3 Banking ProposalsC YOF
CHANHASSEN
PO ~ 147
C,'~.~lssen. MN 55317
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w'~'t ci.chan, hassen.mn.us
MEMORANDUM
TO:
FROM:
Mayor
City Council
Bruce M. De. gong, Finance Dir~tor
DATE: January 8, 2003
Banking Proposals
The City of Chanhassen sent out a Request. for Proposal in December that asked
for cost estimates for banking services and received three proposals. The three
local banks that responded are the Chanhassen Bank (cm'r~t vendor), M&I Bank,
and TCF National Bank. The proposals are very competitive given the low
interest rate environment that we are currently experiencing. All three banks are
well qualified, sufficiently capitalized, mad eager to obtain the city's business.
Based on the proposals received it appears to be in the City's best interest to
change banks to M&I, based on their higher total interest payments.
The form used was similar to the form used the last time we requested proposals
in 1998. The Chanhassen Bank and M&I chose to waive all fees for services and
presented different methods of calculating interest on our account. The
Chanhassen bank will pay interest on balances with a 10% reserve after deducting
for the float amount with estimates monthly earnings of $1,695.83. The method
that M&I uses will pay interest on all collected balances without limitation with
estimated monthly earnings of $2,187.50. The proposal from TCF Bank followed
the format presented and reported interest earnings of $1,503.33 and average
monthly fees of $342.94 for a net earnings of $1,160.39.
Recommendation
Staff recommends that the City switch banking services to M&I Bank for three
years as shown in the proposal.
Attachments: Proposals
The City of Chanhaesen · A grcwing commumty .,,,,il~ clan '¥~s. ~',.~' 7 schocls, a charmi-~ ~o,,,'ntown. t.h..r',--g businesses. ;-,i~-~-~ !rails. and beautiful parks. A g~at place to live, work, and play.
CITY OF CHANHASSEN
PROPOSAL FORM FOR
CITY BANKING SERVICES
Date: 12/02/2002
City of Chanhassen
7700 Market Blvd.
Chanhassen, MN 55317
We submit for your consideration the following proposal for providing banking services for the
City of Chanhassen's checking account and provide the general information as requested herein.
A. We will establish a checking account in the name of the City of Chanhassen.
B. We
X
will provide the following services: (check those that apply)
Deposit tickets
X Acceptance and clearance of all deposited items
X Monthly statements of accounts
X Activity of analysis reports
X Wire transfers in and out
X Safekeeping
X Direct deposit of payroll (ACH)
X Electronic banking
1. Home office and type of institution:
Name: State Bank of Chanhassen
Address: 600 West 78th Street
City: Chanhassen
State: MN
Zip Code: 55317
Telephone: (952) 937-2265
Charter: June 10th. 1919
Incorporation:
City of Chm~hassen, MN
Proposal Form
City Banking Services
.
Location of facility in the City of Chanhassen (if different from previous address):
-Same-
3. List normal hours of business:
Lobby: M-F 9 a.m. to 6 p.m. Drive-Up: M-F 7 a.m. to 7 p.m.
Sat. 9 a.m. to 1 p.m. Sat. 8 a.m. to 1 p.m.
4. Member of Federal Reserve?
Yes X No
Bank Number: 091914587
ABA No: 091914587
Magnetic Encoding No: 091914587
5. Describe wire transfer procedures fbr federal funds/same day transfers'
Wires
There are three different options tbr the Cits.' of Chanhassen when it comes to wires. Each
will be discussed here:
a) e-Corp- with e-Corp, wires can be sent from the convenience of the City's offices, e-
Corp can be set up to allow different security clearances for each employee. This
option would be very convenient for the City.
b) Wire Agreement-The State Bank of Chanhassen and the City can set up a wire
agreement that allows the City to call our Central Operations Division directly. With
this agreement, the City account signer simply has to give their password to the COPs
employee and the necessary information to initiate a wire. COPs will callback the
City to verify the wire. We can even set up codes that identify which wire they want
sent. This system is more convenient than the Option C, which I will discuss next.
c) Person to Person Wire-Using this option, a signer on the City's account needs to
come into the bank with the following information:
1) Amount of the wire,
2) Routing number and name of the bank that money is to be wired.
3) Account Number and name of the beneficiary, and
4) Beneficiary's address.
City of C~ssen. MN
Proposal Form
City Banking Services
The signer must sign our wire transfer form. Once the bank receives the wire request, the
information is sent to our Central Operation Division in Chaska. They wire the money
through the Fedline system. Any wire request received before two o' dock P.M. will be
sent on that day's business.
Incoming Wires
Any wir~ received for the City's credit that is received before three o'clock will be
credited to the City's account on that business da,.'.
.
Describe procedures for direct deposit of payroll services, including processing and
scheduling requirements (city. has bi-weeldv Friday payday schedule):
The State Bank of Chanhassen is proposing a new-process for direct deposit of payroll
services. This proposal is the use of e-Corp to process the City's payroll. Using e-Corp,
the City's payroll file would be transmitted to our data center in Chaska using our e-Corp
program. This file could be generated by using a program that comes along with our e-
Corp program or the City's payroll pro,am may be able to generate an ACH file. If it
can. the City. would then use e-Corp to transmit this file.
This file would have to be transmitted to our data center by Thursday noon before the
Fridav settlement date.
The State Bank of Chanhassen can continue to do the City's payroll in the present
manner, which is inputting from a spreadsheet sent to us. Using this method, the file
needs to be at The Chanhassen Bank by noon on the Tuesday before the Friday payroll.
Using e-Corp is much safer and efficient than the system presently used.
City of Chanhassen, MN
Proposal Form
City Banking Services
,
Facilities for safekeeping of securities, etc.:
Held directly? Yes X No (if no. list where held)
The securities held as collateral for the CiG' of Chanhassen are held by US Bank of
Minneapolis. The securities are held under a separate account at US Bank and cannot be
released without proper City approval or proper substitution.
,
Collateral Requirements: A city depository is required to provide collateral sufficient to
secure the account balance in accordance with Minnesota Statutes 118.01, such collateral
being subject to acceptance by the city.. Performance bonds are not an acceptable
substitute for collateral. The range of collateralization is expected to be $2-$10 million.
