CONTRACT FOR BANKING SERVICES (2)
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CONTRACT
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This negotiated Contract entered into this
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day of C/
1979, by and between the City of Clearwater, Florida, a Municipal corporation
hereinafter called the City and Barnett Bank of Clearwater, N.A., located at
1130 Cleveland, Clearwater, Florida, hereinafter called the Bank:
WITNESSETH:
WHEREAS, it has been deemed advisable to consolidate to the extent possible
all cash resources of the City into accounts in one official depository bank to
be selected by competitive bidding by the commercial banks in the City; and
WHEREAS, the bid most advantageous to the City has been submitted by
Barnett Bank of Clearwater, N.A., which bank is engaged in the business of
commercial banking in the City of Clearwater and is qualified to perform the
required services;
NOW THEREFORE, the parties agree as follows:
1. The Bank will perform the services called for in a proposal forwarded
to the Bank under cover of a letter .from the Purchasing Officer dated April 16,
1979, a copy of which letter and proposal marked "Exhibit A" are attached hereto,
and by reference made a part of this Agreement as if fully rewritten herein,
except as modified by the Barnett Bank of Clearwater bid, marked "Exhibit B"
attached hereto and by reference made a part of this Agreement as if fully
rewritten herein, and by the following:
Item 11.4. "Pension Trust Accounts" as provided for
in the Request for Proposals is excluded
fram this agreement.
2. The City, on its part, agrees to pay for services provided in the
manner specified in "Exhibit B."
3. This Agreement will remain in effect for three years and may,be
b = """"_12:"',,"'
Mayor-Commlssioner
mutual cons~r
CITY/OF CL
By / i/ -
renewed
Attest:
\}
and correctness:
BARNET~ ^~~.. 7:'"
By t;d- ( IAAh
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N.A.
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I EXHIBIT A
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CITY OF
CLEARWATER
POST OFFICE BOX 47.48
CLEARWATER. FLORIDA 33518
April 16, 1979
In 1976 the City of Clearwater consolidated its banking relationships
with the award of the first co~petitively bid banking services agree~ent
to.Barnett Bank~ That agreewent envisioned a three-year relationship~
Which time has passed.
This request for proposal sets forth the City's requirements for
banking services, and a standardized bid response form to ensure bid
comparability. It is the City's intent to award a new banking services
agreement based on this competitive bidding process for a three year
time period.
Very truly your&;/ , \
~t:., A."'/I," / . /:: ,/
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~. / vi:' ,y/~ . ,~~.f!hZ'
onald j. Y~te sen,
Purchasin~Officer
Enclosures
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Subject:
Reauest for Proposals~ Banking Services Agreement
I. Bid Procedures
1. Sealed Bids: Responses to this request should be submitted in a sealed
envelope, clearly identified as:
Bid Proposal
Banking Services
and mailed to:
Donald J. Petersen
Purchasing Officer
F. O. Box 4748
Clearwater, FL 33518
or delivered to:
Donald J. Petersen
Purchasing Officer
711 }!.aple Street
Clea~ater> Florida
2. Bid ResDonse: m~st be on standard form provided. Supporting material
may be submitted~ however" the City's decision in select-
ing the most responsive bidder will be based on the
standardized form provided.
3. Ouestions~ Additional Information:
Requests for clarification or additional information
should be submitted in wTiting to:
Jeffrey E. Butler
Assistant City Manager
P. O. Box 4748
Clearwater, FL 33518
Responses will be in writing to all bidders as addenda
to this RFP. Telephone questions to individuals within
the City of Clearwater are not encouraged, but will be
permitted, ~th the exnlicit proviso that any such answers
are in no way binding upon the bidding process and upon
the award of contract.
4. Bidding Schedule
April 17. 1979:
Distribution for Request for Proposals.
Nav 11. 1979:
Bids must be in possession of Purchasing
Director by 3:00 P.M. this date.
June 7. 1979:
Reco~ndation for award to City Commission a
Julv 7. 1979:
Implementation date for new three year
agrep,-;;pnt.
