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HomeMy WebLinkAboutRes 2013-04-04 Awarding Bank Depository Contract.pdfCITY OF ANNA, TEXAS RESOLUTION NO. 2013-04-04 A RESOLUTION AUTHORIZING THE CITY MANGER TO ACT ON THE CITY'S BEHALF IN EXECUTING A CONTRACT FOR PRIMARY BANK DEPOSITORY SERVICES WITH INDEPENDENT BANK WHEREAS, the State of Texas Local Government Code: Chapter 105 Municipal Depository Act; Chapter 176 Conflict of Interest Act; Chapter 2256 Public Funds Investment Act; and Chapter 2257 Public Funds Collateral Act established the process for selecting a depository bank; and, WHEREAS, resolution 2013-02-06 of the City of Anna (City) authorized bids to be received from financial institutions located outside the City; and, WHEREAS, the City received only one proposal from Independent Bank; and, WHEREAS, staff has reviewed the proposal submitted by Independent Bank in concert with Valley View Consulting and recommends that the contract be awarded to Independent Bank; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2. Approval and Authorization of Contract The City Council hereby approves the Contract attached hereto as Exhibit 1, subject to approval as to form by the City Attorney, for Primary Bank Depository Services and authorizes the City Manager's execution of same. The City Manager is hereby authorized to execute all documents and to take all other actions necessary to finalize, act under, and enforce the contract. PASSED by the City Council of the City of Anna, Texas, on this 23rd day of April, 2013. ATTEST: APPZKIJ, -10 , OF°Nq Na a i kison, City Secretary Mike Crist, o a Res. 2013-04-04 Awarding Bank Depository Contras dos aP PA a,6°64 O, 1, �epa1r�;�'piW�\'1,1�\1\1 Mayor 04-23-13 DEPOSITORY SERVICES CONTRACT THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF COLLIN § The following provisions shall constitute an agreement (hereinafter referred to as "this Contract") between the City of Anna, Texas, a municipal corporation (hereinafter referred to as "the City"), and Independent Bank of Anna (hereinafter referred to as "the Bank"), which shall hereby serve as primary bank depository for the City for the period of June 1, 2013 through May 31, 2015. WITNESSETH: 1. The Bank shall act as the primary depository of the City. The Bank must, during the term of this Contract, provide sufficient security for all funds deposited by the City with the Bank, as required under the provisions of V.T.C.A., Local Government Code, Section 105.031, et. seq. and Texas Government Code, Chapter 2257 and in accordance with the Tri -Party Safekeeping Agreement Between the City of Anna, Independent Bank, and Independent Banker's Bank (hereinafter referred to as the "Tri - Party Agreement"), which is attached hereto as Exhibit 1. The Bank must fully execute and cause the Custodian to fully execute the Tri -Party Agreement and deliver same to the City as a condition of this Contract. 2. As the depository of the City, the Bank shall: (a) keep the municipal funds covered by this Contract; (b) perform all duties and obligations imposed on the Bank by law, under this Contract, and under the Tri -Party Agreement; (c) pay on presentation all checks drawn and properly payable on a demand deposit account with the Bank; (d) pay all transfers properly payable as directed by the designated officer of the City; (e) provide and maintain security at the level required by law; and (f) account for municipal funds and collateral as required by law. 3. Additionally, the Bank shall maintain receipts, expenditures, and balances of all of the City's accounts with the Bank, and shall prepare for the City a monthly report of such accounts and any individual fund balances not later than the tenth day of the following month. The Bank shall also provide the City with periodic reconciliation reports. 4. Reference is hereby made to the Bank's March 18, 2013 proposal for contract (hereinafter referred to as "the Bank's Proposal"), which is attached hereto as Exhibit 2 and made a part of this Contract for all purposes. However, to the extent of any conflict between any of the provisions of the Bank's Proposal and this Contract, the conflicting provisions of this Contract shall prevail. Further, to the extent of any conflict DEPOSITORY SERVICES CONTRACT Page 1 of 3 between any of the provisions the Bank's Proposal and the Tri-Party Agreement, the conflicting provisions of the Tri-Party Agreement shall prevail. To the extent of any conflict between any of the provisions this Contract and the Tri-Party Agreement, the conflicting provisions of the Tri-Party Agreement shall prevail. 5. This Contract may not be changed, varied, or altered except by an instrument in writing, duly executed on behalf of the City and the Bank. Any suit brought in connection with this Contract shall be tried in Collin County, Texas, and every obligation arising from this Contract shall be performable in Collin County, Texas. 