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

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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

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Legislative Remedy

• In 1993, the legislature passed the Cash
  Management Act
• Emphasized effective and efficient management of
  states 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

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Cash Management ActRole 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

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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

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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

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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

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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

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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

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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

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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

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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.)

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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

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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

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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

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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

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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

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RFP Delegation Authority

• OST coordinates acquisition process for other
  agencies or delegates authority for
• Lottery
• Unemployment Benefits Insurance
• Child Support
• DOH WIC Program
• Colleges

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Whats new?

• Stored Value Card Master Agreement?
• Contract amendments to allow for Check 21
  enhancements?
• Additional Internet products?
• We are here to Implement Your Vision!

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Questions?

• Thank you.

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Contacts

• Elaine Emans Jacqueline Biss
• 360-902-8900 360-902-8914
• elaine_at_tre.wa.gov jackie_at_tre.wa.gov