Loading...
HomeMy WebLinkAbout1998-135ORDINANCE NO 4-135 AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR LOCKBOX SERVICES, PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE (BID # 2197 — LOCKBOX SERVICES AWARDED TO BANK ONE IN THE AMOUNT OF $5,593 06 PER MONTH OR $67,116 72 ANNUALLY) WHEREAS, the City has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of STATE law and City ordinances, and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the 'Bid Proposals" submitted therefore, and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS $FICTION I That the numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" attached hereto, are hereby accepted and approved as being the lowest responsible bids for such items BID ITEM NUMBER NO VENDOR AMOUNT 2197 ALL BANK ONE $ 67,116.72 SECTION That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and related documents SECTION III That the City Manager or his designated representative is hereby authorized to execute a written contract in a form substantially the same as the one attached hereto, provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents herein approved and accepted SECTION IV That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herem SECTION V That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this 01 day of , 1998 JA n LLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY + _ 2198-SUP LY ORDUNNANCE STATE OF TEXAS COUNTY OF DENTON § LOCKBOX SERVICE AGREEMENT ARTICLE I BANK ONE, TEXAS, NA, hereinafter referred to as "Depository' at 1200 West University DnN e, Denton, Denton County, Texas 76201, a bank located in the State of Texas and the deposits of which are insured by the Federal Deposit Insurance Corporation, and the City of Denton, Denton County, Texas hereinafter referred to as "City" to provide lockbox services for the City The action of the City Council was duly taken and the Depository is to serve pursuant to this contract for a period of one year, beginning August 1, 1998 and ending July 31, 1999, and until its successor shall have been duly selected and qualified thereafter, unless sooner terminated by Depository's failure to adhere to all requirements of this contract ARTICLE II Depository agrees to provide the City with certain lockbox services as more fully described by Exhibit "A" (Bid for Lockbox Services, includes Request for Bid by City) and it is incorporated herein as if written word for word Pnor to the commencement of the services, the City shall provide Depository with all information as may be reasonably required to implement the services Payment to Depository is pursuant to price schedule (Pricing -Exhibit "A") which is incorporated herein as if written word for word The Depository will be paid based on a monthly billing based on the above Exhibit A (Pricing -City of Denton Utility Payments and City of Denton Tax Option A -Retail Lockbox) and volume, not to exceed $67,116 72 for the year, for the volumes specified in Exhibit A The City of Denton will be responsible to only withdraw collected funds from the lockbox depository accounts and avoid any deficit collected balances ARTICLE III The City authorizes Depository to establish two unique United States Postal Service (USPS) addresses ("Lockboxes") to be used to specifically identify the City's remittances One such address will be for utility payments and the other address %Hill be for property tax payments The Depository shall have exclusive and unrestricted access and use of the Lockboxes for the purposes of handling of the City's remittances The Depository shall notify the City as to the unique mailing addresses with which the Depository shall use to identify the City's utility and propertv tax remittances for the purposes of this Agreement The City shall use these mailing addresses in communications to its customers and tax pavers as to the address for mailing their remittances The Citv shall notify the Depository periodically as to the number of its customers and tax payers receiving such communications and the payment date of all anticipated remittances (with prompt notification to the Depository if such information materially changes) ARTICLE IV The Depository shall collect, open and process for deposit all of the City's mail recen ed by or from the USPS identified by the Lockboxes according to established mail pick-up and processing schedule All items will be processed in accordance with the schedule and requirements of Exhibit "A" Items which are deemed to be unprocessable due to failure to meet processing criteria set forth in this Agreement shall be delivered to the City The Depository will endorse all items for deposit with the standard Lockbox endorsement The City will establish and maintain Accounts with the Depository or an Affiliate in which remittance payments will be deposited Depository will inform the City of the appropriate options for the Lockboxes location The Depository will create multiple batches of items throughout the processing day as volume warrants for deposit to the City's account Depository will ensure completion of item sorting and clearing, including the assignment of float and according to the latest check clearing schedule, throughout the processing day The deposits will be microfilmed in processing sequence Microfilm records will be retained by Depository in accordance with its record retention schedule, as amended from time to time Depository will prepare a remittance package(s) containing reports and back-up documentation each business day as described in Exhibit "A" The remittance package(s) will be forwarded daily via the method indicated in Exhibit "A" ARTICLE V During the performance of the Services under this Agreement, COLLECTOR shall maintain the following security for the guaranteeing of payment of monies to the city and such security agreement to be in a form approved by the City Attorney Securities pledged that are acceptable to the City of Denton in an amount for at least $350,000 00, guaranteeing payment to the city for monies due the city under the contract period and to be in effect for the term of this Agreement and for a period of ninety days thereafter ARTICLE VI Depository and its officers and employees performing services hereunder agree that in the performance of these professional services, they shall be responsible to the level of competency and shall use the same degree of skill and care as presently maintained by other practicing professionals performing the same or similar types of work in the State of Texas Paste ARTICLE VII Depository shall indemnify and hold harmless the City, its officers, agents, and employees from loss, damage, liability, or expenses on account of any claims, damages, or injuries, whatsoever to all persons including employees of Depository and City, which may arise from any negligence, error, or omission in the performance of this contract on the part of Depository or any breach of their obligations or duties under this contract, and shall defend, at its own expense, any suits or other proceedings brought against the City, its officers, agents, and employees, and shall pav any expenses to satisfy all judgments which may be incurred or rendered against them or the City ARTICLE VIII. All exhibits attached to this contract are considered to be integral parts of same, and Depository will fully comply with the terms and conditions of same ARTICLE IX For purposes of determining venue and the law governing this contract, services performed under this contract are performed in the City and County of Denton, Texas Any dispute regarding this contract shall be decided and settled in a court of competent j unsdiction sitting in Denton County, Texas ARTICLE X This contract may be executed in any number of counterparts, and each such counterpart shall be deemed for all purposes to have the same effect as if all parties to this contract had signed one and the same signature page of this contract ARTICLE XI The City and Depository shall, as a matter of right without necessity of default on the part of City or Depository, terminate this contract at any time by giving the City or Depository, terminate this contract at any time by giving the City or Depository ninety (90) days prior notice inwriting Should Depository default in any of its obligations to City under this contract, City shall give Depository notice of default in writing, and Depository shall have thirty (30) days from receipt of the notice to correct the default If Depository falls to remedy default within this time, City, at its sole option, may cancel this contract and Depository shall be fully responsible to pay City any and all damages caused by its default Depository shall be paid for all services satisfactorily performed in accordance with this contract up to date of any termination hereunder Depository's filing of a petition in bankruptcy or being declared insolvent by a federal bank regulatory agency shall be considered a material breach of this contract Nothing