Depository Services

							      Knox County
      Housing Authority



Depository Services
Request for Proposal
Depository Services
COMPANY INFORMATION
Recognizing that the need for shelter falls only slightly below that of nutrition in the
human hierarchy of needs, the Knox County Housing Authority's (KCHA) mission is to be
the leader in making excellent affordable housing available for low and moderate-income
persons in Knox County. This mission is expanded to include partnering with other
agencies and the families served to plan and implement programs and services that will
help those families develop and thrive. Effective management and the wise stewardship
of public funds to be primary considerations throughout.

Reasons for Issuing the RFP
The objectives of this Request for Proposal are to identify the banking institution
that can offer the highest quality service at the best value to our organization. The
Knox County Housing Authority intends to maximize deposit availability, m aximize
deposit security, and m inim ize cost and management time. As you will see when
you review this proposal, the Knox County Housing Authority is interested in
obtaining the best m ix of services to meet our specific banking needs. KCHA is
looking for an Annual Service Agreement renewable each year up to 5 years.


Operational Requirements
          KCHA requires five checking accounts, one Public Housing operating
           account, one Section 8 Housing Choice Voucher operating account, two
           accounts for two local, privately owned, HUD subsidized Section 8 New
           Construction apartment complexes and one account for KCHA owned, non-
           HUD subsidized apartment complexes.

          The Public Housing operating account is used to handle routine expenses
           such as payroll, utilities, etc. and payments to various vendors and
           contractors for equipment, facility improvements and services. The average
           balance of this account is approximately $175,000. An average of 125 checks
           written and 100 ACH transactions are made each month on the operating
           account.

          The account for Section 8 Housing Choice Voucher has three large HUD
           deposits at the beginning of each month, 5 to 7 small deposits during the
           month, about 170 checks or ACH transactions made each month.

          The two accounts for the Section 8 New Construction complexes each have
           two deposits and two to three checks written each month.




                                            2  Depository Services Request for Proposal
        The account for the KCHA owned complexes is an operating account with 20
         to 30 deposits and approximately 70 written checks each month.

1.   KCHA expects the statement cycle for each account to be cut off the last day of
     each month. Statements are to be delivered within 10 days. Images of deposit
     tickets are required, but images of cleared checks are not.

2.   KCHA would like the selected bank to collect rents from our tenants. The
     collection process would consist of approximately 30 renters bringing their rent
     payment to the bank by the 5th of each month and a teller at the bank depositing
     the rent to the correct checking account. Deposit receipts are picked up by KCHA
     on the first work day after the 5th of each month. The bank selected will not be
     expected to become involved in any disputed amounts or to make any
     determinations about deferring rent collections for extenuating circumstances.
     KCHA would continue to handle these matters. KCHA has properties in 6 areas
     of Galesburg, and one in Abingdon. Please list branches that are closest to each
     of our sites: Moon Towers, McKnight St., Iowa Ct., W. South and Berrien Streets,
     900 W Dayton, 300 E Davis and Bluebell Tower in Abingdon.

3.   KCHA requires electronic access to all accounts, balances, transactions, images,
     ability to transfer between accounts and to process ACH direct deposit and direct
     debits.

4.   The selected bank must designate a bank staff person to act as liaison between
     KCHA and the bank.

5.   Investments held by KCHA are listed in an attachment, along with their maturity
     dates. KCHA will transfer all funds under its control and all such additional funds
     that might become available for deposit to the banking institution selected.
     Proceeds from current investments will be placed on deposit with the institution
     selected upon maturity. Because KCHA is fiduciary of public funds, the safety of
     principal is of prime importance. Investments must be limited to those which are
     backed by the full faith and credit of the U.S. Government or a U.S. Government
     Agency, or issued by a U.S. Government sponsored agency, and which receive
     the best rate of interest consistent with the policy.

6.   Some of the HUD approved investments are: demand and Savings Deposits;
     Certificates of Deposit, U.S. Treasury Bills, Notes and Bonds; GNMA; Federal
     Financing Bank; Federal National Mortgage Association; Repurchase
     Agreements; and State-Approved Investments meeting HUD regulations. Any
     portion of our funds not insured by a Federal insurance organization must be fully
     (100%) and continuously collateralized with specific and identifiable U.S.
     Government or Agency securities as prescribed by HUD.

