75460 pcecil@Inbparis.com Richard Amis First Federal Community Bank 630 Clarksville Street Paris, Texas 75460 damis@1st-Fed.com Terry Christian People's National Bank 35 S. Plaza Paris, Texas 75460 tchristian@pbparis.com Ken Dority Guaranty Bond Bank 3250 Lamar Avenue Paris, Texas 75460 kdority@gnty.com . (lf!C'9(9 Depository Agreement Comparison Certificates of Deqosit Under $100,000. Maturi Rate Current Proposed T-bill plus basis points 7-13 days 10 20 14-29 days 30 30 30-59 days 40 40 60-89 days 45 70 90-179 days 50 120 180-365 days 55 200 Certificates of Deposit Over $100,000. 7-13 days 10 30 14-29 days 30 40 30-59 days 40 50 60-89 days 45 80 90-179 days 50 130 180-365 days 55 210 Service Charges none none Interest rate on Consolidated Cash Account 12 68 Q ~