Describe the t3~pe of collateral proposed to be assigned and list the maximum amount
available to the city. Also list any charges for the assignment and maintenance of the
collateral.
The securities pledged for the Citw of Chanhassen are usually United States agency
bonds. Occasionally municipal bonds are used for collateral if agency bonds are
unavailable.
Currently, the State Bank of Chanhassen has $21.343.371 of securities available for
pledging. This does not take in account the securities the bank presently has pledged to
the city.
The State Bank of Chanhassen does not charge for assigning or maintaining collateral.
,
What are your total number of Chanhassen households and businesses served by your
bank:
Chanhassen
Households:
Chanhassen
Businesses:
2.084 ~last bid we reported accountsl
534
City of Chanhassen, MN
Proposal Form
City Banking Services
10.
Interest Earnings: Establishment of an interest bearing account so as to generate interest
earnings for the city as calculated below is required (see "Definitions: which describe
how each term below is to be calculated). An alternate method of paying interest earnings
may be attached if the proposer can demonstrate that the yield will be the same or higher
without consuming additional cry staff time.
Interest Calculation Example:
Average Daily Balance $1,500,000
Average Float $ 250.000
Net $1,250,000
Reserve $ 150.000
Amount to be Invested $1,100.000
Federal Rate 1.64%
Monthly Earnings $ 1.804.00
We agree to pay interest earnings based on this formula to the city and will show
such on monthly statements for that month.
Exception:
If the "average daily balance" falls below $ N/A we will pay interest earnings at
the current rote in effect for our commercial accounts.
An alternate method of paying interest on the city's account is attached and
labeled "Exhibit C" which conforms to the requirements above. Differences in
"Definitions" are shown and such shall be considered as an official part of our
RFP.
Definitions of terms used in this proposal:
The amounts to be used will be actual amounts for each item shown in the example.
Average Daily Balance: Daily balances divided by the number of days during the period.
Federal Rate: Average of the previous three month Treasury 3-Month Constant Maturities.
Amount to be Invested/Earnings shall be calculated as follows:
Times
Equals
Times
Equals
Net Available Funds
Earnings Rate/360
Daily Earnings Credit
Number of Days in Statement Period
Earnings to Apply Against Service Charges
City of Chanhassen. MN
Proposal Fonu
City. Banking Services
1 IA. List proposed service charges:
A. Yearly Charges:
E-Corp Annual Fee
Deposit Ticket Charge
Coin Services'
Purchase ($200 tvdce/year)
Counting ($50 four/month)
Part A Subtotal
Charges
N/C
N/C
$ 0
B,
Monthly Charges
Per Item
Charge
Monthly Maintenance Fee $ N/C
Debits N/C
Credits N/C
Items Deposited N/C
Monthly Check Sorting Fee N/A
NSF Checks N/C
Stop Payment N/C
Wire Transfers N/C
Special Handling N/C
e-Corp Monthly Fee N/C
Payroll Processing:
Setup Charge N/C
Additions or Changes N/C
Fee/Payroll N/C
Charge/Item On Us N/C
Other N/C
Monthly Report on Verification
Of Collaterization of Deposits
N/C
Total Monthly Charges
Total Monthly Charges x 12 (Part B Subtotal)
Estimated
Monthly
Activity
1
470
40
2.665
1
1
1
2
0
1
1
2
20
88
Estimated
Monthly
Charges
$ 0
N/A
0
0
0
0
0
0
0
$ 0
ESTIMATED YEARLY CHARGES (PART A+B) $ _0
City of Chanhassen, MN
Proposal Form
City Banking Services
Net Earnings:
Estimated Earnings (see Appendix C)
Estimated Yearly Charges (from page 5)
Net Earnings
$ 20,349.96
$ 0
$ 20,349.96
liB.
llC.
12.
Which services will the City of Chanhassen be able to perform electronically?
The State Bank of Chanhassen has a product called KleiNet e-Corp.
Using this product, the City can review their accounts at their convenience, e-Corp also
gives the City the ability to put on stop payments, wire money, and do ACH (electronic)
transactions, e-Corp will benefit the Cit3' with by saving time and greater convenience.
If the City's payroll software is capable, xve can set up a system that the City's file is sent
directly to our data center in Chas 'ka though e-Corp. Tiffs system could be a great
timesaver for the City.
The City could also use e-Corp for utilit3- and related billings. We would be happy to
help set up such a program. This could save the City substantial dollars and staff time.
Are there additional charges for the electronic access to our account listed in 1 lB?
No. We really encourage the City to take advantage of our e-Corp product. It is easy to
use and can be a great convenience for the City.
List other optional services provided by 3'our firm. anticipated benefits of such to the City
and costs of services.
The State Bank of Chanhassen has an Employee Benefit Banking program that could be a
great perk for City of Chanhassen employees. With this program, city employees would
get a free checking account and many more perks. A brochure for this product is
enclosed.
City of Chanhassen, ~
Proposal Form
City Banking Services
The State Bank of Chanhassen has a full-time Investment Representative at the bank. The bank
can offer a full line of investment options including 401 (k) products that would be beneficial to
the City and its employees.
Bank certificates of deposit and repurchase agreements are available to the city. The City could
benefit by using these for short-term invesunents. The State Bank of Chanhassen also has a
Money Market account the City may want to look into.
The State Bank of Chanhassen's staff will fulfill the City's notary, and signature guarantees needs
for no charge and we v-ill continue to provide a free chec 'king account for the Employee Group
Fund.
The State Bank of Chanhassen also has a sweep account that could help the City earn more
interest. When this was discussed previously, it seemed that this was not an option because the
money actually goes outside the bank and is not FDIC insured. We would certainly be willing to
investigate this possibilit).' again.
13.
Describe aspects of your banldng sen, ices that distinguish you fro1T1 other banks.
Service. The State Bank of Chanhassen strives to provide the city with excellent
service. We have worked with the City for many years and feel that we know and
fulfill the City's needs. We look forward to continuing this sen, ice for many years to
come. We have also served this communitv for over 83 years and feel like an
important part of the community.
· Community Involvement. The State Bank of Chanhassen is involved in the
community in many ways. The bank sponsors many charities in the area and is very
active in community events. We are active in the Chamber of Commerce as well as
other community groups.
· Gold Sponsor. We have been a Gold Sponsor of the City every year of the program.
