Banking Services Agreements

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					 Banking Services Agreements
  Presentation to the NAST Treasury
       Management Conference
          December 5, 2004
         Scottsdale, Arizona
          Elaine Emans, Deputy Treasurer
Jacqueline Biss, Cash Management Division Manager
     Office of the Washington State Treasurer
Background
   With few exceptions, in 1993 most agencies did
    not have contracts for purchased banking
    services
   Use of credit cards and other electronic payment
    methods was just beginning and economic
    feasibility was not always considered
   “Master” agreements for financial services were
    bid through Office of State Procurement; no
    working knowledge of financial process
Legislative Remedy
   In 1993, the legislature passed the
    Cash Management Act
   Emphasized effective and efficient
    management of state‟s cash
    resources
   Permits use of treasury/trust
    income accounts for payment of
    purchased banking services
   Policies, procedures, and practices
    to be reviewed and revised to
    support the Act
Cash Management Act
Role of Treasury
State Treasurer directed to:
   “take such actions that are necessary to
   ensure the effective cash management of
                 public funds.”
     Authorized to represent the state in all
      contractual relationships with financial
      institutions
     May delegate authority to affected state
      agencies with concurrence from budget and
      accounting office
Regulations, Policies and
Guidance
State Administrative and Accounting Manual
  updated for role of Treasury
   Negotiate master contracts with financial institutions
   Coordinate agencies‟ acceptance and use of credit
    cards and other payment methods
   Provide required language that must be included in
    any RFP and/or agreement/contract that has either
    an electronic funds settlement component or involves
    a vendor who holds funds for a period of time before
    remitting to the state
Goals and Objectives
Establish and maintain beneficial banking
  relationships such that:
   Banking requirements for all state agencies are met;
   Quality services are provided at the best possible
    price; and,
   Financial Institutions work in partnership with state
    agencies to meet the needs of the citizens of the
    state
Strategy
   Ensure that all bank accounts used by state
    agencies are covered by an agreement
   Leverage economies of scale to secure best
    possible rates
   Employ a „menu‟ approach within agreements
    to permit tailoring of services to agency-
    specific requirements through a single
    agreement
Process
The approach we use in acquiring banking
  services is similar to that used for selecting
  vendors of other services
   Identify the banking services required for state
    agency operations
   Identify, and develop an understanding of,
    services provided by financial institutions
   Employ a competitive process utilizing a
    Request for Proposal -- RFP
Master Agreement RFP
Process
                 Meet agencies to
                  identify their needs

                 Develop core
                  requirements - separate
                  from agency unique
                  specs

                 Gather statistics -
                  transaction volumes if
                  known and dollars
Master Agreement RFP Process
   Include detailed specifications for services, plus
    expectations for these services
   Provide detail of activity
   Describe evaluation process and scoring criteria
   Send RFP to several prospective bidders
   Introduce Competition - bidders will “sharpen
    their pencils”
   Bidders Conference optional, but offers
    opportunity to meet in person, ask ??‟s
Statewide Master Agreements
   Establish Master Depository agreements to
    ensure that banking services used by any state
    agency is covered by a contract
   Establish master agreement for Merchant Bank
    Card Services leveraging economies of scale to
    secure low rates
   Establish new master agreement for Lockbox and
    Automated Remittance Services to be applicable
    to more agencies
Master Depository Agreements
Secured basic depository agreements with
  over 50 financial institutions- used mostly
  for remote locations
                        PDPC protection of deposits
                        Fixed pricing - agencies could
                         effectively budget
                        Agencies can choose among
                         banks
                        13 different agencies utilizing
                         these contracts (LCB, DOL,
                         Parks, etc.)
Merchant Bankcard Agreement
   One statewide master agreement for credit and
    debit card acceptance
   Various service delivery methods
      In-person

      MOTO

      Internet


   Menu of processors to choose from - must settle
    through our vendor gateway
Merchant Bankcard Agreement
Over 20 Agencies currently accept debit/credit
  cards for items/services such as:
                            Camping Fees
                            Ferry Tickets
                            Licensing Fees
                            Liquor sales, etc.
                         FY 2004
                          7.37 million transactions

                          $267.85 million
  Lockbox and Automated
  Remittance Processing Services
One statewide master
  agreement for lockbox
  processing
 Currently eight agencies

  utilize this contract
 2.7 million items

  processed annually
  representing over
  $7.7 billion
 Both wholesale and retail
  lockbox
Outreach Program

Master agreements will be successful only
 to the extent they support the
 requirements state agencies

     Amendments sometimes possible
     Sometimes you just have to rebid
Outreach Program
   As part of our Outreach Program, we provide:
       RFP Banking Services template
       Boilerplate contract language
   Ensure public funds protected - third party
    vendors - suggested language
   Provide information on available technology,
    alternatives and associated costs – assist in
    implementation
RFP Delegation Authority
OST coordinates acquisition process for other
 agencies or delegates authority for:
     Lottery
     Unemployment Benefits & Insurance
     Child Support
     DOH WIC Program
     Colleges
What‟s new?
   Stored Value Card Master Agreement?
   Contract amendments to allow for
    Check 21 enhancements?
   Additional Internet products?

We are here to Implement Your
 Vision!
Questions?

 Thank you.
Contacts
Elaine Emans        Jacqueline Biss
360-902-8900        360-902-8914
elaine@tre.wa.gov    jackie@tre.wa.gov