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HomeMy WebLinkAboutBank of America - 1998-01-05s . e J. CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK DATE: b 14 9 %• �Z /5k J TO:,.lG.�. y_T-_sA Name 1D461 Street IJ City, state, zip See Attached Action Agenda Item E- ? CALIFORNIA 92648 ATTENTION: d-- GV P�J DEPARTMENT: -cam ^ 4L,-. nu= REGARDING: LF �o-w►J Date of Approval 1519 Enclosed For Your Records Is An Executed Copy Of The Above Referenced Item For Your Records. Connie Brockway City Clerk Dv,ohe Attachments: Action Agenda Page q Agreement _V Bonds Insurance RCA Deed Other Remarks: CC: Tame Department Name Dcpar?mc ttt 621 &'� _ gam,, ._- Name cl Departmcnt RCA Agreement t RCA Agre�, ✓ ✓ RCA Apreen:ent Risk Management Department Insurance Copy N id Insurance Ocher Insurance. Other Insurance Other rya f e,'.r ' tIS o., �; �I / Glollowup.'agrmts transltr (Tela phone: 714.536.5227 ) Council/Agency Meeting Held: Deferred/Continued to: ® Approved © CondiConally A proved I3 Denied -o City Clerk' ignature Council Meeting Date: January 5, 1998 Department ID Number: 98-01 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCY -MEMBERS SUBMITTED BY: c� r RAY SILVER, City Administrator/Executive Director4i's CC all PREPARED BY: DAVID BIGGS, Director of Economic Development =. rn r- - SHARI L. FREIDENRICH, City Treasuret�e SUBJECT: Approve -the Formal Assurance Loan Program Operating Agreement for the Housing Rehabilitation Loan Program with Bank of ArneftaZ;' Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Execute the Operating Agreement for Formal Assurance Loans with Bank of America for the housing rehabilitation loan program. The City would have the bank act as its servicing agent for the purposes of recommendation of approval and the collection of payments on rehabilitation loans. This process was initially established July 10, 1981 by City Council action. Funding Source: Community Development Block Grant, Program Income, HOME Program, and Redevelopment Housing 20% Set -a -Side Funding. Recommended Action: Motion to: Approve and authorize the Mayor and City Clerk to execute the Operating Agreement for Formal Assurance Loans with Bank of America for the Housing Rehabilitation Loan Program. Alternative_Action[s]: 1. Do not execute the Operating Agreement for Formal Assurance Loans with Bank of America. 2. Instruct staff to execute a new Request for Proposals. G� � REQUEST FOR POUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: January 5, 1998 DEPARTMENT ID NUMBER: 98-01 Analysis: The Huntington Beach Housing Rehabilitation Program is funded through the Community Development Block Grant (CDBG) fund to benefit persons earning 80% or less of the county median income. The City has received numerous awards from HUD. Huntington Beach was one of the first cities to have a Mobile Home Rehab program, which has been very successful. The Housing Rehabilitation Program as it exists today was- established on July 10, 1981 by City Council action. At that time, Council person Bailey stated that it would benefit the City, along with its residents, to set up a revolving loan pool. The Housing Rehabilitation Program has been very successful over the last sixteen years. The Housing Rehabilitation Program is identified in the City's Housing Element as one of the main means for preserving affordable housing. The goal of the Consolidated Plan and Housing Element is to have 300 units rehabilitated in the time frame between 1995 through 2000 using CDBG and HOME funds. Program income from the housing rehabilitation program received over the last several years are as follows: 93194 = $288,116; 94195 = $188,480; 95196 = $248,282; and 96197 = $299,723. All program income is recycled back into the rehabilitation program and must be expended first. The original operating agreement for the rehabilitation program was executed February 16, 1982 with Security Pacific National Bank (SPNB). On April 22, 1992, SPNB and Bank of America (BofA) merged, and has continued to adhere to all requirements and conditions of the agreement. These requirements and conditions are set forth on page 18 of the 1997 Request For Proposals (RFP) for banking services (attached). On March 14, 1997, this RFP was sent to all 26 banks in the City of Huntington Beach. Of these institutions, only one met the requirements of the housing rehabilitation loan program: Bank of America. Environmental Status: None 1. 1 Operating Agreement for Formal Assurance Loans. 2. 1 Request for Proposal for Banking Services. I Bank of America RFP Response for Rehabilitation RCA Author: DEB, x5901. M. BOFAOPER.DOC -2- 12/08/97 1:02 PM • Operating Agreement for Formal Assurance Loans ATTACHMENT #1 BANK OF AMERICA NT&SA COMMUNITY DEVELOPMENT CENTER OPERATING AGREEMENT FOR FORMAL ASSURANCE LOAN This Agreement is made as of S&1919 , between the City of Huntington Beach, a municipal corporation or politics subdivisi n of the State of California, whose address is: CITY OF HUNTINGTON BEACH Department of Economic Development 2000 Main Street Huntington Beach, CA 92648 hereinafter referred to as the "City," and BANK_ OF AMERICA NT&SA, a national banking association, whose address is: t BANK OF AMERICA NT&SA Community Development Center 10901 Westminster Ave. Garden Grove, CA 92843 hereinafter referred to as the 'Bank." The City is carrying out a program for housing rehabilitation as part of its Community Development Program and anticipates that it may deposit both Federal Funds received under the Community Development Act of 1974 (and reauthorized in 1977) and City funds from its own general funds and/or redevelopment funds. Therefore, the City and the Bank agree to operate under the methods and procedures outlined herein under which the Bank will originate City -funded loans for housing rehabilitation and improvement purposes. The City shall establish an interest bearing account with Bank into which it shall deposit funds received under the aforementioned Program. Bank shall provide a monthly statement of activity for this account which shall be governed by all applicable banking laws, customs and clearing house regulations and this Agreement. Interest earned on deposited funds in the Account shall be at the equivalent market rate for deposits of similar character, maturity and size. BA 2.1 FA Rev.6-46 OPERATING AGREE1 E49FORMAL ASSURANCE 0 2. LOAN APPLICATI NN PACKAGE FROM THE CITY The City shall refer all persons desiring credit under this Agreement to the Bank by forwarding to the Bank a loan application package consisting of at least the following documents and materials: (a) Letter of introduction from the City stating interest rate to be charged and term requested; (b) Loan application, application supplement and Bank's form of California fair lending notice; (c) Construction contract or bids or description of work with cost estimate; (d) Applicant authorization for disclosure of confidential information; (e) Such other information as the Bank may reasonably request. I LOANDOCUMENTATION Within five days of receipt of the loan application package, Bank shall prepare and forward to the City all loan documentation described in (c) below. Bank shall draw the loan documentation using the interest rates and terms designated by the City in its letter of introduction in addition to the following: (a) Payments on loan shall be substantially equal monthly installments; (b) First payment on the loan shall be due 30 days from note date; (c) Bank shall use standard bank loan documentation to be assigned to the City following execution by borrower. The City shall obtain borrower's signature on loan documentation, including note, and arrange for notarial acknowledgments and return all documents to the Bank. The Bank shall arrange for recording of deed of trust. 4. All loan disbursements of loan proceeds will be made by City. 5. LOAN SERVICING; COLLECTION OF FUNDS Bank shall hold all loan documentation and collect all monthly payments made on account of loans originated under this program. There shall be no additional charge to the borrower or the City for servicing of loans except charges to obligor resulting from late payments, defaults and/or foreclosures. All principal and interest collected hereunder shall be deposited by the Bank into a demand deposit account established for that purpose and shall be considered CDBG Funds to be used as outlined in Community Development Block Grant Regulations (24 CFR § 570.513 et seq.). Bank agrees to comply with all of the Community Development Block Grant Regulations and any of the laws that apply to this housing rehabilitation loan program applicable to the Bank. Loans established with the City general funds will be collected and deposited by Bank to a Demand Deposit Account established for that purpose and held separately from CD13G Funds. 