     Excess money held in all accounts other than the rental accounts may be swept
     into one or more accessible investment account. Funds in these accounts, along
     with any interest they generate, must be individually tracked and identifiable as to
     source for future accounting and audit requirements.




                                           3  Depository Services Request for Proposal
     All funds placed on deposit with an institution pursuant to this agreement must be
     available to KCHA, without penalty within six months after the end of the service
     agreement.

7.   The selected bank will analyze the investments annually and help KCHA create
     an annual investment strategy.

8.   Quality of service, convenience for our tenants and cost are all of great concern
     to us.




Response Guidelines
1.   Emailed responses must be received by 4:30 PM on May 1, 2009 at the following
     address:

            mhulick@knoxhousing.org

2.   Questions may be directed to either Margie Hulick at (309)342-8129, extension
     223 or Jayne Lofing at (309)342-8129, extension 212.

3.   All proposals should be submitted by email to mhulick@knoxhousing.org. Please
     identify each answer with each question or use the actual proposal as the format
     for bidding; preferably using a different color or font.

4.   The bank must guarantee the terms provided in the bank’s proposal for 45 days.




                                           4  Depository Services Request for Proposal
Depository Services RFP
I.         BANK BACKGROUND
Safety and Soundness
1.     Identify key measures of the bank's financial strength (e.g., capital ratios, market
       capitalization, and total assets). Provide the most recent annual report and call
       report, as well as the bank’s Web site address.

2.     Provide ratings for the bank and/or bank holding company from two of the
       following agencies: Standard & Poor's, Moody's, Fitch, Sheshunoff or Lace.
       Include ratings for: [Customer to specify: (e.g., senior debt, subordinated debt,
       long-term deposit)].

Personnel
List the names, titles, phone and fax numbers, e-mail address and provide brief
biographies of bank personnel that will have ongoing responsibility for servicing this
account. Include professional designations and treasury association involvement.
Describe the role of each person listed in the relationship with the company.

References
Provide names and phone numbers of three references, preferably within our industry or
with comparable volumes, who have been using the services requested in this RFP for
more than one year.

Provide any additional information that you believe to be relevant to this RFP and your
capabilities to provide the services requested (e.g., product brochures, articles in trade
journals).




                                              5  Depository Services Request for Proposal
II.        PROCESSING
Depository Service Options
1.    What is the cut-off time to ensure same day ledger credit?

      a. Address any differences for branch services.
      b. Address any differences for cash versus checks, drafts, etc.
      c. Are there any options that might affect this cut-off time (e.g., provisional
           credit, delayed verification)?

2.    Do you accept loose and/or rolled coin for deposit at branch and night drop
      locations? If so, list any fees for depositing loose or rolled coin?

3.    Provide an availability schedule.

      a.   How do you determine and calculate availability of deposited items?
      b.   Do you give immediate availability for on-us items?
      c.   Do you calculate availability by item or formula?
      d.   Do you use a standard schedule? Accelerated schedule? How often is it
           updated?


Deposit Supplies
1.    Does the customer order deposit tickets and other supplies through the bank or
      directly from a vendor? How are the charges handled?

2.    Do you accept deposit tickets from a third-party printer? List any limitations and
      attach a specifications sheet.

3.    How many copies of each deposit ticket does the bank require?

4.    What types of deposit bags do you allow/require?

      a. How are these bags obtained?
      b. What are the fees for these bags?



Deposit Verification

1.    Does the bank identify and adjust all discrepancies?

      a. If no, at what dollar amount do you write off discrepancies?
      b. Do you adjust the deposit amount or process an adjusting debit or credit?



                                             6  Depository Services Request for Proposal
     c. What is the standard procedure for reporting deposit adjustments and what
        additional options are available (e.g., electronic reporting with location ID
        attached, adjustment copies to multiple locations)?
     d. What information do you provide to the company regarding a deposit
        adjustment (e.g., deposit bag number, denomination breakdown)?
     e. Describe any fees related to adjustment processing.

