HomeMy WebLinkAboutC-2382 - City's Banking Services AgreementCity of Newport Beach
Managing Agency Agreement
June 1996
41 08 City National Bank
City National Investments
MANAGING AGENCY AGREEMENT
This Agreement is made and entered into this 24 day of June, 1996, by and between City National
Bank ( "Agent ") having its principal offices at 400 North Roxbury Drive., Beverly Hills California and
City of Newport Beach ( "Principal "), having its principal offices at 3300 Newport Boulevard, Newport
Beach, CA.
WHEREAS, Principal desires to employ Agent as its investment manager and custodian with
respect to those assets Principal deposits with Agent from time to time, ( "the Account "), and Agent
desires to provide investment management and custodian services to Principal on the following terms
and conditions.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter, contained, the parties
hereto mutually agree as follows:
1. Appointment. Principal being duly authorized, hereby employs and appoints Agent as
investment manager and custodian for the Account and Agent hereby accepts such appointment.
2. Receiot and Investment of Account. Principal's custodian shall receive and hold all
assets acceptable to Principal. Agent may, (a) buy, sell, exchange, convert and otherwise trade in any
stocks and any other securities, notes, obligations or money market instruments of any kind
whatsoever subject to Principal's Investment Policy, (b) place orders for the execution of such
securities transactions with or through such brokers, dealers or issuers as Agent may select.
Agent may employ suitable sub - agents or sub - custodians as shall be necessary and appropriate.
Neither the Agent nor any sub - custodian or sub -agent shall be entitled to reimbursement by the
Principal for any fees or expenses of any sub - custodian or sub - agent.
3. Standard of Care. Agent shall exercise the standard of care of a professional
investment manager in performing its services under this Agreement in managing the funds of a Public
Agency.
4. Registered Investment Company. To meet the cash requirements of Principal or
Account. Principal authorizes Agent to invest in any sweep vehicle. Such sweep vehicle must meet
the investment policy of the City and the Agent may not receive compensation from sweep vehicle or
any other investment placed by Agency on City's behalf.
5. Use of Nominee, The Agent's custodian will hold property in its nominee name; but
no such registration or holding will relieve the Agent or its custodian of the responsibility for the safe
custody of such securities and investments and at all times the assets will be shown on the Bank
records as the property of the Principal.
6. Disbursements. Agent shall disburse cash and other property then held in the Account
in accordance with the written directions of Principal or its authorized representatives. Agent shall
have no responsibility to determine whether any such disbursements are in accordance with applicable
law, regulations, or any agreement other than this Agreement. Notwithstanding any other provision
of this Agreement, if at any time there is insufficient cash or securities in the Account with which to
carry out the instructions of Principal or its authorized representatives, Agent shall notify the party
giving the instructions of such insufficiency as soon as practicable after receiving the instructions and
shall have no further responsibility for complying therewith until it receives sufficient cash or securities.
A list of authorized representatives is attached.
7. Reports. Agent shall render to Principal monthly, quarterly or annual reports, in the
usual and customary manner and form, or as may be required by Principal, setting forth all receipts,
disbursements and transactions effected with respect to the Account. Agent shall also provide
Principal with a report of the status of the Account upon request of Principal at reasonable intervals.
In the absence of any exception thereto filed in writing with the Agent within 1 year after the date
of filing with Principal, any accounting filed with Principal shall constitute a final accounting by and
discharge of Agent from all claims and liabilities with respect to the acts and transactions as shown
in such account, except for any acts of fraud or misrepresentation by Agent and shall be binding and
conclusive upon all persons. It is agreed that Agent, in the maintenance of its records, does not
assume responsibility for the accuracy of information furnished by Principal. In computing the market
value of any investment of the Account, the valuation method shall be consistent with generally
accepted principles of valuation utilized in the investment management industry, and each security
listed on any national securities exchange shall be valued at the last quoted sale price on the valuation
date on the principal exchange on which such security is traded. Any other security or asset shall be
valued in a manner determined in good faith by Agent to reflect its fair market value.
8. Indemnification. Agent shall defend, indemnify and hold harmless Principal and its
officers and employees, with respect to any claim, litigation, loss or damages (including reasonable
attorneys fees and defense costs) to the extent caused by the negligence, fraud or willful misconduct
on the part the Agent; provided, however, Agent's duties pursuant to this paragraph shall not apply
to any claim, litigation, loss, or liability to the extent caused by the sole negligence, fraud or willful
misconduct of Principal and /or its officers or employees.