2 BA 2.1 FA RW.696 OPERATING AGREEMEI- FORMAL ASSURANCE 6. DEFAULT Bank shall advise the City of any loan made hereunder which is in default more than 30 days because of nonpayment of any sum of money due pursuant to the terms of the loan. Notwithstanding default, the Bank's Community Development Center shall perform its customary collection procedures with respect to each loan until such loan becomes more than 90 days in default at which time the Bank may return all loan documentation to the City. The Bank may accept delinquent payments, partial payments of amounts due and payments by check, draft or other similar instrument and may forward such instruments for collection in the same manner and subject to the same rights and liabilities as are attached to checks deposited with Bank. 7. EXCULPATION: ETC In connection with the performance of their respective obligations under this Agreement, neither parry shall be liable to the other party for any acts or omissions of such other party. The Bank shall not be liable for any alterations to its standard loan documentation which may be requested by the City. 8. INDEMNIFICATION Bank agrees to indemnify, defend and hold harmless City, its officers, agents, employees and representatives against loss, damage or expense by reason of any suits claims, demands or judgements caused by the wrongful acts or omissions of Bank, its employees or agents arising out of the performance of this Agreement. City agrees to indemnify, defend and hold harmless Bank, its officers, agents, employees and representatives against loss, damage or expense by reason of any suits claims, demands or judgements caused by the wrongful acts or omissions of City, its employees or agents arising out of the performance of this Agreement. In the event suit is brought by either party to enforce the terms and conditions of this agreement to secure the performance hereof, each party shall bear its own attorneys' fees and costs. 9. FEES AND CHARGES For its services provided hereunder with respect to each loan subject to this Agreement, the Bank shall be entitled to a $125.00 loan underwriting fee for each single family one -to four -family property and $175.00 for each multi -family property (i.e., residences containing five or more family units). In addition, for each loan, Bank shall be entitled to a one-time $125.00 loan origination fee that will reduce to $50.00 for loans already originated and documented by the City together with an annual servicing fee as follows (check one): one (I%) percent of the original amount financed, subject to a minimum annual fee of $60.00, but not to exceed $120.00 or Z' a flat fee of $100.00 per annum per loan. 3 BA 2.1 FA P".6.96 OPERATING AGREEMEI_ FORMAL ASSURANCE • The annual servicing fee for each loan shall be payable at inception and on each anniversary date of the loan. The Bank shall be further entitled to the actual cost of its out-of-pocket expenses arising, for example, from title searches, lot book reports, credit investigation fees and/or recording fees if applicable. 10. NOTICES Any notices required or permitted under this Agreement shall be in writing and may be personally served or sent by Certified U.S. Mail to the parties at the addresses indicated below: in the case of the City: in the case of the Bank: City of Huntington Beach Department of Economic Development 2000 Main Street Huntington Beach, CA 92648 Attn: Bank of America NT&SA Community Development Center 10901 Westminster Ave. Garden Grove, CA 92843 Attn: Phil Long, Vice President & Manager 11. LAWS GOVERNING "`This Agreement shall be governed by the internal laws of the State of California. 12. AIMENDMENT/TERMINATION The term of this Agreement shall be ongoing from the date of execution by the City and the Bank. This Agreement may be amended so long as such amendment is in writing and agreed upon by both the City and the Bank. Written notice of intent to terminate must be given at least 30 days prior to the termination date. —Upon termination, any documentation in the possession of the Bank shall be returned to the City. Notwithstanding the foregoing, this Agreement may be terminated immediately upon notice to the other should any state or federal court or regulatory authority having jurisdiction over either of the parties determine that such parry's participation in connection with this Agreement is unlawful or improper in any respect or should counsel for such party render a written opinion in good faith to such effect. 4 BA 2.1 FA Ray.&96 OPERATING AGREEME*_ FORMAL ASSURANCE 0 13. TRANSFER OR ASSIGNMENT: SUC ESSORS AND ASSIGN Except as herein specifically permitted, neither party shall assign or transfer this Agreement, nor any of the rights or obligations hereunder without the prior written consent of the other. The City recognizes and acknowledges that Bank is a member of a bank holding company subject to regulation by the Board of Governors Federal Reserve System of the United States Government. Bank shall have the right to transfer or assign its rights and/or delegate its responsibilities under this Agreement to any of its subsidiaries or affiliates at any time upon prior written notice to the City. Any entity with, or into, which the Bank may merge or consolidate shall automatically upon notice to the City become a party to this Agreement without the necessity of any other act by either party, and such successor shall be entitled to all the benefits thereof. All of the terms, conditions and provisions of this Agreement shall be binding on and inure to the benefit of the parties to this Agreement and any permitted successors and assigns. 14. ARBITRATION In the event a claim or controversy arises concerning the interpretation or enforcement of any of the terms of this Agreement, Bank and the City agree that such claim or controversy shall, at the request of either party, be settled by final, binding arbitration. The arbitration shall be conducted in accordance with the United States Arbitration Act (9 U.S.C. § 1 et seq.), notwithstanding any choice of law provision in this Agreement, and under the Commercial Rules of the American Arbitration Association ("AAA"). The arbitrator(s) shall give effect to statutes of limitation in determining any claim. Any controversy concerning whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the arbitration award may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. CITY OF HUNTINGTON BEACH f California BY: , NAICJ• Zaz� s1411.10 �y - �l o (typ ed/pf inted name & title) DATE: November 17, 1997 ATTEST: City -Clerk 5 BA 2.1 FA Aev.6-46 OPERATING AGREEME10— FORMAL ASSURANCE APPROVED AS TO FORM: CITY ATTORNEY/ Z ATTEST: CITY CLERK ��98 BANK OF AMERICA NTBrSA BY: Phil Long Vice President & Manager DATE: November 17, 1997 6 RA 2.1 FA Rev.6-96 1� Request for Proposal for Banking Services TACHMENT #2 • C� March 14, 1997 Attn: Bank Manager Dear Sirs: The City of Huntington Beach is seeking to establish a three year contract for banking service. Its current contract expires on May 31, 1997. Proposals will be accepted from area financial institutions currently conducting business in the City of Huntington Beach. The intent of this Request for Proposal is to select one banking institution to provide all banking services; however, the City may also elect to award an agreement(s) to the winning proposers of any or all optional services. (If a service requirement cannot be met by a proposer, then the term "No Proposal" or "exception" should be entered on the Proposal form for that specific requirement). Please provide full explanation of any "exception" under separate sheet. The City of Huntington Beach is looking to introduce new technology available in the banking industry to reduce costs to the City of Huntington Beach and provide more effective services. Vendors are encouraged to submit detailed attachments of any other services they are capable and willing to provide to the City of Huntington Beach that meet our objectives The City of Huntington Beach is a full service city with a population of 190,000, a total annual budget of approximately $200 million, and General Fund budget of approximately $97 million. In 1994 the City changed its fiscal year end to September 30th. The City Treasurer's Office includes a staff of 13 members and has accounts receivable, business license, Central cashiering/Utility bill collection and Vault operations. Closing Time and Date: Your signed proposal must be submitted in a sealed envelope marked "Banking Services/RFP# 97-0409" prior to 4:00p.m. on Wednesday April 9, 1997. Offerors are strongly encouraged to carefully read the entire Request for Proposal. Offeror must submit one (1) original of a signed and completed proposal response. Five (5) additional copies are also requested for evaluation use. Unsigned bids will be considered non -responsive and rejected. Location: City of Huntington Beach/Purchasing Division Attn: "Banking Services/RFP#97-0409 2000 Main Street Huntington Beach CA 92648 Additional information may be obtained by contacting Richard AmadriI at 714/536-5221. 