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HomeMy WebLinkAbout1996 08-13 FCA• AGENDA BROOKLYN CENTER FINANCIAL COMMISSION August 13, 1996 City Hall Conference Room B 1. Call to Order: 7:00 P.M. 2. Roll call. 3. Approval of Minutes: May 15, 1996 4. Request for Proposals for Banking and Financial Services. 5. Comprehensive Annual Financial Report for 1995. 6. Set Date of Next Meeting. • 7. Adjournment: 9:00 P.M. is MINUTES OF THE PROCEEDINGS OF THE FINANCIAL COMMISSION . OF THE CITY OF BROOKLYN CENTER MAY 15, 1996 CITY HALL, CONFERENCE ROOM B CALL TO ORDER Chair Donn Escher called the meeting to order at 7:03 P.M. in the Conference Room B. ROLL CALL Present at roll call were Chair Donn Escher, Commissioners: Ned Storla, Jay Hruska, and Phillip Roche. Also present were Council Member Kathleen Carmody, City Manager Michael McCauley, and Finance Director Charlie Hansen. Commissioner Lee Anderson was excused. Annroval of Minutes_ A motion was made by Commissioner Jay Hruska to approve the minutes of the April 18, 1996 meeting. Commissioner Ned Storla seconded the motion and all members voted in its favor. Special Assessment and Internal Loan Tnterest Rate Policv and Purchasing Policy Donn Escher reported that the City Council had adopted the Special Assessment and Internal Loan Interest Rate Policy and the Purchasing Policy at their meeting of May 13, 1996. He asked about the status of the policy on Requests for Proposals for Professional Services. Mike McCauley responded that this would be submitted to the City Council in the near future. Mavor and Council Member Total Compensation Donn Escher gave a summary of the history and purpose of this process. He spoke of the dangers of not increasing the compensation if that extends over several years. He drew the commission's attention to page 5 of the agenda packet which had the salary data from other cities in three groupings. After extensive discussion, a consensus was reached that: the grouping of cities with populations within 10,000 of Brooklyn Center were most representative; the median compensation was the measure to which Brooklyn Center compensation should be compared; and that Brooklyn Center compensation should be brought up to the median of this group plus inflation for the next two years. The median compensation for Mayor was $7,800 per year in 1996, which compares to $7,700 for Brooklyn Center. The median compensation for Council Member was $6,000 per year in 1996, which compares to $5,700 for Brooklyn Center. A motion was made by Commissioner Ned Storla that the compensation of the Mayor and Council Members should be raised to the survey median plus 2.75 % for 1997 plus another 2.75 % for 1998. Commissioner Jay Hruska seconded the motion and all members voted in its favor. Next Meeting, The next meeting would normally be Thursday, June 13, 1996 at 7:00 P.M. This meeting is canceled due to the absence of the Council Liaison and the City Manager. A July meeting will be called and the Commission notified of its date. • Awl JOIIRNMENT A motion was made by Commissioner Ned Storla to adjourn the meeting at 8:21 P.M. Commissioner Jay Hruska seconded the motion and all members voted in its favor. 0 MEMORANDUM TO: Michael J. McCauley, City Manager CC. Financial Commission Chair Donn Escher, Members Ned Storla, Ron Christensen, Lee Anderson, Lawrence Peterson, Jay Hruska, Phillip Roche, and Council Liaison Kathleen Carmody FROM: Charlie Hansen, Finance Director C H DATE: August 2, 1996 SUBJECT: Requests for Proposals for Banking & Financial Services Attached is a copy of the Policy and Procedure on Requests for Proposals for Financial Professional Services. This policy was recommended by the Financial Commission on April 18, 1996 and adopted by the City Council on May 28, 1996. The policy establishes a schedule for taking requests for proposals (RFPs) on six services used by the Finance Department. Banking services are scheduled for 1997 and again in the year 2000. The policy also states that service levels will be monitored by the staff and RFPs done earlier if unsatisfactory service is received. The City of Brooklyn Center has received its banking services from Marquette Bank Brookdale for many years. It has been a very satisfactory and benefitial relationship until recently. The account was structured so that the City maintained modest cash balances in our accounts on which we received no interest income, in exchange for which the bank processed our deposits and checks without charging us any fees. Marquette Bank Brookdale was also a valuable partner to the City in economic development efforts. This spring, the bank suddenly began charging us several hundred dollars a month in fees. At that point we felt it became necessary to do a RFP for banking services. Attached is a draft of a Request for Proposals for Banking and Financial Services. The Financial Commission should discuss the RFP, propose changes or additions if needed, and recommend a RFP to the City Council. The resulting RFP could be submitted to the City Council for their approval on August 26, 1996. 0 w • POLICY AND PROCEDURE ON REQUESTS FOR PROPOSALS FOR FINANCIAL PROFESSIONAL SERVICES I. NEED FOR POLICY: The City needs a policy and procedure to provide for the orderly conduct of requesting proposals for professional services for handling financial affairs, to ensure that all services will be periodically reviewed, and that the proper balance will be maintained between cost and quality of services. II. POLICY: 1. All professional services in the area of city finances will be periodically let out for request for proposals according to an established schedule. 2. Service levels will be monitored by the City Council and Staff and if unsatisfactory • service is received, that contract will be re-advertised prior to the year set in the schedule. 