(Continued)
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I. Bid Procedures (Continued)
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5. Selection Criteria:
The fo11o~ng criteria will be used to evaluate bid responses and
to recommend award to the City Commission:
complete response to all required response items on standardized
bid forms;
aggregate banking services cost, per identified activity;
calculation method of earnings allowance on cash balances;
eA~erience and continuity of bank officials identified as
primary contact points;
physical proximity to City offices and activities.
6. Terms and Conditions:
The City reserves the right to reject any irregularities or inforwality
in any bid~ or to accept or reject any item. In the event that the
bidder to whom the bid is awarded does not execute a contract within
30 days after the award of bid. the City ~y give notice to such bidder
of intent to award the bid to the next most qualified bidder, or to
call for new bids.
The intent of this bidding process is to select one bank to provide
all banking services~ However~ for items such as Pension Trust Accounts,
the City reserves the right to distribute services to different banks
if this approach rrdght result in significant savings to the City. The
standardized bid form indicates the number of transactions anticipated~
and altnough this is the City's best estimate of volume, tne City does
not guarantee these as minimum volumes.
Bids will be on file in the Finance Department for review after,
June 1, 1979.
II. Scone of Banking Services
"I. Main Operating Account:
The City's operating account contains a variety of activity_ Each of
the various services provided by the City is responsible for its OIVU
deposits. Therefore~ it is necessary tha~ a drop depository be avail-
able 24 hours a day for deposit of collections. Deposits ~11 be made
by City ~~ployees or a security service. Except for Bridge and Parking
Deposits, all deposits ~11 be accompanied by a deposit slip in duplicate.
Upon verification of tne deposit, a copy of the deposit slip must be
acknowledged by tne Bank and mailed to the City Finance Office the same
day. Pads of deposit slips printed ~th the name of the activity ~11
be furnished at no charge by the Bank~ in such quantities as may be
required.
In the case of deposited checks being returned because of insufficient
funds or any otner reason, one attempt ~11 be made by tne Bank to re-
deposit the check, after which it will be fo~arded to the City Finance
Office for processing.
(Continued)
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II. Scope of Banking Services (Continued)
1. Main Operating Account (Cont.):
It is estirr~ted that the City writes approximately 1,500 checks per four
week period on the operating account. It is estimated that 400 deposits
per four week period are wede to this account.
All investment transactions relating to cash management ~ll be routed
through this account.
The average amount of money processed through this account each four
week period is $7,500,000. Of this amount approximately one-half in-
volves the purchase or maturity of investments.
The bank must have the capability of receiving the wire transfer from
Federal Government for items such as Federal Revenue Sharing and
Community Development Block Grant.
The total value of this account (including cash and- short term invest-
ments) at the present time is approximately $25,000,000.
2. PavToll Deoository:
The City is currently on a biweekly payroll basis, paying an average
of 1,400 employees every other Friday. Net pay amounts to approximately
$450,000 biweekly. In addition, a special sanitation workers payroll
of some 100 checks is issued weekly on Friday. Net pay for this payroll
amounts to approximately $15,500 weekly. It is the intent of the City
to con~inue with this payroll system; however, mainly due to employee
union contracts, this system way change. It is estirrdted that 3,000 payments
and 4 deposits per four week period are associated with this 'account.
Although the City is not currently utilizing a direct deposit payroll
system, the ability of the bank to provide this service (either
completely or for a portion of our employees) in the future, at the
City.s option, is desirable.
3. Statements:
The City operates on a 13-period year rather than the traditional 12-
month year. This necessitates a cut-off date for .statement purposes
that will conform to a predetermined schedule which will be furnished
by the City. Statements must be delivered to the City Finance Office
"ithin 5 working days following the cut-off.
Payroll checks are currently wTitten by the corrputer. The depository
bank must have in-house computer capability to effect reconciliation-
of accounts, utilizing magnetic tapes furnished by the City covering
checks issued during the period, and Bank computer files of checks paid.
(Continued)
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Scope of Banking Services (Continued)
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3. Statements" (Continued):
It is anticipated that the operating account will be computerized by
October 1, 1979. The same reconciliation procedure will be necessary
for this account at that time.