herein shall deprive City of any other remedies in law and equity to enforce the terms, conditions, and obligations of this contract including, but not limited to, instituting suit for damages or, in the altemati%a specific performance of this contract Pa,,,e ARTICLE XII All notices required under this contract must be given by certified mail or registered mail, addressed to the proper party, at the following addresses CITY Ted Benavides, City Manager City of Denton 215 E McKinney Denton, Texas 76201 DEPOSITORY Randall McDonald, President Bank One, Texas NA P O Box 580 Denton, Texas 76201 Either party may change the address to which notice is sent by gig ing the other party notice of the new address in the manner provided in this section ARTICLE XIII Depository shall not assign any interest in this contract and shall not transfer any interest in this contract (whether by assignment, novation, or otherwise) without the prior written consent of the City thereto ARTICLE XIV. This contract shall be binding upon and enure to the effect of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and assigns where permitted by this contract ARTICLE XV This contract and the attached exhibits constitute and express the entire agreement between the parties and shall not be amended or modified except by written instrument signed by both parties ARTICLE XVI. Depository hereby does represent to the City that its officer or officers who have executed this contract have full and complete capacity and authority to execute a binding Depository Contract which is effective, for all purposes, as to all services to be provided and all terms and obligations under this contract This contract is executed by the City and the Depository in three copies, all of which shall be deemed originals Paac 4 AGREED AND ACCEPTED on behalf of Depository this the i`� `may of �> 1998 CITY OF DENTON Name (Print) TED BENEVIDES Title City Manager Address Citv of Denton 215 E. McKinney Denton. Texas 76201 ATTEST JENNIFER WALTERS, CITY SECRETARY BY l ,i/,?& APPROVED AS TO LEGAL FORM / HERBERT L PROUTY, CITY ATTORNEY BY / DEPOSITORY By AUTHORIZED SIGNATURE Name (Print) Randall McDonald Title President Paee 5 E • THE CITY OF DENTON, TEXAS BID INVITATION TABLE OF CONTENTS EXHIBIT A BID INVITATION EXHIBIT B TREASURY MANAGEMENT EXHIBIT C COLLATERAL INFORMATION EXHIBIT D REFERENCES BAN BONE Exhibit A BID INVITATION #2197 LOCKBOX SERVICES FOR THE CITY OF DENTON, TEXAS SUBMITTED BY. BANK ONE, TEXAS, N.A. APRIL 16, 1998 40 Bank One Texas NA TXI 3279 1200 West University DrNc PO Box 580 Denton TX 76201 BANK:FONE Apnl 15, 1998 Mr Tom Shaw Purchasing Agent City of Denton 901 B Texas Street Denton, Texas 76201 Dear Mr Shaw On behalf of Bank One -Denton, I am pleased to enclose our bid for Utility & Tax Collections lock box services In an effort to find the lowest cost solution for the City of Denton, we are submitting two proposals for the tax collections lockbox (Proposal A & Proposal B) The primary difference between the two proposals is that Proposal A does not include daily electronic transmission during the slow volume months and Proposal B includes daily transmission throughout the year Please note that we have included pricing for check clearing wluch is an ancillary service to lockbox services Under the City's deposit contract, the City of Denton is presently incurring these costs with Texas Bank, therefore, an adjustment to their bid or our bid should be made to accurately compare actual proposed costs If Bank One is the successful bidder for lockbox services, the account analysis charges assessed by Texas Bank would be reduced by the amount associated with clearing utility and tax collection checks Bank One proposes to meet the $350,000 surety bond requirement through the pledge of securities as collateral, combined with Bank One, Texas's Standard & Poor's credit rating of AA and Moody's rating of Aa2 Please let me know if I may provide any additional information and thank you for your consideration of our bid Sincerely,., Randall McDonald President C� 100 a111 . e PURCHASING DEPARTMENT City of Denton 901 B Texas St Denton Texas 76201 Bank One 1200 W University Denton TX 76201 BID INVITATION CITY OF DENTON, TEXAS Date March 31, 1998 BID NUMBER 2197 BID TITLE LOCKBO% SERVICES Sealed bid proposals will be received until 2 00 p m APRIL 16, 1998 at the office of the Purchasing Agent 901 8 Texas St Denton Texd� 7620' For additional information contact PURCHASING DEPARTMENT 901 8 Texas Street Denton, Texas 76201 Office (940) 349-7100 DF'W Metro 817 267 0042 INSTRUCTIONS TO BIDDERS 1 Sealed bid proposals must ba elved In duplicate on this form, prior to opening date and time to be considered Late proposals will be returned unopened 2. Bids shall be plainly marked as to the bid number name of the bid and bid opening date on the outside of completely sealed envelope and mailed or delivered to the Purchasing Department City of Denton 901 8 Texas St Denton TX 76201 3 Any submitted article deviating from the specifications must be identified and have full descriptive data accompanying same, or it will not be considered 4 All materials are to be quoted FOB Denton, Texas, delivered to the floor of the warehouse or as otherwise indicated S The City of Denton, Texas reserves the right to accept separate items in a bid unless this right Is denied by the bidder 8 In case of default after bid acceptance, the City of Denton Taxes may at Its option hold the accepted bidder or ,.ontractor liable for any and all resultant Increased costs as a penalty for such default 7 The City of Denton reserves the right to reject any and all bids to waive all Informalities and require that submitted bids remain in force for a sixty (60) day period after opening or until award is made, whichever comes first 8 The quantities shown maybe approximate and could vary according to the requirements of the City of Denton throughout the contract period 9 The Items are to be priced each net (Packaging or shipping quantities will be considered ) 10 The Purchasing Department assumes responsibility for the correctness and clarity of this bid and all Information and/or questions pertaining to this bid shall be directed to the City of Denton Purchasing Agent 11 Any attempt to negotiate or give information on the contents of this bid with the City of Denton or its representatives prior to award shall be gounds for disqualifications 12 The conditions and terms of this bid will be considered when evaluating for award 13 The City of Denton Is exempt from ail sales and excise taxes (Article 20 04 B) BID NUMBER 2197 BID PROPOSALS Page 2 of 2 City of Denton, Texas tat B Texas eL Purchasing Department Denton, Texas 70201 SM DESCRIPTION OUAN PRICE AMOUv- i Lockbox services for Utility collection processing 300,000 $ $ 4 , 889 each each 2. Lockbox services for property tax revenue processing 18,000 $ $ 703 each each 1) It is the intent of the City of Denton to award this contract to a single bidder for item I & 2 2) This contract will be for a period of I year from date of award and shall be renewable for two (2) one-year penods upon mutual agreement and with all terns, prices and conditions remaining unchanged City of Denton reserves the right to close this contract to coordinate with completion of current depository contract, November 30, 1999 TOTALS We quote thelabove f o b delivered to Denton, Texas shipment can be made In days from receipt of order Terms net130 unless otherwise Indicated In submitting the above bid, the vendor agrees that acceptance of any or all bid Items by the City of Denton, Texas within a reasonable period of time constitues a contract The completed Bid Proposal must be properly priced, signed and returned 1200 W University Drive MNdne Addreee Denton TX 76201 Orr 9ute Lp (940) 381-7425 Bank One Texas (Denton) NOW 8wneture President Teleplone ntle Tom Shaw - LOCKDOX - request for bid doc Pa --- REQUEST FOR BID For LOCKBOX SERVICES The City of Denton (City) is seeking a qualified financial institution (provider) for lock -box services for the purpose of collecting and processing the City's utility and property tax revenues The contract will be awarded to the provider whose bid is determined by the City to be the lowest responsible offer The following requirements must be met for full consideration in the decision -making process • The provider must obtain a surety bond for $350,000 00, guaranteeing payment to the City for monies due the City under the contract period • The provider must obtain two (2) post office boxes one (1) for utility payments, and one (1) for tax payments • The provider must be capable of processing approximately 25,000 pieces of mail per month, with a seasonal increase at tax time, up to 33,000 Processing includes retrieving mail from post office, opening all correspondence, balancing contents, direct deposits to the City's bank account, and transmitted updates/posting, to the City of Denton, customer accounts • The provider