3. Quality of service will be the primary factor in awarding a contract for professional service, but cost will also be a determinant. III. PROCEDURE: 1. A schedule shall be established for the conduct of R.F.P.s. The schedule should be adhered to unless there is a performance problem or other justification for an earlier R.F.P. Going to the market too frequently with R.F.P.s expends staff time, requires extensive orientation of new professionals, and discourages quality firms from submitting proposals at their most attractive price since they will expect to only have the contract for a short time. 2. Specifications tailored to the professional service to be advertised will be prepared by staff, reviewed by the Financial Commission, and approved by the City Council. 0 • 3. A review committee made up of the City Manager and Finance Director shall review proposals for Banking Services, Insurance Agent, Risk Management Consultant, and Custodian for investment securities. Proposals for Auditor and Financial Advisor shall be initially screened by staff, and then reviewed by a committee of City Council members and Financial Commission members appointed by the Mayor in consultation with the Chair of the Financial Commission, with the approval of the City Council, which committee shall also include the City Manager and Finance Director. 4. The specifications will emphasize the abilities, qualifications, and experience of the applicant firms to provide high quality service to the City. Price will be considered after one or more applicants have been identified as providing the desired quality of service. When appropriate, the specification shall require prices to be submitted in a separate, sealed envelope to be opened after applicants have been ranked according to quality. 5. The City Manager shall make a recommendation to the City Council of a provider to be appointed to a multi-year engagement. It shall be written in the engagement that the appointment may be terminated earlier. 0 This policy was adopted by the City Council on May 28, 1996. 0 CITY OF BROOKLYN CENTER SCHEDULE OF REQUESTS FOR PROPOSALS INTERVAL BETWEEN LAST SCHEDULE PROFESSIONAL SERVICE R-F-P.s R.F.P. 1997 1998 1999 2000 Financial Advisor for bond sales 4 - 6 years Fin Advis Banking Services 3 years Bank Bank Insurance Agent 4 years 1990 Ins Agent Risk Management Consultant 4 years 1988 Risk Mgmt Custodian for investment securities 6 years 1993 Custodian Auditor 4 - 6 years 1994 Auditor 2001 • 2002 Fin Advis Risk Mgmt • SCHEMI .c xi.s 5/23/96 • PROPOSED SCHEDULE FOR RFP PROCESS Request for proposal reviewed/approved by Financial Commission Request for proposal reviewed/approved by City Council Request for proposal issued Due date for proposals Proposals reviewed/screened by City Manager & Finance Director City Manager's report with recommendation to Financial Commission City Manager's report with recommendation to City Council August 13 August 26 August 27 September 6 Sept. 6 - 11 September 12 September 24 • • August 27, 1996 Financial Institution Address Brooklyn Center, MN 55430 The City of Brooklyn Center is soliciting proposals from various financial institutions with facilities in Brooklyn Center for checking account services. The City's checking account is currently with Marquette Bank Brookdale. The current terms require the City to maintain a required minimum balance to avoid fees and charges. Interest is not earned on balances above the required minimum and fees are charged when the balance falls below the required minimum. We are willing to continue a no interest/no fee account by maintaining a minimum compensating balance, but will consider other alternatives as outlined in the proposal document. I have enclosed the proposal request form with supporting exhibits and background information on the City's checking accounts. I expect to receive proposals based on each banks normal commercial structure and will be using historical account activity data to compare the various rate structures. All responses must be made in writing and use the enclosed proposal form. If there is any additional information you think would be appropriate, please feel free to provide it. I am requesting that all proposals be returned by September 6, 1996. Should you have any questions concerning any of the information, or need additional information, please feel free to call me. Sincerely, Charles R. Hansen Finance Director Enclosures 0 CITY OF BROOKLYN CENTER, MINNESOTA 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: 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 $ C. These terms will be effective starting January 1, 1997 for a period of: Check one: one year two years either one or two years at the City's option PART II CHECKING ACCOUNT SERVICE - INTEREST BEARING ACCOUNT FOR FUNDS EXCEEDING THE MINIMUM 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 % compounded and paid . The account balance would be swept daily for funds exceeding the minimum compensating balance. - 1 - • 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 either one or two 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: B. Earnings credits will be based on , the rate is adjusted . The current rate is The rate for the last six months has been: 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. D. These terms will be effective starting January 1, 1997 for a period of: Check one: one year two years either one or two years at the City's option - 2 - 0 PART IV 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 either one or two years at the City's option The terms are hereby agreed to by: Date: Signature: Title: Financial Institution: THE CITY RESERVES THE RIGHT TO ACCEPT OR REJECT ANY AND ALL PROPOSALS. - 3 - Exhibit A City of Brooklyn Center, Minnesota Proposed Terms for Financial Services Agreement Minimum Balance Based Account 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. 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. 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 must 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. - 4 - 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. 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 must 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. - 5 - 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: General Payroll E.D.A. Service Account Account 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. - 6 -