14. Contact Person(s)'
Name: Alan G. Tellers
Name' Kevin P. McShane
Title: Senior Vice President of Operations
Title: President and CEO
City of Chanhassen, MN
Proposal Form
City Banking Services
This proposal, if accepted by the city. shall begin as soon as practicable after January 1, 2003,
and shall remain in force and effect through December 31. 2005. The eonwact may be canceled
by the bank on or before November 1 of each year. The termination of the contract shall then
become effective on January 1 of the year following notification. The city may cancel by
providing the bank with a 30 day notice. All terms, rates, and other services shall be as stated in
the proposal unless specifically modified and agreed to by both parties for the term of the
contract.
In submitting this proposal, I (we) understand that the City. of Chanhassen reserves the right to
reject any oral proposals, to waive informalities, and to make any award which it considers to be
in the best interest of the city.
Submitted by: Alan G. Tellers
Date: 12/2/2002 /~
Print Name: Alan G. Tellers
Title: Senior Vice President of Operations
Phone Number: (952) 975-5885
Interest Calculation Example:
Average Daily Balance*
Average Float
Net
Reserve
Amount to be Invested
Rate**
Monthly Earnings
$1,500,000.00
$250,000.00
$1,250,000.00
$150,000.00
$1,100,000.00
1.85%
$1,695.83
*we will require the City to maintain an Average Daily Balance of $1,250,000.00 on a monthly
basis. If the monthly average balance is below the required amount, no interest will be paid for
that month. The State Bank of Chanhassen will give the City a one-month exception on the
above requirement on an annual basis if the City is operati~ in good faith.
**The rate will be fixed for the fist two years of the agreemem. If the Fed Fund rote increases to
2.75% or greater by December of 2004, this rate will increase to 2.10% for any month in 2005
that the Fed Fund rate rem at or above 2.75%.
Banking Proposal for
City of Chanhassen
December 9, 2002
CORPORATE PROFILE
At September 30, 2002
TCF Financial Corporation is an $11.5 billion financial holding
company headquartered in Minnesota
38th largest* public bank in the U.S. based on market
capitalization; 45th largest public bank in the U.S. based on
asset size
· Stock traded on the New York Exchange as TCB
· Website istcfexpress.com
· 378 total bank branches in the Upper Midwest (4th largest in
U.S.)
· 95 branch offices in Minnesota
· Client focus is on convenience through branch offices, longer
hours, ATM, Internet and telephone banking
· TCF strives to be the Iow cost provider
· Owns and operates 1,163 TCF EXPRESS TELLERsM ATMs
· 1.3 million checking accounts
*Source: Thomson Financial
December 9, 2002
Mr. Bruce M. DeJong
Finance Director
City of Chanhassen
7700 Market Blvd.
Chanhassen, MN 55317
Dear Mr. DeJong:
On behalf of TCF National Bank, I want to thank you for this opportunity to provide a banking
proposal to the City of Chanhassen.
TCF has provided banking services in the City of Chanhassen since 1997. We now provide full-
service banking at more than 90 traditional and in-store locations throughout Minnesota and
approximately 378 locations across the Upper Midwest. A more complete profile of our
company and our business philosophy is provided in the 2001 TCF Financial Corporation
Annual Report, a copy of which is enclosed.
TCF has a solid reputation for quality credit, cash management and investment products and
services to small and middle market businesses and not-for-profit organizations. Based on our
review of your banking RFP, we are confident of our ability to provide the required range of
services along with the necessary customer service support to exceed your expectations.
The following information is provided in addition to your RFP:
Customer Service
High quality telephone support is provided to our public, non-profit, and commercial clients by a
dedicated team of bank representatives in TCF's Commercial Customer Service Department.
They are available Monday through Fdday between the hours of 7:30 a.m. and 5:00 p.m.
Central Time by calling toll-free (877) 784-8239. This team also provides technical support for
Intemet banking service. Performance is monitored and measured monthly, with an incentive
plan that rewards representatives for accurate, timely and professional service. In the remote
chance that service does not meet your expectations, I would ask that you contact me as your
Relationship Manager for assistance.
TCF is aware that a reputation is not built by marketing or branding alone. In fact, good
reputations are sustained by quality service after the sale. To that end, managers in our Cash
Management team meet at least monthly with counterparts in our operational support
departments to make sure issues are raised and resolved to our customers' ultimate
satisfaction.
As a routine part of any new relationship, we would encourage you to stop by our local branch
to introduce city deposit representatives to Sara Halverson, TCF manager, and her staff. It is
important to us that you know who will be involved to support the relationship and how they may
be reached upon need.
'~.4m'r~ef FDIC
801 M.x~r.,[:urr~ Av~-:',;u~. MINNEAPOLIS. MN 55402-3475
Communi~ Involvement
TCF has demonstrated a commitment to more than banking in the Chanhassen community. We
have contributed generously to many different charitable and human service organizations in
the region. In 2001 and 2002, numerous gifts were provided organizations in the city. These
include the Chanhassen Chamber of Commerce, City of Chanhassen, Minnesota Landscape
Arboretum and Chanhassen Fire Dept. Relief Association. Educational programs throughout
our market area have benefited from TCF Foundation contributions, Employee Fund
contributions (via voluntary payroll deduction) and a company match. This is especially true
when we have employees actively involved through volunteerism, board or committee
participation.
Special Purpose Accounts
TCF has a long tradition of providing free or Iow-cost depository accounts (checking, savings
and money market) to booster clubs, fundraising organizations, alumni associations, special
events, and other non-personal entities. These accounts are also used for trusts and
scholarship funds, and may be restricted by intended use or special purpose. Of particular
interest is our Free Community Group Checking Account and Free Small Business Checking
Account. Both are available through me or by visiting our local office.
As you consider this proposal for your banking services, please know that TCF is committed to
establishing and maintaining strong ties with public entities in all the communities served by our
branch banks. Consideration of TCF as your next banking partner will be greatly appreciated.
Thank you for this opportunity to respond to your proposal. If you have any questions, please
call me at 612-661-8308 or contact me via e-mail at dchou@tct~ank.com. I look forward to
hearing from you.