6. Upon expiration of the original two-year term of this Contract, the parties may renew this Contract for subsequent one-year terms up to a maximum of three years after the expiration of the original term. Such one-year renewals shall occur provided that the City gives notice to the Bank of such renewal within 90 days of the expiration of the original term (or within 90 days of the expiration of any subsequent term) and the Bank does not terminate this Contract in accordance with the applicable termination provisions of this Contract or the Tri-Party Agreement. IN TESTIMONY WHEREOF, the instrument, in duplicate originals of equal force, has been executed on behalf of the Bank on this the day of 2013, and has been executed on behalf of the City by its City Manager, and attested by its City Secretary, pursuant to authorization by resolution of its City Council on the day of 2013. ATTEST: Natha Wilkison, City Secretary CITY OF ANNA, TEXAS Philip Sanders, City Manager DEPOSITORY SERVICES CONTRACT Page 2 of 3 INDEPENDENT BANK Johnny Bratcher, President ATTEST: Jan Webb, Executive Vice President DEPOSITORY SERVICES CONTRACT Page 3 of 3 TRI -PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK This Tri -Party Safekeeping Agreement Between the City of Anna, Independent Bank, and Independent Banker's Bank (this "Agreement"), is made and entered into on this day of 2013 by and among the City of Anna, Texas, a home -rule municipality duly incorporated under the laws of the State of Texas (hereinafter referred to as "the City"), Independent Bank, a State banking association, duly organized and authorized by law to do banking business in the State of Texas (hereinafter referred to as "the Bank"), and TIB — The Independent Banker's Bank, a State banking association duly organized and authorized by law to do banking business in the State of Texas (hereinafter referred to as "the Custodian"), with all three of said parties sometimes referred to collectively herein as the "Parties." The City and the Bank have entered into a Depository Service Contract. The City hereby designates the Bank as a depository for certain accounts in the name of the City, and such accounts shall be opened by the City designating the accounts and making deposits therein and the Bank accepting said deposits. The City shall have the right and power to determine and designate the character and amount of all funds on deposit with the Bank. Deposits of the City shall never be the subject of any garnishment or attachment and the Bank shall not recognize any attempt to garnish or attach same or be a party to such action. The rights of the Bank set forth herein are not exclusive, and the City has and reserves the right to select and use such other depositories as the City may in its sole discretion decide. Bank statements, canceled checks, check registers, deposit slips, debit and credit notices, reconciliations, notices of interest earned, and any other related documentation, or images thereof, shall be retained by the Bank for a period of seven years after the date of receipt of the items or such longer period of time as may be required by applicable law, rule, or regulation. The Bank shall maintain separate, accurate and complete records relating to all deposits and transactions of the City (including all deposits of money and other assets, the collateral or substitute collateral pledged to secure such deposits and all transactions relating to the collateral or substitute collateral), and shall make available to the City at any reasonable time during the term of this Agreement all records, books, and supporting documents, or images thereof, pertaining to the City's accounts and transactions made with or through the Bank or with the Bank's assistance. The Custodian shall maintain separate, accurate and complete records relating to all securities received on behalf of the City or the Bank pursuant to this Agreement, as well as all transactions related to such securities. The City shall have the right to examine, audit, inspect, or make copies of any and all of such records, books, documents, and images held by or for the Bank or the Custodian at any reasonable time. The Bank and the City, by execution of this Agreement, hereby designate the Custodian, an independent third -party bank, to hold in trust, according to the terms and conditions of this Agreement, any necessary collateral and substitute collateral, which may be required under this Agreement and the Custodian by execution of this Agreement hereby accepts such designation. Such collateral and substitute collateral shall be held in an account maintained by the Custodian in the name of the Bank and subject to the control of the City, all in accordance with the terms and conditions of this Agreement, any security agreement, and any other agreement mutually agreed to with the Custodian to document such relationship. TRI -PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK Page 1 of 7 The Bank shall cause the Custodian to accept the said collateral and hold the same in trust for the purposes herein stated, in a separate joint safekeeping account with the Custodian, the City, and the Bank, to be managed in accordance with the terms hereof, any applicable laws, and any security agreement between the City, the Custodian, and the Bank. All funds on deposit with the Bank to the credit of the City in the amount above the Federal Deposit Insurance Corporation (or its successor) ("FDIC") insurance limit shall be secured by collateral (or substitute collateral) as provided for in the City's Investment Policy and the Public Funds Collateral Act (Texas Government Code Chapter 2257), as the same may be amended or superseded, in the Charter or ordinances of the City and in other applicable law, and upon which the City shall have first and prior lien, and the City shall have a perfected security interest in such collateral (or substitute collateral). The Bank, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby grants a security interest in and a pledge and assignment of: (a) any and all collateral or substitute collateral from time to time held by the Custodian, delivered by the Bank to the