Checks are to be arranged in nTh~eric order before they are returned to
the City with the statements.
A statement must be furnished for all accounts (including Lock Box
Service and Savings Accounts~ if any~ excluding Pension Trust Accounts)
required by the City on the 52me schedule as the regular accounts.
In addition to regular statements, the Bank must provide on demand,
daily balances in the depository accounts if and when such information
is required by the City.
Please see Pension Trust Accounts~ and Lock Box Service for additional
reporting requirements associated with those services.
4. Pension Trust Accounts:
The City is currently under agreement with two companies to rranage the
investments of the Employees' Pension Fund.
The Bank will establish separate trust accounts for each Investment
Manager employed by the City. All receipts will be credited to the
account from Which income is generated, or from which securities sales
have been made; or if new money is deposited by the City for the Invest-
ment Managers accounts, pursuant to instructions of the City. All cash
coming into Investment }~nagers accounts will be deposited i~diately
in a savings account or other interest bearing account in the name of
the appropriate Manager account pending instructions from the Investment
Manager.
All principal cash received or collected and any stock dividends or
other dividends in kind paid or received in respect to the property
in these accounts will be credited to appropriate Manager account or
accounts.
Statements of principal and income will be submitted to City and Invest-
ment Managers monthly.
Bank will carry out the ~itten instructipns received from each Investment
Manager regarding all investments~ the purchase, sale or exchange of any
securities or other property held in that Manager's account. Bank is
authorized to use for the purchase of any- security of property directed
by any Investment Manager, any uninvested funds held in that Manager's
account on behalf of City. Funds of the separate Manager accounts will
not be commingled for this or any purpose.
(Continued)
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Scoue
of Banking selvices (Continued)
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4. Pension Trust Accounts (Cont.)
Bank ~ill prepare and furnish to City and Investment Managers a report
of the property in each account showing units, descriptions, carrying
values, estimated income and market values on a quarterly basis. Such
information will be on the form used for this purpose by Bank and ~ill
sho~ valuations as of the end of the month prior to date prepared.
Reports ~ill be prepared as of the end of any other months. if arranged
in advance. Properties will be carried on the books at values furnished
by City or at cost if purchased for the account.
All securities held Which require registration may be registered in
City's name or in Bank's name as nominee.
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Bank will be under no obligation whatsoever ~ith respect to the voting.
or failure to do so. of any stock or other securities. but Bank will
vote proxies on written instructions of Investment Managers.
Bank ~ill furnish to City as soon as practicable after the end of each
calendar qUnrter, a report of all sales in each account made during
the preceding quarter showing carrying value and net proceeds of salea
In the matters of Rights, Fractional sbares, Savings accounts, Bank
will act only in accordance with instructions of Investment Managers.
Current activity for both accounts involves 50 transactions per month;
average warket value of managed investments in each account is
$1,003.765.
5. Coin Deposits:
(1) The C1ea;r-t..;1ater Pass Toll. Bridg~:p and Ci ty parking meters:p generate
collections of coins in 1-5-10-25-50~ denominations. amounting to
approximately $2500-$10.000 a day. In the case of parking meters.
these coins are gathered by City employees ~ho ~ill deliver them
uncounted to the location and/or individual specifically designated
by the Bank. Coins from the bridge ~ill be delivered to the same
place or person, either by a City employee or by a security service.
Collections in these two instances are not counted in advance of
deposit. It ~ill be necessary for the Bank to sort and count the
coins, determine the amount involved, and prepare deposit slips in
duplicate for each department involved. Deposit slips for the
bridge must list the number of each vault delivered and the amount
for each denomination of coins contain~d in each vault. A deposit
slip will be forwarded to the Finance Office as specified in 6
below. The Bank must provide the internal security obviously
needed to guarantee proper handling of such deposits. The Bank will
be ex~ected to provide such mechanical sorting and/or counting
equipment as may be required.