.._._ ..~..~r~Sincerely, "
_..~ck Chou, CCM
Cash Management Officer
Cc: Sara Halverson, TCF Chanhassen Brach Manager
BANKING PROPOSAL
FOR CITY BANKING SERVICES
We submit for your consideration the following proposal for providing banking services for the
City of Chanhassen's checking account and provide the general information as requested
herein.
A. We will establish a checking account in the name of the City of Chanhassen.
B. We will provide the following services:
I~ Deposit tickets
~] Acceptance and clearance of all deposited items
~ Monthly statements of accounts
I~ Activity of analysis reports
~ Wire transfers in and out
I~ Safekeeping
D
irect deposit of payroll (ACH)
Electronic banking
.
TCF National Bank is a Nationally Chartered, Delaware Corporation. Home office address
is 801 Marquette Ave., Minneapolis, Minnesota 55402. My direct phone number is 612-661-
8308.
2. The closest traditional branch is approximately 0.45 miles from the City and is located at
900 W. 78~ Street, Chanhassen, Minnesota 55317.
,
Normal Lobby hours are Monday through Fdday 9 a.m. to 6 p.m., Saturday and Sunday
from 10 a.m. to 3 p.m. Ddve-up windows are open Monday through Friday 7 a.m. to 7 p.m.,
Saturday from 8 a.m. to 3 p.m. and Sunday from 10 a.m. to 3 p.m.
4. TCF is a member of Federal Reserve. Transit and routing number is 291070001. Deposit
ticket routing number is 599913501.
.
Wire transfers may be initiated electronically using TCF Express Business Internet banking
or by calling TCF's Cash Management Operations team. Phone requests are recorded for
security, and Personal Identification Codes (PICs) are issued to each initiator and approver.
As an added safety measure, TCF performs a callback verification on all wire transfers over
$50,000. You may set this number higher or lower, as you prefer.
.
Payroll direct deposit batches may be imported into TCF Express Business and transmitted
to TCF via Internet. Payroll may also be originated by using recurring batches within TCF
Express Business. We would prefer the city transmit direct deposit files two days pdor to
settlement date.
.
The safekeeping of securities is held through TCF Express Trade's clearing partner
PdmeVest, Inc. Trades may be made on-line through a link from tcfexpress.com or by
calling the trading desk directly.
8. Collateral will be pledged in sufficient amount to provide a surplus in excess of the statutory
requirement at no cost. TCF will pledge Government or Agency securities.
9. As of October 2002, the number of households and businesses served by our bank is:
Chanhassen Households:2341
Chanhassen Businesses: 19'1
10. [~ We agree to pay interest earnings based on this formula to the city and will show such
on monthly statements for that month.*
*Net interest earnings (or net service charge) will be applied to the account on or about
the fifth day of the following month.
llA.
A. Yearly Charges: Charges
Deposit Ticket Charge ($27.51 per 200 duplicate)
Coin Services:
Purchase ($200 twice/year) $0.11 per roll
Counting ($50 four/month)
82.53
5.50 (50 rolls)
No Charge
Part A Subtotal
$ 88.03
C. Monthly Charges
Proposed Estimated Estimated
Per Item Monthly Monthly
Charge Activity Charges
Monthly Maintenance Fee S 15.00 1
Debits 0.10 470
Credits 0.25 40
Items Deposited
On Us 0.03
Local 0.04 2665
Transit 0.06
Monthly Check Sorting Fee 30.00 1
Per Item 0.06 470
NSF Checks 30.00 1
Stop Payments 28.0t) 1
Wire Transfers
In Bound 5.00 2
Out Bound 10.00
Special Handling 0
Payroll Processing:
Setup Charges 200.00(waived) 1
Additions or Changes No eharg.e. 2
Fee/Payroll 10.00 2
Charge/Item OnUs 0.10 20
Other 0.1__..Q0 88
Monthly Report on Verification
Of Collateralization of Deposits
Waived 1
$15.00
47.00
10.00
106.60 (local)
30.00
28.20
30.00
28.00
10.00 (in bound)
No charge
No charge
20.00
2.00
8.8q
No Charge
Total Monthly Charges
Total Monthly Charges x 12 (Part B Subtotal)
:335.60
4,027.20
ESTIMATED YEARLY CHARGES (PART A + B)
$ 4~115.23
Net Earnings:
Estimated Earnings (~ $1,503.34' x 12 =
$18,040.00
Estimated Yearly Charges (from page 5) =
$ 4,115.23
Net Earnings
$13,924.77
*Based on the information from question 10 of the RFP, the monthly earnings is calculated to be
$1503.34
11B. Enclosed is a demo CD-Rom and brochure for TCF Express Business Intemet Banking.
Please take few minutes to familiarize yourself with the safety and convenience of this new
cash management tool. You'll find it to be user-friendly and functional. The service
provides balance and information reporting, book transfers, stop payments, wires and
ACH - all from the convenience of any PC or MAC with access to the Internet. We will
make all modules available to the city at your request. We believe it is the most efficient
too for management of your cash.
11C. TCF is pleased to offer as a suite of Internet banking services: pdor day balance reporting,
stop pay, wire and ACH modules for $40 per month. We will waive a one-time $50 setup
fee.
12.
A convenient and efficient alternative to check sorting is to receive canceled check images
(front and back) on a CD-Rom. Each month's CD includes the software for viewing check
images on your PC. The software provides for multiple search options with sorting flexibility.
The CDs containing imaged checks require less storage space and provide quick access to
cancelled checks upon need. Check imaging is $30 per month per account and $0.035 per
check imaged.
13.
TCF stdves to be the most convenient bank in Minnesota. To that end, our traditional and
in-store (CUB Foods) branches are open seven days a week and on some holidays.
Branches stay open longer hours and are equipped with coin counters free to TCF
customers. A dedicated team of commercial customer service representatives is just a
phone call away for public, non-profit and corporate customers to meet your routine and
special service needs.
14. Contact Person(s)'
Name: Nick Chou
Title: Cash Management Officer
Name: Ron Britz
Title: Senior Vice President
This proposal, if accepted by the city, shall begin soon as practicable after January 1, 2003, and
shall remain in force and effect through December 31, 2005. The contract may be canceled by
the bank on or before November 1 of each year. The termination of the contract shall then
become effective on January 1 of the year following notification. The city may cancel by
providing the bank with a 30 day notice. All terms, rate, and other services shall be as stated in
the proposal unless specifically modified and agreed to by both parties for the term of the
contract.