12/4/97 ! 0 INSTRUCTION TO BIDDERS Note: All pages of the bid mist be returnee! EXAMINATION OF BID Each bidder is responsible for examining the invitation to bid and submitting its bid complete and in conformance with these instructions. DISCREPANCIES IN BID DOCUMENTS Should bidder find discrepancies in, or omissions from the invitation to bid, or if the intent of the invitation is not clear, and if provisions of the specifications restrict bidder from bidding, they may request in writing that the deficiency(s) be modified. Such request must be received by the City's Purchasing Central Service Manager five (5) days before bid opening date. All bidders will be nntified by addendum of any approved changes in the invitation to bid documents. Fax questions at least 5 days prior before due to (714) 374-1603 Attn: Shari Freidenrich, City Treasurer or Richard Amadril, Central Services Manager at 714/536-5221. ORAL STATEMENTS The City of Huntington Beach is not responsible for oral statements made by any of their employees or agents concerning this invitation to bid. If the bidder required specific information, bidder must request that it be supplied in �,krriting by the City of Hunting**ton Beach. BRAND NAVIES AND SPECIFICATIONS The detailed specifications and/or brand names stated are descriptive only and indicate quality, design, and construction of items required. Offers will be considered to supply articles substantially the same as those described herein provided the articles are equal in quality, durability.and fitness from the Variations in the bid. Acceptability of alternate will he determined solely by the City of Huntington Beach. Bidder MUSE submit specific�itions when bidding ahernatil-e equipment. 4 5. RIGHT TO REJECT City reserves the right to reject at any time any or all bids, or parts thereof, and to waive any variances, technicalities and informalities which do not impair the quality, utility, durability, or Performance of the items. 6. SAMPLES Samples of items, when requested or requiWd, must be furnished to the city free of expense to the city and, if no[ destroyed by tests will, upon request, be returned at the bidder's expense. 7. PRICES individual item pricing must be shown for each line item. In case of error in extension oI prices, unit price will govern. All prices must be firm for the contract term unless the city specifically provides for adjustment. Please submit any information on pricing structure if they vary from our estimated volume. All quotations must be FOB delivered. S. SIGNATURE 12/4/97 0 City of Huntington Beach • Request forProposal for Banking Services The proposal must be signed by an officer or authorized employee. Proposals may be rejected if the signatures are not signed. 9. SUBYIISSION DATE AND WITHDRAWAL OF PROPOSALS Each proposal must be delivered to the location and received on or before the clue date and time stated below. Proposals will not be accepted after the date and time stated on the cover sheet. Proposals may be withdrawn without prejudice, providing the written request is received by the Purchasing Division no later than the time set for opening bids. Withdrawals will be returned to bidder unopened. FAXED PROPOSALS ARE NOT ACCEPTABLE. 1214197 • Company California Bank Sumitomo Bank of California American Savings Bank Citibank FSB Coast Federal Bank Downey Savings & Loan Fidelity Federal Bank Tokai Bank of California Union Bank Bank of America Great Western Bank Address Citystzip Garfield n Beach Ave CA 92647 16041 Huntingto Goldenwe n Beach st St. CA 92649 16911 Huntingto Algonquin n Beach CA 92649 7552 Huntingto Edinger n Beach Ave CA 92647 9971 Huntingto Adams n Beach Ave CA 92646 20002 Huntingto Brookhurs n Beach t St CA 92646 19900 Huntingto Beach n Beach Blvd CA 92648 19006 Huntingto Brookhurs n Beach t CA 92646 17122 Huntingto Beach n Beach Blvd CA 92647 16811 Huntingto Algonquin n Beach CA . 92649 16141 Huntingto Beach n Beach Blvd CA 92647 Attn • 14 is 8ankadd.doc 12/04/97 2:10 PM 0 City of Huntington Beach 9 Request forProposal for Banking Services SCOPE The City currently has five (5) demand accounts and plans to have an two additional (2) interest bearing accounts, which cannot be co -mingled. These are the General Demand Account, the Payroll Account, the Treasurer's Deposit and Trust Fund Account, Water Refund Account, the Civil Liability Account, a Trust Account for Deferred Compensation and a Joint Powers Agreement (JPA) Account, respectively. Currently, the Treasurer's Deposit and Trust Fund Account and the Civil Liability Account have separate manual two signature checks imprinted for each account. All other checks are computer printed and signed with a two signature facsimile. The two new accounts would have separate manual two signature checks also. The City requests that the Bank not honor checks ninety (90) days after the date of issuance and, on a best efforts basis, will return items received after ninety (90) days. We have estimated the dollar amounts and quantities in this R)~P based upon past experience. The City reserves the right to increase or decrease transaction volumes in accordance with actual needs. Please provide any information on pricing structure that relates to volume. The City currently has electronic funds transfer for some of its payroll and is in the process of implementing this for all Federal and State payroll taxes. The City is in the process of considering an automated "zero balance" account for the five accounts and is implementing a "PC on-line" system to enable the City to access data readily and efficiently. In addition, the City is implementing "Positive Pay" for its checks which includes full account reconcilement and "ImageSuite" which allows the City to access images of paid checks (front and back) daily and receive a CD-ROM of all checks at month -end. Currently the City receives canceled checks from the Bank in numerical sequence. The City would like the Bank to price both methods of receiving checks. The City has daily armored car afternoon pick-ups at City Hall with whom the Bank contracts. All deposits shall be deposited for same day credit. The City has a late afternoon courier pick-up for checks deposits which are delivered to the bank service center and receive same day credit also with whom the Bank contracts. The hours of City Hall Treasurer's Office are :Monday through Friday from 8:00 a.m. to 5:00 p.m. City holidays are New Years Day, Martin Luther King's Birthday, Presidents Day, Memorial Day, Independence Day, Labor Day, Veteran's Day, Thanksgiving, Friday after Thanksgiving and Christmas Day. Holidays falling on a Saturday will be observed on Friday. Holidays falling on a Sunday will be observed on Monday. The City may request the bank to -process Letters of Credit (IJC) which are presented by the City for payment. The processing should be done in an expeditious manner to ensure prompt payment of the Letters of Credit. The L/C are most commonly frorn HouSing and Urban Development grants and other agencies. The City accepts VISA and Mastercard currently which are processed through the Bank. The City expects to implement a payment program in the next six months to increase the use of credit card, debit cards and pay by banking services. Currently, the City is paying a 4 12/4/97 • City of Huntington Beach 0 Request forProposal for Banking Services flat percentage on all transactions, but is interested in obtaining either a flat percentage or a transaction fee or a combination of both. The City is interested in gaining efficiencies in these services. The City currently holds all of its investment securities in safekeeping at the Bank. The Bank provides a monthly list -of cost and market value for all securities. The City is interested in having these securities maintained either in a trust situation or at a 3rd party custodian. The City requests the pricing of all options. The City has the Bank maintain a "Drug Money" safe deposit box in the amount of $150,000 and maintains copies of all currency in the box. The City currently funds loans for our .Housing Rehabilitation Loan Program and underwrites some of the loan documents and outsources some of the underwriting of the loan documents. EXECUTION OF AGREEMENT/CANCELLATION OF CONTRACT The Bank shall not be permitted to levy any services or other charges against the City account, other than those listed in their proposal without written approval from the City Treasurer or his/her delegated designee. The Bank may offer and the City may accept, any additional services beyond the minimum listed, only services directly benefiting the Cil� If a banking institution does not execute an agreement within thirty (30) days after being notified of selection, the City may give notice to the bank of the City's intent to select the next most qualified proposing bank or call for new proposal, whichever the City deems most appropriate. The depository contract shall provide that the City reserves the right to cancel any agreement at any time upon ninety (90) days prior written notice of its intent to terminate any agreement. The designated depository shall provide the City at least ninety (90) days prior written notice of its intent to terminate any agreement. In the case of termination for cause by the city or voluntarily by the banking institution, the bank will work with the city to ensure a smooth banking transition. A The City reserves the right to cancel any agreement awarded pursuant hereto at any time for, but not limited to the following circumstances: I. Non-performance, inadequate or poor performance concerning services, reports, statements, etc. 2. Bank repeatedly falling to notify Treasurer or designee of funds received from sources other than City deposits by 3:00 p.m. on the day on which the funds are received. 