HomeMy WebLinkAbout1996 09-19 FCA•
AGENDA
BROOKLYN CENTER FINANCIAL COMMISSION
September 19, 1996
City Hall
Conference Room B
1. Call to Order: 7:00 P.M.
2. Roll call.
3. Approval of Minutes: August 13, 1996
4. Request for Proposals for Banking and Financial Services.
5. Review of Capital Improvements Fund Expenditure Policy.
6. Discussion of the Status of the Financial Commission.
0 7. Set Date of Next Meeting.
8. Adjournment: 9:00 P.M.
0
MINUTES OF THE PROCEEDINGS OF THE FINANCIAL COMMISSION
• OF THE CITY OF BROOKLYN CENTER
AUGUST 13, 1996
CITY HALL, CONFERENCE ROOM B
CALL, TO ORDER
Chair Donn Escher called the meeting to order at 7:00 P.M. in the Conference Room B.
ROLL CALL
Present at roll call were Chair Donn Escher, Commissioners: Ned Storla, Jay Hruska, and Larry
Peterson. Also present were Council Member Kathleen Carmody, City Manager Michael
McCauley, and Finance Director Charlie Hansen. Commissioner Lee Anderson was excused.
Commissioners Ron Christensen and Phillip Roche were unexcused.
Aj2proval of Minutes
A motion was made by Commissioner Ned Storla to approve the minutes of the May 15, 1996
meeting. Commissioner Jay Hruska seconded the motion and all members voted in its favor.
Mavor and Council Member Total Comnensation
Mike McCauley reported that an ordinance was adopted on August 12th which sets the Mayor's
salary at $8,000 and Council Members salary at $6,000 for 1997. For 1998 these amounts will
be increased by 2.75 % to $8,220 for the Mayor and $6,165 for the Council Members.
• Request for Pronosals for Banking and FinanciaLServices
Charlie Hansen explained that this RFP was being done a year earlier than called for in the policy
for Financial Profession Services due to a change in the way our current bank is handling our
account. The draft RFP was discussed and several changes proposed including space for the
banks to select to have their terms effective for a third year. A motion was made by
Commissioner Larry Peterson to recommend the draft RFP to the City Council as amended.
Commissioner Jay Hruska seconded the motion and all members voted in its favor.
Comnrehensive Annual Financial Report for 1995
The report had been distributed with the agenda packets. Extensive discussion followed on the
topics of: delinquent taxes receivable, accrued vacation and sick leave liability, post retirement
health insurance liability, the operating losses at the Earle Brown Heritage Center, and
engineering fees reimbursed to the General Fund by the capital projects funds.
Capital and Infrastructure Needs
Mike McCauley reported on the City's capital and infrastructure needs and raised the possibility
of changing the Capital Improvements Fund Expenditure Policy to meet the needs. Ned Storla
suggested a review of the policy at the next meeting and a tour of some of the facilities.
Next Meeting
The next meeting will be Thursday, September 12, 1996 at 7:00 P.M.
ADJOURNMENT
A motion was made by Commissioner Jay Hruska to adjourn the meeting at 8:40 P.M.
Commissioner Ned Storla seconded the motion and all members voted in its favor.
0
MEMORANDUM
0
TO: Michael J. McCauley, City Manager
FROM: Charlie Hansen, Finance Director
DATE: September 16, 1996
SUBJECT: Report on Fund Balances
Attached is a spreadsheet which extracts fund balance information from the Combined
Balance Sheet in the 1995 Comprehensive Annual Financial Report. Due to the wide
divergence of funds involved, I will discuss each fund type separately.
GENERAL FUNDI
The General Fund had a balance of $5,834,792 as of December 31, 1996. The bulk of this
was reserved in several ways. Advances to other funds in the amount of $105,074 is
reserved to offset the receivable from the Earle Brown TIF District. This originated as the
fees for building permits when the Earle Brown Heritage Center was constructed. Instead
of collecting cash for the fees, this non-interest bearing receivable was set up. Based upon
the recent Springsted study, this isn't likely to be paid in cash until after the year 2000.
Reserved for Working Capital is the amount determined by the Adequate General Fund
Balance Policy Formula. The main element of the formula is the 45 % of the next year's
budget which is set aside for cash flow needs until tax settlement and state aid payments
arrive in July. This reserve needs to increase a little each year to keep up with inflationary.
increases in the General Fund Budget.
Another reserve is set up for amounts of unexpended 1995 appropriations we are carrying
over to the 1996 budget. This is $109,750 this year, but fluctuates siginificantly.
Unreserved, undesignated of $343,211 is the amount determined by the Adequate General
Fund Balance Policy Formula to be in excess of the General Fund's current need. The
City's Financial Management Policies give the City Council the option of using up to 50%
of the excess in the next budget year.
40 General Fund operating surpluses were $803,684 in 1994 and $620,379 in 1995. By the
time we prepared the 1996 budget, I was aware of the 1994 results and began adjusting the
budget to reduce the surplus. I expect 1996 to again produce a surplus, but a smaller one
than in the last two years.
3
•
0
• City of Brooklyn Center
A-1
General Fund
COMPARATIVE BALANCE SHEET
December 31, 1995
1995
1994
ASSETS
Cash and cash equivalents
$615,176
$371,061
Investments
5,660,356
4,656,048
Accounts receivable
41,955
42,150
Delinquent taxes receivable
282,251
237,996
Due from other funds
862,831
1,044,340
Due from other governments
18,399
21,841
Advance to other funds
105,074
105,074
TOTAL_ ASSETS
$7,586,042
$6,478,510
LIABILITIES AND FUND BALANCE
•
Liabilities
Accounts payable
$245,582
$266,152
Due to other governments
17,785
44,132
Accrued salaries payable
134,652
109,902
Accrued vacation and sick pay
563,171
526,755
Deferred revenue
790,060
317,156
Total Liabilities
1,751,250
1,264,097
Fund Balance
Reserved for advances to other funds
105,074
105,074
Unreserved fund balance
Designated:
Working capital
5,276,757
5,052,687
Appropriated to next budget
109,750
56,652
Undesignated:
343,211
Total Fund Balance
5,834,792
5,214,413
•
TOTAL LIABILITIES AND FUND RA ANCE
$7,586,042
$6,478,510
4
CITY OF BROOKLYN CENTER
• ADEQUATE GENERAL FUND BALANCE POLICY FORMULA
AS ESTABLISHED BY THE CITY COUNCIL ON DECEMBER 22, 1980
(AS SET FORTH IN M&C NO. 80-31)
(AMENDED FEBRUARY 26, 1990 AND MAY 22.1995).
1. Latest Audited Total Fund Balance
At December 31, 1995 $5,834,792
2. Less Items Not Readily Convertible to Cash:
a. Accounts Receivable 41,955
b. Advances to Other Funds 105,074
$147,029
3. Fund Balance Convertible to Cash $5,687,763
•
4. Less Amount Appropriated to the General Fund Current
Year Budget: 1996 $109,750
5. Amount Available Before Deduction for Working Capital $5,578,013
6. Less Amounts to be Reserved for Working Capital:
(40% of Total General Fund Current Year Budget)
40% of. $11,632,894 = $4,653,158
7. Amount Available After Deduction for Working Capital
8. Less Amounts to be Reserved for Other Purposes:
a. Reserve for Overestimation of Revenues:
(5% of General Fund Revenues in Current Year Budget)
5% of: $11,632,894
•
9. Amount Available per Formula for Other Use
ADQFDBAL.XLS
1995
$924,855
581,645
$343,211
7/11/96
S
3. On all projects, at least 50% of the principal shall be retired within ten years.
• 4. The City will attempt to keep the average maturity of General Obligation Bonds at
or below 20 years.
5. Total debt service for General Obligation debt will not exceed five percent of total
annual locally generated operating revenue in the general, special revenue, and
proprietary funds.
6. Total General Obligation debt will not exceed two percent of the market valuation
of taxable property.
7. Where possible, the City will use special assessment, revenue or other self-supporting
bonds instead of General Obligation Bonds.
8. The City will not incur debt to support current operations.
9. The City will maintain good communications with bond rating agencies regarding its
financial condition. The City will follow a policy of full disclosure in every financial
report and bond prospectus.
10. Direct net-debt (gross debt less debt fully supported by revenues) per capita shall
not exceed $600 per capita.
. 11. The City will require Minimum Assessment (Taxable Valuation) Agreements on all
projects in which the City is providing development assistance through tax increment
financing or committing its bonding authority. This will ensure minimal cash flow
(increment) to repay obligations, provide another level of review before commitment
(by the City Assessor), and to the minimal value agreed upon, eliminate tax appeals
during the agreement period.
1. The City will maintain an undesignated and unreserved General Fund balance in an
amount determined by applying the Adequate General Fund Balance Policy Formula
as established by the City Council. The formula shall be reviewed annually by the
City Council. The formula shall be designed to establish a fund balance at a level
which is sufficient to avoid issuing debt to meet current operating needs.
2. If the City Council deems it appropriate to reduce fund balances for the portion
above the formula amount, such reductions shall not exceed 50% of the excess for
one year.
•
June 8, 1992
A- 6
SPECIAL REVENUE FUNDS:
Earle Brown Tax Increment Financing District:
The fund has a negative fund balance of $1,807,020. I expect this to decline to a negative
$811,278 in 1996 on the strength of the collection of delinquent property taxes from the
Earle Brown Commons. In future years, I expect continued annual surpluses at a rate of
about $150,000. This is a slightly more optimistic projection than Springsted made in their
study. At this rate the negative fund balance won't be corrected until sometime after the
year 2000. There will be no funds available for other purposes until then.
DISEASED TREE REMOVAL:.
This fund was created in the 1970s in response to the Dutch Elm Disease problem and the
need to account for state grant money. We seldom do removals from private property
anymore and I recommend we close this fund into the Special Assessment Construction
Fund at the end of 1996. The 1995 fund balance was $54,973 and I anticipate that
approximately that amount will be transferred to the Special Assessment Construction fund
when this fund is closed.
COMMUNITY DEVELOPMENT UQCK GRANT F JND:
• This fund exists to account for federal grant money and never has a fund balance.
•
7
00f Brooklyn Center
Special Revenue Funds
COMBINING BALANCE SHEET
December 31, 1995
Earle Brown
Tax Incr. Diseased Community
Financing Tree Development
District Removal Block Grant
ASSETS
Cash and cash equivalents
Investments
Accounts receivable
Deferred special assessments
Delinquent special assessments
Due from other governments
TOTAL ASSETS
LIABILITIES AND FUbjp BALANCES (DEFICITS)
44 LiabilALQa
Accounts payable
Due to other governments
Due to other funds
Advances from other funds
Deferred revenue
Total Liabilities
Fund Balances (Deficits)
Unreserved
Total Fund Balances (Deficits)
TOTAL LIABILITIES AND
FUND BALANCES (DEFICITS)
$463
$463
$1,109,340
698,143
1,807,483
(1,807,020)
(1,807,020)
$463
$5,411
50,571
364
12,691
654
$69,691
$235,643
$235,643
$1,373
$235,643
13,345
14,718 235,643
54,973
54,973
$69,691
0
0
$235,643
Totals
1995
1994
$5,411
$3,844
50,571
49,345
364
280,572
12,691
21,010
654
1,145
236,106
65,816
$305,797 $421,732
$1,373
1,344,983
698,143
13,345
2,057,844
(1,752,047)
(1,752,047)
$305,797
$19,414
97,973
1,690,160
698,143
22,155
2,527,845
(2,106,113)
(2,106,113)
$421,732
DEBT SERVICE FUNDS.
All of our debt service funds except the state aid street bonds have principal and interest
payments due on February 1 and interest only due on August 1 of each year. The state aid
street bonds have principal and interest payments due on April 1 and interest only due on
October 1 of each year. The state aid street bonds debt service fund receives payments
from state in time to make the payments so there is no need for a fund balance.
The TIF bonds receive transfers from the TIF district special revenue funds. On
December 31 we transfer in enough cash to make the next year's principal and interest
payments. This is needed because the districts receive their revenue in July and
December, but the bulk of the debt service must be paid by February 1.
The street improvement bonds of 1994, 1995, & 1996 are supported by a combination of
property taxes and special assessments. A schedule of the required property tax levy is set
in the bond covenants and must be adhered to. The fund balances are largely the result of
the same timing issue described in the TIF bonds paragraph and the fact that we
experienced larger than expected special assessment prepayments. The 1995 and 1996
issues were reduced for prepayments to avoid selling more bonds than we really need.
The refunding bonds of 1987 refunded special assessment bonds originally sold in 1982.
• These have no property tax revenue unlike our more recent improvement bonds. The last
principal and interest payment will be made on February 1, 1997. A surplus balance will
be available from this fund due to interest earned on prepayments, the gain from the
refunding in 1987, and that in the mid 1980s, delinquent special assessments from other
closed debt service funds were dumped in here and then gradually collected. I estimate
that $250,000 could be transferred from this fund in 1996 and a few tens of thousands
more when the fund is closed.
•
9
•
6SSETS
Cash and cash equivalents
Investments
Delinquent taxes Receivable
Special assessments receivable:
Deferred
Delinquent
Due from other funds
Restricted investments
TOTAL ASSETS
LIABILITIES AND FUND BALANCES.