9. Termination. This Agreement may be terminated for any reason at any time by either
party giving to the other thirty (30) days written notice of such termination. Agent shall deliver to
Principal or as otherwise directed, all securities and other instruments duly endorsed, and all cash,
except compensation and expenses due under this agreement. After termination of this Agreement,
Agent shall file with Principal an accounting as of the date of such termination, covering the period
since the close of the last previous period for which an accounting was filed.
10. Amendment. This Agreement may be modified at any time by a writing signed by the
parties.
11. Notices. Unless otherwise specified herein, all notices, directions, instructions and
advises with respect to security transactions or any other matters contemplated by this Agreement
shall be deemed duly given when received in writing by Agent at the address first above written or
when deposited by first -class mail postage prepaid, or delivered by hand to Principal at the address
appearing above, or at such other address or addresses as shall be specified, in each case, as notice
similarly given. Agent may rely upon any notice, direction, instruction and advise (written or oral) from
any person reasonably believed by it to be genuine and authorized.
12. Bank's Compensation and Exoenses. Bank shall not be reimbursed for any expenses
incurred on behalf of Principal unless such expenses have been authorized prior to the time they are
incurred. Bank shall receive quarterly compensation for its services hereunder calculated at the rate
of 25 basis points annually times the amount of money on hand in the managed account, calculated
on the account's average market value during each calendar quarter. Compensation shall be paid to
Bank for its services quarterly. All expenses must be approved in writing by the Principal's Finance
Director, Deputy Finance Director or City Manager.
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13, Counsel. Bank may, at the expense of Principal, consult with and obtain advice from
legal counsel, provided that the Principal has in advance authorized the expense and the parties have
mutually agreed upon the Attorney supplying the services and the nature and extent of the expenses
to be incurred. The expenses must be approved in writing by the Principal's Finance Director or City
Manager.
14. Governing Law. Subject to any laws of the United States which may be applicable, this
Agreement shall be governed, construed, regulated and administered under the laws of the State of
California.
15. Force Majeure. Agent shall not be liable for any delay or failure to act as may be
required hereunder when such delay or failure is due to fire, earthquake, any act of God, interruption
or suspension of any communication or wire facilities or services, war, emergency conditions or other
circumstances beyond its control provided it exercises such diligence as the circumstances may
reasonably require,
16. Invalid Provisions. It is not the intention of any party to this Agreement to violate any
statute, regulation, ruling, judicial decision, or other legal provision applicable to this Agreement or the
performance thereof. If any term of this Agreement, or any act or omission in the performance thereof,
is or becomes violative of any such provision, such term, act or omission shall be of no force or effect
and any such term shall be severed from this Agreement. Any such invalid term, act or omission shall
not affect the validity of any other term of this Agreement that is otherwise valid, nor the validity of
any otherwise valid act or omission in the performance thereof, unless such invalidity prevents
accomplishment of the objectives and purposes of this Agreement in the event any such term, act or
omission is determined to be illegal or otherwise invalid, the necessary steps to remedy such illegality
or invalidity shall be taken immediately by the parties.
above.
IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first written
City of Newport each „ ( "Principal ")
S
Deertnis C. Danner
Title Administrative Services Director /Treasurer
Richard C. Kurth
Title Administrative Services Deputy Director
City National Bank ("Agent ")
By Vern Kozlen
Title Fxecu-tive Vice President
City of Newport Beach
Institutional Custodial Agreement
June 1996
�® City National Bank
City National Investments
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INSTITUTIONAL CUSTODY
CUSTODIAL AGREEMENT
This Agreement is made this 24 day of June, 1996, between City of Newport Beach (the "Principal ")
and City National Bank (the "Bank "). The Principal and the Bank hereby agree as follows:
ARTICLE I: APPOINTMENT OF BANK AS CUSTODIAN
Section 1.01. The Principal appoints the bank as custodian to receive and hold for safekeeping
all securities tendered to it from time to time by the Principal or upon the Principal's direction
( "Custodial Assets "), and to perform such ministerial functions as provided in this Agreement. The
Bank agrees to hold and keep as custodian all property deposited or received by it for the account of
the Principal in a separate account ( "Custodial Account ") and shall faithfully discharge its duties as set
forth in this Agreement.
Section 1.02. The Principal represents and warrants that it is authorized under the laws of the
State of California to appoint the Bank as custodian and to transfer or cause to be transferred custody
of Custodial Assets to the Bank.
Section 1.03. The Principal may direct the Bank to establish one or more custodial sub -
accounts to hold such portions of the assets of the Custodial Account as the Principal shall direct,
along with the earnings and profits thereon.