3. Bank must forward a detailed debit/credit memorandum of any adjustments to City Accounts no later than one (1) full working day after the adjustment(s) were made. 5 1214/97 • City of Huntington Beach • Request forProposa! for Banking Services 4. All entries to city checking accounts must be shown as posted to the bank statements on the actual date the transaction occurred. 5. All monthly bank statements MUSt be i i the local branch of the bank within fifteen (15) working days after the close of the previous month. 6. Inadequate or poor performance on the part of the bank's data processing center to correctly record all transactions. The Bank should provide contingency plans or systems for the City to access data in the event of systems breakdowns or other emergencies. 7. Failure on the part of the Bank to return paid items which were charged to the Clty's checking account. 8. Failure to promptly and faithfully provide the minimum service required. 9. Failure to maintain standards established by Federal and State regulatory agencies. 10. Moving the bank institution outside the corporate limits of the City of Huntington Beach. 11. Failure to cooperate upon receiving by designated persons, any reasonable requests for information or service. 12. Failure or refusal to reimburse the City for costs or losses as specified above. 13.Improper actions of the banking institution's officers or employees which, in the opinion of the City, would adversely affect its interests or endanger the safety or liquidity of municipal funds. CONDITIONS QUALIFYING A BALKING INSTITUTION TO PROPOSE: i . For the convenience, efficiency and safety of the City, its employees, citizens and vendors, a proposer must be a federally or State of California chartered banking institution with branch banking facilities located within the city limits of the City of Huntington Beach. 2. The bank will be required to comply with all depository regulations and requirements as set forth in the California government Code, applicable Federal laws, and the City Charter. EVALUATION PROCESS 41 6 l 2/4i97 • 0 City of Huntington Beach 0 Request forProposal for Banking Services An evaluation committee comprised of Treasury staff will serve to evaluate proposal responses. Scoring Criteria I. Overall capability of the financial institution to satisfy the City's banking requirements. 2. Net cost of the proposal. 3. Financial soundness of the financial institution 4. Responsiveness and completeness of proposal. 5. Adherence to bidding instruction. Scoring: Outstanding = 5 Good = 4 Average = 3 Poor — 2 Not addressed/unacceptable = 0 BANKBACKGROUND _. Safety & Soundness 1. Each proposer shall submit with their proposal copies of their quarterly call reports for the past two (2) years along with their annual financial reports for the past three (3) years. These reports will be used by the City to determine the financial strength of the proposer. The successful proposer shall, during the duration of this contract, continue to furnish to the City updated issues of each report in a timely manner. 2. Identify key measures of the bank's financial strength: • Capital ratios • Market capitalization • Total Assets • ROA • ROE 3. Provide ratings for the bank and /or holding company from two of the following agencies: Standard & Poor'-s, Moody's, Thomson BankWatch, Sheshunoff, or Lace. Personnel: I. List names, titles, phone and fax numbers and e-mail address and provide brief biographies of bank contact personnel. 2. Will one primary contact he assigned to our account'? Is so, from which area of the organization? 3. How many employees does the bank have in key areas providing the service? Experience 7 12it:9, ■ • City g of Huntington Beach Request forProposal for Banking Services 1. I -low long has your bank offered the services bein,,; requested in this RFP? 2. Specify the number of corporate/business customers using this service. 3. What has been your average monthly volume (items and dollars) of checks cleared during the past 12 months? Volume of return items? 4. List the number and locations of your branches, cash vaults or affiliated banks by state. Competitive Position and Future Commitment 1. What differentiates your service from other providers? 2. How do you plan to keep this product/services current and competitive? • What approach is the bank taking in the development of new services? • Whar new services or features does the bank plan to offer, and within what time frame? References 1. Provide name and phone numbers of three references, preferably within our industry or with comparable volumes, who are currently using the service requested in this RFP. Select a mix of long-standing and recent customers. Price Sheet - Required Services Group l: Deposits: 1. Concentration account a. Daily deposits of Cash/Currency b, Daily deposits of Checks (to include microfilming of all checks) - pre -encoded Daily deposits of chocks (to include microfilming of all checks) - not pre -encoded C. Wire Transfers, incoming d. Deposit Tickets 2, Payroll Account a. Automatic transfers from Con- centration account 3. Water Refund Deposit Account a. Automatic transfers from Con- centration account Price Sheet - Required Services 8 Vendor Response Annual Units/ Unit Est Annual Volume Cost Cost (Est) 1,800,000 418,992 215,808 12 720 52 52 Vendor Response Annual Units/ Unit Est Annual 1214197 • City of Huntington Beach 0 Request forProposal for Banking Services Volume Cost (Est) 4. Deposit Trust Account a. Deposits of checks 26 5. Civil Liability Account a. Automatic transfers 12 6. Trust - Def. Comp. Account- • a. Deposit or checks 250 7. JPA Account a. Deposits of checks 20 _ Group II - Withdrawals I . Concentration Account ti. Wire Transfers for investments and special transactions b. Automatic transfers to Payroll C. Automatic transfers to Water d. Automatic transfers to Civil Liability C. Automatic transfers to JPA 1. Automatic transfers to Bond Acci. g. CD -Rom ( All Accounts) 2. Payroll Account " a. Employee paychecks - 900 bi-weekly b. Direct deposit employee paychecks 300 bi-weekly to 50 institutions 3. Water Refund Deposit Acct .�. Checks wrilten 4. Trust Account a. Checks Written 5. Civil Liability Account a. Checks written 6. Trust - Def. Comp. Account a. Checks written Group III: Other Required Services: 60 26 52 20 20 52 23,400 7800 520 36 150 26 Cost l . Administrative Services a. Armored car service (1 per business day) - same day credit 250 b. Returned checks ( 90 monthly) ` 960 C. Reclear Items (160 monthly) 1920 d. Stop payments orders - 12 coon. 48 C. Courier service (I per business day)250 f. Bags for Coin Deposits 2000 g. Straps for Currency Deposits Price Sheet - Required Services Vendor Response Annual Units/ Unit Est Annual Volume Cost Cost 9 1214/97 k. 1. m n. I 0 City of Huntington Beach • Request forProposal for Banking Services (Est) Baas for Currency 500 _ Bags for Check Deposits 480 Statement Preparation (daily, all accls) (possibly eliminated with PC On-line reporting) 250 PC -On line Banking Costs 6 Telephone notification of account Balances, etc. (eliminated with PC On -reporting) 250 Aceount analysis report, each aect. 60 Set-up fees Drug Money Safe Deposit Box $150,000 Payroll EFT Per Transmission 26 Maintenance Fee (Mon.) 12 11e111 Count 1200 Additions! Bank Statements 240 Check Orders Safekeeping of Investments 300 3rd Party Custodian 300 Trust Department - 300 1.800,000 9 r. S. L. U. p V. Currency Deposit Group IV Price Sheet - Optional Services 1. Credit Card Processing 2. Housing Rehab Underwriting $240,000 60 a to 10 12/,r97 • City of Huntington Beach 0 Request forProposal for Banking Services Suggested Service(s) 1 ?14M • City of Huntington Beach • Request forProposal for Banking Services Additional questions related to servieos above: Depository Service Options Are night drop, vault, remote and branch service options available? a. Is pricing different for utilizing these different deposit options? b. Are any processing applications outsourced to a third party? If so, name the Vendor(s) and describe the app]ication(s). N%`hat is the cut-off time to ensure same day ledger credit'? a. Is it the same for night drop, vault, and branch services? b. Is it the same for cash as for checks, drafts, etc. C. What courier services are provided by the bank, if any, for pick-up and delivery of check deposits? If not provided by the bank, what third -party couriers are available and/or recommended? What is the cut-off time for same day credit? d. Are there any options that might affect this cut-off time (provisional credit, delayed verification)?' 