O Liabilitieg
Deferred revenue
Total Liabilities
EWId Balances
Reserved for debt service
Total Fund Balances
TOTAL LIABILITIES AND
FUND BALANCES
Tax
Tax
Increment
Increment
Bonds
Bonds
of 1985
01 `1991
$55,335
$55,395
517,174
517,733
•
City of Brooklyn Center
Debt Service Funds
COMBINING BALANCE SHEET
December 31, 1995
Refunding
Tax Tax
Increment Increment
Bonds Bonds
of 1992 of 1995
$39,763
371,640
78,835 78,920
$4,180,920
$651,344 $652,048 $4,180,920
$651,344
$652,048
$4,180,920
651,344
652,048
4,180,920
$651,344
$652,048
$4,180,920
56,651
$468,054
$468,054
468,054
$468,054
Cl
Street
Street
Refunding
improvement
Improvement
Bonds
Bonds
Bonds
of 1987
of 1994
of 1995
$18,461
$220,692
$60,744
172,543
936
150,048
124,777
190,925
7,423
334
26,301
$374,776
$346,739
$251,669
Totals
1995
1994
$450,390
$194,684
1,579,090
1,051,402
936
465,750
445,415
7,757
7,922
240,707
259,299
4,180,920
4,182,719
$6,925,550
$6,141,441
$157,471
$126,047
$190,925
$474,443
$453,337
157,471
126,047
190,925
474,443
453,337
217,305
220,692
60,744
6,451,107
5,688,104
217,305
220,692
60,744
6,451,107
5,688,104
$374,776
$346,739
$251,669
$6,925,550
$6,141,441
City of Brooklyn Center
•
Debt Service Funds
G.O. IMPROVEM
ENT REFUNDING BONDS
, SERIES
1987A
1997 BUDGET
1994 1995
1996
1996
1997
ACTUAL ACTUAL
BUDGET
ESTIMATE
BUDGET
Revenues
Special assessments
$141,103 $177,860
$70,000
$160,000
$10,000
Investment earnings
i
83,964 5,074
$4,000
$10,000
$1;000
Total Revenues
225,067 182,934
74,000
170,000
11,000
Expenditures
Principal
$100,000 85,000
50,000
50,000
40,000
Interest
11,913 7,131
3,550
3,550
1,100
Fiscal agent fees
400
400
400
Total Expenditures
111,913 92,131
53,950
53,950
41,500
Excess or Deficie_ ncv W of Revenues_
penditures
113,154 90,803
20,050
116,050
(30,500)
• Other Financing Sources or Uses U
Transfer to Central Gara
e Fund
450
000
g
,
Total Other FinanciDa Sources or Uses f-1
450,000 0
0
0
0
urolus or DP ci
($336,846) $90,803
$20,050
$116,050
($30,500)
Fund Balances January 1
463,348 126,502
217,305
217,305
333,355
Fund Balances December 31
$126,502 $217,305
$237,355
$333,355
$302,855
is
f.\finance\citybdgt\nextbdgt\bonds BONDS87A.XLS 8/27/96
11
CAPITA PROTECTS FUNDS:
0 HOUSING & REDEVELOPMENT ATTMORITY FUND:
The HRA collects a property tax equal to .0144% of the City's estimated market value.
This revenue is transferred in its entirety to the EDA which has greater latitude to
undertake a variety of projects. The HRA has no fund balance at year end.
ECONOMIC DEVELOPMENT AUTHOUTY:
The EDA collects a property tax equal to .01813 % of the City's estimated market value.
It also receives transfers from the HRA and the Community Development Block Grant
Fund. The, EDA's fund balance had three components. First is the $3,477,619 remaining
balance of the proceeds of the TIF bonds of 1995. Second is $1,000,000 that was
transferred in several years ago from debt service fund surpluses and dedicated by the City
Council to be an endowment to produce investment earnings and only the earnings used
on housing programs. Third is the unreserved fund balance of $1,488,802. Some of this
(probably $250,000) is needed as operating capital until tax settlements are received in
July and to cover the delay in getting CDBG reimbursements.
CAPITAL IMPROVEMENTS FUG
•
Revenues of this fund have consisted primarily of investment income. In earlier years
there was a wider variety of revenue sources. The smaller part of its fund balance is a
reserve for advances to other funds of $1,297,672. This is an offset for loans to the
Course loan of $1,161,500 and the Liquor Stores of $136,172 Collection of the Golf
Course loan of is questionable. The Liquor Stores are current with payments on their loan,
but the remaining payments are scheduled to continue through the year 2000.
The larger part of the fund balance is unreserved in the amount of $4,721,775. This is
however, governed by the Capital Improvements Fund Expenditure Policy adopted by the
City Council. This policy sets several guidelines for the use of the fund. The most
significant are that a minimum balance of $3,000,000 (as of 1/1/93) increasing at the rate
of inflation be maintained (about $3,278,000 as of 12/31/95) and that expenditures be used
for the acquisition of land and facilities.
0
tl
•
0
MUNICIPAL STATE AID FOR CONSTIRUCTION FUND:
• Advances to other funds in the amount of $593,069 is reserved to offset the receivable
from the Earle Brown TIF District. This originated as a repayment of MSA money spent
on street improvements within the district. It is a non-interest bearing loan and I anticipate
the TIF District may have the resources to repay it in the 1998-2001 time period. The
larger part of fund balance is unreserved in the amount of $2,890,359. This was built up
as a result of double dipping on MSA projects and the interest on the resulting cash
balances. As a matter of practice, we have limited the spending of this resource to local
matches on state aid streets.
About $900,000 per year is allocated to the city from the State gas tax revenue for the
support of local streets designated by the city as Municipal State Aid (MSA) streets.
About $300,000 per year of the allocation is dedicated to the repayment of bonds sold in
1991 to pay for the construction of 69th Avenue from Shingle Creek Parkway to Brooklyn
Boulevard. Moneys remain on deposit with the State until we undertake an approved
project. The December 1995 balance on account was $1,465,341. This account is shown
as a receivable in the asset section of the balance sheet and offset by a deferred revenue
in the liabilities section, but not as a part of fund balance.
SPECIAL ASSESSMENT CONSTRITCTION FUNS
i
This fund shows a negative fund balance of $536,769. I feel this is misleading because
government accounting rules require us to offset special assessments receivable with a
deferred revenue in the liabilities section. If this weren't done, there would be a positive
fund balance of $426,847. Much of this is needed for operating capital due to the large
volume of projects run through here each year and the fact that many of the
reimbursements from other funds come at the end of the project. Unfortunately, we don't
have a formula like the General Fund for setting an amount of adequate fund balance.
This is the fund that I recommend you tap into for the needed funding of the Xerxes &
53rd Avenue project that we weren't able to bond for. Doing that will eat up about
$160,000 to replace the property tax and those special assessments which aren't prepaid.
This fund would also be the recipient of about $50,000 from the closing of the Diseased
Tree Removal Fund.
•
13
City of Brooklyn Center
. Capital Projects Funds
COMBINING BALANCE SHEET
December 31, 1995
D-1
Municipal
Economic
State Aid
Special
Development
Capital
for
Assessment
Totals
Authority
Improvements
Construction
Construction
Fund
Fund
Fund
Fund
1995
1994
ASSETS
Cash and cash equivalents
$392,649
$408,948
$261,321
$53,106
$1,116,024
$580,181
Investments
3,669,811
3,822,152
2,442,382
496,341
10,430,686
7,448,015
Accounts receivable
300
30,684
30,984
69,192
Delinquent taxes receivable
12,158
12,158
9,648
Special assessments:
Deferred
905,638
905,638
1,018,095
Delinquent
57,978
57,978
46,181
Due from other funds
932,748
582,626
372,303
1,887,677
1,920,517
Due from other governments
1,465,341
1,465,341
1,968,764
Advance to other funds
1,297,672
593,069
1,890,741
1,902,053
Restricted investments
1,000,000
1,000,000
1,000,000
TOTALASSETS
$6,007,666
$6,142,082
$5,134,416
$1,513,063
$18,797,227
$15,962,646
LIABILITIES AND FUND BALANCES
(DEFICITS)
Liabilities
Accounts payable
$4,350
$2,212
$2,304
$8,866
$72.,258
Contracts payable
120,258
$194,475
32,399
347,132
127,485
Due to other funds
1,050,477
1,050,477
1,144,791
Accrued salaries and wages
2,767
165
172
1036
4,140
4,585
Accrued vacation and sick pay
21,970
21,970
18,640
Deferred revenue
12,158
1,456,341
963,616
2,432,115
3,042,688
Total Liabilities
41,245
122,635
1,650,988
2,049,832
3,864,700
4,410,447
Fund Balances (Deficits)
Reserved:
Bond proceeds
3,477,619
3,477,619
Dedicated housing account
1,000,000
1,000,000
1,000,000
Advances to other funds
1,297,672
593,069
1,890,741
1,902,053
Unexpended appropriations
223,951
Unreserved
1,488,802
4,721,775
2,890,359
(536,769)
8,564,167
8,426,195
Total Fund Balances (Deficits)
5,966,421
6,019,447
3,483,428
(536,769)
14,932,527
11,552,199
TOTAL LIABILITIES AND
FUND BALANCES (DEFICITS)
$6,007,666
$6,142,082
$5,134,416
$1,513,063
$18,797,227
$15,962,646
is
•
0
• fincomm\cappolcy City Council approved by
motion on 1-10-94
CITY OF BROOKLYN CENTER
CAPITAL IMPROVEMENTS FUND EXPENDITURE POLICY
POLICY OB TECTIVE:
The City of Brooklyn Center makes unrestricted capital expenditures through one of two funds.
Generally, small capital expenditures are funded through the general fund and planned for as part
of the annual budgeted process for the general fund. Large unrestricted capital expenditures are
funded through the capital improvements fund based on resolution 68-246, which was approved
in 1968. Capital expenditures are also made through other funds such as the M.S.A. construction
fund, the special assessment construction fund, the water fund, the sanitary sewer fund, and the
storm drainage fund. These funds each have restrictions in place to guide their expenditures.
The objective of this policy is to clarify funding for all unrestricted capital expenditures by
specifically defining which capital expenditures are eligible for funding through the capital
improvements fund. Unrestricted capital expenditures not meeting the criteria for the capital
improvements fund must be made from the general fund operating budget.
• Specifically excluded from this policy are capital expenditures that are to be reimbursed by
insurance proceeds. These may be accounted for through the capital improvements fund at the
discretion of the Director of Finance.
SOURCE OF FUNDS:
The sources are ad-valorem taxes, issuance of bonds, state and federal grants, transfers of
unrestricted balances from other funds and investment earnings.
USE OF FUNDS:
The following defines general expenditure criteria for the utilization of the capital improvements
fund balance.
A.) Major: Any capital expenditure that exceeds $25,000. Capital expenditures of less than
$25,000 are to be made through the general fund operating budget.
B.) Permanent: Any capital expenditure that has an estimated useful life of 10 years or
longer.
C.) Facility: Buildings, improvements to real estate, the acquisition of land for city purposes.
. This definition excludes the acquisition of land for development or resale and excludes
vehicles.
IS-
Additionally, the capital improvements fund may be used to provide loans to other funds
maintained by the City. However, loans from the capital improvement fund may only be made
to proprietary funds which have the ability to generate revenue and repay the loan within 10 years
at prevailing interest rates.
AUTHORITY TO SPEND:
Expenditures meeting the above criteria may be funded through the capital improvements fund
based on the following authority limits:
A.) Expenditures from $0 to $25,000: Not eligible for funding from the capital
improvements fund. Funding is required through the general fund operating
budget.
B.) Expenditures from $25,001 to $200,000: The City Council may, through simple
majority, approve these expenditures.
C.) Expenditures over $200,000: Following a public hearing, City Council may,
through a 4/5th's majority, approve expenditures in this category.
SPENDING LIMITATTON/FUND BAL&NCE REOUIREMENT:
The objective as described above and previously defined in Resolution 68-246 requires the capital
improvements fund to be a permanent source of funding for planned major expenditures. As such,
the following criteria is established to comply with that intent:
A.) Planned Expenditures: If the proposed capital expenditure is in excess of
$200,000 it must have been included in the five year capital improvements plan for
at least two years.
Additionally, the five year capital improvements plan must be approved by the City
Council at a public hearing on an annual basis.
B-) Fund Balance Requirements: A minimum fund balance shall be maintained with
a beginning balance of $3,000,000 as of January 1, 1993 and increased by the
Consumer Price Index each year thereafter.
POLICY AMENDMEn:
Amendments to this policy require a 4/5th's majority by City Council vote.
•
16
. ROLE QF THE FINANCE COMMISSION:
If a review of an expenditure is requested by the City Council from the Finance Commission, the
Finance Commission will respond on the basis of the following questions:
A) Does the expenditure comply with the Capital Improvements Fund Expenditure
Policy?
B.) Is the expenditure appropriate considering the financial condition of the City?
•
•
l-7
•
0
00
1996 Estimated Street I ovement Costs
i As Estimated/96
Note: All costs include 15% contingency (Orchard incl 10%)
Fund Orchard 69th 2 Logan, 57th Xerxes &
Source Lane E 1 James&Knox 53rd
Special Asmnt - Street
GO Bonds -
San Sewer Utility
Water Utlility
Strm Drain Utility
Special Asmnt-Storm D
Capital Improvement Fu
MSA bridge
MSA
MSA-Local
TOTAL
Bid date
Storm Drain SA
$673,830
491,150
415,605
385,707
705,567
$154,000
10,984
609,468
$214,600
373,606
309,204
224,207
239,623
221,870
88,100
107,300
30,000
167,986
1,123,964
373,537
410,273
(123,328)
$2,923,729
$2,564,775
$1,718,749
$625
$625
$625
TOTAL
$74,375
$55,360 $1,172,165
121,040 985,796
87,932
823,725
87,099
1,306,481
204,062
1,149, 252
26,610
443,880
420,375 1,917,876
14,935 301,880
$915,388 $176,400 $8,101,055
$625 $0
8/16/96
1996 Estimated Other Capital Improvement Costs
Note: All costs include 25% contingency
•
Fund Replace Relocate Playground Misc Park Assessmen Cahlander
Source Lift #1 Sewer Main Equipment Improvement Stabiliz. Landscape TOTAL
Capital Improvements $220,000 $75,000 $295,000
Water Utility 0
San Sewer Utility 1,100,000 75,000 75,000
Strm Drain Utility 100,000 100,000
MSA-Local 50,000 50,000
0
•
0
ENTERPRISE FUNDS;
LIOUOR FUND:
The liquor fund has a fund balance of $416,249 but a cash balance of only $1,945.