ARTICLE 11: AUTHORITY AND RESPONSIBILITY OF CUSTODIAN
Section 2.01. The Bank is authorized to sign any documents which are now or may hereafter
be required in order for the Bank to perform its responsibilities under this Agreement.
Section 2.02. The Bank shall collect and receive the interest and other income, including
dividends, paid to it by any person or organization with respect to securities and other properties which
it holds as custodian under the terms of this Agreement. In the case of interest or dividends paid upon
any municipal bonds, federal book -entry eligible treasury issues, and debt obligations or equity
securities of any domestic corporation, the monies shall be credited to the Custodial Account and /or
Demand Deposit Account # Ito be provided) (hereafter referred to as the "DDA ") in accordance with
the Funds Payment Policy in effect from time to time. Interest or dividend income on all other assets
shall be credited to the Custodial Account, barring any direction from the principal to the contrary.
In the event the Bank fails to actually receive any monies which have been credited to the
Custodial Account and /or DDA as hereinabove described, the Bank shall notify the Principal within
twenty four (24) hours thereof, shall reverse out such credit and shall be entitled to interest at a fair
and reasonable rate, as mutually determined by the Bank and Principal when such event happens, from
the date of credit to the Custodial Account until the date such credit is reversed.
Section 2.03. The Bank shall use its best efforts to collect, on behalf of the Principal, monies
which are due and owing to the Principal upon the maturity, redemption, principal payments, or sale
of securities or other property held in the Custodial Account, or at the dates of their calls for payment
of which the Bank has actual notice from the reporting services to which the Bank subscribes, and
proceeds of property so received shall be held in the Custodial Account, or forwarded upon the
direction of the Principal. The Bank shall not be obligated to institute or participate in any legal
proceedings to make such collection. Whenever the Bank has been unable to make a collection
pursuant to this section, it will notify the Principal of its inability to make such collection, and the
reasons therefor, insofar as such reasons are known to the Bank.
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Section 2.04. The Bank will notify the Principal of any voluntary offering with respect to the
securities held in the Custodial Account and will forward to the Principal, upon request, such literature
and reports as may be received by the Bank pertaining to any securities held hereunder. The Bank,
absent directions, is under no duty to take any action with respect to any securities held in the
Custodial Account.
The Bank will execute proxies with respect to Custodial Assets held in its name or in its
nominee name and forward the proxies to the Principal without having voted the proxies.
Section 2.05. The Bank shall disburse cash and other property then held in the Custodial
Account and /or DDA in accordance with the instructions of the Principal. The Bank shall have no
responsibility to determine whether any such disbursements are in accordance with applicable law,
regulations, or any agreement other than this Agreement.
Section 2,06.
(a) The Principal hereby authorizes the Bank on a continuous and on -going basis to
deposit in the Federal Reserve /Treasury Book -Entry System (the "Book -Entry System ") and /or The
Depository Trust Company and /or The Participants Trust Company (the "Depositories ") all securities
eligible for deposit therein and to utilize the Book -Entry System and the Depositories to the extent
possible in connection with settlements of purchases and sales of securities, and other deliveries and
returns of securities.
(b) Where securities eligible for deposit in the Book -Entry System and /or the
Depositories are transferred to the Custodial Account, the Bank shall identify as belonging to the
Principal a quantity of Securities in a fungible bulk of securities shown on the Bank's account on the
books of the Book -Entry System or the Depositories. Securities and monies of the Principal deposited
in either the Book -Entry System or the Depositories will be represented in accounts which include
assets held by the Bank of customers, including but not limited to accounts in which the Bank acts in
a fiduciary or agency capacity.
Section 2.07. The Bank will hold property in its nominee name; but no such registration or
holding will relieve the Bank of responsibility for the safe custody of such securities and investments
and at all times the assets will be shown on the Bank records as the property of the Principal.
Section 2.08. The Bank is authorized to deliver any instrument or document necessary to
register the securities in the Custodial Account, or to complete any sales or deliveries of them. The
Bank may execute on the Principal's behalf any declarations, affidavits, certificates of ownership or
other documents required to service the Custodial Account and guarantee that such documents have
been executed by the Principal. The Principal shall furnish the Bank with all documents, authorizations,
representations, or powers of attorney as may be reasonably required by the Bank to carry out its
obligations hereunder, but no such document, authorization, representation, or power of attorney shall
be construed to authorize the Bank to take any action not authorized by this Agreement.
Section 2.09. The Bank is authorized to sell fractional interests resulting from a stock split, a
stock dividend or any capital change on a security and to credit the Custodial Account with the
proceeds thereof.