must notify the City of all miscellaneous correspondence received through the lock -box, (1 e , address changes, payment extension requests, etc ) • The provider must submit daily and monthly reports, indicating the number of pieces received and the total revenue deposited for utilities and tax • The provider must transmit data electronically, on a daily basis, by 1 00 p m , in order to expedite cash flow and customer updates Tom Shaw - Lockbox - request for bid doc Pace - The volume of utility payments the City currently receives through the mail is estimated to be 25,000 pieces per month Tax payments received in the mail are heaviest during the months of December and January with an average of 8,000 pieces per month During the remainder of the year, tax payments received through the mail are approximately 200 pieces per month The City separates utility bill collections and tax collections into two (2) divisions because of their unique needs and record keeping constraints Each would require a separate file returned for input to the City's system Bids must include separate quotes for each division The goal of the City of Denton is to streamline processing methods and expedite daily deposits and account updates The deadline to submit a signed original and three copies of your bid is as listed in the notice to bidders Please include a reference list of agencies, currently using your company for lock -box services Any questions regarding the bid process should be directed to Tom Shaw Purchasing Agent 901 B Texas St. Denton, TX 76201 Telephone: (940) 349-7100 Fax: (940)349-7302 Any technical questions regarding this RFB should be directed to Jerri Rainey Treasury Services Manager 215 E. McKinney Denton, TX 76201 Telephone: (940) 349-8210 Fax: (940)349-7211 Treasury Management Ser)ice Proposal City of Denton Bank One, Texas, N.A. Treasury Management Service Proposal Presented to: City of Denton Randall McDonald Donna Melotakis April 1998 BAGI K CANE Treasury Management Service Proposal City of Denton Executive Summary -+- BANKS -ONE Treasury Management Service Proposal City of Denton Executive Summary Introduction Today's business environment is more competitive than ever before To stay ahead of the competition, you must be prepared to take advantage of every opportunity to enhance your bottom line, including skillful management of your company's cash By actively managing your cash, you can put funds to profitable use, without compromising your day-to-day financial operations A successful Treasury Management program designed by Bank One can help you achieve this objective by providing a program to optumze your cash flow and save you money At Bank One, we can help you maximize your available cash through a wide variety of services With our help, cash will flow into your company faster, and more cash will stay in your company where you can put it to profitable and productive use You'll have better, up-to-date information about your account balances and activity to make informed decisions concerning disbursements, investments and debt service Whether you're managing the assets of an emerging business or an established firm, you need the strength and ingenuity of a resourceful banking partner who can make your company's cash work as hard as possible 33ANKSONE Treasury Management Service Proposal City of Denton Bank One's Treasury Management Commitment Bank One, Texas is a leader in providing quality Treasury Management services By focusing on the needs of business customers, we consistently deliver innovative solutions to serve the diverse and changing Treasury Management needs of companies like City of Denton We do this through our commitment to providing quality Treasury Management products and services to your business At Bank One, we will tailor a comprehensive Treasury Management program to help City of Denton meets its goals and objectives Your Treasury Management Sales Officer, Donna Melotakis, will work with you to ■ review and evaluate current and alternative systems and procedures ■ prepare a cost -benefit analysis based on City of Denton's unique characteristics ■ formulate specific recommendations to optimize your cash flow ■ assist with scheduling, implementation and control to turn recommendations into solutions SANK CNE Treasury Management Service Proposal City oJDenton About BANC ONE CORPORATION BANC ONE CORPORATION, operates 1,502 banking offices in Arizona, Colorado, Illinois, Indiana, Kentucky, Louisiana, Ohio, Wisconsin, Oklahoma, Texas, Utah and West Virginia BANC ONE ranks as the tenth largest bank in the United States with total assets of $90 billion Net income in 1996 exceeded $1 billion for the fourth year in a row, and we had the seventh highest income of any bank in the country Additionally, over the past 10 years, BANC ONE has recorded the highest average return on assets and fourth highest return on equity among the current 25 largest U S banking organizations Banc One Corporation Banking Locations Dark Shading Denotes States with BANC ONE Office 4 B®NK ONE Treasury Management Service Proposal City of Denton About Bank One, Texas, N A Bank One, Texas, N A offers City of Denton a Texas financial institution with $21 5 billion in assets and 189 locations throughout the state As one of the largest banks inTexas, we offer a full array of banking services to meet the business and personal banking needs of communities statewide In addition to our long-standing financial stability, our commitment to delivering quality service through ever -improving technology, and our professional, responsive employees set us apart from other financial institutions Treasury Management Service Proposal City of Denton Treasury Management Customer Service ®— HAN _CNE Treasury Management Service Proposal City of Denton Treasury Management Customer Service One of the most important elements of Bank One's Treasury Management Service is the Customer Service Function That's why we've assembled a team of outstanding customer service professionals with exceptional Treasury Management experience that allows them to quickly respond to inquiries and do "Whatever it takes" to meet your needs Texas Treasury Management Team At Bank One, we believe customer service means more than lust responding to your questions — it means anticipating them as well That's why we assign City of Denton a team of Treasury Management professionals who understand your business and its Treasury Management needs The following description of these professionals will help you understand how Bank One provides the best service possible for your company Relationship Manager -Randall McDonald (940-381-7425) The Relationship Manager's primary responsibility is to keep abreast of your business and changes in your banking needs Randall will ensure all your banking needs are satisfied by coordinating the involvement of other bank personnel in areas such as trust, investments, leasing, employee banking, and more Treasury Management Sales officer -Donna Melotakrs (817-884-5729) Your Treasury Management Sales Officer, Donna Melotakis, will prepare your service agreements and implement your new Treasury Management services In addition, Donna will maintain regular contact with you to ensure service performance is satisfactory and to introduce new products or enhancements as needed Administrators One of our Customer Service administrators will be specifically assigned to your account You may reach your administrator toll free at 1-888-434-3030 Your administrator will be selected based on your company's industry classification Tlus focus on industry lines allows your adtnu istrator to become familiar with you and your Treasury Management service needs, as well as with the unique needs of your industry Our administrators know that when you call Customer Service, you want to talk to someone who can answer your questions and respond quickly to your account needs To ensure you'll always have access to a well -trained, professional customer service representative, all Bank One Treasury Management administrators provide back-up assistance to one another, This ensures your Treasury Management issues always receive immediate attention. SANK, ME Treasury Management Service Proposal City of Denton Collection Services BANKSONE e Treasury, Management Service Proposal City of Denton Collection Services Overview Bank One's Collection Services are designed to improve your cash flow by accelerating the collection of accounts receivable, and concentrating these funds into accounts where you can put your money to work Collection Services can significantly reduce City of Denton's processing and administrative costs You'll find our Collection Services are a convenient and cost-effective way to convert your receivables into working cash You'll also realize bottom-lme benefits, as more funds are at your disposal for operations and investment The following section details the Collection Services offered by Bank One, your one source for Treasury