2.   What is the bank’s policy on receipt of tampered bags?

3.   When counterfeit bills are discovered, what is your notification and adjustment
     process?

Return Item Processing
1.   Can return items be automatically redeposited? If so, KCHA requests that an
     item only be redeposited one time.

     a. Is this service optional by location?
     b. Can copies of all redeposited return items be provided to the depositing
        location or a central office? If so, within what time frame?
     c. Provide information about the bank’s re-presented check entry (RCK)
        program.

2.   Provide the bank’s standard return item and reclear processing instructions. List
     any non-standard options that are available.




                                            7  Depository Services Request for Proposal
III.           DEPOSIT REPORTING
Previous Day
1.         Discuss the format and delivery options available for the company to receive
           previous day deposit activity detail files.

           a. In what formats (e.g., BAI, flat file) is the daily deposit activity detail file
              available? Supply file layout specifications and a sample of each format
              option.
           b. By what methods can the company receive this file (e.g., electronic
              transmission, Web-based, FTP, third-party data exchange)? Describe the
              technical requirements and technical support for each delivery method.

2.         Discuss the methods (e.g., Web-based, proprietary software) by which the
           company can view previous day deposit activity detail and balance information.

           a. Can information be accessed by multiple users?
           b. Can information be accessed from multiple locations?
           c. Can individual users be restricted to accessing information only on certain
               accounts or transaction types?
           d. Can users specify the types of information that they want to view?
           e. What are the hardware and software requirements for each access method?

3.         Will the daily deposit reporting system provide beginning and ending ledger
           balances, collected balances, available balances, and float assignment?

4.         Indicate the bank’s capability to provide the specified detailed information for
           each transaction listed:

                                    Master       Auxiliary
       Trans action Type            Account       MICR       Trans action    Trans action
                                    Number        Field         Date           Amount
Deposits

Return Items

Deposit Correction – Teller

Deposit Correction – Vault

Deposit Correction – Proof

Coin and Currency Orders

Misc. Debits and Credits

ACH Debits and Credits


5.         Is the detail indicated above available for all formats and delivery options
           described in question #4? If not, discuss any variations.




                                                     8  Depository Services Request for Proposal
6.   Does your deposit reporting service report electronic transactions (e.g., merchant
     card deposits, ATM deposits, ACH, wire), as well as paper documents?

7.   How many business days is data stored on the reporting system and available for
     customer access?

8.   Describe the bank’s security procedures for its information reporting system, both
     for access and information protection.

Current Day
1.   Discuss how the company can view current day deposit activity detail and
     balance information.

     a. Can information be accessed by multiple users?
     b. Can information be accessed from multiple locations?
     c. Can individual users be restricted to accessing information only on certain
        accounts or transaction types?
     d. Can users specify the types of information that they want to view?
     e. What are the hardware and software requirements for each access method?

2.   Provide a list of the types of current-day transactions that are available through
     the reporting system?

3.   How often is current day information updated (real-time or batch updates)? What
     are the reporting times throughout the day? (Specify time zone)

4.   How many business days of current day information is stored on the reporting
     system and available for customer access?

Cycle End
1.   What type of output media is available for cycle-end deposit reporting (e.g.,
     mailed paper report, magnetic tape, cartridge, CD-ROM, file transmission, Web-
     based)?

2.   What is the bank’s standard cut-off for statements and/or paper reports?

3.   Can the customer specify a cut-off date for statements and/or paper reports? Is
     there a cost for a special cut-off?

4.   How soon after the cut-off date will the statements be sent?




                                            9  Depository Services Request for Proposal
IV.        IMPLEMENTATION
1.    Discuss any inconsistencies between the service terms proposed to the company
      and the bank’s standard service terms.