ARTICLE III: INVESTMENT OF CUSTODIAL ACCOUNT
Section 3.01. The assets of the Custodial Account shall be invested and reinvested in
accordance with instructions of the Principal, unless the Principal delegates investment responsibility
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and authority for all or a portion of the Custodial Account to one or more authorized representatives.
In addition to the powers and duties described in Article II, the Bank shall have the following powers
and duties which it shall exercise and perform only upon the Instructions of the Principal or its
authorized representatives:
(a) To pay for all securities which have been purchased upon receipt of such securities
by or for the Bank.
(b) To deliver securities which have been sold in accordance with generally accepted
street practices or any special directions of the Principal or its authorized representatives, including but
not limited to, the free delivery of securities. In acting upon instructions (on which the Bank is
authorized to rely) to deliver securities against payment, the Bank is authorized, in accordance with
customary securities processing practices, to deliver such securities to the purchaser thereof or dealer
therefor (including to an agent for any such purchaser or dealer) against a receipt, with the expectation
of collection payment from the dealer, purchaser or agent to whom the securities were so delivered
before the close of business on the same day. When the Bank delivers securities against a receipt in
accordance with the preceding sentence, the Bank shall not bear the risk associated with such
securities processing practice, provided that the Bank did not select the party to which such securities
were delivered.
(c) To convert, surrender, tender or exchange securities.
Section 3.02.
(a) Notwithstanding any other provision of this Agreement, if at any time there is
insufficient cash or securities in the Custodial Account and /or DDA with which to carry out the
instructions of the Principal or its authorized representatives, the Bank shall notify the party giving the
instructions of such insufficiency as soon as practicable after receiving the instructions and shall have
no further responsibility for complying therewith until it receives sufficient cash or securities.
(b) Principal agrees that all investments executed through a broker - dealer will be in
compliance with all applicable laws and regulations and that sufficient cash will be available in the
Custodial Account to pay for any securities purchased without consideration given to the proceeds
from the sale of the same securities. Principal acknowledges that Bank will not pay for the purchase
of securities with the proceeds from the sale of the same securities.
Section 3.03. The Bank shall have no duty or responsibility:
(a) To supervise the investment of, or make recommendations with respect to the
purchase, retention or sale of, securities or other property relating to the Custodial Account.
(b) For any loss occasioned by delay in the actual receipt of notice by the Bank of any
payment, redemption or other transaction in respect to which the Bank is authorized to take some
action pursuant to this Agreement, unless due to negligence or an intentional act of the Bank.
(c) For any act or omission, or for the solvency or notice to Principal of the solvency,
of any broker or dealer which is selected by Principal or any other person other than the Bank officers,
employees or agents, to effect any transaction for the Custodial Account.
Section 3.04. Principal may authorize Bank to invest a portion or all of the Custodial Assets
in shares of one or more registered investment companies ( "Funds ") made available by Bank to its
customers, Bank or its affiliates may not receive fees for services provided to the Funds. Bank shall
provide to Principal copies of the prospectuses of the Funds. Bank shall have no investment authority
over those assets of the Custodial Account so invested or the Funds' which have been purchased with
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such assets, nor shall the Bank have any responsibility with respect to investment performance of the
Funds or to make any recommendations with respect to the purchase or sale of such shares.
ARTICLE IV: AUTHORIZED REPRESENTATIVES
The Principal may appoint in writing one or more authorized representatives for the Custodial
Account and shall contemporaneously give written notice of said appointment or appointments to the
Bank and shall instruct the Bank in writing with respect thereto. Selection of an authorized
representative shall be in the sole and absolute discretion of the Principal. The Bank shall follow only
the instructions of the authorized representatives in exercising the powers granted the Bank under
Articles II and III.
ARTICLE V: CUSTODIAN INSTRUCTIONS
Section 5.01. Except as hereafter provided, any directions, instructions or notices which the
Principal, or any other person designated by the Principal is required or permitted to give to the Bank
under this Agreement (the "Instructions ") shall be in writing. The Bank is authorized to record any
telephonic communications between authorized representatives and the Bank.
Section 5.02. The transmission of the Instructions by photostatic teletransmission with
duplicate or facsimile signatures or by affirmation via the national institutional delivery system shall be
authorized methods of communication until the Bank is notified by the Principal to the contrary.
Section 5.03. The Bank shall as promptly as possible comply with any direction given by the
Principal or any authorized representative.
ARTICLE VI: COMPENSATION AND EXPENSES OF THE BANK
The Bank shall receive reimbursement for any expenses, if any, incurred from the Principal's
Investment Manager. All expenses must be approved by the City's Finance Director, Deputy Finance
Director or City Manager in writing prior to incurring expenses.
