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Res 2831 8/18/1981RESOLUTION NO. 2831 RESOLUTION ACCEPTING PROPOSAL AND AUTHORIZING CITY MANAGER TO EXECUTE DEPOSITORY CONTRACT. WHEREAS, heretofore the City of Wichita Falls has advertised for proposals to act as depository of City funds for two years from October 1, 1981; and, WHEREAS , three proposals were received, and it is found that the proposal of the City National Bank in Wichita Falls offers the most favorable terms and conditions for the handling of such funds. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF WICHITA FALLS, TEXAS , THAT: The proposal of the City National Bank in Wichita Falls to act as depository of City funds for a two year period beginning October, 1981, is hereby accepted, and the City Manager is authorized to execute with such bank a depository contract, a copy of which is attached hereto, containing the terms and provisions of such proposal, with the variable rate on time deposits over $100, 000 . PASSED AND APPROVED this the 18th day of August, 1981. M A Y O RR ATTEST: 11111_ City Cle DEPOSITORY CONTRACT This contract made and entered into this the At day of September, 1981 , between the City of Wichita Falls, Texas, hereinafter called "City" , and the City National Bank in Wichita Falls , hereinafter called "Bank" , WITNESSETH: For and in consideration of the mutual covenants contained herein, City and Bank do hereby agree that Bank shall serve as depository of City and maintain custody of the funds of City for a period of two years from October 1 , 1981 through September 30 , 1983 in accordance with the covenants and provisions contained in Bank ' s Proposal for Depository Contract, including its Attachment to the Proposal for the Depository Contract, all of which are attached hereto and incorporated herein by reference. On time deposits over $100 , 000 , Bank shall pay City the variable rate shown under Alternative No. 2 in Section III of the Attachment to the Proposal for the Depository Contract. IN WITNESS WHEREOF, the parties have caused this contract to be executed as of the day and year first stated above. CITY OF WICHITA FALLS , TEXAS B Y art A. Bach, City Manager ATTEST: 4- 1 Ytl/ f City lerk CITY NATI ' AL BANK IN WICHITA FALLS BY : s Joe N. Prothro, Pr°sident ATTEST: c y-----4_,.._,. , , ,,....... NOTICE TO BANKING INSTITUTIONS WITHIN THE CITY OF WICHITA FALLS, TEXAS PROPOSAL FOR DEPOSITORY CONTRACT Notice is hereby given that the Governing Body of the City of Wichita Falls, Texas , subject to the provisions of Article 2559 to Article 2566A, Inclusive, Revised Civil Statutes of Texas , as amended, will receive proposals from all interested banking institutions within the City of Wichita Falls to serve as prime depository of the City of Wichita Falls and maintain custody of all City funds for a period of two years from October 1 , 1981 through September 30, 1983. Any such proposal shall be delivered to the office of the City Clerk in the Municipal Auditorium prior to 8:30 a.m. , July 27, 1981. It is requested that each bank bid by filling in the blanks and agreeing to the following specifications . All blanks must be filled in for your bid to he properly evaluated. Please read exhibit "A" for terms defined for this proposal by the City of Wichita Falls, Texas. Each banking institution will he required to submit a bid based upon both a variable rItte of return as well as a fixed rate of return. In addi- tion, specific services will be required from each banking institution at no cost to the City of Wichita Falls, Texas as listed. Other services may be charged to the City of Wichita Falls, Texas at amounts indicated in the proposal. Bidder agrees to secure all deposits by either, (a) Federal Deposit Insurance Corporation insurance or (b) the pledge of securities in the form of obligations of the United States Treasury, United States Govern- ment Agencies, the State of Texas , or political subdivisions of the State of Texas . All collateral shall have a Moody's bond rating of AAA or better except for Texas Municipal Bonds which shall have a Moody's rating of A or better. These securities shall be valued at par or market value, whichever is lower. The value of securities offered will at all times be sufficient to fully secure all funds on deposit plus a minimum margin of 10%. The bidder also agrees to advise the City of Wichita Falls of the description, amounts and locations of securities pledged for these deposits, monthly. The City of Wichita Falls reserves the right to reject