However, it typically has an operating profit of $120,000 to $150,000 and we have been
making an operating transfer to the General Fund of $100,000 each year. The remaining
profit has been used to build up the balance sheet and repay the loan to the Capital
Improvements Fund. Retaining some profit in the Liquor Fund will continue to be needed
if it is to give up the Brooklyn Boulevard building it has paid for and start over to buy
another building.
GOLF COURSE FLJN
The Golf Course has a negative fund balance of $99,209 which is the result of poor
operating results and some one time events in 1994 and 1995. Operations year to date in
1996 are more positive, but it is still questionable if they will be able to repay the
$1,161,500 loan and make capital outlays in the long run.
EARLE BROWN HERITAGE CENTERM,!~W,-
From the time the EBHC opened in 1990 through 1995, it had operating losses of
$1,464,313. Operating subsidies of $1,333,204 transferred in from the Earle Brown TIF
District covered the losses through 1994. The cash flow consequences of the 1993
D'Amico contract, the accounts receivable balances, the 1995 loss and capital outlays
beginning in 1993 result in an internal loan from the investment trust fund of $595,755.
Operations year to date in 1996 are more positive, but it is still questionable if they will
be able to make capital outlays in the long run. There is obviously no money available to
transfer out to meet other infrastructure needs in the city.
UTILITY FUNDS:
Unlike the funds listed up to this point, the utility funds tend to have large amounts of
land, buildings, mains and equipment. This results in large fund balances which are
almost totally unavailable to spend. The utility funds are further restricted by the City
Charter which specifically states that their revenues are not a general revenue of the City .
These funds all have large infrastructure needs of their own looming in the coming years.
•
11
•
•
•
•
City of Brooklyn Center
E-1
Enterprise Funds
(Continued next page)
COMBINING BALANCE SHEET
December 31, 1995
E. Brown
Municipal
Golf
Heritage
Recycling
Water
Sanitary
Storm
Liquor
Course
Center
& Refuse
Utility
Sewer
Drainage
Totals
ASSETS
Fund
Fund
Fund
Fund
Fund
Fund
Fund
1995
1994
Current Assets
Cash and cash equivalents
$1,945
$478
$143,522
$6,668
$478,047
$356,088
$50,825
$1,037,573
$909,604
Investments
62,324
4,467,974
3,328,099
475,023
8,333,420
8,012,733
Accounts receivable - net
8,693
315,029
11,269
66,630
144,536
41,901
588,058
435,406
Accrued revenue
28,545
131,912
298,823
118,796
578,076
535,332
Special assessments receivable:
Deferred
49,394
5,666
76,362
131,422
61,886
Delinquent
3,148
3,148
3,590
Due from other governments
149,789
461,805
611,594
940,091
Inventories
301,000
7,535
29,093
18,961
356,589
328,575
Prepaid expenses
6,468
17,438
119,305
143,211
143,157
Total Current Assets
318,106
8,013
505,082
108,806
5,216,066
4,402,306
1,224,712
11,783,091
11,370,374
Restricted Assets
Revenue bond construction account
N Due from other governments
473,344
C
Total Restricted Assets
473,344
Fixed Asset,
Mains and lines
8,715,706
7,244,920
2,495,297
18,455,923
15,971,551
Structures
327,595
301,875
9,555,862
4,439,590
1,895,669
16,520,591
16,119,716
Equipment
143,013
32,636
1,040,729
26,887
23,223
6,736
1,273,224
1,256,114
Land
107,405
1,391,711
925,000
23,938
3,388
287,158
2,738,600
2,738,600
Land improvements
12,904
77,450
2,600
92,954
84,981
590,917
1,803,672
11,521,591
13,208,721
9,167,200
2,789,191
39,081,292
36,170,962
Less: Allowance for depreciation
245,317
108,030
1,823,424
4,267,293
2,410,845
6,789
8,861,698
8,203,431
Total Net Fixed Assets
345,600
1,695,642
9,698,167
8,941,428
6,756,355
2,782,402
30,219,594
27,967,531
TOTALS
$663,706
$1,703,655
$10,203,249
$108,806 $14,157,494
$11,158,661
$4,007,114
$42,002,685
$39,811,249
0 0 0
E1
(Continued from
LIABILITIES AND FUND EQUITY
Current Liabilities
Accounts payable
Contracts payable
Accrued salaries payable
Accrued vacation and sick pay
Accrued interest payable
Due to other funds
Current portion of long-term debt
Total Current Liabilities
Current Liabilities gayable from
Resticted Assets
Accounts Payable
Lona-Term Liabilitieg
Bonds payable
Advances from other funds
Total Long-term Liabilities
Fund Ea ft
Contributions
Retained earnings (Deficits)
Reserved:
Debt Service
Special assessments
Unreserved
Total Retained Earnings (Deficits)
Total Fund Equity
TOTALS
E. Brown
prior page)
Municipal
Golf
Heritage
Recycling
Water
Sanitary
Storm
Liquor
Course
Center
& Refuse
Utility
Sewer
Drainage
Totals
Fund
Fund
Fund
Fund
Fund
Fund
Fund
1995
1994
$81,794
$2,308
$153,032
$500
$18,525
$19,435
$1,934
$277,528
$383,627
26,390
866,875
59,299
952,564
5,783
640
23,795
5,021
2,131
393
37,763
32,321
23,708
1,530
13,760
13,461
52,459
48,399
37,760
37,760
37,760
595,755
595,755
389,205
24,828
24,828
22,812
136,113
4,478
786,342
500
63,397
888,441
99,386
1,978,657
914,124
54,710
1,830,000
1,830,000
1,830,000
111,344
1,161,500
1,272,844
1,286,172
111,344
1,161,500
1,830,000
3,102,844
3,116,172
636,886
9,548,016
4,997,510
5,668,426
146,963
20,997,801
21,187,660
198,315
198,315
90,625
52,542
5,666
76,362
134,570
65,476
416,249
(99,209)
(131,109)
108,306
9,044,045
4,596,128
1,656,088
15,590,498
14,382,482
416,249
(99,209)
(131,109)
108,306
9,096,587
4,601,794
1,930,765
15,923,383
14,538,583
416,249
537,677
9,416,907
108,306
14,094,097
10,270,220
2,077,728
36,921,184
35,726,243
$663,706
$1,703,655
$10,203,249
$108,806
$14,157,494
$11,158,661
$4,007,114
$42,002,685
$39,811,249
•
•
INTERNAL SERVICE FUNDS;
PUBLIC EMPLOYEE RETIREMENT FUG
This fund was created back in the late 1970s when the local police relief association was
dissolved and the police enrolled in PERA. Little or no use of the fund was made until
1986 when a post retirement health insurance benefit was created. In about 1989, the City
Council passed a policy creating a set of benefits for laid off employees to be supported
by this fund. The fund has a fund balance of $91,578, assets of over a million dollars, and
a staff estimated liability for the health insurance benefits of $987,081.
CENTRAL GARACE FUND:
This is another fund with large assets in the form of both cash and equipment. The fund
equity is also large, although more of it is in contributions from other funds rather than
retained earnings. In spite of the large cash balance, the latest funding analysis shows that
we are still $426,751 short of our target replacement balance required to have cash on
hand for all vehicles as they come up for replacement. I believe that our new method of
determining the fixed cost charge element of the Central Garage fees will eliminate this
shortage in a few years.
0
0
1-1
City of Brooklyn Center
Internal Service Funds
• COMBINING BALANCE SHEET
December 31, 1995
Public
F_1
Employee
Central
Retirement
Garage
Totals
ASSETS
Fund
Fund
1995
1994
Current Assets
Cash and cash equivalents
$103,997
$329,821
$433,818
$277,545
Investments
971,983
3,082,605
4,054,588
3,562,956
Accounts receivable
2,679
10,890
13,569
3,027
Inventories
10,045
10,045
17,874
Total Current Assets
1,078,659
3,433,361
4,512,020
3,864,402
Fixed Assets
Equipment
4,190,101
4,190,101
3,936,720
Less: Allowance for depreciation
2,205,353
2,205,353
1,982,949
Total Net Fixed Assets
1,984,748
1,984,748
1,953,771
TOTAL ASSETS
$1,078,659
$5,418,109
$6,496,768
$5,815,173
LIABILITIES AND FUND EQUITY
Current Liabilities
Accounts payable
$103,362
$103,362
$15,751
Accrued salaries payable
3,837
3,837
3,565
Accrued vacation and sick pay
23,725
23,725
21,099
Accrued health insurance liability
$987,081
987,081
205,876
Total Current Liabilities
987,081
130,924
1,118,005
246,291
Ford Equy
Contributions:
-
Transfers from:
General Fund
950,000
950,000
950,000
Debt Service Funds
1,335,437
1,335,437
1,335,437
Capital Projects Funds
8,078
8,078
8,078
Enterprise Funds
588,304
588,304
588,304
General Fixed Asset Account Group
976,587
976,587
1,232,536
Total Contributions
3,858,406
3,858,406
4,114,355
Retained Earnings:
•
Unreserved
91,578
1,428,779
1,520,357
1,454,527
Total Fund Equity
91,578
5,287,185
5,378,763
5,568,882
TOTAL LIABILITIES AND FUND EQUITY
$1,078,659
$5,418,109
$6,496,768
$5,815,173
23
CONCLUSION:
The following funds have balances which can be considered to be surplus and could be
transferred or reprogrammed to other purposes:
General Fund: Surplus from the 1996 budget and further savings from the 1997
budget. Amount to be determined.
Diseased Tree: Close fund and transfer about $50,000 to the Special Assessment
Construction fund.
Debt Service: Close Refunding Bonds of 1987. $250,000 would be available
immediately and a little more in 1997.
E.D.A.: Bond proceeds of $3,477,619 and about $1,200,000 out of the
unreserved fund balance that is excess of operating capital needs.
Capital Improvements Fund:
About $1,400,000 would be available for land or buildings from the
unreserved fund balance under the current policy. Another
$3,278,000 is reserved by current policy but could be freed up by
amending the policy.
•
M.S.A. Construction:
About $2,800,000 is available in the unreserved fund balance. Past
practice has been to spend this only on transportation uses, primarily
M.S.A. designated streets.
Special Assessment Construction:
This fund has a real balance of about $425,000. I have recommended
tapping this source to pay for the estimated $121,040 cost of the 53rd
Avenue Project. The remainder is probably needed for operating
capital in the fund.
•
Iy
• To: Michael McCauley, City Manager
Charlie Hansen, Finance Director EMORAND~M
From: Tim Johnson, Asst. Finance Director
Subject: Banking Service Request for Proposal
Date: September 17, 1996
The City received three responses to our request for proposals concerning banking
services. The three responding banks included First Bank, Marquette Bank Brookdale
and Norwest. The City did not receive proposals from City-County Federal Credit
Union, Firstar Bank and TCF Bank. Because of the short time frame, I was unable to
contact the banks with questions. As a result, the information provided to you is
limited to the data provided in the proposals. It is my intention to clear up all
questions before the Financial Commission meeting Thursday night and provide you
with complete and accurate information.
In reviewing the proposals, I have excluded First Bank based on the assumption that
the branch location in Brooklyn Center is closing October 1, 1996. I have placed a call
to First Bank's representative to verify this assumption. Marquette Bank Brookdale has
proposed two alternatives. The first proposal is identical to the City's current banking
situation with Marquette. Marquette proposes a $250,000 compensating balance be
maintained to offset all fees charged against the account. No interest would be earned
on any of the funds and fees would be charged for periods where the balance in the
account falls below $250,000. This proposal appears reasonable and the $250,000
compensating balance is slightly lower than our historical average in all accounts at
Marquette. In my opinion, the alternate proposals offered by both Marquette and
Norwest are worth further analysis. Both proposals are checking accounts where
interest earnings offset bank fees. Each proposal sets a target balance needed to offset
all bank fees. In addition, each bank offers to sweep the account for any funds above
the established target balance and deposit the excess funds in an interest bearing
investment. Norwest has provided a complete list of all bank fees and has listed the
proposed target balance needed to offset the fees. In comparison, Marquette has
provided a generic list of bank fees. As a result, I have placed a call to Marquette's
representative to verify what bank fees are included and excluded when compared to
Norwest's proposal. Norwest also included the past interest rates on the invested funds
above the target balance, whereas Marquette did not.
Despite the missing information, Marquette appears to have the better proposal.
Norwest would require a compensating balance of $325,000. Marquette noted in the
executive summary that the required compensating balance may be as much as $50,000
lower than our current arrangement of $250,000. This review is subject to the
• verification of all assumptions, interest rates and bank fees.