ARTICLE VII: ADVANCES AND OVERDRAFTS
Section 7.01. In the event that (1) the amount on deposit in the Custodial Account, DDA
and /or any sub - account is insufficient to pay the total amount due upon the purchase or delivery of
securities therefor, or (2) an amount otherwise drawn against the Custodial Account, DDA and /or any
sub - account is in excess of the available balance on deposit therein, the Bank may, if practicable, elect
to advance funds to the Custodial Account, DDA and /or any sub - account in an amount necessary to
cover any resulting overdraft on such account.
Section 7.02. If the Bank should advance funds to or on behalf of the Custodial Account or
any sub - account to cover such overdraft or for any other reason, the amount so advanced by the Bank
(less any amount deposited by the Bank to the Custodial Account or sub - account in lieu of monies
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which have not been collected by the Bank on behalf of the Custodial Account or sub - account when
due because of the failure of the Bank to make timely presentment or demand for payment) shall
constitute a Loan hereunder. Each such Loan shall be payable on demand. Any Loan not repaid by
the Bank's close of business on the day of disbursement shall bear interest for each day until payment
in full at a rate per annum equal to 2 percent over the Bank's prime commercial lending rate in effect
from time to time, such rate to be adjusted on the effective date of any change in such rate but in no
event should the rate payable be less than six percent per annum. Interest on the Loans shall be
computed on the basis of a 360 -day year and actual days elapsed and shall accrue from and including
the day of disbursement to but excluding the date of payment. The Bank will notify the Principal of
any interest owed due to a Loan prior to recovering the principal and accrued interest of any Loan made
to the Custodial Account by the Bank hereunder.
Section 7.03. In order to secure the repayment of the principal and interest of any Loan to the
Custodial Account or any sub - account, the Principal hereby agrees that the Bank shall have a
continuing lien and security interest in and to any property specifically allocated to and held by the
Custodial Account or any sub - account to which such Loan is deemed to have been made. In this
regard, the Bank shall be entitled to all the rights and remedies of a pledgee under common law and
a secured party under the California Commercial Code as then in effect.
ARTICLE VIII: RECORDS AND ACCOUNTS
Section 8.01. The Bank shall keep accurate records and accounts with respect to all cash and
other assets held by it in the Custodial Account, and all receipts and disbursements and other
transactions involving such cash, securities and other assets. The Principal shall have access to all
such accounts, books and records at all reasonable times. All such accounts, books and records shall
be open for inspection and audit at all reasonable times by the Principal or by any person or persons
duly authorized by the Principal.
Section 8.02. The Bank shall furnish the Principal and the Principal authorized representatives
with monthly reports in the usual and customary manner and form, setting forth all receipts,
disbursements and transactions effected with respect to the Custodial Account.
Section 8.03. Upon agreement of the parties, the Bank shall periodically determine the market
value of the assets held in the Custodial Account. Market value for the purposes of this Agreement
means with respect to marketable securities the market price of each such security at the close of
business of the day as of which the valuation is being made, and in the case of all other assets the
market value shall be deemed to be cost.
In determining the market value of marketable securities, the Bank may utilize any one or more
sources of information deemed by the Bank to be reliable, including, but not limited to, a pricing
service, standard financial periodicals or publications, newspapers of general circulation, records of and
information from securities exchanges and brokerage firms.
ARTICLE IX: AMENDMENTS AND TERMINATIONS
Section 9.01. This Agreement may be modified at any time by a writing signed by the Principal
and the Bank, and may be terminated for any reason at any time upon thirty (30) days' written notice
delivered by any party to the other, provided, however, that this Agreement shall continue thereafter
for such period as may be necessary for the complete divestiture of all cash, securities, and other
instruments held hereunder by the Bank, but solely to the extent necessary to effect such complete
divestiture.
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Section 9.02. The Bank shall, immediately upon the receipt or transmittal notice of termination,
as the case may be, commence and prosecute diligently to completion the transfer of all cash and the
delivery of all securities and other instruments, duly endorsed, to the successor of the Bank.
The Principal shall select such successor within thirty (30) days after the receipt or transmittal
of such notice of termination, as the case may be, and shall forthwith notify the Bank of the selection
of such successor. In the event the Principal has not timely notified the Bank of the selection of a
successor, the Bank, in its discretion, may deliver to the Principal all securities and other instruments,
duly endorsed, and all cash.
Upon delivery to the Principal or successor of the cash, securities and other instruments held
by it hereunder, the Bank shall have no further liability or responsibility under this Agreement or
otherwise, or for any act or omission of the Principal or the successor.