Custodian pursuant to this Agreement the collateral or substitute collateral to be identified on the Custodian's books as held for the account of the City or jointly for the account of the Bank and the City, together with (b) the products and Proceeds of the foregoing and any substitutions or replacements, therefore, whenever acquired and wherever located to the City, in order to secure the payment when due, of the Deposits pursuant to this Agreement. For purposes hereof: (a) "Proceeds" means any principal or interest payments or other distributions made in connection with collateral, substitute collateral and anything acquired upon the sale, lease, license, exchange, or other disposition of same, and (b) "Deposits" means all Deposits by the City in the Bank, including all accrued interest thereon, that are available for uses generally permitted by the Bank to the City for actually and finally collected funds under agreement between the City and the Bank and the Bank's policies. Collateral or substitute collateral shall consist only of Eligible Securities. "Eligible Securities" shall include: (1) obligations of the U.S. Government, its agencies and instrumentalities, including mortgage- backed securities but only those that pass the bank test; and (2) obligations of the State of Texas or agencies, counties, cities, or other political subdivisions in the State of Texas rated at least AA as to investment quality by at least two nationally recognized rating agencies. The said collateral or substitute collateral shall be kept and retained by the Custodian in trust in an account maintained in the name of the Bank or jointly for the account of the Bank and the City and subject to the control of the City, so long as the depositor relationship between the Bank and the City shall exist hereunder, and thereafter so long as any portion of any deposit made by the City with the Bank hereunder shall have not been properly paid out by the Bank to the City or on its order. PA The total market value of the collateral (which includes accrued interest or income) securing the City's Deposits will be in an amount at least equal to 102% of such Deposits plus the amount of any accrued interest thereon and less the amount that such Deposits are insured by FDIC (the "Required Collateral Value"). The Bank will be liable for the monitoring and maintaining of the required collateral levels at all times. The Bank will be liable for the monitoring and maintaining of Required Collateral Value levels at all times. The market price on such collateral will be provided by the Custodian. But the City, at its expense, may at anytime obtain its own evaluation from an independent, generally recognized pricing source. The final determination of such market value shall be at the discretion of the City, whose decision shall be final and binding so long as the market value comes from a pricing source widely accepted in the banking industry. TRI -PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK Page 2 of 7 If the aggregate market value of collateral or substitute collateral held by the Custodian at any time does not equal or exceed the Required Collateral Value, the Bank shall provide Eligible Securities within that business day to bring the total aggregate market value equal to the Required Collateral Value and shall notify the City in writing within that same period of the additional collateral. The Bank may substitute Eligible Securities for any of the Eligible Securities held by the Custodian at any time by providing the Custodian with a withdrawal notice signed by an authorized representative of both the Bank and the City, provided that the market value of the collateral following such substitution would equal or exceed the Required Collateral Value. Substitutions require the City's written consent and new collateral shall be received by the Custodian before existing collateral is released. To the extent that consent is required, the City agrees that it shall not be unreasonably withheld so long as the substitution would equal or exceed the Required Collateral Value. The City will notify the Bank as soon as is practicable if large deposits are going to be made so that sufficient collateral may be pledged on a timely basis. The City will also notify the Bank as soon as is practicable if large withdrawals are going to be made that would reduce the amount of collateral pledged and will not unreasonably withhold the release of the collateral. V. The Custodian shall permit the City or its independent auditor(s) to examine the collateral or substitute collateral in the presence of the appropriate official of the Custodian at any time during normal business hours. If the City or its independent auditor(s) examine the collateral (or substitute collateral) more frequently than two times during the City's fiscal year, the City must reimburse the Bank reasonable costs and expenses associated with having appropriate officials attend the additional examination(s) and the cost of making the collateral and records related thereto available for examination as to each examination after the fourth annual examination. VI. If the Bank shall desire to sell or otherwise dispose of any one or more of such collateral so deposited with the Custodian, it may, with prior written approval of the City, substitute for any one or more of such collateral other collateral of the same market value and of the character authorized herein, which said right of substitution shall remain in full force and be exercised by the Bank as often as it may desire