(Continued)
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II. Scone of Banking Services (Continued)
5. Coin Denosits (Cont.)
(2) The Bridge collections will contain tokens that must be counted
and reported the same as regular coins. The City owns a machine
that extracts. counts and bags these tokens. This machine will
be made available to the Bank awarded this agreement. A log
must be maintained by the Bank~ showing the amount of tokens on
hand at all times. On a periodic basis, usually twice a week,
the City will deposit to the Bank proceeds from the sale of
tokens at the bridge. The Bank will count this money, deposit
it to the operating account. then send to the bridge by security
service, an aIDDunt of tokens equal to the money deposited,
(6 tokens for each $1 deposited).
(3) Parking meter collections are segregated by individual parking
lots in containers. These containers will have to be emptied
into bags or other receptacles to be provided by the Bank pending
sorting and counting. The integrity of separate collections from
specific lots rollst be preserved and separate deposit slips prepared
on each.
(4) Foreign coins, tokens~ slugs, mutilated coins, etc. will not be
counted or assigned a value but will be removed from deposits,
acclli~lated, and turned over to the City Finance Department weekly.
Details of this procedure will be worked out between the City
Finance Department and the depository.
(5) The Bank Imlst be prepared to provide on demand approximately
$4,000 to $5.000 weekly in rolled quarters for change in the
bridge toll booth.
(6) Coin deposits must be counted and doclli~nted during the business
day received~ or the following day if collection is received after
the cut off time established by the Bank.
6. Lock Box Service:
The Bank will provide a Lock Box Service for the City's Utility collections
per the following instructions:
(1) The City .~ll provide a post office box. The Bank will
retain the key to this post office box and have exclusive
use of same. The Bank must pr~vide the internal security
needed to~ guarantee proper handling of these deposits.
(2) Each morning Bank personnel will empty this box of its contents.
The contents of the envelopes will be removed and the checks or
cash will be verified against the utility stub. Items matching
will be processed. Items that do not match will be classified
as rejects and set aside.
(Continued)
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II. Scone of Banking Services (Continued)
6. Lock Box Service (Cont.):
(3) All processed items will be batcbed, balanced and filmed,
and the aggregate amount deposited to the operating account.
(4) Reject items will be filmed.
(5) The processed utility stubs and a list tape will be delivered
to the Data Processing Center at the City Annex prior to
2:00 P.M., the s&~e day.
(6) The deposit receipt w~ll be delivered to the Finance Department
at City Hall the same day.
(7) All reject items will be delivered to tbe Utility Department
at 900 Chestnut Street the same day.
(8) The estimated volume of transactions for the above service
is 25,000 items per month.
(9) The City reserves the right to require additional collections
from the post office if that volume of items supports this
request.
7. Inves~ments:
The Bank will bandle tbe purcbase or liquidation of investments only
upon instructions of the City Treasurer or his designate.
Investment transactions must be consummated on the same day instructions
are received from the City Treasurer, or on the next business day if
instructions are received after the necessary time deadline for current
date action. Repeated failure to consummate investment instructions will
be cause for cancellation of agreement.
On maturity or liquidation of an investment, notification will be sent
to the City Finance Office showing the deposit of the proceeds. The
same type notification will be required for all purchases of investments.
These notiIications will be mailed the same day as the transaction.
The bank shall provide s2fekeeping for investments ow~ed by the City.
A copy of the safekeeping receipt will be remitted to the City Finance
Office.
The City reserves the right to invest in time deposits~ U. S. Government
securities or repurchase agreements through other banks or institutions
if higher interest rates have been offered.
(Continued)
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Scooe of Banking Services (Continued)
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7. Investments (Cont.):
The bank shall provide repurchase agreements to the City at rates
equivalent to the bank's most preferred customer.
The City estimates that investment activity will include 8 purchase
transactions and 6 maturity transactions per month.
8. Collateral:
Deposits in excess of FwD.I.Cpcoverage must be fully collateralized.
This requirement "~y be met by the pledge of any security, other than
shares of stock~ in which the Bank is authorized by law to invest its
funds. The total collateral required to be pledged will be computed
initially at market value of securities involved.