any and all bids. VARIABLE RATE BASIS Certificates of Deposit under $100,00.00 for periods of 30 through 90 days will he based upon the 13-week U. S. Treasury Bill rate or estab- lished at the preceding week's Treasury Bill offering, adjusted to the coupon equivalent rate, and compounded daily on a 365-day basis . The mini- mum rates will be subject to Federal Reserve Bank Regulation Q, which may limit the interest rate that can be paid on Certificates of Deposit of less than $100,000.00. Certificates of Deposit greater than $100,000.00 will be based upon the 13 week U. S. Treasury Bill rate as established .at the preceding week's Treasury Bill offering, adjusted to the coupon equivalent rate, and compounded daily on a 365-day basis with a fixed minimum yield of 12% and fixed maximum of 23%. FIXED RATE BASIS Certificates of Deposit under 5100 ,000.00 for periods of 30 through 90 days, will be paid at a fixed rate per annum, compounded daily on a 36)-day basis . Certificates of Deposit of 5100,000.00 or more will be paid at a fixed rate per annum, compounded daily on a 365-day basis . SAVINGS ACCOUNTS Savings accounts will be offer.'d for all City of ''icbita Falls Accounts and will he paid in accordance with current banking rc,ulations compounded daily on a 365-day basis . SERVICES TO BE PROVIDED The following services will he provided to the City of Wichita Polls at no charge: Foreign and Domestic Exchange Wire Transfer Services Night Depository Services Traveler's and Cashier's Checks Safe Deposit Boxes Coin Wrappers Handling Checks and Deposits Handling NSF Items and/or Debit-Credit Items Cremation Certificates on Bonds and Bond Coupons Handling Letters of Transfers Between Accounts Counting and Depositing of Parking Meter Collections and Bus Fares or Others as Required Checks and Deposit Slips That Conform to The City of Wichita Falls Specifications Statements' on a monthly basis, as of the last day of the month, and a list of check numbers for those checks not leaving the Accounts Payable and Payroll bank accounts during the month Quarterly statements for savings accounts Sort all checks paid during the month into check number sequence for each account Safekeeping service for securities owned by the City of Wichita Falls Lock bank bags as needed Temporary overdraft privileges not to exceed 48 hours as defined in Exhibit "A" Daily balances of each account on request Stop payment orders Parking facilities OTHER SERVICES - CHARGEABLE Rate of Interest to be charged and rate 56% of City National Prime and legal loan limit limit $2, 500,000 Rate of Interest- to be charged on rate 56% of City National Prime certificates of obligation limit $2, 500,000 Rate of Interest to be charged on tax warrants rate 56% of City National Prime Charges for providing bond and Various coupon paving services Other services the bank can offer Thy• City of Wichita Falls reserves the ri ght to reject any and all bids . EXHIBIT "A" Notice to !Banking Institutuions Withitt The City of Wichita Falls, Texas Definitions and Specifications Certificate of Deposit - any deposit with reference to which there is in force a contract, that neither the whole nor any part of such deposit may be withdrawn by check or otherwise prior to the expiration of the period of notice which must be given in writing in advance of withdrawal. Savings Accounts - any deposit which will earn interest compounded on a daily basis of 365-days and can be transferred to a demand account or withdrawn on demand. Letter of Transfer - written authorization by the City of Wichita Falls, Texas to "debit" or "credit" the appropriate accounts listed on a form for the transfer of monies between accounts. Demand Account or Checking Account - any deposit payable on demand without interest being earned on the account. Checks - All checks will be a three-part form, with the exception of payroll which will be a one-part form, in the paper weight of 24-pound first copy and 16-pound for each additional copy. All checks will contain the appropriate MICR coding including the check number. Temporary Overdraft - overdrafts in demand accounts not to exceed 48 hours, provided overdrafts in the aggretate do not exceed balances in other demand accocunts . The bank will notify the City of Wichita Falls upon overdraft status. Other Services - any additional banking services that are not included in "Services to be .Provided" or "Other Services - Chargeable". "Other Services" must be specifically listed and designated as no charge or chargeable. e A.DL'.,.ILLi•i /,I 1 DEPOSITORY CONTRACT OF TIIE CITY OF WICHITA FALLS, TEXAS VARIABLE RATE BASIS" The variable rate that each bank may offer will be quoted as an adjustment to the "Coupon Equivalent Rate". For example, the "Coupon Equivalent Rate" as quoted in the Wall Street Journal Tuesday July 7, 1981 for the 13 weeks Treasury Bill is 15.155. Each banking institution may submit a bid quoting a variable rate in excess of this "Coupon Equivalent Rate" by stating that they will offer to pay a rate of so many "basis points" in excess of the "Coupon Equivalent Rate" as stated in the Wall Street Journal ispued each Tuesday. Please change the wording of the second sentence under "Variable Rate Basis" to read as follows "The maximum rates will be subject to the Federal Reserve Bank Regulation Q, which may linit the interest rate that can be paid on Certificates of Deposits less than $100,000.00". Certificates of Deposits greater than $100,000.00 will be based upon the 13 week U.S. Treasury Bill rate as established at the preceding week's Treasury Bill offering, adjusted to the "Coupon Equivalent Rate" plus the Basis Points, and compounded daily on a 365-day basis. EXHIBIT " A " Please emend the definition of "Savings Accounts" to read as follows : Savings Accounts - any deposit which will earn interest compounded on a daily basis of 365-days and can be transfered to a demand account or withdrawn on demand, with proper notice to the banking institution. L Please use the srace provided on this form for submitting the Variable Rate Basis and the "Fixed Rate Basis" . Variable Rate Basis Fixed Rate Basis Certificate of Deposit SEE ATTACHMENT * C Under : 100,000.00 Certificate of Deposit SEE ATTACHMENT * Greater than `:100,000.00 esen,: lecre c' _ - and 1 r- Attachment to the Proposal for the Depository Contract for the City of Wichita Falls, Texas I. Savings Accounts We will pay the maximum rate currently allowed by Regulation Q on all Savings Accounts maintained by the City. Such rate is 51/4% and will he compounded daily on a 365 day basis. II. Time Deposits Under $100,000 A) . We will pay -4 of 1% over the 26 week U. S. Treasury Bill discount rate on certificates of deposit of $10,000 or more having maturity of 182 days after the date of deposit. (Such rate changes weekly on Tuesday and as of _July 21 was 15. 56%) Federal Regulations currently prohibit compounding of interest,on these certificates. B) . We will pay the maximum rate currently allowed by Law under Regula- tion Q of the Federal Reserve System on other time deposits having a maturity of 14 days or more after the date of deposit or payable upon written notice of a like number of days. The maximum allow- able rate is 8%. We will compound interest daily on a 365-day basis. III. Time Deposits Over $100,000: At the present time there are no maximum rates prescribed on any time deposit of $100,000.00 or more. Such rates are dependent on conditions which may exist from time to time in the money markets and are further influenced by the maturity of the time deposit. Accordingly, we are offering the City two alternatives as requested on such deposits. Alternative No. 1 - Fixed Rate We will pay the City a fixed rate of 12.60% interest per annum, com- pounded daily on time deposits written during the contract period andmoreafterthedate. of deposit orof1 + days or morhavingamaturitydatey payable upon written notice of a like number of days. Such rate will be compounded daily on a 365-day basis which will provide an effective yield of 13.43 per annum. The advantage of such a fixed rate is that it affords a definite sum of income to the City which can be used in budgetary projections. Alternative No. 2 - Variable Rate On time deposits having a maturity of 14 to 179 days, we will pay the City 25 basis points in excess of the "Coupon Equivalent Rate" of the 13 weeks U. S. Treasury bill discount rate as stated in the Wall Street Journal e Page 2 City of Wichita Falls, Texas Depository Lid issued each Tuesday. On time deposits having a maturity of 180 to 365 days, we will pay the City 25 basis points in excess of the "Coupon Equivalent Rate" of the 26 weeks U. S. Treasury bill discount rate as stated in the Wall Street Journal issued each Tuesday. In the event that the rate as calculated above falls below 10.00%, then we will pay the City of Wichita Falls 10.00% on such time deposits. NOTE: In offering these Alternatives, only one may be chosen by the City and the Alternative chosen will become a part of the contract for the two-year period. .