Management solutions SANKSCNE Treasury Management Service Proposal City of Denton Retail Lockbox Service Bank One's Retail Lockbox Service improves funds availability and information flow by streamlining the collection of remittances and increasing cash balances available for investments or operations The service reduces your mail processing and float tunes and provides a timely flow of information to update your accounts receivable Bank One, Texas has become a leader in remittance processing by combining a staff of skilled lockbox professionals with a commitment to technology to bring you consistent quality and accurate processing Our single -site operation, located in Dallas, uses the most sophisticated and up-to-date equipment and computers to process over 1,000,000 items each month originating from all SO states With over twenty years of remittance processing experience, our efficiency, organization and experience provide a competitive advantage over third -party vendors and most in-house alternatives Our Retail Lockbox processing expertise offers City of Denton b You Impnved Cub Mongament Incomes cab balameu armlable far mveamect m other purposes ecd rcxive timely sod a acme mhrmaon at update scant rtamvable mnotds Savior Save me and money by reducing mail p ocusmg and ebeck collection rime. by rdumng the onto and coca woonsd with deposit prepsYlon Security separate bdlmg ad collection hmcbmm ra grater audit ecnuoi. and reduce credit tiska through hats imowiedge ofdWraomd dwAL Treasury Management Service Proposal City of Denton Retail Lockbox Service Features Specializing in customized processing, our Retail Lockbox Service offers features not available through most alternative processors ♦ Expert assistance in designing your remittance document Bank One's Retail Lockbox staff is one of the most experienced in the industry, with managers averaging more than 14 years experience ♦ Fast and efficient mail processing through the use of automated postal operations Retail Lockbox Service begins with the delivery of your remittances to the Main Facility of the Dallas and Fort Worth Post Offices, two of the most up-to-date and automated postal operations in the country Expedited mail handling via unique zip codes and the use of caller boxes As a Bank One Retail Lockbox user, you'll be assigned a unique rune -digit zip code number to allow your mail to be sorted and processed quickly Additionally, the use of caller boxes provides even faster processing because no additional sorting is required once the mail is delivered to Bank One Customized processing Customized processing is our specialty, and we take pride in our ability to handle exception payments as efficiently and effectively as non -exception payments For accounts requiting significant special handling, we assign to your account personnel who are completely familiar with your individual requirements • Chartered Institution As a chartered institution, Bank One has the ability to control the entire check clearing portion of the remittance process and all relevant issues ♦ Advanced technology and processing technology Bank One uses the most soplusticated and up-to-date equipment and computers to provide renttance processing 24 hours a day, 7 days a week RANNK ME Treasury Management Service Proposal City ojDenton Customer Requirements Contact your Treasury Management Officer, Donna Melotakis, who will help you ♦ Execute the Lockbox Service Agreement ♦ Outline your specific remittance processing requirements ♦ Design and print payment coupons and envelopes ♦ Obtain a post office box number for receipt of your payments (unique zip or caller box depending upon on total monthly volume) ♦ Communicate address to your customers a BANK ME Treasury Management Service Proposal City of Denton Information Services HANK CNE Treasury Management Service Proposal City of Denton Information Services Overview Bank One's Information Services give you fast and convenient access to the information you need to manage your company's cash position From information about specific deposits and paid items activity, to historical account information and balance reporting, our up-to-the-minute information about your accounts gives you an effective tool to support decisions concerning disbursements, investments and debt service Bank One's Information Services work in concert with our comprehensive line of Treasury Management products to save you time and money, and to provide innovative solutions to meet your diverse Treasury Management needs In this section you'll learn more about the following Information Services from Bank One, your one source for Treasury Management solutions SANK ONE Treasury Management Service Proposal City of Denton Account Analysis Services Bank One's Account Analysis provides City of 1?enton flexibility and convenience at competitive rates With our Account Analysis, you'll receive unlimited business checking account transaction privileges while earning an attractive Earnings Credit based on the average collected funds in the account and the average of the last four 91 day Treasury Bill Discount Auction rates The Earnings Credit can be used to help offset the cost of the account, plus any other Treasury Management services such as Account Reconciliation Service or Lockbox Service Account Analysis can provide City of Denton many benefits, including 1 Ou a saving Youll save money by eemmg an amaCdVC eammgs credit that can help offset the coat ofyour cash commissioner services Flexibility You can pry for your cash managamart services wnh an uml= or debit from your Beds one Checking account or offset fees through compensating balances Enhanced Control and Reporting Youll receive monthly statements detailing your eeeount activity The statements itemize the services you use to help you back usage and volume HANKHONE ON Treasury Management Service Proposal City of Denton The One* Connection 1d Access to accurate and timely information about your accounts and daily account activity is critical to the successful management of your company's cash position That's why Bank One created The One® Connectionsm, an innovative, flexible information and treasury management reporting service that gives you the information you need to make informed Treasury Management decisions, and helps you take advantage of a broad range of investment and disbursement opportunities The One® Connection$" is a complete information reporting and treasury management service that can accommodate all your reporting requirements, including ledger balances, collected balances, total debits and credits, transaction detail, lockbox deposit reporting and more The One® Connectionsm operates 24 hours a day, and is easy to access through your PC, terminal or touch-tone phone With The One® Connection3m, you'll also have access to Cash Concentration and Stop Payments The Onem Connectionsm is available in three different formats to fit your needs With The Oneg Connectionsm On -Line service all that is needed for access is a P C with virtually any communications software package The One® Connectionsm for DOS/WmdowsTM is a software program that is available in a Windows version or a DOS version and is housed on your PC This package has many options for reporting and customization No matter which service you chose, The One® Connectionsm gives you daily access to the information you need to manage City of Denton's cash position imp""CW R6adue f d.MYW Ya=d"misyawau6pwIm mly ohma"by Im Yuu menwar a-p nmm4gWlavmo,6aaupn pMa inuh'PC.ae-oaawL w bemq melt vim. m ae.mvm PomumBu aAM mot Rwmc 4FM M%You ,-.i, Ya"Uhlbb$9WW F0111. W gmeedirora'a KdW W=*M% W aonlldanYiryUsm umamiedam�do. -e-doaa RNmu,dWWW MadPMWI.as Ih wdomaam d"Im Ya-hokum din hnm.a. q-tl„,a "" Rwwr )wu aatlW mi� SANK ONE Treasury Management Service Proposal City of Denton The One, Connection °"*Services The One® Connections" offers a comprehensive selection of modular reporting options to provide fast, accurate information on all your Bank One accounts, as well as accounts maintained at other financial institutions From account balance and activity information to help you make time -critical decisions to account tracking information to enhance the accuracy of cash forecasting and strengthen audit controls, your Treasury Management representative, Donna Melotakis, will help you select the right balance and activity reports for your business Information options include Previous Day Reporting Previous Day Reporting will allow City of Denton to monitor account activity as of the close of business the previous day Previous Day Reporting's flexible report formats and query capabilities give you information on Ledger balances Collected balances Available balances One day and Two + days float Month -to -date average collected balances Total number and dollar amounts of debits and credits Individual debit and credit transaction detail Previous Day Reporting provides flexible delivery options to allow you to take advantage