Section 9.03. Upon termination of this Agreement and either after payment to the Bank of all
fees owed pursuant to this Agreement or the holding of sufficient funds or assets equal to any fees
in question, all monies, securities and other assets of every kind and nature held in the Custodial
Account shall be paid over, delivered or surrendered upon a written order or receipt signed by the
Principal or its appointed successor.
ARTICLE X: CONCERNING THE CUSTODIAN
Section 10.01. Agent shall defend, indemnify and hold harmless Principal and its officers and
employees, with respect to any claim, litigation, loss or damages (including reasonable attorneys' fees
and defense costs) to the extent caused by the negligence, fraud or willful misconduct on the part the
Agent; provided, however, Agent's duties pursuant to this paragraph shall not apply to any claim,
litigation, loss, or liability to the extent caused by the sole negligence, fraud or willful misconduct of
Principal and /or its officers or employees.
Section 10.02. The Bank shall not be liable for any delay or failure to act as may be required
hereunder when such delay or failure is due to fire, earthquake, any act of God, interruption or
suspension of any communication or wire facilities or services, war, emergency conditions or other
circumstances beyond its control provided it exercises such diligence as the circumstances may
reasonably require.
ARTICLE XI: MISCELLANEOUS
Section 11.01. Subject to any laws of the United States which may be applicable, this
Agreement shall be governed, construed, regulated and administered under the laws of the State of
California.
Section 11.02. It is not the intention of any party to this Agreement to violate any statute,
regulation, ruling, judicial decision, or other legal provision applicable to this Agreement or the
performance thereof. If any term of this Agreement, or any act or omission in the performance thereof,
is or becomes violative of any such provision, such term, act or omission shall be of no force or effect
and any such term shall be severed from this Agreement. Any such invalid term, act or omission shall
not affect the validity of any other term of this Agreement that is otherwise valid, nor the validity of
any otherwise valid act or omission in the performance thereof, unless such invalidity prevents
accomplishment of the objectives and purposes of this Agreement. In the event any such term, act
or omission is determined to be illegal or otherwise invalid, the necessary steps to remedy such illegality
or invalidity shall be taken immediately by the parties.
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Section 11.03. Disclosure of Beneficial Owner Information Securities and Exchange
Commission Rule #14b -(c), enables corporations to learn the identity of their security holders whose
securities are held by Banks and registered in "nominee" or "street" name. According to the rule, the
issuing company would be permitted to use your name and related information for "corporate
communication" purposes only.
[ ] I do not want any name, address, and securities positions disclosed to all the companies in
which I own securities that are registered in "nominee" or "street" name.
or
[X] I want my name, address and securities positions disclosed to all the companies in which I own
securities that are registered in "nominee" or "street" name.
Section 11.04. Any controversy or claim between the parties and any claim based on or arising
from an alleged tort shall at the request of either party be determined by arbitration. It shall be
conducted in accordance with the rules of the American Arbitration Association ( "AAA "), The
arbitrator(s) shall resolve all claims and defenses or other matters in dispute in accordance with
applicable law, including without limitation thereto, all statutes of limitation. Any controversy
concerning whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The institution and maintenance of
an action for judicial relief or pursuit of provisional or ancillary remedies shall not constitute a waiver
of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any
other party contests such action for judicial relief.
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IN WITNESS WHEREOF, this Agreement is executed in State of
California, as of the date first above written.
City of Newport ch
By
Derfiis C. Danner
Title Administrative Services Director /Treasurer
u
By / -G(I�/�QY� C.. r�
Richard C. Kurth
Title Administrative Services Deputy Director
Tax Identification No. 095 - 6000751
City National B nk
By z1 en
Title Executive Vice President
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June
(390
24, 1996
Council
Agenda
• City of Newport Beach ` " " " "" `
JUN 2 4
Administrative Services Department
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY
COUNCIL
FROM: Dennis Danner, Administrative Services Director 40.,/,
SUBJECT: INVESTMENT MANAGEMENT AND CUSTODIAL
AGREEMENTS WITH CITY NATIONAL BANK
Discussion: Attached are proposed agreements establishing investment
advisory /management and custodial relationships with City National Bank.
The City Attorney has reviewed the agreements, and changes recommended
by his office have been incorporated.
City National is already our primary bank for day to day cash management
and transaction activities, including our checking accounts and short -term
. government securities investments. We have had a banking relationship
with them for a number of years. We last solicited proposals for general
banking services about three years ago, and, despite a number of procedural
changes and the relocation of their closest branch, City National's proposal
again rose to the surface among a field of five other bidders.