-4S
0
•
•
•
•
BANKING SERVICES RFP SUMMARY
Service Description (Per Item & Account)
Account Maintenance
All Credit Items
Deposit Items (Credits)
Local
Transit
On-Us
Checks Written (Debits)
Incoming Wire Transfers
ACH Transactions
ACH Payroll Direct Deposit Items
Return Items
Stop Payments
Other Fees Listed by Banks:
Serialized Statement
Check Sequencing
Per Item
Wire Transfer Fee
ACH Base Fee
Transmission
Return Items Instructions
Collateral
Approximate Compensating Balance Required
Average Rate of Return - Last Six Months on
Compensating Balance
Interest Rate on Funds Above Compensating
Balance (July 1996)
Marquette
19.50
0.400
0.060
0.105
0.050
0.120
Prime + 2%
4,51%
Norwest
14.00
0.315
0.049
0.084
0.049
0.098
7.000
0.070
0.056
2.80
14.70
11.90
14.00
0.021
4.55
17.50
12.25
17.50
215.75
$ 325,000
5.01%
4.4%-4.5%
1`
First Bank
Civic Banking
Marquette Avenue Office
• 90 South Sixth Street
Minneapolis. MN 55402
September 4, 1996
Charles Hansen
Finance Director
City of Brooklyn Center
6301 Shingle Creek Parkway
Brooklyn Center, MN. 55430-2199
Dear Mr. Hansen:
We are pleased to enclose our Proposal for Banking Services for the City of Brooklyn
Center. We have chosen to bid on Part III of the Request for Proposal.
Thank you for the opportunity to submit a proposal to the City of Brooklyn Center.
If you have any questions or would like further information, please feel free to call
me at 973-8203.
•
Sincerely,
rl ~
Susan R. Moses /
Vice President
•
Memoer =!r6? BanK g,:s~em
27
•
0 Presented By: First Bank
September 1996
First Bank's Proposal to the
City of Brooklyn Park
For Banking Services
First Bank
Member First Bank System
if
TABLE OF CONTENTS
SECTION I
RFP i
SECTION II
Attachments A & B 4
•
0
41110
0
•
•
CHECKING ACCOUNT SERVICE - EARNINGS CREDIT APPLIED TO ALL FEES
A. As an alternative to the checking account services outlined in Part 1, it is hereby proposed
to provide a checking account and other services outlined in Exhibit B with fees and
charges offset by earnings credits, with the following exceptions:
None
B. Earnings credits will be based on a managed rate, the rate is adjusted monthly. The current
rate is 4.75%. The rate for the last six months has been:
4.7 4.6 4.6 4.6 4.8 4.9
C. Fees assessed to the account will be charged based on the attached schedule (Please attach
your bank's schedule). All fees and charges are to offset against earnings credit in Section
B above unless listed as exceptions in Section A above.
See Attachment "B"
•
D. These terms will be effective starting January 1, 1997 for a period of:
Check one: one year
two years
three years
Y either one, two, or three years
at the City's option
CHECKING ACCOUNT SERVICE - ALTERNATE PROPOSAL TO PARTS I - III.
A. As an alternative to the checking account services outlined in Parts I - III, it is hereby
proposed to provide a checking account and other services as outlined (attach additional
information as necessary):
X/A
B. These terms will be effective starting January 1, 1997 for a period of:
XIA
0
gAproposa1\shared\p038 Ldoc
1
41110
30
0
•
The terms are hereby agreed to by:
Date: C -
Signature: U
Title:
Financial Institution: v` j ► ~l `~1 /4
a•
10
a
THE CITY RESERVES THE RIGHT TO ACCEPT OR REJECT ANY AND ALL
PROPOSALS.
o:\proposai,shared\p038I -doc
z
31
41110
1 0
Exhibit B
City of Brooklyn Center, Minnesota
Proposed Terms for Financial Services Agreement
Earnings Credit Based Account
1. Checking account service shall be provided free of charge when the City maintains
a compensating balance in an amount necessary to offset the charges levied against
the account. Charges against the account shall be based on the schedule provided
by the financial institution. Earnings credits shall be based on the earnings rate
specified in the financial institution's proposal. An occasional overdraft balance
will be allowed.
2. The financial institution shall provide the following services:
a. A verbal, or other acceptable method, for the City to obtain a report of the
current balances in the checking accounts.
7•
First Bank offers Fastline free of charge to our civic banking customers.
Fastline allows you to transfer funds, create stop payments and obtain
balances 24 hours a day.
b. A monthly checking account statement based on the calendar month. A
summary statement of debits, credits, and the daily balance is required.
Additionally, a check reconciliation statement is to be provided that lists the
checks in check number order along with the date of the debit and amount. All
checks are to be returned sorted in numerical order. All records will be
furnished to the City within 7 calendar days following the end of the month.
First Bank will comply.
c. Verbal stop payment orders will be accepted from designated personnel.
First Bank offers this service via Fastline (see 2a above).
d. Uncollected or insufficient funds checks will be presented twice before being
charged against the City's account.
First Bank will comply.
i 0
eAproposai\shared\pM Ldoc
3
37,
3. The financial institution shall pledge collateral of a type required by State law.
Collateral shall have minimum market value of $1,500,000 and shall provide
quarterly reports of the securities pledged.
See attachment ",4
4. All service charges and fees shall be offset by earnings credits, unless specifically
spelled out in the financial institution's proposal.
First Bank will comply.
5. The financial institution shalt provide same-day credit for all deposits received prior
to 2:00 p.m. on weekdays (except holidays).
First Bank accepts deposits for same-day credit until 3: 00 p.m.
6. The City shall be permitted to wire transfer funds into and out of any of the
accounts either via personal contact, telephone instruction, or by facsimile. The
City will keep the bank informed in writing of the names of employees authorized
to wire transfer funds. The bank will compensate the City for any loss or cost
incurred as a result of wires not being completed on time.
First Bank accepts wire transfers via telephone, on-line via PC, or direct
transmission. Security PIN numbers will be issued for authorized
personnel. First Bank will absorb any costs incurred for a bank mistake.
g:\proposai\shared\p038 Ldoc
4
41110
33
r
j 0
City of Brooklyn Center, Minnesota
Background on the City of Brooklyn Center
The City of Brooklyn Center provides a full range of municipal services including public
safety (police and fire), streets, culture-recreation, public improvements, planning and
zoning, and administrative services. The City also operates three off-sale municipal
liquor stores, a public water and sewer utility, a golf course, and a convention center
known as the Earle Brown Heritage Center.
The resulting volume of banking services for an average year is shown in the following
table:
Service
General Account
Pavroll Account
F.D.A. Account
Deposits
2,175
30
500
Deposited Items
98,250
30
1,800
Checks Written
7,250
6,675
1,350
Outgoing Wire Transfers
Incoming Wire Transfers
50
ACH Transactions
985
55
550
DCH Transactions
Returned Items
235
10
Stop Payments
10
20
5
In addition, approximately 175 employees participate in a payroll direct deposit program.
Payroll is paid bi-weekly, so an average of 4,550 payroll direct deposit transactions occur
per year.
The City reserves the right to change the volume of transactions and type of services
provided based on future needs. The volume and type of transactions may also change in
response to the accepted proposal.
•
*Aproposa1\shared\p038 Ldoc
4111)
3K
Attachment A
First Bank will provide the City deposit protection fully adequate to meet its needs. First
Bank offers deposit protection in the form of a surety bond. The surety bond is provided
by Municipal Bond Investors Assurance Corporation ("MBIA"), which carries an AAA
rating from Standard and Poors. First Bank currently has a $95,000,000 unsecured bond
from MBIA. MBIA has stated in writing that it will increase the bond to a level in excess
of $175,000,000 at our request. First Bank is also in a position to offer collateral, in the
form of U.S. Treasury securities, for deposit protection.
Provided the City is willing to provide written evidence it will accept the surety bond,
pricing for deposit protection shall be the same whether the deposit protection be in the
form of surety bond or collateral. This pricing currently is .28% per annum times the
daily average of positive ledger balances, calculated monthly using the following
formula:
daily average of positive ledger balances x .023333%
Increases and decreases to the surety bond maximum coverage amount can be done on a
same-day basis with a fax request followed by a hard copy. First Bank Treasury will
send, by overnight mail, a new insurance certificate to the City showing the new level of
maximum coverage available under the bond. There is no charge for the maximum
coverage level itself. However, First Bank would prefer to City designate a maximum
coverage amount which is appropriate relative to its needs and make changes as
necessary. If the City requires an immediate increase in deposit protection and the sure
bond is not immediately available, First Bank is in a position to offer collateral at the
same cost to the City as the surety bond.
If the City is unwilling to accept the surety bond, the charge for collateral will be .40%
times the market value of the collateral, calculated monthly as follows:
ty
((Market value of collateral x .40%) /360) x 9 days
First Bank cannot guarantee that the surety bond will always be available; therefore, First
Bank does reserve the right to substitute collateral for the surety bond. However, as long
as the City is willing to provide written evidence it will accept the surety bond, the
pricing for the surety bond and for collateral shall be the same. First Bank reserves the
right to adjust its charges for deposit protection in response to changes in costs or market
conditions.
•
g:1,proposa1\shared\p038 Ldoc b
31
•
0
Attachment B
City of Brooklyn Center
Pricing
Service Month ly Volume
Price
Deposits (credits) 225
$ .45/deposit
Deposited Items 8,340
Local
.065/item
Non-local
.11/item
Checks (debits) 1,273
.14/debit
Wires
Wire Maintenance 1
$ 5.00/month
Outgoing Freeform
14.00/wire
Outgoing Repeat
12.00/wire
Incoming w/o phone notification 4
6.00/wire
ACH (credits or debits)
Per Item Origination
One day
$ ' .12/item
Two-day
.065/item
On-us
.05/item
Processing Run
13.00/run
Deposited Items Returned 20
$ 4.00/check
Stop Payments 3
20.00/stop
Other:
Account Maintenance 3
$ 14.50/month
Check Sort ;
20.00 +.03/
debit per account
ACH set-up fee
100.00/one time
TaxTeL
3.00/payment
Fastline
No charge
ACH charges also apply for Direct Deposit of Payroll. Tax payments can be made
through ACH or electronically through TaxTeL. TaxTeL is a servi
ce which you initiate
your account to be debited far 'a tax payment by calling with a PIN
Number and amount.
gAproposa1\shared\p038 Ldoc
7
36
~U►
,l
C
n
City of Brootdyn Center
Charles Hansen
Finance Director
•
Table of Contents:
♦ Section l: Executive Summary
♦ Section 2: Proposal For Banking Services
♦ Section 3: Exhibits A-B: Terms & Conditions
♦ Section 4: Exhibits C-F: Additional Services to
Consider
♦ Section 5: Exhibit G: Service Charge Schedule
13
At.
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0
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EXECUTIVE SUMMARY M
R
Historically, Marquette Bank Brookdale has, in effect, provided the City of E
Brooklyn Center with free checking services by reversing any service
charges that were incurred. This was done in recognition of the importance u
of the City's deposits to us and was not part of any formal arrangement. N
3
This formal proposal seeks to offer the City of Brooklyn Center two
y
1
J
separate alternatives for managing its deposits. We are not providing an
interest-bearing alternative because the City will reaiize higher rates with a
U
compensating balance or earnings credit alternative in conjunction with an
R
investment sweep account.
•
As you review our proposal, please note carefully the four additional
A
services available to you as summarized in Exhibits C through F. Please
c
also note that the earnings credit alternative is a different account type with
c
lower service charges than you presently have. We estimate that this
o
account will reduce your average balances needed to break-even by as much
u
as $50,000.
N
Your primary contacts for any responses or questions should be Peter
Bridston, Business Banking at 569-1447 or Diane Hefner, Cash
.
Management at 661-3 991.
Marquette Bank Brookdale has enjoyed serving the City of Brooklyn
Center's deposit needs in the past, and we greatly appreciate the opportunity
to bid for the City's future deposit business.
l~
39
CITE' Or BROOKLYNI CEN'T'ER, TIVIINI NI ESOTA
PROPOSAL FOR BANKING AND FINANCIAL SERVICES
• Please complete at least one of the following parts for your proposal. If there is any additional
information you: feel is appropriate, please feel free to provide it with our proposal form.
PART I CHECKING ACCOUNT SERVICE - NON-INTEREST BEARING
ACCOUNT - MINIMUM COMPENSATING BALANCE
A. It is hereby proposed to provide checking account services in accordance with
the terms outlined in Exhibit A except for the following conditions:
All terms in Exhibit A are acceptable
B. The above services will be free of charge provided the City of Brooklyn Center
maintains a compensating uncollected balance in the amounts listed below for
each of the checking accounts:
City General Account:
City Payroll Account
Economic Development Authority Account $
• Aggregate Annual Collected Balance $ 250,000
C. These terms will be effective starting January 1, 1997 for a period of:
Check one: one year
two years
three years
y either one, two, or three
years at the City's option
D.*
-141 CHECKING ACCOUNT SERVICE - INTEREST BEARING ACCOUNT
FOR FUNDS EXCEEDING THE MINIitilUivl COMPENSATING BALANCE
A. As an alternative to the checking account services outlined in Part I, it is hereby
proposed to provide an interest bearing checking account and other services
outlined in Exhibit A with the following exceptions:
B. Interest on the account balance exceeding the minimum compensating balance
will be o compounded and paid . The
account balance would be swept daily for funds exceeding the minimum
l compensating balance.
* See Exhibits C through F for 4 additional services to be
considered. Each additional service selected by the City
would require an additional $15,000 in compensating balances
(except for the Corporate Sweep Service, which is free of chargel
Lf 0
l
C. The above services will be free of charge provided the City of Brooklyn Center
maintains a compensating uncollected balance in the amounts listed below for
each of the checking accounts:
City General Account: $
City Payroll Account $
Economic Development Authority Account $
D. These terms will be effective starting January 1, 1997 for a period of:
Check one: one year
two years
three years
either one, two, or three
years at the City's option
PART III CHECKING ACCOUNT SERVICE - EARNINGS CREDIT APPLIED TO
ALL FEES
A. As an alternative to the checking account services outlined in Part I, it is hereby
proposed to provide a checking account and other services outlined in Exhibit B
with fees and charges offset by earnings credits, with the following exceptions:
All terms in Exhibit B. are acceptable
30 day average of
B. Earnings credits will be based on 90 d a y T - B i 1 1 , the rate is
adjusted _ n0 A t-h 1 Y The current rate is 4.59 %o . The rate for the
last six months has been: z R A ZLr,a n ~
* multiplied by 10~io bi" cod i ected bal anc"e'
C. Fees assessed to the account will be charged based on the attached schedule
(Please attach your banks schedule). All fees and charges are to offset against
earnings credit in Section B above unless listed as exceptions in Section A
above. (See Exhibit G; "Corporate Checking")
D. These terms will be effective starting January 1, 1997 for a period of:
740
Check one: one year
two years
three years
x either one, two, or three
years at the City's option
E. See Exhibits C through F for 4 additional services to be
considered. The cost of each additional service selected
by the City can be offset by the Earnings Credit
(Corporate Sweep Service is free of charge).