3. What type of deposit bags do you allow/require? a. Do you provide these bags? b. Do you charge a fee for these bags? 4. Are there any restrictions on deposit bags provided by the customer? 5, Are there any benefits to separating cash and checks in two deposit bags? 6. Do you require that checks and currency be on separate deposit tickets? 7. Do you limit the number of deposit tickets that can be included in one deposit bag? 8. Are the deposit tickets that you provide available in multiple part forms? How many copies does the bank require? 9. Can the deposit tickets contain an auxiliary MICR field for our location and/or transaction information? 10. Would you accept deposit tickets from a third -party printer? List any limitation. 11. Do you require that cash be deposited in standard straps only? Is there a penalty for depositing non-standard straps? • 12. Do you accept Armored Car deposits? Is there a fee for depositing loose or rolled Will? What is the cut-off to ensure same day ledger credit'? What Is the cost of the Armored car courier? 13. What type of check reader/sorter do you use? 14. How do you determine and calculate availability of deposited items? a- Do you give immediate availability for on -us items? b. Do you calculate availability by item or formula? C. Do you use a standard schedule? Accelerated schedule? Hoy often is it updated'? d. Can you provide intra-day or next day recap of our deposit availability? 15. What are the requirements for depositing checks? 16. Do you accept pre -encoded checks? '12 l Ja197 • City of Huntington Beach Request forProposal for Banking Services a. Provide a copy of the bank's instructions for pre -encoded checks. b. Is there a discount for pre -encoded checks? C. Do you require that the checks be endorsed in conformance with Reg CC in order to qualify for a discount? d. Describe you encoding duality monitoring process. 17. if pre -encoded checks are rejected, what additional costs, if any, are charged'? 18. If deposits for the day, did not exceed the withdrawals and an overdraft balance occurred, what is the Bank's policy for covering this and what costs, if any, would be incurred by the City including how those costs are calculated. Deposit Verification 1. How many bank employees are present when deposit bags are opened? what specific security measures are employed? 2. How will you return the validated depclsit receipts to us? Within what time frame? Can they be returned with the Courier? 3. if provisional credit is given, when does verification take place? In 24 hours? 48 hours" 4. Does the bank identify and adjust all discrepancies? • If no, at what dollar amount do you write off discrepancies? • Do you adjust the deposit amount or process an adjusting debit or credit? • What is the standard procedure for reporting deposit adjustments? 5. What is the bank's policy on receipt of tampered bags? 6. When counterfeit bills are discovered, what is your notification and adjustment process'? Vault Services 1. Does the bank have an automated vault service? Describe the deposit and change order procedures, cut-off times and othel features of this system. 2. 1-low much advance notice is required for coin and currency orders? 3. Lobby pick-up 4. Are there minimum purchase requirements? Is a discount offered for purchasing standard amounts? What settlement options are available for change orders? 5. Describe security at the cash vault center? What fraud prevention procedures are in place? Return Item Processing I. Can return items be automatically redeposited? If so, how many times? At what cost? 2. Can copies of all redeposited return iteins be provided to the depositing location or a central office? If so, within what time frame? Can they be delivered by courier back to the City? At ,4vhat cost? a 13 i 214197 • City of Huntington Beach • Request forProposal for Banking Services 3. Provide the bank's standard return item and reelear processing instructions. List any non-standard options that are available. 4. Can you provide a detailed return item transmission to depository customers? If not, when will the service be available? • Does the transmission include both returns and reclears? • Is there a separate record for each returned item? • Can these records identify the ck;positing location and the type of item being returned (personal check, traveler's check, money order)? • Indicate which of the following details the bank can report: Check number Check date Check amount Reason code Check account and ABA number Full name of check Complete address Phone numbers Driver's license number and state Original deposit date Copy of check 5. Is it the bank policy to refuse return items not sent through the system in a timely manner? 6. Do you assign float to return items? 7. Do you have the ability to interface with third -party providers of negative databases? Transaction Research 1. What documentation is provided with deposit correction adjustments? What delivery methods are available? 2. Within what time frame can you provide requested copies or documentation? What delivery options are available'? 3. Are there additional costs for research? 4. Can duplicate copies of deposit slips or debit/credit memos be requested? At what cost? Disaster Recovery I. Describe the bank's disaster recovery plan in detail. 2. Where are off -site facilities located'? 3. How quickly can the "hot" site be implemented in the event of an emergency? 14 1214197 0 City of Huntington Beach 0 Request forProposal for Banking Services Deposit Reporting 1. What type of deposit reporting services do you provide for consolidated account customers? Are these services optional? 2. What type of output media is available for deposit reporting (mailed paper report, electronic transmission, etc.?) 3. -Does your deposit reporting service report electronic transactions (merchant card deposits, ACH, wire, etc.) as well as paper documents? Wire Transfer Initiation 1. Does the bank offer the following methods of initiation? If so, describe each method's process of initiation, approval and release. Also provide the number of customers using each method of transfer. • Voice • Touch-tone phone • Telex • Fax • PC • CPU to CPU 2. Does the bank offer batch input of wires? Is so, what is the maximum volume of transfers allowed in each batch? Can repetitive and free form wires be in the same batch'? 3. Is tliere any manual processing Involvea in executing either a repetitive or free -form wire transfer that has been initiated via one of the automated input vehicles? Is so, describe. 4. Can ACH payments be initiated through the wire transfer initiation screens? 5. What are the opening hours and the cut-off times in Eastern Standard Time for initiating wire transfers to ensure Same -day execution'' List by type of transfer and method of communication. E±� q° ` T�opch-tunes voice �InEiit �.'- � DIwMrCP.0 .'aim Ta cofTrunsfer Phone V ethad Y,G Fax Telex Intradistrict (within Fed District) Inter.!i;;rict Book Transfed]nternal Drawdown 6. What is the cut-off time for incoming domestic wire transfers to receive same day credit? ~ Confirmation 15 12/467 City of Huntington Beach Request forProposal for Banking Services 1. How soon after wire execution would an internal bank confirmation/sequence number (not the Fed reference number) be available? Explain any delays. 2. How long does it take for the Fed Reference number to be assigned to a wire assuming no repairs are needed and there are sufficient funds in the account? Explain any delays. 3. At what point does the bank assume legal liability for executing a wire transfer? How is that event identified? Warehousing 1. Does the bank's wire transfer system have the capability of warehousing instructions for future value dated wire transactions9 If so, what are the limitations? How many days/months in advance? Is the warehouse function limited to certain types of wire transfers? Explain. 