In submitting this proposal, I (we) understand that the City of Chanhassen reserves the dght to
reject any oral proposals, to waive informalities, and to make any award which it considers to be
in the best interest of the city.
Submitted by: TC,/
Date:
Authorized Signaturec
Print Name' /~' ~-~'
Title:
Phone Number:
Treasury Management Proposal
Prepared in Response to the Request for Proposal of:
CITY OF CHANHASSEN -
December, 2002
Presented bY:
Anthony Stocker, Vice President
(612) 798-3263
Kevin Pleasant, Assistant Vice President
(612) 798-3169
TABLE OF CONTENTS
INTRODUCTION TO THE MARSHALL & ILSLEY CORPORATION ..................................................... 3
REQUEST FOR PROPOSAL ............................................................................................................................ 4
PROPOSED SERVICES ................................................................................................................................... 13
AGH GASH D~SBURS£MENT ........................................................................................................................... 13
M~WEB BUS~NESS BANK INTERNET REPORTING OVERVIEW & REQU~REMEN:I'S ......................................... 16
OPTIONAL SERVICES ................................................................................................................................... 18
CD-ROM & Check Truncation ............................................. ' ........................... : ................... i ..... 18
EXHIBITS ........................................................................................................................................................ . 19
Page 2
INTRODUCTION TO THE MARSHALL & ILSLEY CORPORATION
M&I Marshall & Ilsley Bank (M&I Bank) makes a significant commitment to offedng the finest
banking services to corporate clients t. hroughout Wisconsin and the Midwest. This
commitment and keen awareness of our clients' needs has led M&I Bank to the forefront in
many areas. Heading into the 21 st century, it is vital to enhance those relationships, which will
continue to build on the present and look to the future to meet the needs of our Strong
Partners.
The Marshall & Ilsley Corporation (M&I), presently has more than 225 banking offices serving
Wisconsin, Minnesota and Illinois along with 25 banking offices in Arizona. In addition, the
holding company has a leasing subsidiary with 14 offices throughout the United States, an
investment management company, two mortgage banking companies, a venture capital
company, a data services company with more than fifteen offices and trust companies in
Wisconsin, Adzona and Flodda with nine offices.
Within M&I there are four pdmary operating divisions: Banking, Trust, Data Services and
Financial Services. While each of the operating divisions represents a different aspect of the
current finandal services market, there is one consistent operating philosophy found in each
of them. The philosophy, simply stated, is that M&l's success in delivering supedor service is
a result of a foundation built from four cornerstones: People, Performance, Programming and
P#ce.
Retum on assets in 2001 was 1.54%, while return on equity averaged 16.70%. M&I is a well-
managed, profitable and strong company which historically has performed well above its peer
group while maintaining high asset quality and a strong commitment to customer service. It
has quietly become a $29.1 billion holding company with a regional and national banking
presence.
A copy of the most recent Marshall & Ilsley Corporation annual report is enclosed.
Page 3
REQUEST FOR PROPOSAL
We submit for your consideration the following proposal for providing banking services for
the City of Chanhassen's checking account and provide the general information as
requested herein.
A. We will establish a checking account in the name of the City of Chanhassen.
M&I Bank will establish a checking account In the name of the City of
Chanhassen.
B!
We
x
x
x
x
will provide the following services: (check those that apply)
Deposit tickets
Acceptance and clearance of all deposited items
Monthly statements of accounts
Activity of analysis reports
Wire transfers in and out
Safekeeping
Direct deposit of payroll (ACH)
Electronic banking
1. Home office and type of institution:
.Corporate Headquarters
Re_~ional Headquarters
Marshall & Ilsley Bank
770 N. Water St.
Milwaukee, WI
53202 (414) 765-7700
Marshall & Ilsley Bank
Gaviidae Common
651 Nicollet Mall
Minneapolis, MN
55402 (612) 904-8000
Charter: M&I Marshall & Ilsley Bank Is a Wisconsin State Chartered Bank.
Incorporation: M&I Marshall & Ilsley Bank Is qualified as a corporation In the State of
Wisconsin.
M&I Is a regional bank with banking offices serving Minnesota, Wisconsin, Illinois,
and Arizona.
2. Location of facility in the City of Chanhassen (if different from previous address):
761 W. 78th St.
Chanhassen, MN 55317
Page 4
,
,
List normal hours of business:
Lobby: Monday- Friday 9 am - 5 pm
Saturday 9 am- 12 pm
Drive-up: Monday- Friday
Saturday
7 am - 6 pm
9 am - 12 pm
Member of Federal Reserve? X Yes
No
Bank Number: 091001157
ABA No: 091001157
Magnetic Encoding No:
091001157
,
Descdbe wire transfer procedures for federal funds/same day transfers:
M&I Bank offers wire transfers through the following methods of Initiation:
Voice - Each individual is assigned a PIN number for validation at the time the
wire Is placed. Depending on the authorizations set up by the City, the
wire is sent out Immediately or placed in a queue for review and
confirmation.
..
Electronic - The City could request repetitive wire transfers of funds from Its
M&I Bank accounts to receiving accounts at other financial
Institutions via M&l's MIWeb Business Bank.
PC-
..
PC generated wires are available through M&l's Money Transfer
Workstation product. This Is a PC based software that allows you to create
individual and batch wires on your PC for group transmission to M&I. The
same approval processes available for voice wires can also be
Implemented with MTW.
MTW is a Windows based product offering excellent security and easy to
use reporting features. With it, our clients are able to download
confirmations for wires that are sent, get complete detail for wires that are
received, create reports and export the Information for use in other
programs.
MTW also allows for International Wires in U.S dollars and foreign
currencies.
Wire transfers must be initiated before 4:30 pm central time to receive same-
day execution. Incoming wire activity's cutoff is 5:00 pm central time. The PC
system is available until 5:30 for inquiry.
Page 5
,
,
,
,
Describe procedures for direct deposit of payroll services, including processing and
scheduling requirements (city has bi-weekly Friday payday schedule):
Please see ACH Disbursements within the Proposed Services section.
Facilities for safekeeping of securities, etc.:
Held directly? Yes No (if no, list where held)
All Fed items are held directly. Additionally all DTC Items are held at Deutsche
Bank.