2.    What is the average lead time required for implementation, including but not
      limited to the following services? What are the critical factors that may impact
      that lead time?

      a. Deposit ticket orders/endorsement stamps/tamper resistant bags or spec
           sheet delivery
      b.   Account opening
      c.   Information reporting/detail transmission
      d.   Cycle-end deposit reporting
      e.   Data exchange procedures
      f.   Other

3.    Describe materials available and/or any on-site training provided by the bank in
      the areas listed below.

      a. Information reporting/detail transmission systems
      b. Technical support




                                            10  Depository Services Request for Proposal
V.      CUSTOMER SERVICE AND QUALITY
Customer Service
1.   Describe your bank’s customer service organizational structure (e.g., separate
     customer service department for depository services, centralized customer
     service department for all cash management services)

2.   Will a specific customer service representative be assigned to handle this
     business?

     a. For how many other accounts is this representative the primary contact?
     b. How does the bank ensure continuity of service when the primary customer
        service representative is unavailable?
     c. Describe the responsibilities of customer service personnel, including the
        chain of command and escalation procedures for problem resolution.

3.   Is local customer service support available for the customer’s depositing
     locations?

4.   What are the hours of operation of the depository services customer service unit?

5.   Discuss all methods (e.g., phone, fax, e-mail, real-time messaging) the company
     can use to initiate and track inquiries. Describe the security measures associated
     with each method.

6.   Describe the bank’s procedures for processing inquiries that require research
     and/or adjustments.

7.   Are there established turn-around times for research and adjustment items? If
     yes, specify.

8.   What is the bank’s record for meeting established response times?

9.   Describe the bank’s technical customer support for computer hardware, software
     and communications problems? What are the hours of operation for technical
     support?




                                         11  Depository Services Request for Proposal
VI.       COMPENSATION
Pricing
1.    Provide a price schedule for the proposed services. Include any one-time or set-
      up charges, research fees and all other fees that will be charged, even if already
      in place or listed elsewhere in the proposal.

2.    How long will the bank honor the price schedule offered in this proposal while the
      company is evaluating proposals?

3.    If your bank is awarded this business, for how many years will the bank
      guarantee the price schedule provided in this proposal?

4.    How and when is the customer notified of a price change?

5.    If prices are tiered based on volume, provide all price tiers.

6.    Does the bank offer employee banking packages? If so, describe.

Analysis
1.    Does the bank accept compensation in fees, balances or a combination of the
      two? If fees are accepted, is there a surcharge or a different price schedule for
      fee compensation? Describe.

2.    What fee payment options does the bank offer (e.g., direct debit, ACH, check)?

3.    If fees are not paid through direct debit, are there late fees for payments made
      after the due date?

4.    Describe the method used to calculate the earnings credit rate (ECR).

      a. To what rate is the ECR pegged?
      b. What has the bank’s ECR been for the last six months?
      c. Is the reserve requirement deducted from the available balance before the
          ECR is calculated? If not, explain.

5.    Is there a fee or other assessment for FDIC or NCUA Insurance? If so, how
      does the bank calculate the charge?

6.    Can the customer decide how the balances in its accounts will be grouped for
      purposes of compensation (e.g., assessed individually, at the relationship level)?

7.    When calculating average balances, are daily positive and negative balances
      netted?




                                            12  Depository Services Request for Proposal
8.    How does the bank charge for overdrafts? Does the bank charge for use of
      uncollected funds? If so, how is the charge calculated? Are these fees a direct
      charge or can they be offset by the earnings credit allowance?

9.    What billing period options do you offer? How and when will the company be
      billed for deficiencies?

10.   How long can excess balances be carried forward to apply to charges in future
      billing periods?

11.   How soon after the close of the billing period is the account analysis available to
      the customer?




                                           13  Depository Services Request for Proposal
                              KNOX COUNTY HOUSING AUTHORITY INVESTMENTS


                                                                                     SECTION 8 NEW
                              LR                                                     CONSTRUCTION                   AHP
                                                                                                             Brentwood/Prairieland
   COCC           Moon                Family        Bluebell        HCV            GT            MAW              Combined



$ 116,293.68   $ 416,985.90        $ 443,022.47   $ 119,367.72   $ 507,356.53   $ 52,515.77   $ 177,880.54   $ 145,817.02




                                                                 14  Depository Services Request for Proposal