Certificates of Deposit, or time deposits, placed Qy the deoositorv
bank in banks other than the official depository will be treated as
part of the balance on deposit in the depository bank and collateralized
accordingly by the depository bank as if such C.D. 's or time deposits
were in the depository bank.
Certificates of Deposit placed Qy the City in other banks w~ll be
collateralized separately by arrangement between the City and the
bank involved.
As of the end of each month, the Bank will furnish a listing of pledged
securities including U. S. Government securities~ indicating current
market values. At this time, the amount of collateral required may be
recomputed as rray be indicated by current balances on deposit and/or
market values of securities pledged.
The ~UDunt of pledged collateral may also be recomputed at other times
as required coverage varies.
9. Safety Deposit Boxes:
The Bank shall provide such safety deposit boxes as may be needed for
storage of Registered Bonds3 coupons) or other material requiring
exceptional security.
10. Line of Credit:
The City will be granted a $1,000,000 line of credit available as may
be required, upon appropriate resolution by the City Commission.
11. Wire Transfers:
The City occasionally is required to wire transfer funds to other
Banks. This service will be provided on the request of the City
Treasurer or his designate.
(Continued)
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II. Scone of Bankin~ Services (Continued)
III.
10.
11.
12.
13.
14.
15.
12. Savings Bonds:
The City offers to its employees the payToll deduction plan for the
purchase of Savings Bonds. The bank must have the capability of
preparing and delivering to the City approximately 150 Savings Bonds
every two weeks.
Standard Bcnking Services Bid Responses
(Actual Bid Response Form Attached)
Part A
Bank Name
Official Submitting Response
Title
Phone
Part B
Honthly
Cost
Estimated Monthly
Activitv/Tr2usaction
Unit Price
'Banking Service
1. Account Maintenance
(P and MO)
2. Account Reconciliation
(P)
Items Paid (P and MO)
Items Deposited (P and MO)
(a) Coin Sorting and
Counting
(b) Coin and Currency
Shipment
Lock Box ~ervices
Stop Payments
Wire Transfers
Investment Transactions:
Buy
Maturities
Trust Accounts
Safety Deposit Boxes
Returned Items
Savings Bonds
Other Itemzied Services
2
3.
4.
5.
1 - 3400 Items
4600
22 ,000
$75,000.00
$20,000,00
25,000
6.
7.
8.
9.
6
1
8
6
50
2
40
333
Totals:
Option: Direct Deposit Payroll System
Part C
Earnings Allowance:
1. Procedure:
The Bank will prepare an analysis of the City's accounts at the end of
each month. This analysis will show the monthly average account balances~
less reserve requirements.. This will be computed with no provision for
uncollected balances. Banks should factor this item into their bidded
cost of services. (The average daily uncollected balance on the City's
accounts for the past year was $129,762.) Tnis average account balance will be
used to compute tbe monthly earnings on the account based on the average
Federal Funds rate for each Friday of that month. (The Federal Funds rates and
the computed average will be included with each monthly an.alysis~)
The difference between the monthly earnings an'd monthly ite:mzed service
charge will result in an earnings credit or charge to the-City.s ~in
operating account. A copy of this analysis will be submitted to the City
FiruL~ce Office within ten calendar days after the end of each month~
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III. Standard Banking Services (Continued)
Standard Banking Services Bid Resnonse Form (Cont.)
Part C (Cont.)
Earnings Allowance (Cont.):
2. Hvnothetical Examnle for Month of July. 1979:
(1)
Average Account Balance July, 1979:
Less: Reserve Requirements @ 137.
$500,000.00
(65.000.00)
Average Account Balance Subject to
Earnings $435,000.00
(2) Average Federal Funds Rate for Month of July 8%
(3) Monthly Earnings (435,000 x .08 -:- 12) $ 2,900.00
(4) Monthly itemized banking service charge for
July, 1979 1.500.00
(5) Monthly earnings credit for July $ 1,400.00
3. Alternative Earnin~s Allowance:
Failure to conform to the above procedure ~ll be considered an incomplete
response, in that bid comparability will be jeopardized; hOw~ver, the
following standardized alternative earnings allowance computations are
provided to encourage maximum peE sible competition.