We also have various working relationships with other Banks and financial
institutions, of course, including Bank of America, Wells Fargo, and Union
Bank of California. Until their merger with Wells Fargo, we had an
investment advisor/ custodial relationship with First Interstate Bank. That is
the reason for the current proposal. Our combined First Interstate/ Wells
Fargo accounts are so large that, consistent with the provisions of the City's
Investment Policy, we need to add another Investment Advisor /Custodian to
replace First Interstate. We interviewed several, then selected City National.
Because of our other financial activities with them, we will probably
maintain a somewhat smaller investment account balance there than with
our other advisors; simply in the interest of diversifying our funds.
Recommendation: That the City Council approve the Investment
Management and Custodial Contracts with City National Bank.
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• • COUNCIL AGENDA
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MANAGING AGENCY AGREEMENT
This Agreement is made and entered into this 24 day of June, 1996, by and between City National
Bank ( "Agent ") having its principal offices at 400 North Roxbury Drive., Beverly Hills California and
City of Newport Beach ( "Principal "), having its principal offices at 3300 Newport Boulevard, Newport
Beach, CA.
WHEREAS, Principal desires to employ Agent as its investment manager and custodian with
respect to those assets Principal deposits with Agent from time to time, ( "the Account "), and Agent
desires to provide investment management and custodian services to Principal on the following terms
and conditions.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter, contained, the parties
hereto mutually agree as follows:
1. Appointment. Principal being duly authorized, hereby employs and appoints Agent as
investment manager and custodian for the Account and Agent hereby accepts such appointment.
2. Receipt and Investment of Account. Principal's custodian shall receive and hold all
assets acceptable to Principal. Agent may, (a) buy, sell, exchange, convert and otherwise trade in any
stocks and any other securities, notes, obligations or money market instruments of any kind
whatsoever subject to Principal's Investment Policy, (b) place orders for the execution of such
securities transactions with or through such brokers, dealers or issuers as Agent may select.
Agent may employ suitable sub - agents or sub - custodians as shall be necessary and appropriate. •
Neither the Agent nor any sub - custodian or sub -agent shall be entitled to reimbursement by the
Principal for any fees or expenses of any sub - custodian or sub - agent.
3. Standard of Care. Agent shall exercise the standard of care of a professional
investment manager in performing its services under this Agreement in managing the funds of a Public
Agency.
4. Registered Investment Company. To meet the cash requirements of Principal or
Account. Principal authorizes Agent to invest in any sweep vehicle. Such sweep vehicle must meet
the investment policy of the City and the Agent may not receive compensation from sweep vehicle or
any other investment placed by Agency on City's behalf.
5. Use of Nominee. The Agent's custodian will hold property in its nominee name; but
no such registration. or _old +n•„ will elieve the Agent or its custodian of the responsibility for the safe
custody of such securities and investments and at all times the assets will be shown on the Bank
records as the property of the Principal.
6. Disbursements. Agent shall disburse cash and other property then held in the Account
in accordance with the written directions of Principal or its authorized representatives. Agent shall
have no responsibility to determine whether any such disbursements are in accordance with applicable
law, regulations, or any agreement other than this Agreement. Notwithstanding any other provision
of this Agreement, if at any time there is insufficient cash or securities in the Account with which to
carry out the instructions of Principal or its authorized representatives, Agent shall notify the party
giving the instructions of such insufficiency as soon as practicable after receiving the instructions and
shall have no further responsibility for complying therewith until it receives sufficient cash or securities.
A list of authorized representatives is attached. •
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7. Reports. Agent shall render to Principal monthly, quarterly or annual reports, in the
usual and customary manner and form, or as may be required by Principal, setting forth all receipts,
disbursements and transactions effected with respect to the Account. Agent shall also provide
Principal with a report of the status of the Account upon request of Principal at reasonable intervals.
In the absence of any exception thereto filed in writing with the Agent within 1 year after the date
of filing with Principal, any accounting filed with Principal shall constitute a final accounting by and
discharge of Agent from all claims and liabilities with respect to the acts and transactions as shown
in such account, except for any acts of fraud or misrepresentation by Agent and shall be binding and
conclusive upon all persons. It is agreed that Agent, in the maintenance of its records, does not
assume responsibility for the accuracy of information furnished by Principal. In computing the market
value of any investment of the Account, the valuation method shall be consistent with generally
accepted principles of valuation utilized in the investment management industry, and each security
listed on any national securities exchange shall be valued at the last quoted sale price on the valuation
date on the principal exchange on which such security is traded. Any other security or asset shall be
valued in a manner determined in good faith by Agent to reflect its fair market value.