4f
IRA, R,TX M CHECKING ACCOUNT SERVICE - ALTERNATE PROPOSAL TO PARTS
I -III.
A. As an alternative to the checking account services outlined in Parts I - III, it is
hereby proposed to provide a checking account and other services as outlined
(attach additional information as necessary):
B. These terms will be effective starting January 1, 1997 for a period of:
Check one: one year
two years
three years
either one, two, or three
years at the City's option
The terms are hereby agreed to by:
Date: S, a
r.a E c ~ ~ 9Y6
Signature: ` fS~
Petry t3-d:,,.,
Title: il,',
II~
Financial Institution:
•
THE CITY RESERVES THE RIGHT TO ACCEPT OR REJECT ANY AND
ALL
PROPOSALS.
Lz
•
Exhibit A
City of Brooklyn Center, Minnesota
Proposed Terms for Financial Services Agreement
Minimum Balance Based Account
1. Checking account service shall be provided free of charge when the City maintains a
compensating balance in the amount specified in the financial institutions proposal. In the
event a daily balance is less than the required compensating balance, the City will increase
the next day's balance above the required amount so that the average balance for the month
equals the required compensating balance. An occasional over draft balance will be
allowed.
2. The financial institution shall provide the following services:
a. A verbal, or other acceptable method, for the City to obtain a report of the current
balances in the checking accounts.
•
b. A monthly checking account statement based on the calendar month. A summary
statement of debits, credits, .and the daily balance is required. Additionally, a
check reconciliation statement is to be . provided that lists the checks in check
number order along with the date of the debit and amount. All checks are to be
returned sorted in numerical order. All records will be furnished to the City
within 7 calendar days following the end of the month.
C. Verbal stop payment orders will be accepted from designated personnel.
d. Uncollected or insufficient funds checks will be presented twice before being
charged against the City's account.
19
3. The financial institution shall pledge collateral of a type required by State Law. Collateral
shall . have minimum market value of $1,500,000 and shall provide quarterly reports of the
securities pledged.
4. All service charges and fees including account maintenance fees, unit charges for checks
paid, deposited items, ACH and wire transfers, stop payments and return items, FDIC
insurance, and direct deposit fees are free of charge unless specifically spelled out in the
financial institution's proposal.
. The financial institution shall provide same day credit for all deposits received prior to
2:00 p.m. on weekdays (except holidays).
6. The City shall be permitted to wire transfer funds into and out of any of the accounts
either via personal contact, telephone instruction, or by facsimile. The City will keep the
bank informed in writing of the names of employees authorized to wire transfer funds.
The bank will compensate the City for any loss or cost incurred as a result of wires not
being completed on time.
43
•
0
•
Exhibit B
City of Brooklyn Center, Minnesota
Proposed Terms for Financial Services Agreement
Earnings Credit Based Account
1. Checking account service shall be provided free of charge when the City maintains a
compensating balance in an amount necessary to offset the charges levied against the
account. Charges against the account shall be based on the schedule provided by the
financial institution. Earnings credits shall be based on the earnings rate specified in the
financial institutions proposal. An occasional over draft balance will be allowed.
2. The financial institution shall provide the following services:
a. A verbal, or other acceptable method, for the City to obtain a report of the current
balances in the checking accounts.
b. A monthly checking account statement based on the calendar month. A summary
statement of debits, credits, and the daily balance is required. Additionally, a
check reconciliation statement 'is to be provided that lists the checks in check
number order along with the date of the debit and amount. All checks are to be
returned sorted in numerical order. All records will be furnished to the City
within 7 calendar days following the end of the month.
C. Verbal stop payment orders will be accepted from designated personnel.
-10
d. Uncollected or insufficient funds checks will be presented twice before being
charged against the City's account.
3. The financial institution shall pledge collateral of a type required by State Law. Collateral
shall have minimum market value of $1,500,000 and shall provide quarterly reports of the
securities pledged.
4. All service charges and fees shall be offset by earnings credits, unless specifically spelled
out in the financial institutions proposal.
5. The financial institution shall provide same day credit for all deposits received prior to
2:00 p.m. on weekdays (except holidays).
6. The City shall be permitted to wire transfer funds into and out of any of the accounts
either via personal contact, telephone instruction, or by facsimile. The City will keep the
bank informed in writing of the names of employees authorized to wire transfer funds.
The bank will compensate the City for any loss or cost incurred as a result of wires not
being completed on time.
44
AA
Exhibit C
DataMarq Balance Reporting
What is balance reporting?
The DataMarq balance reporting system
provides balance and transaction information.
The system offers a variety of options, such as
types of balances reported, methods of output,
and duration of storage.
Benefits to you
• A broad menu of information means you
can select the data that meet your specific
needs.
• Timely and accurate information allows
you to determine your cash position early
in the day.
Who can benefit from balance reporting
• Companies that need to know their daily
bank balance position.
• Companies that need enough money on an
overnight basis to make daily
disbursements.
• Companies that need detailed transaction
information on a daily basis.
How does it work?
• We help select the balance and transaction
information that best fits your needs.
• To access the balance information, you dial
a toll-free phone number by either telephone
or personal computer with a modem, or we
will send the information to you by fax.
• Balance and transaction -information is
available by 8 a.m. CST.
• Information available through DataMarq
includes:
- Ledger balance
- Collected balance
- Available balance
- One- and two-day float
- Total dollar amount of debits and credits
- Detail transactions
- Same-day transactions such as controlled
disbursement totals and lockbox deposits.
• Standard or customized reports can be
accessed by personal computer. Fax output
is also available.
Fee:
Basic report $55.00 per month
Customized reports quoted based on
requirements
For more information about DataMarq balance
reporting or any other service offered by
Marquette Bank please call Diane Hefner at
661-3991.
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T Exhibit D
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Account
Reconcilement
What is account reconcilement'
Account reconcilement reduces the time needed
to reconcile bank accounts through the use of
various computer reports generated by the bank.
Who can benefit from account
reconcilement?
Companies that issue a high volume of
checks, typically 300 or more per month.
♦ Companies that want to eliminate manual
account reconciling.
Companies that need to reduce staff or
reconciling time.
How does it work?
♦ Marquette Bank assists in choosing the level
of account reconcilement that would fit the
company's needs.
♦ Several levels of account reconcilement are
offered:
- Check sequencing
- Partial account reconcilement
- Partial reconcilement with range
- Full reconcilement
- Deposit reconcilement
Here's how the various levels work:
Check sequencing .
This service sorts checks by number.
Partial account reconcilement
This standard service provides a computer listing of
checks paid during the statement period, including
check number, amount, and date paid. As an option,
paid information can also be supplied on a magnetic
tape or diskette.
Partial reconcilement with range
This level of service includes the same information as
in the partial reconcilement service, with the addition
of the check numbers of outstanding checks.
You supply us with the range of check numbers
issued during the period. We match the range against
the paid checks and generate an outstanding report
listing all check numbers of checks not yet paid.
Full reconcilement
The full reconcilement service provides a complete
reconcilement of your checking account. We fully
reconcile the account, matching the paid checks
against an issue tile.
Information on checks written is presented to
Marquette either by a magnetic tape or diskette. The
tape can be in a standard or nonstandard format.
A computer-Generated report includes both the check
number and dollar amount of each item issued and/or
paid. We can also supply this information on a tape
or diskette.
(more on next page)
6
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It
Deposit reconcilement
The deposit reconcilement service provides
information and documentation that allows you to
monitor deposits by location.
Each location uses MICR-encoded deposit tickets. A
location is identified by the first two digits of the
check number field.
A computer report listing the total and date of each
deposit is generated to coincide with the company's
checking statement or, if desired, more frequently.
Within each location the deposits will be listed by
deposit number in numerical order. Missing deposit
tickets are highlighted. A recap report listing all
deposits by day can also be generated.
Benefits to you
♦ Saves time spent reconciling accounts.
♦ Reduces reconciliation costs.
♦ Complements an in-house accounting
i system.
♦ Improves audit controls.
♦ The flexibility to meet your company's
individual needs.
Fee:
Quoted based on service level.
•
For more information about reconcilement or
any other service offered by Marquette Bank
please call Diane Hefner at 661-3991.
Ll7
Exhibit E
0 Corporate Sweep Service
What is the corporate sweep service?
The Corporate Sweep is an automatic
investment service which moves excess
balances into a money market mutual fund
offered through Voyageur Asset Management.
Benefits to you
♦ You save time.
♦ You earn more because idle balances are
always invested.
♦ Liquidity is maintained to meet day to day
cash needs.
Who can benefit from the corporate
sweep service? Fee:
♦ Companies with idle or excess balances. No charge for this service
♦ Companies that lack the time or staff to
handle funds transfer internally.
♦ Companies with a need for liquidity of
funds.
•
How does it work?
♦ Together we determine the appropriate
''peg' balance to be maintained in your
account to cover daily account activity
and/or monthly service charges.
♦ Daily. collected balances in excess of the
peg balance will be transferred into a money
market mutual fund account.
♦ As your cash needs require, the funds are
moved from the investment to vour
checking account.
For information about the corporate sweep
service or any other service offered by
Marquette Bank, please call Diane Hefner at
. 661-3991.
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Exhibit F
• Zero Balance Accounts
i'
What is a zero balance account?
Zero balance accounts are commercial checking
accounts that are automatically maintained at a
zero balance. Checks written on or deposited to
a zero balance account are transferred to a
designated funding account on a same-day
basis. Pooling of funds in this manner allows
for maximum use of cash.
Benefits to you
♦ Increased investment opportunity and
decreased borrowing activity.
♦ Reduces the need to gather information
and make transfer entries.
♦ Time and money are saved.
T
Al!
Who can benefit from zero balance
accounts?
Companies that may have multiple
• depository accounts.
♦ Companies that want to reduce the clerical
efforts involved in monitoring separate
,n accounts.
♦ Companies that want to fund an account on
an "as needed" basis.
7
•
How does it work?
♦ You establish a main or funding account
and any number of subsidiary accounts for
specific purposes, such as payroll, operating
expenses, or tax liability, etc.
♦ At the end of each dav, the net balances
from the subsidiary accounts are moved to
the funding account, keeping the subsidiary
account balances at zero.
♦ Checks are automatically covered by the
funding account.
Transactions are reflected on the account
statement for both the subsidiary and
fundine accounts.
Fee:
Main funding account 530.00
Each subsidiary account$ 15.00
For more information about zero balance
accounts or any other service available from
Marquette Bank please call Diane Hefner at
661-3991.
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• f~x C. • ,
Business Checking Accounts
Ltt►uyer's curl Commu... ity
Munt/rlp
Alaintenance
$ 19.50
Debit Item
S 4:-14
Charge
10. L2
Credit Item
$-4145
Charge
IM)
Items Deposited-
l4woded--Unencoded
44032-$ 4/:047
01111S
%0.050
0:414---$A)A65
a eoent
Transit
$-U It)5
Uncollected
Prime .1. 2%
Funds Usage
Kiriahle Interest
NA
Rate
Credit Earned
Earnings
Based on
On nunnbly average
collected balance is
used to o1i'set service
charge.
Average 91-day
T-bill rate.
No monthly
maintenance fee is
assessed if your
monthly average
collected balance is
greater Hum $2,500
S 0.14
$ 0.20
S 0.20
$ 0.25 over 35
S 0.20
S 0.10 over 10
S 0,45
$ 0.40
S 0.40
S 0.25 over 35
$ 0.40
S 0.10 over Ill
Uncncoded
thlencoded
Unencoded
NA
NA
NA
S 0.057
$ 0.07
$ 0.07
$ 0.065
S 0.07
$ 0.07
$ 0.110
$ 0.11
$ 0.11
Prime -t 2%
Prime + 2%
Prime + 2%
NA
NA
NA
Paid nunuldy on
NA
Paid monthly on the
For sole proprietors
Simple interest earned
This account is
the following
following collected
non-prolit
on the daily collected
available with
collected balance
balance tiers:
organizations, and
balance, credited and
interest.
tiers:
$0-$24,999
public funds
compounded monthly.
$0424,999
$25,000-$49,999
customers. This
$25,000-$49,999
$50,000-$99,999
account is available
$50,0110499,999
$100,000+
with interest.
$100,0001
NA
On monthly average
NA
NA
NA
NA
collected balance is
used to offset
service charge.
NA
Average 91-day
NA
NA
NA
NA
T-bill rate.
0 0 1 N G M 0 R E 0 N Y 0 U R A C C 0 U N T
•
•
J1
•
CONTENTS
Executive Summary Section 1
Response to RFP Section 2
• lnvestAccount
Additional Service Considerations Section 3
• BankTIES Electronic Information Reporting
• Direct Payment Services
S Account Reconciliation and "Positive Pay"
i
Retail Lockbox
Pricing Section 4
Exhibits Section 5
• Norwest Second Quarter Report
• Community Involvement Brochure
• Fee and Information Schedule
•
SS z
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{
Executive Summarv
Managing a city or municipality has never been more challenging than right now.