of just the features you need, thus controlling expenses Information on all Bank One accounts statewide in ASCII report format Information for accounts at other financial institutions Bank One account information reported to another financial institution's reporting system BAI-formatted data for download into a treasury workstation environment ♦ Current Day Reporting Current Day Reporting provides current day account information on the following services and also is available in both report format and BAI data format Lockbox Deposits Controlled Disbursement Presentments Cash Letter Deposits ACH Credits and Debits Incoming and Outgomg Wire Transfers Investment Transactions BANK :CNE Treasury Management Service Proposal City of Denton Using The One® Connections" The One$ Connections" makes information reporting easy and convenient With The One® Connections", you decide both how and when you want to access the information you need to manage your company's cash position 24-Hour Access The One® Connections" network operates 24 hours a day to provide you maximum control and convenience Regardless of your output medium, critical information is available whenever you need it Previous day information is available by 7 00 a m CT each day, and current day information is transmitted at 7 00 a to and is updated at 8 30 a m , 12 30 p in and 2 00 p m daily Access to this information is available at any time Historical Information Historical information for Bank One accounts is maintained for 45 days ♦ Output Methods You can receive these reports in a variety of ways Personal Computer - all you need is a telephone line and modem to access The Ones Connections" On-Lme by personal computer You can use your own communications software to access your information Or you can install our Windows or DOS version of The Ones Connections" and put the power of your PC to work to create your own customized reports and data base Terminal Access - Terminal access to The Ones Connections" On-Lme requires a telephone, modem and asynchronous dial -out capability The OneA4 Connections" - If accessed by personal computer or by terminal, you'll be given a local telephone number and a unique customer identification and password To ensure confidentiality and security, all users must change their passwords every 90 days Direct Transmission - You can receive a direct transmission to your personal computer or data processing system Direct transmission reports are available in standard BAI format Touch -Tone Telephone - You can also access The Ones Connections" by touch-tone phone You'll be assigned a unique series of numbers to identify your company's access. Then, simply dial a toll -free "800" number and the assigned access number, and the automated voice response system will provide summary account information BANK ONE Treasury Management Service Proposal City of Denton System Requirements The system requirements for The One,& Connections"" On -Line are as follows • Your PC with virtually any communications software or ♦ Your terminal, telephone, modem and asynchronous dial -out capability The system requirements for The One® Connections"" for DOS/WindowsTTM are as follows DOS ♦ IBM Compatible PC ♦ 512K Internal Memory ♦ 7 Megabytes disk space ♦ Hayes compatible modem ♦ 3-1/2 or 5-1/4 High density diskette drive Windows ♦ IBM Compatible PC ♦ Pentium Processor ♦ 16 Megabytes disk space ♦ AT compatible 9600 baud modem ♦ 3-1/2 or 5-1/4 High density diskette drive Customer Requirements To take advantage of The One® Comiections"''s information reporting capabilities, simply contact your Treasury Management sales representative, who will work with you to ■ Execute the Bank One Service Agreement ■ Select the modules City of Denton needs ■ Identify the best method to access this information ■ Select your password and define City of Denton user access Within five working days of executing your Bank One Information Reporting Service Agreement, a comprehensive user manual will be sent to you that will provide full detail on accessing and using The One® Connections" E4NKe CNN Treasury Management Service Proposal City of Demon Pricing BANKSONE Bank One, Texas, NA Proforma Pricing for City of Denton Utility Payments ANALYSIS DESCRIPTION I Volume I Unit I Unit of 'I Total Balances DEPOSITORY SERVICES Account Maintenance 1 $10 001 account 11$10 00 S2 4288 45 Checks Paid/Debits Posted $0 12 item $0 00 $0 00 De osits/Credits Posted 20 $0 60 item _ $12 00 $2 914 1- Deposited Item Rejects $0 101 item1 $0 00 so 00 Commercial Tiers 'Encoding NO CHARGE 25,0001 On Us 3,6521 $0 0001 item $00151 item $0 00 $0 00 $54 78 $13 303 19 Local City Clearing House 5,0751 $0 030 item $152 25 $36,973 5� Local RCPC 1,8001 $0 0451 item $81 00 $19,670 66 Dallas Country $0 055 1 item $0 00 $0 00 1 Ith Fed District - City 900 $00401 item 1 $36 00 $8 74251 'I Ith Fed District - RCPC 2501 $00551 item $13 75 $�3 339 16_ Federal Reserve Cities 250 $0 070 item S17 50 ' $4,249 83 Federal Reserve CPC & Country1350 $0 070 item $94 50 ' $22,949 10 Statewide Clean House 5,900 $0 020 item $1 l8 00 r $28,656 02 Local City Selects 363 $0 025 item $9 08" $2,203 84 Local RCPC Selects 5,460 $0 035 item $191 1011 $46,408 18 Dallas! Counkv Selects $0 045 item $0 00 1 $0 00 High Dollar GrogSort $0,2501__ item $0.00 SO 00 Return /tenv Return Item $3 00 item $0 00 $0 00 ,Remm Item-Redppostt/Reclear $2 50 item $0 00 l $0 00 Red turn —I em ut M Itt le Location Reporting $3501 item $0 00" $0 00 (Return Item Teletihime Notificatt $3001 item $0 00 1I $0 00 Return Item Tra smission of Available $0 10 item $0 00 F $0 00 Return Item Notification -Alternate Address $3 00 item $0 0011 $0 00 Return Item -Duplicate Advice $1 00 advice $0 00' $0 00 'Return Item -Du Iicate Co of Check $1 00 item $0 00!' $0 00 De Return - D 1 Reporting $0 10 item ' r Return Item S e ial Handling $3 75 item $0 00" $0 00 !Statements Dail Statement $5 00 each $0 00 $0 00 rWeekl Stateme t $5 00 each $0 001 $I 0 0000 S ecial Statement Cut-off $7 00 each $0 00' $0 00 Additional Statement $8 00 each $0 00 $0 00 Duplicate Statement $5 00 each $0 0011 $0 00 ,Hold Statement $5 00 each $0 00 SUBTOTAL 5789.96li $191. M 7t Previous Day Rgggdng Page 1 BANK CNE Bank One, Texas, NA Proforma Pricing for City of Denton Utility Payments Randall McDonald Treasury Management Contact Donna Melotakis 1999 Pricing ANALYSIS DESCRIPTION Volume Unit Unit of Price Measure Total Balances Price Required Accounts $35 00 account $0 00 SO 00 Transactions $0 16 Item $0 00 S0 00 Intraday Re or#n Accounts $5 00 account $0 00 S0 00 Transactions can't capture at this time) so 00 SO 00 SUBTOTAL SO.00iI $000 c Mortgage Processingcustom item $o 00 b $0 00 Retail Lockbox Maintenance 1 $20 001 box 1 $50 00 $60,71191 Lockbox Payments 25,000 $0 15 item I $ $3 750 001 $9l0 678 64 P O Box Rental cost box $0 00 $0 00 Credit Card Processing custom custom $0 00 $0 00 Stop File Handle $200 001 box $0 001 $0 00 Lockbox Correspondence custom I item $0 00 $0 00 I Microfiche $50 00 box $0 00 $0 00 Microfilm custom box $0 00 1 $0 00 Multiples $0 21 1 item 1 $0 00 1 $0 00 Custom Processi item Additional Reports $0341 item custom nem $0 001 $0 00 $0 OOP $0 00 li Coupon Re ects >2% $0 501 item $0 00 $0 00 Key -Input custom I item $0 00'1 $0 00 Stop File Rejects Telephone Notification Un rocessables $0 201 item $150 001 box $0 151 item $0 001 $0 00 $0 001 $0 00 $0 00 $0 00 GounedExpress Mail Prep I Col uner/Ex ress Mail Charges $25 001 box cost box $0 001 $0 001 $0 00 $0 00 _ Delivery to Bank One Texas branch $65 00 box $000 $0 00 Transmission Output Walk In Deposits Forwarded Mail 1 $100 00 $10 0o $0 20 month item item $100 00 $0 001 $0001 $24 284 76 $0 00 $0 00 Address Chan a On -Line $0 351 item $0 00 $0 00 Address Change Transmit custom I item $0 001 $0 00 Account Looku s custom I item $000 $0 00 Time Outwit $300001 item Programming $60 00 hour SUBTOTAL $o 001 $Q00� $0 00 $0 00 54.100.0011 $995.675.32 MONTHLYTOTAL S4 gg9"96 cI Ia7 sUM Page 2 .BANK ONE Bank One, Texas, NA Profonna Pncmg for City of Denton Tax ANALYSIS DESCRIPTION SUBTOTAL Option A Retail Lockbox Volume 11 Umt I Umt of 11 Total 11 Balances I o' custom ttem $0 00 SO 001 Mortgage Retail Lockbox Wanm 1 S250 00 box $250 00 $60 711 91 Lockbox Item sam 1 500 $0 19 item $285 00 S69,211581 0 00' P O Box Rental 11 coat I box $0 00 S Page 1 Bank One, Texas, NA Profonna Pncm$ for City of Denton Tax Option A Retail Lockbox Rangau mcgonnig iressurvmanar-emenji-onjacy. ijonnaivigiotams 98 Prldna ANALYSIS DESCRIPTION Volume Umt Pnce Unit of Measure Total Price Balances Required Credit Card Process i $0 06 custom $0 00 $0 00 Stop File Handle $200 00 box $0 00 $0 00 Lockbox Correspondence $0 15 item $0 00 $0 00 Microfiche $50 00 box S0 00 $0 00 orofihu $0 06 item $0 00 $0 00 Multiples $0 25 item $0 00 SOGO Custom Processmitem $0 34 item $0 00 $0 00 Additional Reports custom item" $0 00 $0 00 Coupon Rejects >2% $0 50 item $0 00 $0 00 Kev-1mnft custom item $0 00 $0 00 Stop File Rejects $0 20 item S0 00 $0 00 1 Telephone Notifi on $150 00 box $0 00 $0 00 1 n ssables $0151 item $0 00 $0 00 1 Couner/E Mprep Counar/E Chames $25 00 cost box box $0 00 $0 00 $0 00 1 $0 00 1 Delivery to Bank One Texas branch $65 00 box $0 00 $0 00 Transmission Ou t (Dady, Dec & Jan onl 1 $100 00 mouth $100 00 $24 284 76 Postue for Fe - November NO CHARGE $0 00 item $0 00 $0 001 Fogyarded Marl $0 20 item $0 00 $0 00 , Address Change -Lme $0 35 item $0 00 $0 00' Address Chanae Tmwmt custom I item $0 00 $0 00 . Account Lookups custom I item $0 00 $0 001 Ou ut $300 00 item $0 00 SO 001 $60 00 hour I S0001 SUBTOTAL ® $154.208 25! MONTHLY TOTAL Page 2 Bank One, Texas, NA Proforma Pncmg for City of Denton Tax ANALYSIS DESCRII'TION Option B Wholesale Lockbox Processing Volume II Unit I Unit of II Total rr. Balances IITXW l City Cleans House 1 30711 S0 0301 item II $9 21 II $2.236 63 Local RCPC 108 $0 045 item $4 86 $1 180 24 Dallas Country $0 055 item $0 00 $0 00 lth Fed District - Cr 54 $0 040 item $2 16 $524 55 I Ith Fed District - RCPC 15 $0 055 item $0 83 S200 35 edmal Reserve C ties 15 $0 070 item $1 05 $254 99 Federal Reserve RCPC & Country 81 $0 070 item $5 67 $1 376 951, Statewide Clearm 1354 $0 020 item $7 08 $1 719 36� Local City Selects 21 $0 025 item $0 53 $127 501 Local RCPC Selects 327 $0 035 item $11 45 $2 779 39 Dallas Country Se $0 045 item $0 00 $0 00 ah Do 0 25 r 00 so 00 [TijC41AF.Ve Page i Bank One, Texas, NA Proforma Pncmg for City of Denton Tax Option B Wholesale Lockbox Processing Randall Mennnnid Treasury ManaLrement Contact Donna Melotakis 1997Pricina ANALYSIS DESCRIPTION Volume Unit Pnce Unit of Measure Total Pnce Balances Required The One Conned n DOSMIndotar Bank Account R Lockbox Deposit Poled Report(Everyday) 1 $10 00 account $10 00 s0 o0 Lockbox Dep DeW (Avg per mo 1,500 $0 10 item $150 00 $0 00 Accounts (Sumnoy On1v Ev de I $10 00 account 4 48 SUBTOTAL ® $2.428.48 WH LS O Wholesale Lockbo Maintenance 1 $90 00 box $90 00 $21 856 29 Lockbox Items Processed mmunum per lookbox 1,500 $0 30 $50 00 item box $450 00 $109,281 44 Lockbox Corm once $0 15 item $0 00 $0 00 n rocessables $0 15 item $0 00 $0 00 Walk -In Deposits $10 00 depoik $0 00 $0 00 Special Sort Rmort $50 00 box $0 00 $0 00 Special Sort/Deposit Maintenance $0 12 $50 00 item box $0 00 $0 00 Batch Size Limttatum Maintenance $0 05 $50 00 item monthly s0 0o so 00 stnctiva Endorsgmont Review Maintenance $0 15 $50 00 item month! $0 oo $0 00 Additional Pho $0 15 ttem $0 00 $o o0' Duplicate Deposit Aftee $20 00 box $0 00 $0 00 Closed Account Whng $0 20 item $0 00 $0 001 Multiple Address $20 00 box $0 oo so oo h Pose Daly O CHARGE for 1,500 $0 00 $0 00 item Mint $0 00 $0 001 Coma /E Preparation $25 00 box $0 00 $0 001 Deli to Bads Texas branch $65 00 box $0 00 $0 00 11 Data En MICR Lips 1.50011 $0 10 item $36 427 151 Data En K 0 0075 stroke $0 001 Custom Report Tmnsrmssion Output $55 00 $50 00 box $0 00 $o 00pelhoCall - t Totals Onl $15000 boxSO 00Call - Detail + olal fee $025 itemsd It, To a Od 520000boxl + o fed $025 item $000 in ut $20000 box $0 00 S60 00 hour SUBTOTAL ® $167 564.871 MONTHLY TOTAL Pap 2 Treasury Management Service Proposal City of Denton Pricing Pricing and solutions offered are confidential in nature The disclosed pricing is valid for 90 days from the date of this proposal BANK O'NE LOCKBOX SERVICE AGREEMENT THIS AGREEMENT is executed by BANC ONE CORPORATION as agent on behalf of certain banking subsidiaries (such subsidiaries, whether one or more, "Bank One') and the undersigned customer ("Customer') Terms not otherwise defined in this Agreement shall have the same meanings as such terms have in that certain Treasury Management Services Agreement by and between Bank One and Customer In consideration of the mutual covenants contained herein, Bank One and Customer agree as follows 1 Services. Bank One agrees to provide Customer with certain lockbox services (the "Services') as more fully described in the Implementation Questionnaire By execution of this Agreement, Customer acknowledges receipt of the Implementation Questionnaire Prior to the commencement of the Services, Customer shall provide Bank One with a completed Implementation Questionnaire which shall designate the Services to be provided under this Agreement and shall provide Bank One with such other information as may be reasonably required to implement the Services 2 Establishment of Lockbox. a Customer authorizes Bank One to establish a unique United States Postal Service ("USPS') address to be used to specifically identify Customer's remittances (the "Lockbox') Bank One shall have exclusive and unrestricted access and use of the Lockbox for the purposes of handling Customer's remittances b Bank One shall notify Customer as to the unique mailing address with which Bank One shall use to identify Customer's accounts receivable remittances for the purposes of this Agreement Customer shall use this mailing address in communications to its clients as to the address for mailing their remittances Customer shall notify Bank One periodically as to the number of its clients receiving such communications and the payment date of all anticipated remittances (with prompt notification to Bank One if such information materially changes) 3 Processing of Lockbox. a. Bank One shall collect, open and process for deposit all Customer mail received by or from the USPS identified by the Lockbox according to the Bank One's pre -established USPS mail pick-up and processing schedule All items will be processed in accordance with the Implementation Questionnaire Items which are deemed to be unprocessable due to failure to meet processing criteria set forth in the Implementation Questionnaire shall be delivered to Customer Bank One will endorse all items for deposit with the standard Lockbox endorsement b Customer will establish and maintain an Account with Bank One or an Affiliate in wluch remittance payments will be deposited Bank One will inform Customer of the appropriate Affiliate options for the Lockbox location LOCKBOX SERVICE AGREEMENT Page 1 c Bank One will create multiple batches of items throughout the processing day as volume warrants for deposit to Customer's Account Bank One will ensure completion of item sorting and clearing, including the assignment of float and according to the latest check clearing schedule, throughout the processing day The deposits will be microfilmed in processing sequence Microfilm records will be retained by Bank One in accordance with its record retention schedule, as amended from time to time d. Bank One will prepare a remittance package(s) containing reports and back-up documentation each business day as described in the Implementation Questionnaire The remittance package(s) will be forwarded daily via the method indicated in the Implementation Questionnaire 4 Termination of Lockbox. Any items or correspondence addressed to Customer received in the Lockbox after termination of this Agreement shall be sent by Bank One to Customer at the last address of Customer in effect hereunder for a period of nmety (90) days, provided, however, that Customer shall pay Bank One's then standard fee for such service 5. Service Chary —es . Expenses such as box rental, postage and exchange charges may be paid initially by Bank One Customer agrees that it will be responsibte for and will reimburse Bank One for all such actual expenses incurred by Bank One EXECUTED as of by the duly authorized representatives of the parties hereto BANC ONE CORPORATION, as agentfor certain banking subsidiaries which shall become parties to this Agreement from time to time By By Name Title LOCKBOX SERVICE AGREEMENT Page 2 W Title ("Customer') BANK ONE, TEXAS, N.A. COLLATERAL EXHIBIT Bank One, Texas, N A intends to select securities from the Collateral Exhibit and the Federal Home Loan Bank of Dallas will serve as custodian The Public Fund may request to (a) pledge securities selected by Public Fund or (b) deposit securities with any custodian other than the Federal Home Loan Bank of Dallas All selections of securities or custodians are subject to the approval of Bank One, Texas, N A, which approval shall not be unreasonably withheld The collateral fees will be determined based on the Collateral Fee Exhibit In the event, Bank One, Texas, N A requests substitution of collateral, the Public Fund agrees to provide a written release on a form provided by Bank One, Texas, N A within 48 hours of request US Treasury Bills US Treasury Notes US Treasury Bonds Federal National Mortgage Association Agencies Federal Farm Credit Bank Agencies Federal Home Loan Bank Agencies Federal Home Loan Mortgage Corporation Pools Federal National Mortgage Association Pools Government National Mortgage Association Pools Federal National Mortgage Association REMIC CMO's (No variable rates or original maturities longer than 10 years will be pledged) Federal Home Loan Mortgage Corporation REMIC CMO's (No variable rates or original maturities longer than 10 years will be