Collateral Requirements: A city depository is required to provide collateral sufficient
to secure the account balance in accordance with Minnesota Statutes 118.01, such
collateral being subject to acceptance by the ci.ty. Performance bonds are not an
acceptable substitute for collateral. The range of collateralization is expected to be
$2-$10 million. Describe the type of collateral proposed to be assigned and list the
maximum amount available to the city. Also list any charges for the assignment and
maintenance of the collateral.
M&I Bank will collaterallze the City's deposits in excess of $100,000 using
Investment grade municipal bonds. Any charges associated with the
collateralization of these funds Is reflect within questions 10 and 11A.
What are your total number of Chanhassen households and businesses served by
your bank:
Chanhassen
Households: 380
Chanhassen
Businesses: 67
10.
Interest Earnings: Establishment of an interest bearing account so as to generate
interest earnings for the city as calculated below is required (see "Definitions: which
describe how each term below is to be calculated). An alternate method of paying
interest earnings may be attached if the proposer can demonstrate that the yield will
be the same or higher without consuming additional city staff time,
Interest Calculation Example:
Average Daily Balance $1,500,000
Average Float $ 250,000
Net $1,250,000
Reserve $ 150,000
Amount to be Invested $1,100,000
Federal Rate 1.64%
Monthly Earnings $ 1,804.00
Page 6
We agree to pay interest eamings based on this formula to the city and will
show such on monthly statements for that month.
M&I Bank will pay the City 1.75% on all collected balances, contingent
on a minimum balance requirement of $1,500,000.
Average Daily Balance
Interest Rate Provided
Monthly Earnings
$1,500,000
1.75%
$ 2,229.45
Exception:
If the "average daily balance" falls below $ we will pay
interest earnings at the current rate in effect for our commercial accounts.
An altemate method of paying interest on the city's account is attached and
labeled "Exhibit C" which conforms to the requirements above. Differences
in "Definitions" are shown and such shall be considered as an official part of
our RFP. "
Definitions of terms used in this proposal:
The amounts to be used will be actual amounts for each item shown in the example.
Average Daily Balance: Daily balances divided by the number of days during the period.
Federal Rate: Average of the previous three month Treasury 3-month Constant Maturities.
Amount to be Invested/Earnings shall be calculated as follows:
Times
Equals
Times
Equals
Net Available Funds
Eamings Rate/360
Daily Eamings Credit
Number of Days in Statement Pedod
Earnings to Apply Against Service Charges
11A. List proposed service charges:
A. Yeady Charges:
Charges
Deposit Ticket Charge
Coin Services:
Purchase ($200 twice/year)
Counting ($50 four/month)
No Charqe
No Charqe
No Charqe
Part A Subtotal
$ No Charq~
Page 7
B,
Monthly Charges
Estimated
Per Item
Charge
Estimated
Monthly
Activity
Monthly
Charges
Monthly Maintenance Fee
Debits
Credits
Items Deposited
Monthly Check Sorting Fee
NSF Checks
Stop Payment
Wire Transfers
Special Handling
No
No
No
No
No
No
No
No
No
Chame
Charge
Charge
Char_ae
Charge
Charge
Charge
Charge
Charge
1
47O
40
2,665
1
1
1
2
0
$ No Charge_
No Charge
No Char_ae
No Charge
No Charge
No Char_ae
No Charge
No Charge.
No Char_ae
_
Payroll Processing:
Setup Charge
Additions or Charges
Fee/Payroll
Charge/Item On Us
Other
MiWeb Business
Priorday Balances
ACH/Wire Module
ACH Originations
No Charg~e
No Char_ae
No Charge
.N.o Cha .r..qg.
No Chame
No Charge
No Charge
No Charge
1
2
2
20
88
1
1
108
No Charge.
No Charge
No Char_ae
No Charge
No Charqe
No Charge
No Charge
No C. harge
Monthly Report on Verification
Of Collaterization of Deposits
No Charge 1
No Charge
Total Monthly Charges
Total Monthly Charges x 12 (Part B Subtotal)
$0.00
$0.00
ESTIMATED YEARLY CHARGES (PART A+B)
$0.00
Net Earnings:
Estimated Earnings @ $2,229.45x 12 = $ 26,753.40
Estimated Yearly Charges (from page 5) $ 0.00
Net Earnings
$ 26,753.40 .
The above pricing schedule Is contingent on a minimum balance requirement of
$1,500,000. M&I will review the balance level on a quarterly basis. At such time,
additional balances may be required to offset previous quarter's balance shortfalls.
Page 8
11B.
Which services will the City of Chanhassen be able to perform electronically?
The City will be able to access previous day balance and detail information at
7 am central time, while intraday information Is updated in real-time via M&l's
MiWeb Business Bank.
The following are additional services that the City can .perform electronically
via MIWeb Business Bank:
Internal Deposit Account Transfers (Book Transfers)
Transfer funds online between related business accounts at M&I Bank in real
time by simply choosing a debit from and credit to account and entering the
dollar amount of the transfer. A history of recent online transfers is also
provided.
Stop Payments ....
Request stop payments online. Send an electronic request complete with basic
information such as the check number, payee, amount and date. The system
will notify you if the check has cleared with the past 45 days.
Loan Services
Loan reporting features allow you to view the balance and transaction details of
your M&I Bank loans or lines of credit. You can also make online real time
payment on a loan or request an advance from a line of credit.
Repetitive Wire Trans'fers
Request repetitive wire transfers of funds from your M&I Bank accounts to
receiving accounts at other financial Institutions.
Bill Payments
Create and send one-to-one bill payments to vendors, suppliers and more.
Payments are distributed by M&I Bank as ACH transactions or as checks. The
amount of the payment is automatically deducted from the initiator account.
ACH Orfgination
Use the Automated Clearing House (ACH) system to electronically pay
employees with direct deposit, make direct vendor payments, collect payments
from customers or concentrate funds from remote accounts at other banks to a
main operating account at M&I Bank.
Page 9
File Transfer
Transmit check Issued files or preformated NACHA to M&I bank In a secure
environment. Receive various reports and statements transmited from M&I
bank in a secure environment.
11C.
12.
13.
Are there additional charges for the electronic access to our account listed in 1 lB?