Tighter budgets, fewer employees; and more complex governmental regulations mean
that you must work harder and manage your dollars more efficiently to meet the needs
of your citizens.
That's where Norwest Bank can help. Norwest can add significant value to the City of
Brooklyn Center's banking relationship:
• Maximum Benefit from Bank Balances - Based on the City's recent collected
balances, there will be no out-of-pocket cost for bank services and the City will earn
investment income each month. Excess balances will be swept into Norwest's
overnight investment vehicle, "InvestAccount".
• Financial Services Partnership - Norwest will partner with the City of Brooklyn
Center to offer a wide range of financial services now and in the future. From cash
management to investments to public financing, Norwest will provide the services
and expertise to keep you on too of this ever-changing environment
Service Quality - Hign quality service is an important goal at Norwest. We strive to
be the highest value provider of financial services by combining competitive pricing
with top-flight service.
• Relationship Team - Your relationship manager is the focus of your relationship
• with Norwest. Your relationship manager, Lynn Hultstrand, has 8 years of
experience working with cities and municipalities in the Twin Cities area. Lynn will
act as your entree to all the financial services Norwest can provide.
F
~`'~ho' NP 7777 Cash Management proposal for the City of Brooklyn Center
s3
•
9
C'1"1'1' OF 1312OOK1.1'N Cl:\"1'1.12, ;III\\h-so 1':\
PR0Pt)1012 13.XNkIN(, .XNI) 1:I.NANC1.\1. 'S ) E'RVIC,E.S
•
Please contplcte at is ist one ol,tIle 601iowing parts 6or your proposal. II'thcre is any additional
!nlormation you feel is appropriate, please feel tree to provide it \%•ith our proposal form.
PAR"r I CHECKING ACCOUNT SERVICE - NUN-INTEREST I3FARING ACCOUNT-
MINIMUM COMPENSATING BALANCE
Please see response to part 3.
PART 11 CHECKING ACCOUNT SERVICE - INTEREST BEARING ACCOUNT FOR
FUNDS EXCEEDING THE MINI 11MU)/1 COMPENSATING BALANCE-
Please see response to part 3.
PART II+_ CHECKING ACCOUNT SERVICE - EARNED CREDIT APPLIED T() \LL
FEES
A. As an aiternative to the checking account services outiined to Part 1. it is hcrebv
proposed to provide a checking account and other services outlined in Exhibit B.
• with fees and charges offset by earnings credits. with the following exceptions:
All fees may be offset by earning credits, based on average collected
balances. Earnings credit ntav offset all or part of the City's fees, and
balances over the amount required to offset fees will be sweep into overnight
investments. A "peg" balance is set at the approximate balance needed to
offset all fees.
B. Earnings credits will be based on the 91 day Treasurv Bill Auction for the
urevious month. the rate is adjusted monthly. The current rate: is 5.06",41
(September). The rate for the last six months has been: 5.17. -;.11. 5.03. 4.99.
4.96. 4.83 (Aue. - liarch).
C. Fees assessed to the account will be ehareed based on the attached schedule
(please attach your bank's schedule). All fees and charges are to offset against
earnings credit in Section B. above unless listed as exceptions in Section A abo% e.
The Norwest Fee and Information Schedule is attached. All proposed services
will be discounted by 30% from the standard rate (with the exception of retail
lockbox). Please see the attached pro forma statement of monthly fees.
(continued on ne\t pa_e)
•
Cash Management proposal for the City of Brooklyn Center
S1
C'1TY OF 13RO01\*1.1'N ('EN-1-FR. -NIINNE.SOTA
11ROPOS:~i, FOR B.OKING.01) ((\.~NC(:~t. SERVICES
['lease Complete at leasl ,one ()I' tile 101lowing parts tier your proposal. If there IS an%. adL11110nal
!11t0rn1,ui0n vOu Ieel is appropriate, please feel tree to provide it with Our proposal form.
PART i Cl [ECKING ACCOUNT SERVICE - NON-INTEREST 13FARING \CC'OUNT -
iMINIIIOUNI COMPENSATING BALANCE
Please see response to part 3.
PART 11 CHECKING ACCOUNT SERVICE - INTEREST BEARING ACCOUNT FOR
FUNDS EXCEEDING THE,,MINIMUM COMPENSATING BAI..vNCI_
Please see response to part 3.
PART III CHECKING ,ACCOUNT SERVICE - EARNED CREDIT APPLIED TO m-,
. FEES
A. As all alternative to the checking account services outilned in Part 1. it !s hereby
proposed to provide a checking account and other serL ices outlined in Exhih1 B.
• with fees and charges offset by earnings credits. with the CollowinY, exceptions:
All fees may be offset by earnings credits. based on average collected
balances. Earnings credit may offset all or part of the City's fees, and
balances over the amount required to offset fees will be sweep into overnight
investments. A "peg" balance is set at the approximate balance needed to
offset all fees.
B. Earnini7s credits will be based on the 91 day Treasure Bill :suction for the
previous month. the rate is adjusted monthiv. The current rate is 5.06'%,
(Sentember). The rate for the last six months has been: 5.17-5-11-5.03.4.99,
-4.96. 4.83 (Aue. - March).
C. Fees assessed to the account will be charred based on the attached schedule
(please attach your bank's schedule). All tees and charges are to onset against
earnitws credit in Section B. above unless listed as exceptions in Section A above.
The Norwest Fee and Information Schedule is attached. All proposed services
will be discounted by 30% from the standard rate (with the exception of retail
lockbox). Please see the attached pro forma statement of monthly tees.
(eontillued un nett pa-,e)
•
J41M Jl Cash Management proposal for the City of Brooklyn Center
SS
•
•
1
I
\orwest %sill n►ake available, subject to availability, a combination of surety
Braid and Collateral as pro%ided under Nliunesoul tir►tuc, Chapter. l) and
l IS. No►'~%est currently has in place Public Deposit surety Bond. ;:N\\ :\I.\-
002. issued by Municipal Bond Investors Assurance Corporation, Arn►onk,
(tile Surety Bond). Subject to the tcrn►s of the Surety Bond,
Norwest will make available to the Cite of Brooklyn Centel- -S I,5Ut),000 ofsuch
qualified SuretviCollateral.
\orwest will change the antount of coverage on one dav's writtetl or faxed
notice. '1'lie City call change the amount of coverage as desired fora fee of S2i
per change. Billing for Surety/Collateral is through account analysis at the
foltowin~, rates:
?S h.p. on the niaxinutm coverage (.0025/36_5 x 1,5oo,tltfll x 30 = S308.?'_)
15, b.p. on the average aggregate ledger balance.
r
yi
D. These terms wi11 be effective starttne January 1, 1QW7 t01, a tIer►k)d of.
Check one: One year
Two vears
Three years
Either one. two, or thrQc
years at the City•s owio111
PART IV CHECKING ACCOUNT SERVICE - ALTERNATE PROPOSAL TO 1'.-\RTS
I-111
Please see response to part 3.
y
r
i
~i
The terms are herebv agreed to bv:
Date: September 6. 1996
Signature: ;
Lymn Hultstrand
Title: Vice President
Financial Institution: tior~vest Bank Vfinnesota. N.A.
THE CITY RESERVES THE RIGHT TO ACCEPT OR REJECT a`Y AatiD ALL
PROPOSALS.
4 JORP ' f Cash Management proposal for the City of Brooklyn Center
56
InvestAccount - Automatic Investment Sweeo
Nor-west's InvestAccount is an automatic investment sweep of excess checking account
balances. It provides you with a safe and easy way to reduce idle balances and
maximize the investment earnings potential of your funds. It is especially well-suited for
customers looking for a "passive" investment option that does not require any
l intervention to make an investment.
Collected balances in are available for investment with a fixed $10,000 minimum
investment. To help us manage our collateral which would be impacted by an unusually
high balance in your account, an investment cap amount is mutually established. A
standing peg balance may be used on your checking account to offset analysis service
charges or for loan compensation, above which excess funds are invested.
Daily, qualified excess funds are invested in high yielding overnight Repurchase
Agreements. Since repo's are not insured by the FDIC, Norwest maintains the securities
as collateral for your protection. The investment sweep occurs at the end of each
business day after all other transaction and transfer activity has posted. In this manner,
you obtain a true sweep of excess funds.. Moneys are re-deposited to your account at
the beginning of the following business day.
Interest accrues daily and can be either paid daily or monthly. interest is posted directly
to your checking account on the following day. Rates vary according to the size of your
investment. The more that is invested, the higher the interest rate paid on your money
will be. A sample rate schedule for a recent period is enclosed.
• InvestAccount Benefits
a
j Norwest's InvestAccount benefits you in several key areas:
Improved Cash Management - Idle balances in your accounts are eliminated,
increasing your investment returns and maximizing use of your funds.
• Automated Efficiency - Our automated system eliminates investment guesswork and
frees personnel to perform tasks other than investing and managing bank balances.
• Cost Savings - Costly investment, safekeeping, transfer and other bank fees are
eliminated.
A
• Safe High Yields - Repurchase agreements are collateralized and offer competitive
yields compared with other money market instruments.
•
e ~ '"'R ~1 ?Ir
Cash Management proposal for the City of Brooklyn Center
r7
lnvestAccount Statement
Castcmer
NCRWEST ?ANK
BANK AOCRESS
CITY, STA7-= ZIP
InvestAccount
A=unt Summary
Account No: Period Encing
352^10109' 29JUL]-1
Trans.
Matunty
Ccilar
Interest
Cate
Cate
Oescrnuon
amount
Rate
Earea
w5JUL u
~6JUL9-
Reoo
802.975.32
3.:0000
73 .T
CSJUL54
07.UL34
Reoo
5032.993.90
135000
5t
. %UL= t
QSJLUL 4
Reoo
588..38.31
155000
:3..C
08JUL34
.1JUL94
Rego
406.280 49
3 S50C~
_..'9
.Jt1184
12JUL94
Reco
21 921, 32
145000
33
12JUL4
3JUL9a
Reco
141 .325.29
3.-0000
13 22
01JUL94
05JUL94
Rem .Ad:
746.531 •9
3.55000
302.73
1-1JUL94
15JUL94
Reco
258.;9129
3.35000
18J1JLS4
19JUL94
Reca
34 553.2'
3.25000
" S7
19JULz-:4
2CJUL94
Reco
557 134 34
1-10000
20JUL94
UL3
Reco
153.325.41
3.»0000
_.JUL=t
JUL"n-
Reco
32j 2C2=
3.-5000
31 5
-JULs'
25JUL34
Reoo
342.751...
3.-QCCO
_SJULV
26JUL94
Reoo
35o.M.36
3.55000
345'
L-314
_.JUIs"-
Reco
235..'73._.
3.45CC0
_
:7JUL!Z4
23JULS4
Reco
322.517 -13
3.10000
20 -3
_SJUL Vt
29JUL-:-4
Reoo
19.41C.33
1-0000
2
NOnm+v Interest Eamec
1,. 3
=cr,rcu:res regaramg ru ac=art crease canac. your accourt ar ice
r
Banker's Casn.Wanagament Sar=ms. ?rccacures. ana cans
a Stancares ana ? .=acures ?rcgram
r
`r
5
AutOmaw : vesarent
trvss:Ac=unt
Ccrccer, 94
S $ IVA-73
•
•
INVESTACCCUNT RATES
Historical Monthly Average Rates
51-
$100,001-
$350,001-
$750,001-
DATE
$100,000
$350,000
$750,000
& ABOVE
Jul-96
4.3867
4.4367
4.4867
4.5367
Jun-96
4.4000
4.4500
4.5000
4.5500
May-96
4.4817
4.5333
4.5850
4.636 7
Apr-96
4.3583
4.4083
4.4583
4.5083
Mar-96
4.4387
4.4887
4.5387
4.5887
Feb-96
4.3500
4.4000
4.4500
4.5000
Jan-96
4.6919
4.7419
4.7919
4.8419
Dec-95
4.3097
4.8597
4.9097
4.9597
Nov-95
4.8883
4.9383
4.9883
5.0383
Oct-95
4.8694
4.9194
4.9694
5.0194
Sep-95
4.9283
4.9783
5.0283
5.0783
Aug-95
4.8500
4.9000
4.9500
5.0000
Jul-95
4.9597
5.0097
5.0597
5.1097
Jun-95
5.1267
5.1767
5.2267
5.2767
May-95
5.1081
5.1581
5.2081
5.2581
Apr-95
5.1283
5.1783
5.2283
5.2783
Mar-95
5.1065
5.1650
5.2065
5.2565
Feb-95
5.0393
5.0893
5.1393
5.1893
Jan-95
4.6226
4.6726
4.7226
4.7726
Dec-94
4.5750
4.6250
4.6750
4.7250
Nov-94
4.3450
4.3950
4.4450
4.4950
Oct-94
3.7468
3.7952
3.8435
3.8919
Sep-94
3.8383
3.8883
3.9383
3.9883
Aug-94
3.5855
3.6355
3.6855
3.7355
Jul-94
3.3968
3.4468
3.4968
3.5468
Jun-94
3.3217
3.3717
3.4217
3.4717
May-94
3.0887
3.138 7
3.1887
3.2387
Apr-94
2.6467
2.6967
2.7467
2.7967
Mar-94
2.3984
2.4484
2.4584
2.5484
Feb-94
2.3321
2.3821
2.4321
2.4821
Jan-94
2.1 COO
2.1500
2.2000
2.2500
. - - .1, F-- - W~"
S1
Field
Description
Pnnc,pal
Amount swept from the customer's account for this
transaction.
Rate
Rate paid to the customer for this sweep transaction.