2. Can the wires be input, approved and released so they will be executed automatically on value day? Will the wire transfer system provide a tickler report of warehoused transfers that are pending current day release? 3. Is it possible to cancel a previously warehoused wire transfer request before value day? On value clay'? 4. Is there a cost difference for this service? Systems 1. Does the bank operate its own wire transfer system in-house? If not, Is the system purchased and customized? who is the vendor? 2. Describe the method for granting bank employees physical access to the wire transfer department. By what means do employees gain access to the department. 3. Does the system require the -segregatibn of duties so that the same wire transfer operator cannot enter and release a payment? 4. What levels of security safeguards exist when initiating and releasing wires for each method you have' 5. Are CPU or PC transmissions to the bank encrypted or authenticated'? 6. Describe the security measures for the Master User/Security Administrator. Can the system require dual security Administrators? What functions does the Security Administrator perform? 7. Are security access codes (passwords) encrypted or authenticated? Is a log -on report available showing all log-ons over a given period, including User ID, date and time? 8. Describe procedures when security codes are violated. For example, how many log - on attempts does the system allow before disabling a user? 9. Can passwords be assigned an expiration date? 10. Are passwords user -defined or bank provided? 11. What controls has the bank put in place to prevent wire transfer fraud? hirorniation Reporting 16 1214197 0 City of Huntington Beach 0 Request forProposal for Banking Services 1. What methods of wire transfer information reporting are available to customers? 2. _ Is current day information real-time or batch? If batch, how frequently is the information updated? 3. What detailed information is provided on incoming and outgoing wire transfers on a current day and previous day basis? Provide sample reports. 4. Is historical information available on the system? How many days of history are available? Other Information 1. Describe your institution's activities and accomplishments in meeting the requirements of the Community Reinvestment Act (CRA). 2. If your institution reports Home Mortgage Disclosure Act (HMDA) data, please provide a summary of lending activities in Huntington Beach for the last reporting period (Disclosure Statement). Investments The City may have temporarily idle balances in the Concentration Account which will be invested by the City on a competitive basis. However, it is anticipated that the account will have nominal daily balances (after primary investment transaction) that will be excess to either (1) zero -balance or (2) minimum required compensating balance. The City wishes to effect a procedure whereby these nominal excess funds are invested and requests that the Bank make available its investment di;partment for assisting in these investments. The Bank must be capable of accepting a daily repurchase agreement of up to $20,000,000 with proper collateral. Repurchase agreements average between $2,000,000 and $5,000,000 for up to four (4) days. A Master Repurchase Agreement must be signed prior to implementing any transactions. Please describe what your bank can provide, your investment purchase daily cut-off time, the method to be used for computing the investment earnings rates and any other pertinent information about these services. A The estimated annual charge for this service will be $ On -]tine Banking Services 17 12/4197 • City of Huntington Beach Request forProposal for Banking Services Describe your on-line service capability including all costs associated with setting up the system and ongoing costs for all options, including summary balance in_---ormation, detailed transaction information, and stop payments orders. Please include whin data is available for access, what reports are available, security of data both inte.=nally and externally and how long data is maintained. Calculation of Bank Compensation - The City may compensate the Bank in one or a combination of the following me_hods: • Direct Fees or Charges (volume or non -volume based) • Compensating Consolidated Fund Account Balance If the City wishes to pay the charges directly, explain in detail the specific amo: ants to be charged. If the City wishes to offset the charges through an earning credit _ _alculated monthly on average daily collected balances maintained in its accounts, e-_;plain the method to be used in calculating this. If this rate is variable, indicate frequency - of change and day of month it is determined. Also provide the earning credit rate per me -_:nth based on the calendar year 1996 with an average daily collected balance of $2,000,000 Optional Services: Merchant Bankcard Services . Describe in detail your ability to process credit card and debit card transactions . including funds availability and processing requ(rements, type of cards which can be -- : ocessed, systems capabilities and all costs (including set-up fees, terminals, imprinter-E_s, receipt printers and training). The currently estimated monthly volume is $20,000. Lockbox Describe in detail, your ability to provide Lockbox services. Include all costs _:.associated with the service and the location where all payments would be processed. Housing Rehabilitation Loan Program Indicate whether you are currently qualified to process loans meeting the Department of Housing and Urban Development (HUD) requirements. If so, do you have a =rogram to service these loans and to underwrite loans for applications that the city :nay have received? Please describe your ability to do these activities in detail and specific costs that would be incurred by the City for each loan. Please include an outstandi=g balance or other requirements that the City would need to meet. All Proposals must he signed 18 1214/97 City of Huntington Beach • Request forProposat for Banking Services Signature Print Name Tille Date Phone Number 19 111A197 C� Company Address Citystzip Attn Bank of 18691 Huntingto America Main n Beach Street CA 92648 Bank of 16892 Huntingto Westminst Goldenwe n Beach er St St. CA 92647 California 7222 Huntingto Federal Edinger n Beach Bank CA 92647 First 19950 Huntingto Interstate Beach n Beach Bank of Blvd CA California 92648 El Dorado 16901 Huntingto Bank Bolsa n Beach Chica CA 92649 Glendale 7146 Huntingto Federal Edinger n Beach Bank Ave CA 92647 Harbor 16400 Huntingto Bank Pacific n Beach Coast CA Hwy 92649 First Bank 16531 Huntingto & Trust Bolsa n Beach Chica. CA 92649 Liberty 7777 Huntingto National Center n Beach Bank Ave CA 92647 Sanwa 6881 Huntingto Bank Warner n Beach CA 92647 Household 19021 Huntingto Bank Beach n Beach Blvd CA 92646 Southern 9042 Huntingto Barnkadd.doc 12/04/97 2:10 PM 0 Company Address Citystzip California Garfield n Beach Bank Ave, CA 92647 Sumitomo 16041 Huntingto Bank of Goldenwe n Beach California st St. CA 92649 American 16911 Huntingto Savings Algonquin n Beach Bank CA 92649 Citibank 7552 Huntingto FSB Edinger n Beach Ave CA 92647 Coast 9971 Huntingto Federal Adams n Beach Bank Ave CA 92646 Downey 20002 Huntingto Savings & Brookhurs n Beach Loan t St CA 92646 Fidelity 19900 Huntingto Federal Beach n Beach Bank Blvd CA 92648 Tokai Bank 19006 Huntingto of Brookhurs n Beach California t CA 92646 Union 17122 Huntingto Bank Beach n Beach Blvd CA 92647 Bank of 16811 Huntingto America Algonquin n Beach CA . 