to sell or otherwise dispose of any such collateral; provided, however, that at all times the initial aggregate amount of such collateral or substituted collateral deposited with the Custodian shall always be such that it meets the Required Collateral Value. If at any time the aggregate amount of such collateral so deposited with the Custodian is less than the Required Collateral Value, then in that event, bank shall immediately deposit with the Custodian additional collateral as may be necessary to meet the Required Collateral Value. VII. If at any time the market value of said collateral shall be or become more than 102% of the total amount of City funds on deposit with the Bank, the Bank through its authorized representative may request in writing approval from the City that certain collateral be released from the pledge to bring the total to 102%. Approval shall not be unreasonably withheld. All substitutions, releases, and additional pledges of collateral pursuant to the terms hereof of any security agreement shall be completed at the earliest time possible. Approval may be provided by the City Manager or his or her written designee. TRI -PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK Page 3 of 7 VIII. The Custodian shall promptly provide the City with safekeeping or trust receipts covering all collateral and substitute collateral and clearly marked that said collateral is "Pledged to the City of Anna, Texas." The Bank shall also maintain records relating to all such collateral held for the benefit of the City, and shall provide monthly, and more frequently if requested by the City, a complete report with an itemized list of the City's deposits and of the collateral and the value thereof. IX. Should the Bank fail at any time to pay immediately and satisfy upon presentation any check, draft, or voucher lawfully drawn upon any demand deposit, or fail at any time to pay and satisfy, when due, any check, transfer, maturity or interest, draft or voucher lawfully drawn against or due the City regarding any other deposits or holding, or in case the Bank becomes insolvent or is closed (for any reason other than a normal business practice) or in any material manner breaches its agreements with the City, it shall be the duty of the Custodian upon demand of the City (supported by proper evidence of any of the above listed circumstances), to surrender the collateral to the City, which may sell all or any part of such collateral and out of the proceeds therefrom recover all damages and losses sustained by it, together with all expenses of any kind and every kind incurred by the City on account of such failure or insolvency, or sale, accounting to the Bank for the remainder, if any, of said proceeds or collateral remaining unsold. X. The Bank shall send to the City, on an annual basis, audited financial statements including a letter as to its "fair representation" of the City. XI. For the term of the Agreement, the City designates the City Manager or his or her written designee(s) as authorized to represent and act for the City in any and all matters pertaining to this Agreement, which individuals may be modified by the City Manager or the City Council. XII. It is the intention of the Parties that the covenants and agreements, terms and conditions hereof shall extend to the entire period and any optional renewal periods, during which the Bank shall act as depository for the City. Either the Bank or the City shall have the right to terminate this Agreement at any time and for any reason, prior to the expiration hereof, by giving at least 60 days prior written notice to the other party of its election to do so. When the relationship of the City and the Bank shall have ceased to exist, and when the Bank has paid out all deposits of the City to the City, the Custodian shall, upon notification by the City, which shall be promptly given, release all collateral to the Bank. Notwithstanding the foregoing or any other provision of this Agreement, if the Bank shall sell, assign, transfer, pledge, or otherwise convey (together, "Conveyance") the Agreement or any of its rights, duties, or obligations hereunder, the City, at its sole election, shall have a period of 45 days from and after the City's receipt from the Bank or other person or entity of written notice of such Conveyance to terminate this Agreement; if the City elects to terminate this Agreement within such period, such termination shall be effective upon delivery of written notice without the giving of further or additional notice. TRI -PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK Page 4 of 7 XIII. The Bank makes the following material representations of fact: (a) The Bank is the sole legal and actual owner of the securities or of a beneficial interest in the securities utilized to collateralize deposits, and such securities will be pledged to the City and held by the Custodian in accordance with this Agreement; (b) Other than the security interest granted to the City herein, no other security interest has been, nor will be, granted in the securities utilized to collateralized the City's deposits; (c) All of the City's accounts are and will continue to be insured to the regulatory limits by the FDIC; (d) This Agreement has been approved by the Bank in accordance with the Financial Institutions Reform Recovery and Enforcement Act of 1989, as amended, to the extent same applies to this Agreement, and in accordance with customary bank practices for the approval of such accounts, in this case by a Resolution of the Bank's