Stan`
Date funds were swept from the customer's DOA
account.
Matunty
Date funds will be swept back into the customer's COA
account.
Interest
Interest earned on this sweep transaction.
Collateralized By
Information appearing below this line describes the
security issued as collateral for the repurchase
transaction. The first line of information includes the
security's par value. security short description. coupon
rate and date of maturity.
CUSIP
Committee on Uniform Securities idenifcation
'
Procedures. Unique identification number for the bond.
Sequence
Investment security receipt number.
Pnce
Current market price.
Accrued Interest
Interest that has accumulated between the most recent
coupon payment and the sale of the bond.
21116»
if/// trc :aEs: BANK MCKWW
XAFAFAIFAV
MUTES ur~IiV r1: ~ ~ 1 =a 7:.L n
We rave SO-.r
$11 5C 11101^1 0o Z;: z 7 cz
..aze=a=Ly
Cus_ Jeaue^.'-e
f
40
2-W: 1 "'0 M
Invest4ccount Repurcluse.-l,reement C;onjirmation
• Field Descriptions
BankTIES information. Reportina
• BankT1ES is Norwest's PC based information reporting system. compatibie with
Windows operating systems. Balances and Transaction detail are accessed through
graphical "button" selections or keyboard commands using standard Windows operating
system options. Easy-to-use point and click dialogue boxes enable easy access to past
dates, search or selection criteria. Key features include:
• PC or Network installed software
• Simplified log on procedures
• Current day, prior day and detail reporting
• Specific transaction and search criteria
• Cut and paste capability to other Microsoft applications like Word and Excel.
• Secure access at the user level.
• 30, 60 or 90 day history available
• Standard on-line help features
• High speed data transfer (9600 or 14,400 BPS)
This new reporting service from Norwest is compatible with both stand alone and
networKed PC's with a dedicated modem.
•
i
_I
•
r 9IC IW Cash Management proposal for the City of Brooklyn Center
y' 6 I
- %ankTJES Balance/Transaction Reporler Daily Summary
option i
:EC r;nrlr;. tr;c
SAL»l:C.... .SACTION RE,OR(6^i 1
DAILY SL`:1G1ARY' REaCR r I
AS uF --E 5 1SER ,
4 AIO,:.es: 3,ot:r
U S DOLLAR 4EC "11P 1,'JrvC 0123450739
0123456759 ATEST UPDATE D~c OS 3» CS
LEDGER BALANCE 155. '{3 00
AVAILABLE BALANCE .;5 00
COLLECTED BALANCE 45 _-5 00
NATO AVERAGE LEDGER BALANCE _ .50 00
N1TO AVERAGE COL E'~TE" 3AL.ANCE 09 =0
Option .1i
3--Z,!, T "ES
CC E0
JArL Y !ARC REPOR "
AS CF Dc:..':!ficR !
i
U.S DOL_AR AEC „r'r ":C 01^~ssb739
0/23450759
{ LEDGER SAL'NCE
AVAILABLE 31.ANCE
COLLECTEC 3~~~,N+CE
DAY FLDrT
2- DAY ;LCAT
TOTAL DOL_AR A 'CU RE3iT
TOTAL NUbASE CREW''
TOTAL DOLLA;; AMOUNT DEBITS
TOTAL NUMBER. DE3i"S
MTO AVERAGE ' EDGER BALANCE
"ATO AVERAGE COLLECT eD BAL..',CE
0
BEST JP"E 2 05 33 !:S`
'CS C.
.:L
-0
4 L
-*SankT]ES Balance/Transaction Reporter Detail
Nomesi Sank TIES'
48C Comcan;, Inc
SALANCE'TR.411,,S,4 ClION REPORTE9
DETAiL REPORT
AS CF CECIL ?.ISER I
4 Norwest &,-!o -Yout T(n:).....................................................
1 U.S DOLLAR ABCCC:'P4%JY INC 0123456789
j 0123456 39 LATEST UPDATE Dec 2 05 33 CSC
-----------------------------------CE31'i-----------------------------------
ZBA DEBIT TRA%SFER IZBAT06i•
30 000 00
OOOOCOCOCCO
FUNi01?:G ACCOUNT TRANSFER TO ACCOUNT -987613210
30.000 00
28A DEBIT TRANSFER t--BATC51 REQUESTED
. !TE%I
i
i
30 000 00
r
DE
OTAL ..BITS REQUESTED
1 CE41
I
CE' A!L
....................................................n
U S DOLLAR
AEC CC+. - ",C
0123-56789
0123-56,789
L. EST UPDATE Dec 2 05 33 CS-
"-T . _ -+'+T~L..^,C_, J-T - _ - - - -
-OTHER DE°CS;- ICDF
200 000 00
'
OGCOCCCCCCO
'
115.65! SL
vCCGOC~uCL
'C
j
1_3.273.86
000000C0CG0
120
110 19
COOCCC u009
.
589.311 55
DT* E , DEr^SIT tODEP1 REQU'E3TE0
- = 'S
iCOMING MONE'.. 'ISFER ;i'jt..71-
15.000 00
:COG v!'Cocc
30000 DP,G CO" E C AL 'NANCE
-
(5.000 00
'%CO" I .U . CN;E': TRA`iSr ..`.~T1 REOUESTE'D
MISCELLANEOUS CRcD!TS
i50 00
":D!`:~!LC-_ %IISC CREDIT
000cC000000
'Z7 IT
150 20
E__A=.ECUS CRE017S !SCC;~ ,E-!UES7K)
•1
6c-191
-:"Is
,s
L
_ 6 3
Direct Pavment
. Direct Payment is an ACH cecit application wnereby consumer ano nus+ness bank
accounts are electronicallv debited for receivables payments owed. Direct Payment can
debit any checking or savings account at any financial institution in the country. including
some brokerage or mutual fund accounts, even if they are not ACH members.
Norwest is one of the country's largest originators of pre-authorized debt payments.
We process direct payment transactions on sophisticated software which allows us to
provide you with superior service options at a very competitive price. We have
extensive experience in this industry and have pioneered many creative solutions for
customer direct payment applications. We also offer you an automated re-deposit of
NSF returns, a feature many banks do not provide. As with our other cash
management services, when using Direct Payment you always benefit from our
professionally trained customer service personnel and our proven track record for
quality.
Benefits of Direct Payment
This service eliminates the need for cash forecasting as the guesswork involved with
mailed payments is eliminated.
• Accounts receivable posting is greatly simplified, while the clerical work involved with
a regular paper system is vastly decreased.
• . Reduces costs involved with mailing and preparing invoices.
• Reduces collection float and bad debt collection problems.
The consumer or business on the other end of the debit similarly benefits from a
convenient payment, reduced costs, and greater payment control.
•
~IOt~ Cash Management proposal for the City of Brooklyn Center
c4
Account Reconciliation Plans (ARP)
. Norwest offers sophisticated ARP services to nelo vour reconcile your various bank
account activities. With each Norwest ARP service, you have access to all standard
reoorts including the Account Summary Report, Miscellaneous Debit Miscellaneous
Credit, Paid item. Stop Payment reports among others.
Based on your needs and requirements, we recommend you consider the following
Norwest ARP services:
Partial Reconciliation (Direct ARP)
Norwest's Direct ARP provides computer-formatted paid item files to facilitate
automated processing within the customer's internal reconciling system. This can be in
the form of a transmission. magnetic tape, or PC file through BankTIES File Transfer.
The accompanying ARP statement lists checks in serial number sequence. with the date
each check was paid. It also shows the item address number assigned to your checks
during processing to speed photocopy or other research requests Nonivest also offers
a PC-based individual item research facility through BankTIES Direct ARP statements
and paid item computer files are sent within four business days of cycle end.
Full ARP
Norwest offers a top-of-the-line Full Account Reconciliation service. You have great
flexibility in how you can send issue information to us, and we can generaily adapt to
your format or that of any service bureau you may be using to prepare your checks. We
offer special cycles, customized reports, and escheat or other customer information in
the Full ARP auxiliary field for your convenience. Turnaround is eight business days
after receipt of final issue information.
Positive Pay
Positive Pay helps protect you from unauthorized checks, including counterfeits, by
validating all checks presented for payment against your account. Issued check
information is provided to Norwest as you issue checks. Norwest stores this information
as a positive authorization file: every check presented for payment is validated against
it. Checks not contained in this file are either returned or reported to you so that you
can make a pay or return decision. Positive Pay is most often used in conjunction with
Full ARP; however, you may also use it in conjunction with Direct ARP for fraud control
without giving up your control of the overall reconciliation process.
•
''~%=J1 Cash Management proposal for the City of Brooklyn Center
Gs
■sh, Account Reconciliation
oaw,SrBANKS Issue Check File
IWAUVO: Specifications
11,40 offers great flexibility in accepting your issued check files on either magnetic tape or via data transm)SSlpn. If you currently have a
for your files. please complete the back of this form and return it to your Cash Management Sales Officer. If you do not provide any
ispec~ ormat needs. you should plan to provide your issue files to the bank as indicated below.
lLhatever format you use, we recommend that you:
1. Include your account number on all detail records.
Incorporate payee data into your file as this can be helpful to you at a later date for escheat. check reissuance, or other
research purposes.
ecord Description: Issue Check Detail
field
Number of Date
Constant
Description
Characters
Position
Value
Comments
!Fount number
15
1-15
Account number - do not
include dashes.
erial number
10
16-25
Check number
Void indicator'
1
26
V
Optional
ate-issued
6
27-32
MMDDYY (if date issued
is not supplied the bank's
processing date will be
used)
Amount
12
33-44
No decimal
9(10) V99
La0ata
15
45-59
Optional: Employee, payee
or vendor name or ID (e.g.,
Social security number)
Record Description: Control Record (optional)
W ccount number
15
Record ID
91
Irotal items
8
Total amount
12
rilfer
15
1-15
16-24
25-32
33-44
45-59
Account number
9-9's
Item count
9(10) V99
Zero fill
39 character records: blocking factor = 40
Display mode 59 character records.
=ields are right justified, left zero filled.
1W format.
'S. 00 in the amount field will also be treated as void.
w 62x75 APP (72-90-39992-0)
6r
Retail Lockbox
• Norwest's retail lockbcx sen/icas assist you with the receipt. deposit posting and
processing of high volume mailed utility payments. We focus on both the accuracy of
invoice data for your accounts receivable posting file and processing your deposit for
maximum funds availability Our systems are highly automated and our processing
design is very flexible. This allows us to customize our processing to meet your unique
document, reporting, and processing requirements
Retail Lockbox assists you with the collection of high volume mailed utility payments that
are accompanied by an optically scannable coupon or return document. It offers you a
two-fold service:
It provides an automated posting mechanism for updating an accounts receivable
system
. It accelerates the collection of check payments.
Since the labor intensive manual posting process is eliminated, it is an ideal service for
those with a high volume of remittances (5,000+ payments per month) and those with
recurring payment applications that lend themselves to scannable remittance
documents.
Benefits of Retail Lockbox
• A Norwest retail Lockbox improves cash flow by reducing overall payment collection
time.
• Receivables are provided to you via file download, enabling you to post directly to
your A/R system. This automatically reduces human intervention and the errors
made in the normal manual posting receivables.
The labor costs involved in receiving mail, posting payments, and preparing and
endorsing checks for deposit are eliminated. The need for over-time or temporary
workers is also eliminated.
• Clear audit trails on the paper check and coupon assist your with customer research.
• Retail Lockbox items are encoded during processing, thereby reducing the cost of
your deposited items.
Norwest offers an open invitation to the City of Brooklyn Center to tour the retail lockbox
facility at Energy Park in St. Paul. A tour will provide you with additional knowledge
about how lockbox services are performed, and give you a chance to see how current
customers checks are processed. Retail lockbox services can benefit Brooklyn Park
now and well into the future.
•
r"-1• Cash Management proposal for the City of Brooklyn Center
Pro Forma Statement of Monthly Fees*
for the City of Brooklyn Center
Balance
Service Description
Volume
Price
Cost
Equivalent
General Account Services
Account Maintenance
3
$20.00
$60.00
515,654.00
Credits
225
50.45
$101.25
526,416.13
Debits
1273
50.14
$178.22
$46,497.60
Deposited Items - On Us
2085
50.07
$145.95
538,078.36
Local
5421
50.07
$379.47
599,003.72
Transit
834
SO 12
5100.08
S26,110.87
Serialized Statement
3
S17.00
$51.00
S13,305.90
Check Sequencing
3
520.00
$60.00
S 15,654.00
Per Item
1273
50.03
$38.19
591963.77
Wire Transfer Maintenance
1
56.50
$6.50
S11695.85
Incoming Wires
4
510.00
$40.00
510,436.00
ACH Base Fee
1
525.00
525.00
S6,522.50
Transmission
2
S17.50
535.00
S9,131.50
ACH Two Day items
370
50.08
$29.60
S7,722.64
i ACH Received items
132
S0.10
513.20
S3,443.88
Returned Items
20
S4.00
$80.00
520,872.00
Return Items Instructions
1
525.00
$25.00
S6,522.50
Stop Payments
2
521.00
$42.00
S10,957.80
Collateral (maxmimum)
1
$308.22
$308.22
580,414.60
Collateral (ledger)
TBD
InvestAccount
1
50.00
$0.00
$0.00
Total of Proposed Services
S1,718.68
S448,403.61
Customer Discount
30%
($515.60)
Discounted Total
S1.203.08
S313,882.53
InvestAccount Peg Balance
5315,000.00
Average Investable Balances
510,000.00
Net Fees
Net Interest Income
$0.00
$36.88
1
1
Based on average collected balance of $325,000 and current InvestAccount
and earnings credit rates. Customer discount also applies to all proposec services
68
Norwest
! ~1
! Earning Finah't
-
i~
nos
v.vr' i Mr. L ~ y
-•+L~S'LttiiMYY•i/~~"mil, d
Earnings by Business Line r n, T
Investment, insurance
and2 rust Community - X
s Banking ..xN $1.50
. N ~ YTD
J Mortgage / 37% rT~
12°.40 c,-
Nationwide r% - -
Specialized Consumer
Lending* Finance
14% 25% _
88 89 90 91 92 93 94 5 96
EIGHT YEARS OF RECORD GROWTH
-,orwest is much more
i i We are also geographically Y. /':,r,,,r}~•,,. `n,d. •~:',$S,,y^+•.x„r
3 than a bank. 'We have yr ' i... .
diverse. 54"6 of our earnings conle y ice "
S l
the earnings profile of a
from national businesses including ` °+t 1
dncial services comPany. s r ~ r
consumer finance, mort-aoc credit
based un three cards and student loan,,. These units - nwrtua =e, con-
products and services are sold
sumer finance. and banking,,. However, throughout the United States.