There are additional charges for the services listed In 11B. The charges for
services the services that M&I has proposed to the City can be found in 1 lA
letter B.
List other optional services provided by your firm, anticipated benefits of such to the
City and costs of services.
M&I has the ability to return numerically sorted checks to the City via our
Flnesort product. -
M&l's better alternative to Finesort is M&lmage, our CD-ROM Image product.
With this product, customers receive Images stored on CD-ROM. Both front
and back of the check can be viewed and printed via PC viewer software. With
this service, checks are retained by M&I for 30 days after monthly CDs are cut.
After 30 days, the checks are shredded under fight security.
Describe aspects of your banking services that distinguish you from other banks.
M&I offers relationship banking and is committed to establishing and
maintaining long-term relationships with our customers. M&I uses a team
approach to relationship banking having both primary and secondary
Relationship Managers and Treasury Management Officers assigned to City of
Chanhassen. Specialists from the Implementation, Customer Service, and
Technical Support areas are also Included In the team in order to meet City of
Chanhassen needs.
The customer service staff Is available to all service inquiries and is poised to
address operating problems that may occur from time to time. One person
will be assigned, but should that person not be available, one of the other
experienced staff members will be available to answer your questions.
M&I Bank has established maximum turn-around times for research and
adjustment type items in terms of business days depending on the complexity
of the Issue Involved.
This is the tv=e of customer service City of Chanhassen can and will receive.
Page I0
M&I Bank truly believes in the "strong partner" approach In working with
customers. We work together as a team and take the responsibility of
customer service seriously.
M&I has the knowledge, experience, capability, systems, products and desire
to provide City of Chanhassen with the best overall package In meeting with
your banking services needs. Our product lines range from the development
and maintenance of the electronic systems, providing extended servicing
through 24 hour customer support, and processing at the highest quality
levels.
In addition, Metavante, a wholly owned subsidiary of the Marshall & Ilsley
Corporation, Is one of the most highly respected data services operations in
the country. They are a leader In the Industry and are continually setting new
standards for service and technology enhancements. Overall, our
commitment to quality and customer service sets us apart from our
competitors.
Poge ! !
14. Contact Person(s):
Name: Anthony Stocker
Name: Kevin Pleasant
Title: Vice President
Title: Assistant Vice President
This proposal, if accepted by the city, shall begin as soon as practicable after January 1,
2003, and shall remain in force and effect through December 31, 2005. The contract may
be canceled by the bank on or before November 1 of each year. The termination of the
contract shall then become effective on January 1 of the year following notification. The city
may cancel by providing the bank with a 30 day notice. All terms, rates,-and other services
shall be as stated in the proposal unless specifically modified and agreed to by both parties
for the term of the contract.
In submitting this proposal, I (we) understand that the City of Chanhassen reserves the right
to reject any oral proposals, to waive informalities, and to make any award which it
considers to be in the best interest of the city.
Submitted by:M&l Marshall & Ilsle¥ Bank
Date: December 9, 2002
Print Name: Kevin Pleasant
Title: Assistant Vice President
Phone Number: (612) 798-3169
Poge 12
PROPOSED SERVICES
ACH CASH DISBURSEMENT
M&I offers City of Chanhassen use of the Automated Cleating House (ACH) system to make
direct vendor payments, in addition to electronically paying emp!oyees with direct deposit,
(one-to-many).
MOVE FUNDS EFFICIENTLY...
v' City of Chanhassen can electronically transfer funds via ACH to and from your
company's account(s) and the accounts of clients, vendors, employees, etc. in a
simple, secure, and cost-effective manner.
," The Automated ClearingHouse (ACH) is a nationwide central clearing facility,
which processes ACH transactions. It receives City of Chanhassen's electronic,
pre-authorized credit payments from M&I Bank and routes them to the
designated receiving banks.
,/' M&I Bank offers many options for creating and/or transferring ACH payment
information for processing.
ACH TRANSFERS ARE LESS EXPENSIVE THAN...
Wire transfers.
Paper-based payments
Direct Deposit ' '
Direct Deposit is popular with employers and employees for the payment of payroll, pension
benefits, commissions, child support and expense reimbursements. With direct deposit, funds
are deposited into employee accounts at the financial institution of the employee's choice
through the ACH system.
There are many advantages that acc. me to both the company and the employee as a result of
using direct deposit. Employees appreciate the convenience, ~meliness, and reliability of
direct deposit. Direct deposit eliminates standing in line to cash checks and the need to make
special payment arrangements when ill, on vacation, or traveling. Employees feel comfortable
with the safety of direct deposit. There is never a need to worry about lost, stolen, or forged
checks. Since direct deposit is electronic, it ensures greater confidentiality than checks.
Corporations using this service supply M&I Bank with data via mainframe transmission, PC
transmission or via Intemet file transmission. M&I Bank processes the information, sending
electronic credits to individual demand deposit accounts at vadous banks.
Page 13
MiEmployee Advantage
M&I offers special employee advantage banking to City of Chanhassen's employees who
chose to utilize direct deposit of payroll.
Account features include:
v' FREE Checking
v' FREE first order of checks (up to $29 value)
v' No annual fee M&I Bank Visa Check Card
v' No annual fee M&I Visa Credit Card
· " FREE teller transactions
v' Unlimited M&I ATMwithdrawals
v' FREE non M&I ATM withdrawals, up to four per month
v' Unlimited check wdting
· " FREE 24/7 account access through MiLine - verify account balances, funds transfers etc.
v' FREE 24/7 access to a personal bank through MiLine
v' FREE online banking with M&l's MiWeb Bank
v' Convenient combined statement for easy record keeping
v' Periodic preferred customer bonus offers on investment rates
Below is general information applicable to both ACH debit and credit applications regarding
requirements scheduling,'and system' failure back-up procedures.
ACH Lead-Times
U&l will accept ACH file transmissions a maximum of 90 days in advance of the effective date
of the transaction. Additionally, all file transmissions must be received at least one day prior to
the effective date of the transaction. However, a schedule, which provides for transmission
two days prior to the effective date of the transactions is recommended to maximize reaction
time should there be any problems with the file or the transmission.