Board of Directors or by the Bank's Loan Committee with the power to approve such depository accounts, and such approval is binding on the Bank; (e) The Custodian is an entity wholly independent of the Bank and is not—and during the term of this Agreement shall not become—owned in whole or part by the Bank's holding company, and; (f) Within 10 business days of any Conveyance, the Bank shall provide written notice to the City of same. XIV. This Agreement is binding on the Parties, their successors and assigns. Within 10 business days after its execution of this Agreement, the Bank shall deliver to the City: (1) a certified copy of excerpts from the minutes of a meeting of the Loan Committee and/or Board of Directors of the Bank, properly authorizing the Bank to enter into this Agreement and the Depository Service Contract; (2) a certified copy of the resolution or resolutions of the Bank's Board of Directors or the Bank's Loan Committee that authorized the Bank's officer(s) that signed this Agreement and the Depository Service Contract to bind the bank to said instruments; and (3) a certification that this Agreement, the Depository Service Contract, and the above -referenced resolution(s) and minutes of the Board of Directors or of the Loan Committee of the Bank, as applicable, have been placed (and will continuously be maintained) in and among the official records of the Bank. XV. Notwithstanding any of the provisions hereof, the City shall have and does hereby retain the right to utilize other depositories and the right to terminate this Agreement pursuant to the terms of article XII herein and with notice required thereunder, whenever, in its judgment the interest of the City may demand. If any clause or provision of this Agreement is for any reason held to be invalid, illegal, or unenforceable, such holding shall not affect the validity, legality, or enforceability of the remaining clauses or provisions of this Agreement. TRI -PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK Page 5 of 7 In the event of any action under this Agreement, venue for all causes of action shall be instituted and maintained in Collin County, Texas. The Parties agree that the laws of the State of Texas shall govern and apply to the interpretation, validity and enforcement of this Agreement; and with respect to any conflict of law provisions, the Parties agree that such conflict of law provisions shall not affect the application of the law of Texas (without reference to its conflict of law provisions) to the governing, interpretation, validity and enforcement of this Agreement. The failure by either party to exercise any right, power, or option given to it by this Agreement, or to insist upon strict compliance with the terms of this Agreement, shall not constitute a waiver of the terms and conditions of the Agreement with respect to any other or subsequent breach thereof, nor a waiver by such party of its rights at any time thereafter to require exact and strict compliance with all the terms hereof. The rights or remedies under this Agreement are cumulative to any other rights or remedies, which may be granted by law, in equity, or otherwise. Any rights and remedies either party may have with respect to the other arising out of this Agreement shall survive the cancellation, expiration or termination of this Agreement, except as otherwise expressly set forth herein. For purposes of this Agreement, notices provided for herein shall be in writing, addressed as provided hereinafter to the party to whom the notice or request is given, and shall be either (i) delivered personally, (ii) sent by United States certified mail, postage prepaid, return receipt requested, or (ii) placed in the custody of Federal Express Corporation or other nationally recognized carrier to be delivered overnight. Notice shall be deemed given: when received if delivered personally; 48 hours after deposit if sent by mail; and 24 hours after deposit if sent by Federal Express or other nationally recognized carrier. Address for Notice to the City: Attn: City Manager City of Anna 111 N. Powell Parkway Anna, Texas 75409 Address for Notice to the Bank: Independent Bank Attn: Johnny Bratcher P.O. Box 37 Anna, TX 75409-0037 Address for Notice to the Custodian: TIB -The Independent Banker's Bank Attn: Safekeeping Department P.O. Box 560528 Dallas, TX 75356-0528 The Bank and the Custodian shall operate as independent contractors and not as agents of the City and nothing herein shall be construed to create a partnership, joint venture, joint enterprise, or agency relationship between them. TRI -PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK Page 6 of 7 For purposes of this Agreement, "includes" and "including" are terms of enlargement and not of limitation or exclusive enumeration, and any use of the terms does not create a presumption that components not expressed are excluded. Except as provided for herein, the provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to create or grant any rights, contractual or otherwise, to any third person or entity. Executed this _ day of FOR THE BANK: Johnny Bratcher, Executive Vice President FOR THE CITY OF ANNA: Philip Sanders City Manager FOR THE CUSTODIAN: TIB -THE INDEPENDENT BANKER'S BANK in Printed name Its: Title 2013, by the undersigned authorized officers. ATTEST M Jan Webb, Executive Vice President ATTEST: Natha Wilkison City Secretary ATTEST: By: Printed Name Its: Title rRI-PARTY SAFEKEEPING AGREEMENT BETWEEN CITY OF ANNA, INDEPENDENT BANK, AND INDEPENDENT BANKER'S BANK Page 7 of 7