'l included in the banking unit are mari
Canada. and internationally. The
non-bank businesses. These non-bankur earnings, -F6"~, '
1 rest of o, come
businesses include speciali_ed lending from our 16-state banking region.
investments, insurance and mist. S_ -~'~;-•'T..,~.~.~~ ~ ~ .3.
Norwest Nationwide 1995 FINANCIAL PERFORMANCE
SECOND QUARTER 1996
J
777
7 7
Robert S. Strickland, Vice President
(612) .667-82.75 - -
htip:!/www.norwest.com -
P~ 's ~ ' vF ~ ~ t+; 7a r ,q• ,,ty ` ~ ,y~, ' r ' : ~ - ~ Y y tx .'r, ~'~'K i '"k. , ~y-R` '
i ffimm ii - r.c ?-rc 4 j , k~. ",.r.'IF]_ aF.a s.- v" 4~
y'.a'+~ K _ T t_fC 'S"tia f x ro '"h4 1 RY~,~ .n; : y.
. 21'4„ dpi ~ ~ Y, y_ R ~ K- ; '~~"y~• ~ 1F'.2'x 't
~ •L r~+.'+ah •,,~ro,,,,t 2k"'3a-• ~xfi~i n.. '[~."4•da 10~, c „ .i m a. n r 7 ~ .K - 4- y_
's ~w,• 4 .r a $C _ l -Nryrt i '''c,.. - 1 - '4' lo"' =--•c -
The Growth Company
t sc,' 'Paui
A-•~,i/-. i+ - r+ .r . r .i.. ~ 1. r, r .y4._
l ~...Super..stor
'Ir.~.~• 1 A _ .'Y.r a t~ J d.s L Y Y"S JY' 7
1 7 tl 1 t -1.
I t( r L 1 1 L. 1 1 tri g,7~~1 C"w'
.~'R"•'r''~y`,~F~'0Kl••4;,, . 1. !tir.►T ~ ~ L. ,*-wsro. A ~,.+e - ww.... iTre' xK~° z*1•s+s t ~~S^et'~IS h
,3'ycS2
• f lr a l'. 4 i •'..riLr.i.1L ~CI~y a
a.. '»•..+r ~r-. 1 `y - _ r : , . ~I r., ' 1 y *Y"..:.~.., ~ tdPm - ,'A
,,y.,,, Sr':.'.~ -.~W i:st 71i ~ a.,r : rr ..w »rr~.a,,a;."" 'fx'+ . x t`.i~••~'".:e.~"~'i."";
l.,t,
Fortune 1000 • 1988 - 1995
Annual growth in revenue and operating ? ~eaartia.lMC.,a v.
profit before depreciation of 10%+
6RINKER INTL. HEALTHSOUTH HOME DEPOT ~
- - MICROSOFT NORWEST ;i
y
.~ro. t ro 1 e ~1.i 11( Yy ~ I lit ~ ~ 1.1 ~1 1 ~ Lx
.y,t .sec. ^•t +nrr ..\w. ~ M- ~ r~.. , ` ~
ki-
Strategic Initiatives-Growing
our Mortgage Business
n \11%, We Corltpleted the purcha1c (It .ub.tantlally all of the assets of The
Prudential Home \lort,,,ige C.ompan\ InC. itleludin" Its S47 billion ,crvicim-,
porttolio and other assets. The 1CgLIV Inun makes ;\orwest Mortga,,c the
nations leader In vrrtually all areas of the nu)rt;_3(W 111&10n•. W are the lar,,cst mort-
gage Servicer with a portfolio of S1o8 billion and the nation, largest niort-z-c
originator. We now originate approximately one of every twelve residential nlort a,le,
in the U.S.
Total Credit Outstanding in the U.S.
e believe nu)rt, a,le
bankin,I is an important
Consumer Credit
stratelstc bttcines; for am'
S1.116
Bank Loans & Comm. Paper
dryersltied tinanctal set--
Corporate Bonds S1,006
vices company tot' two
51,328 _
primary reasons. First
Tax Exempt
mort,,age-related credit is
S1,301
the uncle iar,lest cement
of the II.S. credit market
Other Mortgage
-user 4 trillion dollars.
SC700
S1,218 _ U.S. Government
This i; a Iar,,e market
S3.637
with plenty of room for
1995 Total $14,306
us to
Second we a nlorr_Ia~ye like a checklll; aCCOUnt or an imestmeni account as a
core relationship Core relationships are e\U-entely yalllabie beC11.11e the',' _e'lerate
=realer Customer invalry and increase the propensity or CLr~axner. a) huy nu)I-C prod-
LICtS. Otir average Isaltk CLI;ZOI-Iier has ? prodLlCr,~ With Howeyel" a bank
cuStomer who also nas a <orwe;r morrua`'e averages over n prodLICtI, Widl ~(Il'WCSt
A Strollg rnortgaie presence is one of rile :c \'G to rile lon_•term ~itCCe;~ of ~Ur\I e;t
said Dick KoyaCe,, lch. President and CEO
2 '70
~
t J `1"t' AI•.J _ ..3 t~ "r F
rP k'-
7A
Ar-lkom-t
G..•`c1a5.: .tr :''iS '~:~~Zi~-+irx.~`^' oaf"f..::i. i~...• -
~O y' 1 I I / 1 t i, x 1 ,
ganizati nal A4'
7 7.
j' ~ Y4+ ~ i✓.
..p.Kp . A S t ,r71M Ain
.~-14* t •s1t'Sw.'~y K p•+G'~~~rPF c~`~~5.,,,, ~T.'TM~-;•'t"'•r~.*.~ . ~c, a., '•-y,r ~,~-'r"„•'~C^''^NM1m,.~3,~"':
' w ~ t"~` ^ y.. .y= '4.: w^kt$#'I.Z+>i~ddbE .r"yy"•aiw"y~M+ ~-'ist•4` 8tiw ~ - a•~+ ~aa u ~ ~
LL _
} t,- -?'r"4k w-~:c 1`'.;. - "xrS:..1w~'+# •w,••x': i~ `w~...::,:.'' -u..l::. Lw~r.A.r..- t t 'iri 4.
MORTGAGE CONSUMER FINANCE BANKING
' 62%o compound annual
earnings growth
since 1989
Headquartered in !)c, \1otnt.-, 1,,%,t
. ?5 ,tlt'c, in 5O ,talcs
= I t )ri,mato,
=1 Retail Mori a c I.cndcr
I Wilolc,ale Lender
= I FHA \•.a I.cnder
I Com cntonal Lcn\icr
=llunlho Lender
= i \lort,a,c Vic! \ ,ccr
y =1 \lurt a c DoLLMICllt C U,todiall
1 i liank.-\tt!liatcd Ttlc In,wyr
j tin F.`t l-'iil!0n ilurin, ,ceun.{ sitar*.cr I`1`h,
,-;I t18 billion at o 3n vn
V*cigittcd.-V-cra c C01.111oll
Corllpleted (Ile aCnw,i[ion of f'r,;de'rtal Hume
\lortizagc CCompan\' Inc in \la\ \r;lich make,
\vn.e;ts \tutt,a~e Bankin,bus!nc„ tit'
(arses[ in the county'
5 filet '.10, tore" .opened ;ircc P -It
Expanded into 15 ne\, ;Cate, sir,ec i,t:ti`t
Mortgage Store
Growth 766
724
578 Stores 683
]Since 1989 633
467 1 ! I
333
• 277
180
89 90 91 92 93 94 95 2096
19%c compound annual
earnings growth
since 1989
• I-iCad1111.1itcr(:d nt I)c, \It,nlc. II,\.a
1 21- retail tore, ill -17 ,tatc, all
IO Canadian pro%imcs and Internationally
Fnundcd in 1511-
1 ~on,CLLIM C \-car, o, rewrd earnings
~u'nn a„ct tµwiu\
\lana cnicnt c\I\crt,c
A hrnnarv provider oI data processing
to 1011,1tI11C1' 1111,111LC 1114.41,0'\
Rank per .-\ntcrl~an llxln urn
Ith in Net !nc wnc
.'\\cra,c 1991 - 1,1111
ROE it 1 a 1
"1S net nc\c store, opened ,!nLe 1939
Expanded into Canada Guam Central
America and the Caribbean
Consumer Finance
Store Growth t21
598 Stores 799
Since 1989
1.830
942
'
882
733
ti
619
643
f
,
I
I
1270/6 compound annual
earnings growth
since 1989
~ 51 r1 ,tui', n1 I t, ,t,ttcs
Lar,c,t t_onus:uou, kinking ,v,tcm ni the Llti
67 year, loo !ntcr,tatc kinking c\j)citcn"c
3.7 products per aorc hanknn iclauon,hlp
Target of 8+ product,
Currently I I°6 of (-u,tlontcr, have
3 or snore product,
) 2.7 core daily ,alc•, per total I-TV
1 149% houwliold _ft,N th LC 11)1) I
COmmunity I',ankin
Investment,
Insurance
Trust
Processin_, ~crx icc,
Credit Caid,
Student Loan,
Asset-Based I -cnd,nu.
Equipment Financc
Corporate Bankw--,
International Trade ` cr ices
;It- nct ncu tore, opened ince 1951t
Expanded into c,_ht new state, since 1051)
Bank Store
Growth
597 Stores
Since 1989
578
f
410
338
295
804
1
734 i
I
619 j
0 ~
207
89 90 91 92 93 94 95 20 96
89 90 91 92 93 94 95 2096
3
"11
Norwest's
!
Prior Year Data As Originally
Reported S nnlllo
lr,. o-ept prr
;mre 111,11
f
i
Rrttlrn oil .average Assets
I iO"i,
1 47",.
1 44"„
I ti".,
1 +3"„
1 28 i, '
I.IO"i.
Rcturn oil Average Common E(iulty
22 4".
22 4"i,
22.3',.,'
21.4°;.
2l1'/";,
13.i"f,
Net Interest Margin
? o2".,
i3".,
i 60";,
i ;9"„
i i8'%,
i 111%
Tier I Capital, at period end
10 4",.
o"„
Equity Assetti at period end
-
7 1
7 4"„
7()"..
6 9"1.
6.7
Net Income
$iio 8
$451. 1
$9io.0
$30() 4
$oi 3.o
18 4,.
$.3`>3 i
Primate Earnings Per Share
1.50
1 34
2.7o
2.45
2-13
1.7 4"
1.48
Fulh' Diluted Earnings Per Sparc
I.;o
1.32
2.41
2.11)
171
1.46
Dividends Per Share
0.; 1
0 42
(11)0
o-.7
O.o4
0.i.1
0.47
Book Value Per Share
14.71
12.91
14.20
1070
11.04
9.75
8.63
Banking
Consumer Finance
Mortgage
Earning Assets
•
Loans and Leases net of discount
Deposits
Stockholders' Equit}'
.Assets
Earnin, Assets
Loans and Leases net of discount
Deposits
Stockholders Eaulp'
Non-Performin, Assets as a
$370 5
;5237.
0,002_ 2
$;07 1
'6307.2
'$306.0"
$243.0
125.2_
1 loo
248 9
222.5
200. 1
1;9.0`
123.5
of 1
47;
104.9
70.8
in,3
53.4"
3L4
S74 1117
yu2 068
tib6 2?;
S; 55 073
.47 4;3
540 53o
~3b, 179
05 403,
;;.889
;9 303
49 948
4i 1180
36 o7U
32.o07
37 534
34.338
3i ;o I
30 244
24 94
20342
20, 1o0
44,109
37 246
38 8;0
35 474
29 871
25 770
24.460
; 424
4 32;
40,8
3 843
3 342
2.907
2,201
S77 849
Son o23
5-2 134
=9 316
S;o 732
S44.557
S38.;02
o7498
40o
o2 792
;3 325
46 446
40 631
34 490
;8 6;2
;6 277
3b 15.
32.;76
26 94;
22.928
19.33;
4o 284
38 190
42 029
30 424
32 ;73
20 9 0
2? 439
03;
4 72o
= 312
3 346
3 Sob
3 073
2 591
percentage of Loans Leases and OREO
0.431',,
0 ;7"s1
0 4911r,
0.87"..
U.`)9
1.84";,
Allowance for Loan Losses as a
percentage of Loans and Leases
2.61
236"a
2.54".,
2.42",,
3.031%
Allowance for Loan Losses as a
percentage of Non-Perrorming Loans
;;0""
697"„
;4-1
006"„
412"•
397.,
22o"„
Annuaii=ed Net Charge-Offs as a
percentage of .average Loans and Leases
0.91"',
0 72%
U 36":,
0.o4".,
0 70";-
0 97"i,
1.33"„
CL(,I 241,5
• -lilt :~1-= 'fl s~ _I Intl
4 2