pledged) Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated not less than "A" or its equivalent BANK ONE, TEXAS, N.A COLLATERAL FEES ON EXCESS COLLATERAL where securities are held at Federal Home Loan Bank of Dallas as custodian 25 Basis Points on Bank One selected collateral 75 Basis Points on Public Fund selected collateral where securities are held by custodian other than Federal Home Loan Bank of Dallas 100 Basis Points on Bank One selected collateral 200 Basis Points on Public Fund selected collateral The fee will be assessed based on the average ledger balance for the month with a 2% cushion compared to the average market value of collateral pledged for the month The applicable nuir"tber of basis points will be charged on the difference EXAMPLE Average Ledger $1,000,000 00 (+) 2% Cushion $20 000.00 Cushioned Average Ledger $1,020,000 00 Average market value of collateral $1,500,000 00 (-) Cushioned Average Ledger $1 020 000.00 Difference $480,000 00 " (x) 25 Basis Points $1,200 00 divided by 12 = Collateral Fee for the Month $100 00 " This number is an example only LOCAL GOVERNMENT CODE CHAPTER 2257 026 reads as follows A public entity shall inform the depository for the public entity's deposit of public funds of a significant change in the amount or activity of those deposits within a reasonable tune before the change occurs Added by Acts 1993, 73rd Leg, ch 268, off Sept 1, 1993 It shall bQ the responsibility of the public fund to monitor the market value of pledged securities and the total amount of its deposits at Bank If at any tune the market value of pledged securities shall be or become less than 100% of the total amount of the public funds on deposit with Bank, then the public fund shall immediately notify the Bank, and Bank shall pledge additional securities, upon which additional securities the public fund shall also have its first and prior lien in such additional amount of pledged securities so as to provide not less than 100% security The Bank will voluntarily monitor the market value of securities to the public funds on deposit on a weekly basis FEDERAL HOME LOAN BANK OF DALLAS CUSTODIAL SERVICES TERMS AND CONDITIONS These Custodial Services Terns and Conditions ("Terns and Conditions ) govern all future custodial services between Bank One, Texas N A '("Customer") and Depositor w defined herein, and the Federal Home Loan Bank of Dallas ("Bank") with otflces at 5605 N MacArthur, Irving, Texas 75038, mailing address Attention Member Safekeeping Department, P O Box 619026 Dallas/Fort Worth Texas 75261 9026 ARTICLE ONE CUSTODIAL ENGAGEMENT Section I 1 DEFINITIONS "Confirm" means a document substantially in the form of Exhibit A which sets forth the terms of the Custodial Agreement and establishes the specific collateral to be delivered to Bank by Customer for the benefit of Depositor "Custodial Agreement " means an agreement between Bank Customer and Depositor to have Customer deliver to Bank for the benefit of Depositor certain collateral as outlined in the Confirm Such agreement is evidenced by a Confirm which incorporates the Terms and Conditions contained herein "Depositor" means any institution, corporation, municipality, federal or State Agency or instrumentality authorized to enter into Custodial Agreement and who enters into a Custodial Agreement with Customer and Bank "Customer" means Bank One, Texas, N A who has entered into a "Safekeeping Agreement" with the Bank and who pledges collateral to Depositor in a Custodial Agreement. Section 12 PERFECTION OF SECURITY INTEREST BY DEPOSITOR The security Interest that arises out of a pledge of collateral is perfected from the time that the Bank identifies the pledge of the collateral on its books and records and issues a trust receipt Bank shall have the duty to identity the pledge of collateral on its books and records and Issue a cost receipt for the collateral as sat forth In Section 3 4 hereof Depositor shall have the duty to obtain the tout receipt in order to verily that Customer has pledged collateral as directed by Depositor Section 13 PROVISIONAL PLEDGE To the extent that Customer requests in writing, that the Bank provisionally segregate specified collateral held Ina safekeeping account with the Bank to be pledged to Depositor, these Terms and Conditions shall govern such provisional pledge Section 14 AUTHORIZATION OF CUSTODIAL SERVICES Customer and Depositor authorize the Bank to act as custodian of collateral transferred to it pursuant to the Confirm in accordance with the rights and dunes contained in these Terms and Conditions and to safekeep such collateral subject to the terms and conditions of the Securities Safekeeping Agreement executed by Customer and the Bank The Bank shall be compensated for its services in connection with the Custodial Agreement by the Customer in accordance with the published fee schedule in effect on the date the Confirm is issued All charges by the Bank for the handling and safekeeping of collateral pursuant to the Custodial Agreement shill be paid by Customer ARTICLE TWO RIGHTS AND DUTIES OF CUSTOMER Section 2 1 OWNERSHIP OF THE COLLATERAL Customer shall be the owner of all collateral and all income derived therefrom, when transferred to the Bank under the Custodial Agreement as evidenced from the Confirm from time to time and the Bank is acting as custodian of Customer on behalf of Depositor in accordance with a Custodial Agreement Section 2 2 CUSTOMER'S RESERVATION OF RIGHTS IN THE COLLATERAL Upon transfer of collateral by Customer to the Bank on behalf of Depositor, Customer shall reserve the following rights in the collateral unless otherwise agreed to in writing between Customer and Depositor "A" The right to recerve prepayments of principal from mortgage - backed securities and all Income from the collateral, "B" The right to control the management, administration and supervision of the collateral in accordance with these Terms and Conditions and the Securities Safekeeping Agreement Section 2 3 ADDITIONS OF COLLATERAL Customer may transfer to the Bank additional eligible collateral acceptable to Depositor Upon transfer to the Bank of such additional collateral, the Bank will send Customer and Depositor a receipt identifying the additional collateral page 1 Section 2 4 SUBSTITUTIONS OF COLLATERAL In the event Customer requests in writing die Bank shall release to Customer any of the collateral upon receipt of other collateral in substitution thereof on written authonzation received from the Depositor When substitution is made, the Bank promptly shall cause a receipt desenbrng both the collateral substituted and that released to be mailed to Customer with a copy to Depositor Upon such substitution all rights and obligations of Customer and the Bank and Depositor under the Custodial Agreement, including the grant of a security interest in such collateral in favor of Depositor as set forth in the Confirm, shall automatically apply to all substituted collateral Section 2 5 INDEMNITY OF THE BANK Customer shall reimburse, indemnify and hold harmless the Bank from and against claims of third parties, Depositor, or from any taxes or other governmental charges and any expenses related therein, which may be imposed or assessed in respect to the custodial services performed pursuant to the Custodial Agreement except to the extent same results from the gross negligence or willful misconduct of the Bank Customer further agrees that the Bank shall be entitled to make claim for and to receive from the value of the collateral pledged hereunder all funds due to the Bank from Customer pursuant to the indemnity granted by the paragraph and all of the costs and expenses including without limitation, attorney's fees arising out of or in any way connected with an action in the nature of an interpleader Such claims by the Bank shall have pnonty status (subject to any claims of Depositor) among the claims asserted against the collateral Customer shall further reimburse indemnify and hold harmless the Bank from and against claims costs, liabilities, expenses, losses and damages except those caused by the willful misconduct or gross negligence of the Bank, resulting from the exercise by the Bank of any authority or power granted to it hereunder ARTICLE THREE RIGHTS AND DUTIES OF THE BANK Section 3 1 PRINCIPAL PAYMENTS ON COLLATERAL The proceeds of any payments for any redemption of securities upon receipt by Bank of a release of collateral, or of any principal payments made on collateral except prepayments of principal on mortgage backed securities, shall be wired to Customer on each payment date Section 3 2 COLLECTION OF INCOME ON COLLATERAL The Bank shell collect any interest, dividends, prepayments of pnncipal on mortgage backed securities, or other Income from the collateral in accordance with the Secondes Safekeeping Agreement executed by Customer and the Bank Section 3 3 RESPONSIBILITY OF THE BANK The Bank, its ofticars, agents and employees shall not be liable for errors of