(1)
(2)
(3)
(4)
(5)
Use of collected balance rather than total collected and
uncollected balance:
Unwillingness to allow earnings credit to City
account.
Use of alternate earnings rate (describe basis for rate
and basis for future objective documentation of rate).
Use of alternate averaging technique (specify technique
and advantages).
E^~lanation for alternate earnings alIm~ance proposal~
4. Designated Bank Contact Individuals (include position, length of
service, and summary of professional eA~erience. Please attach listing
to bid response form.)
(a) General Information
(b) Investments
(c) Lock Box Service
(d) Eookkeeping
(e) Trust Accounts
(f) Head Teller
(g) Other (Specify)
5. Please attach a current statement of financial condition and income
statements for the past five years.
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STANDARD BANKING SERVICES BID RESPONSE FORM
Bank Name:
Official Submitting
Response:
Title:
Phone:
Banking Service:
Estimated Honthly
Activitv
1. Account Maintenance
(P and MO)
2
2. Account Reconciliation (P)
1 - 3400 Items
3. Items Paid (P and MO)
4600
4. Items, Deposited (P and rID)
22,000
5. (a) Coin Sorting and
Counting
$75,000.00
(b) Coin and Currency
Shipment
$20,000.00
6. Lock Box Services
25,000
7. Stop Payments
6
8. Wire Transfers
1
9. Investment Transactions:
Buy
Maturities
8
6
10. Trust Accounts
50 Transactions
11. Safety Deposit Boxes
2
12. Returned Items
40
13. Savings Bonds
333
14. Other Itemized Services
15.
Totals:
Option: Direct Deposit Payroll System
Unit
Price
Page 1
Nonthly
Cost
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Earnings Allowance Procedure:
Designated Bank Contact Individuals:
Financial Statements Attached:
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EXHIBIT B
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Post Office Drawer 5128
Clearwater, Florida 33518
813/461-1776
J-lay 10, 1979
Mr. Donald J. Petersen
Purchasing Officer
city of Clearwater
P.O. Box 4748
Clearwater, Florida 33518
Dear Mr. Petersen:
We are enclosing our bid to continue as the City's
depository in a separate sealed envelope, per your instructions.
We appreciate the opportunity to orrer our services
to the City and I believe that our long record of service to
the City will be a strong consideration of our capability to
render satisfactory service. We are completely qualified in
all areas of service required and once again enclose our
account reconciliation package and remind you of our capa-
bility of direct deposit of payroll and of our affiliation
with Barnett Banks of Florida, Inc., whose Annual statement
we enclose.
We were somewhat surprised that the City did not
choose to continue our present relationship for an additional
three year period based on the past contract, and we, at this
time, indicate our willingness to do that if you so desire.
We hope that during your consideration of various bids
that you will receive. that a clearwater based bank is given
priority inasmuch as the handling of your account can better
be done on a local basis. rather than through a branch office
operation.
Should you have any questions concerning our proposal,
please advise.
BPC;ae
sincerely,
III /~ /
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,~>y\ L.t.<>-'>~
. B. P-: crosby
President
EXHIBIT B
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S~~ARD BANKING SERVICES BID RESPONSE FORM
Bank Name:
Barnett Bank of Clearwater, N.A.
