Consideration and Acceptance of Proposal and Contracts and Adoption of Resolution No. 2015-13:  Community Banking 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 a community banking program (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. Adopt Resolution No. 2015-13.

Per Council direction, staff was asked to issue a Request for Proposal (RFP) for Community Banking Services for purchases of investments through the Certificate of Deposit Registry Services (CDARS) program for 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 participated in the CDARS program.
• The proposer was 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 was willing to provide regular updates to Council on local lending practices. 

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 the $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. 

1) Accept the Proposal and approve the agreement with Alliance Bank of Arizona for a community banking program.
2) Reject the proposal and do not approve the agreement with Alliance Bank of Arizona for a community banking program.  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 are committed to a community bank deposit program.  The Council endorsed a community bank deposit program whereby a maximum of $5 million dollars will be deposited into a Certificate of Deposit 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.

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.

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