Assistance in Compliance with Federal Reserve Regulation E
It is the responsibility of City of Chanhassen to procure the odginal customer authorization for
a specific debit amount. Should this debit amount change, City of Chanhassen must obtain a
reauthorization for the changed amount. Revisions to Regulation E, approved in March 1996
by the Federal Reserve Board, allow originators to obtain this authorization in wdting or
electronically. M&I Bank is not liable for any discrepancies between the authorized amount
and the amount stated in the transmission. Notification of changes due to incorrect bank
routing numbers or incorrect customer account numbers, however, are communicated to City
of Chanhassen after review by M&I Bank personnel.
Back Up Arrangements in case of System Failures
If M&I Bank's receiving system becomes inoperable for any reason, we have in place a very
sophisticated disaster recovery and contingency processing plan for ACH transactions. In
order to aid in the contingency processing, City of Chanhassen may initiate a tape back up of
the transmitted data to process the file.
Page 14
Returned Item Notification
City of Chanhassen will have the opportunity to view ACH retums online. Detailed information
is also provided via paper advice. M&I Bank is currently in the pilot stage of offedng return
items in a report format via electronic media.
ACH Origination Types
M&I offers numerous ACH transmission options for organizations utilizing mainframe, FTP,
Intemet origination and transmission, or Intemet file transfer.
M&I Bank mechanisms for City of Chanhassen's use with regard to ACH' file-' transmissions
include: ---.
The first option is that of asynchronous protocol or personal computer to personal computer
communications. M&I Bank offers this mechanism through our PC-ACH and MiWeb
products. Generally, asynchronous protocol is used only for small volume files.
Another option available to City of Chanhassen would be conforming to IBM Remote Job
Entry (RJE) specifications. Within IBM RJE, there are two additional options. The first is the
use of 3770 SNA synchronous protocol for use on City of Chanhassen's PC to dial up and
connect to the M&I Bank mainframe using a 4800 or 9600-baud rate modem. This is the
preferred IBM RJE option. The other option is using 3781 bisynchronous protocol. Again, this
is a PC-to-mainframe connection.
City of Chanhassen may consider mainframe-to-mainframe communications using Network
Job Entry (NJE). This mechanism utilizes a dedicated line for City of Chanhassen's use only.
This option is the most costly, but it is also the fastest option, as it operates at ~ minimum
19,200 baud rate.
The Metavante (M&l's data services division) transmission support team is available for
assistance with transmission questions, testing, and troubleshooting for corpo.rate clients sdch
as City of Chanhassen. M&I Bank will gladly assist City of Chanhassen in evaluating its
transmission options for ACH.
ACH Processing Workflow is included as an Exhibit..
Page 15
MIWEB BUSINESS BANK INTERNET REPORTING OVERVIEW & REQUIREMENTS
Bank anytime, anywhere with MiWeb Business Bank and benefit from Web-based features
designed to make your banking easier and more convenient.
With MiWeb Business Bank you have secure access to your business accounts at your
fingertips. Whether your banking needs range from checking balances and transferring funds
to using advanced features such as bill payment, repetitive wire transfers and direct deposit,
MiWeb Business Bank can fit those needs.
Balance & Detail Reports
Allows you to view balances on you~' M&l'deposit accounts. MiWeb Business Bank provides
previous day balance reporting, available balance, and one and two-day float balances.
Additionally, you can view your past month's transactions for each account with a click of the
button, then categorize those transactions by date, transaction type, or by debits and credits.
Funds Transfer
Transfer funds electronically between your business accounts at M&I Bank by simply
choosing a to and a from account and entering the dollar amount of the transfer. A history
of your recent online transfers is also provided.
Bill Payrn en ts
Create and send one-to-one'l~ill payments to vendors, suppliers and more. After a quick one-
time set up telling us where'to send the payment, just provide us with the amount of the
payment and the date to ..4~nd the payment and we'll do the rest. We take care of deducting
the payment from your desighated M&I checking account and getting it to your payee. Note:
Bill Payments do not include remittance advices.
Cash Disbursement
Allows you to use the Automated Clearing House (ACH) system to electronically pay your
employees with direct deposit or make direct vendor payments (one-to-many). Simple one-
time setup for Cash Disbursement transaction groups called categories allow you to specify
the funding account at M&I and the receiving accounts at other financial institutions. Once
approved, you will be able to.o.riginate each' cash disbursement category of credit transactions
at least two business days before the day you want the transaction completed.
. .
..
Repetitive Wire Transfers
Our repetitive wire transfer feature allows you to predefine wire transfer relationships and then
wire funds from your account at M&I to a receiving account. After approval and a one time
set-up, just select the repetitive wire transfer relationship, enter the amount and confirm the
transfer, and we'll take care of the rest. Security features within MiWeb Business Bank allow
you to assign initiation or confirmation privileges for each repetitive wire transfer.
File Export Capability
Export files from MiWeb Business'Bank to popular accounting software programs including
Quicken®, Microsoft Money~ or Excel®. Combining an accounting software program and
MiWeb Business Bank will allow you to store and stay on top of your financial information.
Page 16
Messaging System
Secure online communication with M&I means that you can send us a request for technical or
bank related assistance at anytime, day or night, from within MiWeb Business Bank.
Online Help
Using MiWeb Business Bank's detailed help screens allow you to find your answers quickly. If
you ever have a question you can't find the answer to immediately, an M&I Direct
representative is standing by to assist you, day or night.
Multiple User Access
Allows you to set up sepa .rate user IDs and passwords for each employee user account.
Precise administrative and. security controls allow you to designate access privileges by
account and by feature. This means you specify any and all access privileges for users,
including whether they can view account information for any specific account, input or
transmit requests for funds transfers, bill payments, direct deposits, stop payments or wire
transfers. You can even 'designate administrative privileges to a user, which allows them to
create and maintain user accounts as well. Adding, deleting or modifying user accounts is
done with an easy-to-use, point and click interface.
Page 17
OPTIONAL SERVICES
M&IMAGE
CD-ROM & Check Truncation
This technology will produce clear, crisp images of paid checks. M&I Bank's CD ROM reader
software will allow customers to view paid items and to magnify important portions of the
check to allow closer scrutiny. The CD ROMs utilize "write once, read many" technology,
making images unalterable. Many companies find CD ROM technology allows for:
v' Check truncation and its associated cost-reduction benefits
v' Quick access to exceptional check images for customer service purposes
Page 18