Official Submitting
Response:
Mr. E. J. Biagi
Title:
vice President
Phone:
(813)461-1776
3. Items Paid (P 2nd ill)
4. Items Deposited (P and HO)
5. (a) Coin Sorting and
Counting
4600
Unit Honthly
Price Cost
3.00 6.00
.03 102.00
.07 322.00
.03 660.00
. 5~-J'er 375.00
$10
.025 per 50.00
ro.L.L
.025 625.00
1.00 6.00
3.00 3.00
Banking Service:
Estimated Honthly
Activitv
1. Account Maintenance
(P and MO)
2
2. Account Reconciliation (P)
1 - 3400 Items
22,000
$75,000.00
(b) -Coin and Currency
Shipment
6. Lock Box Services
7. Stop P a)'1Den t s
8. Wire Transfers
$20,000.00
25,000
6
1
9. Investment Transactions:
Buy
}1"2turities
8
6
NjC
N/C
10. Trust Accounts
50 Transactions
Separate Bid Enclosed
11. Safety Deposit Boxes
2
N/C
.50
12. Returned Items
40
20.00
-13. Savings Bonds
333
NjC
14.. Other Itemized Services
15. Safekeeping of
investment securities
Totals:
29
2.00
58.00
$2,227.00
Option: Direct Deposit P2yroll System
This service is currently available through Barnett and can be implemented
irrmediately upon the-City's request.
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HYPOTHETICJ1' EXAMPLE FOR MONTH OF MAl'
1979
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Earnings Allowance Procedure: Please see attached
Average - Ba lance
$309,000.00
Less:
Reserve Requirements @ 13%
40,170.00
Average Balance Available for Investment
Value Investable Balance @ 9.95*
268,830.00
Total Account Expense
$2,229.05
$2,227.00
2.05
Profit or Loss
*Average'
4/6
4/13
4/20
4/27
Federal
- -. ---....,
9.96 )
10.10
9.78
9..94
Funds Rate for April 1979
Desi~2ted Bank Contact Individuals:
Edward J. Biagi
Vice President - Operations
Professional experience - 13 years ~n bank operations
11 years - Barnett Bank of Clearwater, N.A., Clearwater, Florida
2 years - First National Bank, Montgomery, Alabama
(A) General information
(B) Investments
(C) Lock Box service
(D) Bookkeeping
(F) Head Teller
Rt>G=d0i.X:S:labeY.'EIill5x*~E:d::
Robert P. Kinney
Vice President - Commercial Loans
Professional experience - 12 years in commercial lending
5 years - Barnett Bank of Clearwater, N.A., Clearwater, Florida
~7 years - Barnett Bank of Jacksonville, N.A., Jacksonville, Florida
(G) Loans
Financial Statements Attached:
Financial statements enclosed
PROPOSED EA~NINGS ALLOWANCE CALCULATItN
METHOD
,
Our earnings allowance procedure conforms in all areas except
the following:
The difference between the monthly earnlngs and monthly itemized
service charge will result in an earnings credit or charge to the
city's main operating account. 'According to banking regulations we
can offset the accounts monthly itemized service charge against the
monthly earnings but excess earnings cannot be credited to the city's
account.' In our professional opinion that would be the same as
paying interest on demand deposits which we are not permitted to do.
Therefore, we propose the following procedure:
At the beginning of each month a target balance will be established.
The target balance will be the average daily balance that must be
maintained for the month. Then on a daily basis the target balance will
be reviewed to determine balances in excess of the target. Excess balances
will be transferred into a repurchase agreement*. The target balance
will be determined by the earnings credit allowance. At the beginning
of each month the earnings credit allowance for that month will be the
previous month's average federal funds rate. The target balance will be
calculated to produce sufficient earnings to cover the monthly itemized
service charge of $2,227.00.
EXAMPLE
Average federal funds rate for April 1979, 9.95%
At that rate a target balance of $309,000.00 would generate enough
income to offset the monthly account expenses of $2,227.00.
Average Ba lance
Less: Reserve Requirements @ 13%
Average Balance Available for Investment
Value Investable Balance @ 9.95*
Total Account Expense
Profit or Loss
$309,000.00
40,170.00
268,830.00
$2,229.05
$2,227.00
2.05
*A repurchase agreement is the sale of a bank owned security with a
simultaneous agreement to repurchase the security at some future date.
Transactions may run from one day to several months. It offers greater
flexibility than any other medium for the employment of short term funds as
well as a generous return and a complete elimination of the rist of
market fluctuation.
1. The minimum amount of a repurchase agreement will be $50,000.00.
2. The rate of return will be 3/4 of 1% below the federal funds rate.
3. Repurchase agreements will be secured by united states Treasury Issues
and Federal Agency Issues.