92649 Great 16141 Huntingto Western Beach n Beach Bank Blvd CA 92647 il Attn A • Bankadd.doc 12/04/97 2:10 PM rr T E Bank of America RFP Response for Rehabilitation Program . ..... .....ATTACHMENT y#3......... H) Bank of America TAB VllI - OPTIONAL SERVICES ■ Full Account Reconcilement The Full Account Reconcilement service requires that you supply the Bank with checks -issued data through a medium that best suits your operation: data'transmission, magnetic tape, MICR duplicate, check register, or floppy diskette. Our Account Reconcilement department uses an automated system to compare this data to the Bank's records of paid checks. Items that do not reconcile are reviewed and corrected, where possible, by the staff. The reports include detailed information on paid/reconciled, paid/unreconciled, and outstanding items on a daily, weekly or monthly basis. We also prepare a certification report that reconciles the bank balance. Examples of the reports are provided in Tab E. Service Monthly Account Maintenance Automatic Certification On Call Per Issue Fees Magnetic Tape Output Data Transmission Per Data Transmission Per Item Fee $ 60.00 per account* $110.00 per account $ .07 per tape $ .06 per issue $ 25.00 per transmission/Max. $200.00 per mo. (Each account has a minimum monthly charge of $150.00) * This assumes that you designate a dale each month to initiate the reconcilement process The dale should be established so that you have time to update the Bank with check issue data input. Alternatively, you can choose to start the process "on call" for $125 per month, pending receipt of a complete City generated transmittal. ■ Positive Pay/Full Account Reconciliation Service Bank of America offers a Positive Pay service in conjunction with the Full Account Reconcilement service. Positive Pay requires the City to provide check issuance information daily to the Bank by data transmission. Paid items are compared each morning to the accumulated issue file. Misencoded items are immediately identified and corrected. By 8:00 a:.m. each morning, we report via BAMTRAC, our information reporting system, any checks presented for payment without a check issue on the positive pay file, or that do not match the issue data. You can request an immediate photocopy of any non -matching items, and then authorize non-payment of rejected checks, all via BAMTRAC. Alternatively, you can receive digitized images of non -matching items on your personal computer. Page 49 Bank of America Our Full Account Reconcilement service also provides month -end reports detailing checks outstanding, paid and reconciled, and exceptions. We also prepare a certification report that reconciles your bank balance. With Bank of America's Online Positive Pay, you get the convenience and protection o£ • Check fraud loss control. By having us return questionable checks unpaid, you can help limit your exposure to losses from fraudulent checks. • Early warning of fraudulent activity. You can obtain information on questionable checks early each business day via BAMTRAC, Bank of America's online information reporting service. • Online, interactive review. Online reports show you serial numbers and dollar amounts of questionable checks. Following easy online prompts, you indicate which checks you want returned. • Real-time confirmation, online. You receive an online confirmation number immediately after you send us instructions to return a check. • Photocopy option. To help research questionable items, you can make online requests to have photocopies of specific checks faxed to you. • Security features. The BAMTRAC Service has two levels of passwords, giving you secure control over who in your company can access Online Positive Pay and authorize returns. • Access through BAMTRAC for Windows. Online Positive Pay can be accessed through our BAMTRAC for Windows platform. Service Per Item Fee Returned Items $ 8.00 Photocopy Request $10.00 Flat Fee Transmission Charge $150.00 ■ Merchant Bankcard Services Experience Bank of America is the largest electronic payment processing bank in the Western United States, processing more than 320 million credit card transactions and over 80 million debit card transactions annually, originating from over 100,000 retail locations. In additional, over 150 other banks have chosen Bank of America to process their merchants' transactions. Bank of America's annual transaction volume exceeds $24 billion. Page 50 M 0 - 0 Bank of America Services include: • Authorization, deposit, funds settlement, reconciliation reporting, and customer services for Visa"- MasterCard'R'•, Diners Club("-, Carte Blanche"-, the JCB1' Card, and most ATM .cards. In addition, authorization and, capture services for Discover°" Card and American Express" Card are available. • Check guarantee service interface to EquifaxIR'- • Electronic authorization and deposit processing through terminals, personal computers, electronic cash registers, host -to -host links, LAN configurations, IVR interfaces, and Internet. Since inception of the first BankAmericard, Bank of America has continued to develop card products and processing services that are responsive to consumer and retailer needs. This has included specialized card products such as business cards, co -branded cards, photo cards, secured cards and debit cards. Today, we offer merchant credit and debit processing services for all types and sixes of merchants. These services include electronic deposits, sophisticated point -of -sale platforms, and industry -specialized products. While other banks have sold their merchant portfolios, Bank of America continues to invest in this successful and expanding business. Bank of America is currently the number one merchant bank for credit and debit card transaction processing in the country. Service Support Account Manager. An account manager is responsible for all facets of the Bank's relationship with the City including: • Problem Resolution • Equipment Requirements • Location Set-ups • Chargeback and Retrieval Request Assistance • Pricing Updates • Training Customer Service Group. Our customer service group, staffed with trained representatives, is available by telephone (toll free) 24 hours daily. Customer service supports or corrects the following: • Equipment Malfunctions • Transaction Referrals • Balancing Issues • Billing Questions Page 51 HBank of America Equipment Support. Bank of America is one of the largest providers of credit card/ATM card terminals in the U.S., and has established a special equipment support group. Bank -provided equipment is a critical part of a payment processing solution for the City, providing the latest generation equipment. (If malfunctioning equipment cannot be corrected remotely, the Bank will express deliver a replacement.) Training. Bank of America will train city employees over the telephone. Payment System Specifications Availability gfFunds. The Bank can post funds for Visa and MasterCard transactions as soon as the next banking day following the transaction date, Monday through Thursday. We� can post Friday and weekend transactions as early as Tuesday. Transaction Speed. We obtain authorization for transactions within 15 to 20 seconds following receipt of the request. Reconciliation Reporting. Information for reconciliation to internal accounting data includes: monthly processing summary statements, retrieval requests, and chargeback notifications. We send documents either to the locations or the City's headquarters. Mail/Telephone Orders. The Bank offers a batch authorization and settlement personal computer program to expedite mail and telephone orders. This program automatically provides address verification information. For detailed pricing information, please refer to Tab IV. * This service requires prior credit approval and subsequent annual renewals. Two years of financial statements must be submitted ■ Scannable Lockbox Service Based upon the City's volume of checks deposited, we have assumed that our retail -scannable lockbox service would be the type of processing most applicable to your needs. Bank of America's Scannable Lockbox Service saves you both time and money. By using documents or coupons having an Optical Character Recognition (OCR) line of information, you collect payments and remittance information quickly and easily. The OCR line contains your customer's account information. We capture this data automatically and retain the account number and related payment amount electronically. Bank of America operates two major lockbox processing centers in San Francisco and Los Angeles. Our processing capabilities and attention to service quality give you the premier collection system you need. Each center has a unique zip code dedicated exclusively to OCR scannable lockbox remittances. Both centers use automated equipment to speed processing and ensure the accurate handling of payments. Page 52 M 0 0 Bank of America By streamlining your collection cycle and using OCR scannable documents you can: • Receive, deposit, and collect your customers' payments quickly and efficiently • Learn early in the day the amount of funds deposited in your accounts so you can put those funds to immediate use • Receive customer payment information identified in the OCR scan line (such as account number, payment amount, etc.) • Automatically update your accounts receivable system rapidly and accurately At the end of the day we transmit a datafile of all processed payments to you. The file normally contains the account number, dollar amount, and transaction codes. The file can be tailored to your company's specific requirements. We can provide same -day deposit and float notification via telephone, terminal, telecopy (fax), personal computer, or our BAMTRAC Information Reporting Service. On a next -day basis, you can also access deposit and float information via BAMTRAC as early as 5:00 a.m. Pacific time. Service tailored to meet your needs. Before starting the service, we work with you to identify special requirements, establish processing procedures, and address