Judgment either in holding collateral initially delivered to it or in acquiring and afterwards holding additional collateral as Instructed by Customer, nor for any loss arising out of any investment nor for any depreciation in the value of any collateral held by the Bank pursuant to this Agnmment, nor for any act, or omission to act, perPomied or omitted by the Bank, Its officers, employees, or agents, in the execution of this custodianship in good faith The Bank shall be responsible for the safekeeping of any collateral held by it pursuant to these Terms and Conditions, except that it shall not be liable or responsible for any act or omission to act of any broker or similar agent employed by the Bank to effect a transaction on Customer's behalf, or for the financial solvency of any such broker or agent. so long as the Bank exercises the same taro in selecting such broker or agent as the Bank employs in handling similar transactions involving its own property In no event shall the Bank be liable to Customer or Depositor for my special consequential incidental or punitive damages ,r Section 3 4 DUTIES OF THE BANK The Bank shall have the following duties respecting collateral held by it 'A" The duty to take possession of and safekeep all collateral transposed or assigned to the Bank by Customer on behalf of Depositor, "B" The duty to exercise reasonable skill and care when dealing with the collateral The standard of skill and care exercisable by the Bank shall be the same as that employed by the Bank in dealing with similar transactions involving property of a similar type to the collateral for the Bank's own account. "C" The duty (1) to Identify on its books and records each pledge of collateral that is transferred or assigned to the Bank by Customer on behalf of Depositor upon receipt of such collateral, and (2) to promptly issue and deliver to Depositor a trust receipt for such collateral Section 3 5 LIMITATION ON SCOPE OF THE BANK'S DUTIES Depositor acknowledges that "A" The Bank will not make, and has no duty to make, any inquiry into the value or marketability of the collateral and shall not be responsible for determining whether the value of the collateral is sufficient to Polly collateralize Customer's obligation to Depositor, "B" The Bank shall not record any assignments, file any financing statements with respect to any security interest refaced to herein, or take any other action to perfect any such security interest, "C" Neither the Bank nor any of its officers have made any representations, given any assurances, or expressed any opinions to Depositor as to the effectiveness of any of the procedures and rights herein provided in any situations, Including but not limited to a case where Customer is placed in receivership or is liquidated, and "D" The Bank is under no duty to supervise the investment of or to advise or make any recommendation to, Depositor or Customer with respect to the sale or other disposition of any collateral at any time page 2 ARTICLE FOUR GENERAL PROVISIONS Section 4 1 INCORPORATED DOCUMENTS Except to the extent inconsistent herewith the Securities Safekeeping Agreement, and all future documents distributed by the Bank and related to the subject matter hereof shall apply to the Custodial Agreement as evidenced by the Confirm as between Customer and the Bank as though set forth expressly therein Section 4 2 SUCCESSORS AND ASSIGNS The Custodial Agreement w evidenced by the Confine shall inure to the benefit of and shall be binding upon the Bank, Customer and Depositor and their respective successors and assigns Section 4 3 CONSULTATION WITH ATTORNEYS The Bank shall be entitled to employ and consult with counsel of its choosing at the expense of Customer and shall be entitled to act on advice of such counsel Section 4 4 ADDRESS FOR NOTICE All notices to be provided hereunder shall be mailed or provided to the parties hereto at their addresses set forth in the Confirm Section 4 5 AMENDMENT OF THIS AGREEMENT The Custodial Agreement maybe amended at anytime by written agreement signed by all panics thereto Section 4 6 COUNTERPARTS AND EXECUTION The Confirm maybe executed many number of counterparts all of which taken together shall constitute one instrument and any of the parties hereto may execute the Confirm by signing any of such counterparts By executing the Confirm the parties acknowledge receipt of these Terms and Conditions ARTICLE FIVE TERMINATION Section 5 t RESIGNATION OF CUSTODIAN Ilia Bank may resign at any time upon five (5) business days written notice to customer Upon receipt of such written notice, the Customer shall promptly locate and appoint a successfpr custodian and the Bank shall transfer all collateral hold by it to such successor custodian If Customer does not locate and appoint a successor custodian within thirty (30) business days of delivery of notice of resignation from the Bank, the Bank may transfer its custodial dudes to a successor chosen by it and shall have no further obligations or responsibilities hereunder The obligations of Customer and Depositor to the Bank pursuant to this Agreement shall be deemed to survive any termination of the Custodial Agreement and any removal or restoration of the Bank Section 5 2 DEFAULT BY MEMBER If the Bank receives tiom Depositor written notice ("Default Notice") of Customer's failure to pay when due, perform under the terms of any agreement between Customer and Depositor secured by the collateral, or perform under the terms of the Custodial Agreement ("Default"), which failure shall be specified in detail then and notwithstanding any defense, claim or objection that Customer may have to the contrary the Bank shall act a the exclusive agent of the Depositor for the purpose of delivering, with prior written notice to Customer such pan or all of the collateral to the Depositor or its nominee as directed in wnting by the Depositor Depositor shall be entitled to retain only that portion of the collateral having a value equal to the amount of principal and interest that Customer failed to pay at maturity, and Depositor shall promptly execute sty releases, assignments quitclaims, or other documents necessary or desirable to offset a release of Depositoes interest in the remaining portion of the collateral Section 5 3 SATISFACTION Upon satisfaction of the Security Agreement between Customer and Depositor Depositor shall Promptly notify the Bank in writing of such satisfaction Such notice shall be given by Depositor in the form of Exhibit B which exhibit is attached hereto and Incorporated herein by reference Immediately after receipt of notice by Depositor the Bank shall deliver the collateral, together with any necessary assignments(s), to Customer and the Bank shall have no fuller obligations under the Custodial Agreement. Section 5 4 TERMINATION OF THE CUSTODIAL. AGREEMENT The Custodial Agreement shall terminate upon the earlier of the following (i) thirty days from the date that Customer notifies the bank of the termination of the Agreement and delivers the consent of Depositor to such termination and transfer of the collateral or (n) when the Bank no longer holds the collateral identified in a Confine and pledged to Depositor pursuant to these Terms and Conditions "CUSTOMER" BANK ONE, TEXAS, N A BY "BANK" FEDERAL HOME LOAN BANK OF DALLAS BY T 'DEPOSITOR" BY page 3 FEDERAL HOME LOAN BANK OF DALLAS Custody Receipt Federal Home Loan Bank Dallas 5605 N Macanhur Blvd Irving Tx 75038 Returnable sole custody receipt for and on behalf of Bank One Austin Receipt No Tax ID Public Entity Name 11012313 752270994 Attn Judy Guyton 1717 Main Street LLt Dated Acquired Dallas TX 76201 07/26/94 07/22/94 Customer No 6500069 Par/Shares Security Description Cusip Number 5,0000000 FHLB 3133884M9 Prin 60000000 Maturity Rate Issued 10/16/1997 10/16/1992 Interest Dates 01/16 04/16 07/16, 10/16 Location(s) bey " 5,000 0000 PLEDGED to PUBLIC ENTITY NAME Receipt Issued for Exam Is of "Confirm" NON-NEGOTIABLE 4, e3xx'tl EXHIBIT "B" PLEDGE + CUSTODIAN BANK DEPOSITORY BANK Pledgee/Depositor AUTHORIZATION FOR PLEDGED SECURITIES Federal Home Loan Bank of Dallas Bank One, Texas, NA 1717 Main Street LL1 Dallas, TX 75201 THE CUSTODIAN BANK NAMED ABOVE RELEASE You are hereby authorized to allow deposit or release of the securities described below upon request from the above named Depository Bank Safekeeping Custody Security Par Amount Account No Receipt Description of Number (s) Cusip Number Securities Bank One Texas, N A Name of Depository Authorized Signature Date Name of Pledgee/Depositor Authorized Signature Date REFERENCES FOR RETAIL LOCKBOX PROCESSING 0 Denton County Electric Co-op, Inc , (now known as Co-Sery Electric) FM 2181 Corinth, Texas 76205 Contact Mr Donnie Clary Phone (940)383-1671 Fort Worth Water Authority 1000 Throckmorton Fort Worth, Texas 76102 Contact Ms Sharon Hams Phone (817)871-8270 City of Dallas 1500 Martlla Dallas, Texas 75201 Contact Ms Nancy Buschmann Phone (214)670-3676 r1 LJ LJ