Consideration and Acceptance of Proposal and Contracts and Adoption of Resolution No. 2015-13:  Local Bank Deposit Program Services (Approve contracts with Alliance Bank and adopt Resolution authorizing agents for financial transactions)

1) Accept the proposal and approve contracts with Alliance Bank of Arizona for Local Bank Deposit Program Services (CDARS Placement Agreement; CDARS Placement Agreement Supplement; Custodial Agreement; Custodial Agreement Amendment);
2) City Clerk to read Resolution No. 2015-13 by title only;
3) City Clerk reads Resolution No. 2015-13 by title only (if approved above);
4) Adopt Resolution No. 2015-13

Per Council direction, staff was asked to issue a Request for Proposal (RFP) for Community Banking Services (subsequently retitled Local Bank Deposit Program Services) to purchase certificates of deposit (CDs) in an amount not to exceed $5,000,000 and for a term not to exceed three (3) years.  The goal of the RFP process, with direction from Council, was to solicit proposals from lending institutions that met the following criteria.

• The proposer participates in the CDARS program or will fully collateralize the deposits or both to ensure they are fully insured by the FDIC at all times.
• The proposer is considered "local", defined as:  "...any Arizona state chartered financial institution with a physical presence within the Flagstaff city limits and licensed with the Arizona Department of Financial Institutions."
• The proposer has a local lending plan and is willing to provide regular updates to Council on local lending practices. 
• The proposer submits a deposit term sheet for CDs.

 

There is no direct financial impact for the City.  The City is allowed under its investment policy to invest in the proposed securities and the projected returns of the proposed investments are in line with other investments the City may invest in. 

In addition, the City will invest up to $5,000,000 dollars under a "laddering" strategy.  This will allow the City to reinvest funds at higher interest rates if interest rates rise over the short term.

Yes.  Barbara Goodrich provided a City Council Report (CCR) to City Council in September 2013.  Ms. Goodrich also presented more information to City Council at a City Council work session in March 2014.  Another presentation to City Council was giving by Andy Wagemaker at the September 30, 2014 City Council work session. On April 7, 2015 the City Council considered whether to award a proposed contract award to Western Alliance Bank, at which time there were questions about the actual banking services to be provided.

1) Accept the Proposal and approve the agreement with Alliance Bank of Arizona for Local Bank Deposit Program Services.
2) Reject the proposal and do not approve the agreement with Alliance Bank of Arizona for Local Bank Deposit Program Services.  The designated funds will be invested in other investments approved in the City's investment policy.

The City of Flagstaff Revenue Section is responsible for the safekeeping and investment of all public monies and has created an investment policy that provides for the prudent and efficient investment of the City’s temporarily idle cash while safely maximizing returns within carefully defined investment parameters. The objectives of the City’s Investment Policy, in order of priority, are safety, liquidity, and yield.  Within these objectives, the Revenue Section is continuously evaluating investment opportunities to maximize the return on City monies.

The City of Flagstaff Mayor and Council directed staff to issue a Request for Proposals for a Local Bank Deposit Program similar to a program City of Tucson has implemented. Under the program, the City would purchase certificates of deposit up to a maximum of $5 million dollars, which funds will be deposited into a Certificate of Deposit Account Registry Service (“CDARS”) at “local” financial institutions where the City’s deposit would be totally insured by FDIC insurance, fully collateralized with U.S. Government Obligations, or fully covered by a combination of FDIC insurance or the aforementioned collateral.  
 
Barbara Goodrich provided a City Council Report (CCR) to City Council in September 2013.  Ms. Goodrich also presented more information to City Council at a City Council work session in March 2014.  Another presentation to City Council was giving by Andy Wagemaker at the September 30, 2014 City Council work session.  At this last work session, City Council gave the direction to proceed with the RFP and this proposal is the culmination of all those efforts.
 

 

The City advertised the RFP through its standard public procurement process.  Through the RFP process the City received one (1) proposal response from Alliance Bank of Arizona.  With only one (1) proposal response submitted, a small group of City staff reviewed the proposal to ensure that the City's requirements were met and to ensure the intent of the solicitation was met. The bank provided its local lending plan and information summarizing its local loans issued in 2014.  The bank also provided a deposit term sheet.  The City is not required to invest the full $5 million, it has discretion to purchase CDs with satisfactory interest rates. 

Inform