any unique issues. We test your OCR documents before you distribute them to your customers. This ensures that the OCR line on your documents can be machine read. It also minimizes the need for manual processing and potential data entry errors. We tailor our service to specific requirements and work with you to develop detailed instructions that match the processing for your account to your operational needs. ■ Housing Rehabilitation Loan Program The Community Development Center was established in 1976 as a former unit of Security Pacific National Bank and following the merger with Bank of America in 1992 was retained to further expand the public/private partnerships between California cities and the Bank, especially in the area of affordable housing. Bank of America has been an FHA Title I lender since the Program's inception in 1934 and is fully qualified to process loans meeting the requirements of the Department of Housing and Urban Development (HUD). The standard offerings include leveraging programs for property improvement loans for both single family owner -occupied homes as well as investor owned multi -family properties. In addition apart from the loans that are created as assets of the Bank, the Center also originates and services loans where the City is the lender of record. These programs have expanded to the origination and servicing of City funded "seconds" supporting first time buyer programs as well as mobile home loans granted by a City to upgrade units in City owned parks. The Center offers underwriting, document preparation and loan servicing for City funded loans and is also prepared to accept loans that the City has already funded and is seeking loan servicing. On City funded amortized loans the original loan documents are either retained by the City or held in safekeeping by the Bank. Loans that are originated by the Bank or previously originated by the City and accepted for servicing are reviewed (emphasis is placed on the repayment terms as contained in the Note), the loan is assigned a loan number and boarded (placed on the loan Page 53 i • Bank of America accounting system of the Bank) with borrowers names and other necessary identification and information. At the same time a letter of introduction is sent advising the borrower that the Bank is the selected servicer of the City loan. The servicing consists of monthly payment statements mailed approximately 14 days prior to the due date, in the event of non -receipt of payment, reminder notices are sent 5 and 15 days after due date. If the loan continues to remain unpaid we then begin telephone collection activity to not only determine when the payment(s) will be made but also the reason for non-payment. If telephone contact is not made or payment promises broken, additional reminders are sent at 30 and 45 days and a series of collection letters and mailgrams are sent increasing in their severity to the point where we would contact the City for further instructions should no response be received. Borrowers are invited to establish a monthly automatic repayment of their loan which can be made from any financial institution to Bank of America. This is at no additional cost to the borrower and ensures payments are made "on time," resulting in the borrower earning an excellent credit rating and the City's loan being repaid in a timely manner. Ail payments received are credited to the loan on the date of receipt, the following day we then accumulate and deposit into an account established for that purpose. We respond to all requests for beneficiary demands and statements as well as any credit ratings authorized by the borrower. At loan payoff, if appropriate, we will ensure that a Deed of Reconveyance is prepared and forwarded to the County Recorder for recordation. Each year we will notify the borrowers of the interest paid on their loans (IRS #1098) and provide each borrower with a loan history for the preceding 12 months. The loan activity is reported to the credit bureaus to enable the borrowers to earn the rewards of their paying habits. Monthly reports showing the City's outstanding loans and transaction journals will be forwarded to the party designated by the City. In addition an investor daily transaction report is prepared for any day that one of the City loans has any activity. The Center will notify the City of any known Bankruptcy filings by the borrowers and ensure the borrowers rights are observed and maintained. Upon instructions from the City the Center will provide for loan forbearance or instruct the Trustee to commence foreclosure, monitor the process and keep the City advised of the status. There is no minimum balance requirement to obtain these services from the Bank. The fee schedules for the services described in the following pages. Page 54 ImBank of America C HOUSING REHABILITATION LOAN PROGRAM FEES AND CHARGES SCHEDULE For City funded loans the following out of pocket expenses may be applicable with the following appropriate fees due to the Bank. Many of these costs may be included in the loan and paid for by the borrower. Credit - per applicant $ 4.00 Appraisal Owner Occupied SFR drive by (not required if FHA Title I) $150.00 Title and Recording Fees SFR $130.00 Title and Recording Fees Multi -Family (average cost on 5 + Units) $350.00 Underwriting of Loan to City criteria SFR* $125.00 Underwriting of Loan to City criteria Multi- Family* $175.00 Amortized Loan Origination Fee** (documentation and set-up) $125.00 Amortized Loan -Annual Servicing Fee 1% of original loan $ 50.00 min to $350.00 max * Applicable if City requests Bank to complete verifications, obtain credit reports and make recommendation for approval/denial. ** Fee reduced to S50.00for loans already originated and documented by City. Page 55 HBank of America f HOUSING REHABILITATION LOAN PROGRAM TRUSTEE'S FEE California Civil Cade Section 2924d (a) regulates Trustee's Fees as indicated below. The following pages are rate schedules on balances, rounded to the thousand dollars. When calculating actual fees, the unpaid principal balance owing at the time the Notice of Default is filed is used. The following table describes the calculations. FIRST STAGE FEES - From the recording date of the Notice of Default to the date the Notice of Sale is deposited in the mail. Unpaid Principal Balance Calculation for Fee $ 1.00 - 50,000 $200.00 50,001 - 150,000 plus 1/2% of remaining balance 150,001 - 500,000 plus 1/4% of remaining balance 500,001 - and up Plus 1/8% of remaining balance Sample: Balance of $550,000.00 50,000 = 200.00 100,000 = 500.00 350,000 = 875.00 50,000 = 62.50 550,000 1,637.50 First Stage Trustee's Fees SECOND STAGE FEES - From the date the Notice of Sale is placed in the mail until the property is sold. Unpaid Principal Balance $ 1.00 - 50,000 50,001 - 150,000 150,001 - 500,000 500,001 - and up Sample: Balance of $550,000.00 50,000 = 300.00 100,000 — 1,000.00 350,000 = 1,750.00 50,000 = 125.00 550,000 3,175.00 Calculation for Fee $300.00 plus L% of remaining balance plus 1/2% of remaining balance Plus 1/4% of remaining balance Second Stage Trustee's Fees THIRD STAGE FEES - Upon the Trustee's Sale being conducted Unpaid Principal Balance Any Principal Balance Calculation for Fee $300.00 or 1% whichever is greater Sample: Balance of $550,000.00 550,000 5,500.00 Third Stage Trustee's Fees Page 56 0 0 HBank of America HOUSING REHABILITATION LOAN PROGRAM APPROXE%IATE FORECLOSURE EXPENSES Each file will vary with regards to the expenses charged. The following indicates an estimate of the various charges from the vendors. Recording Fees $ 9.00 per document. $ 3.00 for additional pages. Mailing Charges $25.00 per stage. Trustee's Sale Guarantee Liability based on unpaid principal balance. Posting Property Varies from $60.00 (FAMA) to $85.00 Dependent on property type. Publishing Charges Based on length of Notice of Sale and County. Publishing charge is actual newspaper charge. Postponements First three postponements free. Fourth and up are $35.00 to $50.00 i Conduct Sale Charges $35.00 to $60.00 depending on County. Military Affidavit $70.00 per individual. Not applicable to Company Trustors Full Reconveyance Fee $65.00 Partial Reconveyance Fee $75.00 Page 57 RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Formal Assurance Loan Program Operating Agreement for the Housing Rehab Loan Program with Bank of America COUNCIL MEETING DATE: January 5, 1998 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (wlexhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attomey) Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attomey) Not Applicable Certificates of Insurance (Approved by the City Attomey) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable . ...... ... ... . NAPORFORMISSINGA EXPLANATION. FOR RETURN.OF::ITEM: RCA Author: Dan Bruening, x5901.