S. Indemnification. Agent shall defend, indemnify and hold harmless Principal and its
officers and employees, with respect to any claim, litigation, loss or damages (including reasonable
attorneys fees and defense costs) to the extent caused by the negligence, fraud or willful misconduct
on the part the Agent; provided, however, Agent's duties pursuant to this paragraph shall not apply
to any claim, litigation, loss, or liability to the extent caused by the sole negligence, fraud or willful
misconduct of Principal and /or its officers or employees.
9. Termination. This Agreement may be terminated for any reason at any time by either
party giving to the other thirty (30) days written notice of such termination. Agent shall deliver to
• Principal or as otherwise directed, all securities and other instruments duly endorsed, and all cash,
except compensation and expenses due under this agreement. After termination of this Agreement,
Agent shall file with Principal an accounting as of the date of such termination, covering the period
since the close of the last previous period for which an accounting was filed.
10. Amendment. This Agreement may be modified at any time by a writing signed by the
parties.
11. Notices. Unless otherwise specified herein, all notices, directions, instructions and
advises with respect to security transactions or any other matters contemplated by this Agreement
shall be deemed duly given when received in writing by Agent at the address first above written or
when deposited by first -class mail postage prepaid, or delivered by hand to Principal at the address
appearing above, or at such other address or addresses as shall be specified, in each case, as notice
similarly given. Agent may rely upon any notice. direction, instruction and advise (written or oral) from
any person reasonaby De ievea Dy it to De genuine ano autnorizea.
12. Bank's Compensation and Expenses. Bank shall not be reimbursed for any expenses
incurred on behalf of Principal unless such expenses have been authorized prior to the time they are
incurred. Bank shall receive quarterly compensation for its services hereunder calculated at the rate
of 25 basis points annually times the amount of money on hand in the managed account, calculated
on the account's average market value during each calendar quarter. Compensation shall be paid to
Bank for its services quarterly. All expenses must be approved in writing by the Principal's Finance
Director, Deputy Finance Director or City Manager.
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13. Counsel. Bank may, at the expense of Principal, consult with and obtain advice from
legal counsel, provided that the Principal has in advance authorized the expense and the parties have
mutually agreed upon the Attorney supplying the services and the nature and extent of the expenses
to be incurred. The expenses must be approved in writing by the Principal's Finance Director or City
Manager.
14. Governing Law. Subject to any laws of the United States which may be applicable, this
Agreement shall be governed, construed, regulated and administered under the laws of the State of
California.
15. Force Maieure. Agent shall not be liable for any delay or failure to act as may be
required hereunder when such delay or failure is due to fire, earthquake, any act of God, interruption
or suspension of any communication or wire facilities or services, war, emergency conditions or other
circumstances beyond its control provided it exercises such diligence as the circumstances may
reasonably require.
16. Invalid Provisions. It is not the intention of any party to this Agreement to violate any
statute, regulation, ruling, judicial decision, or other legal provision applicable to this Agreement or the
performance thereof. If any term of this Agreement, or any act or omission in the performance thereof,
is or becomes violative of any such provision, such term, act or omission shall be of no force or effect
and any such term shall be severed from this Agreement. Any such invalid term, act or omission shall
not affect the validity of any other term of this Agreement that is otherwise valid, nor the validity of
any otherwise valid act or omission in the performance thereof, unless such invalidity prevents
accomplishment of the objectives and purposes of this Agreement in the event any such term, act or
omission is determined to be illegal or otherwise invalid, the necessary steps to remedy such illegality
or invalidity shall be taken immediately by the parties.
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iIN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first written
above.
j City of Newport Beach ( "Principal ")
By
Title
By
Title
City National Bank ( "Agent ")
By
Title
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City of Newport Beach
Institutional Custodial Agreement
June 1996
City National Bank
City National Investments
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INSTITUTIONAL CUSTODY
CUSTODIAL AGREEMENT
This Agreement is made this 24 day of June, 1996, between City of Newport Beach (the "Principal ")
and City National Bank (the "Bank "). The Principal and the Bank hereby agree as follows:
ARTICLE I: APPOINTMENT OF BANK AS CUSTODIAN
Section 1.01. The Principal appoints the bank as custodian to receive and hold for safekeeping
all securities tendered to it from time to time by the Principal or upon the Principal's direction
( "Custodial Assets" j, and to perform such ministerial functions as provided in this Agreement. The
Bank agrees to hold and keep as custodian all property deposited or received by it for the account of
the Principal in a separate account ( "Custodial Account ") and shall faithfully discharge its duties as set
forth in this Agreement.
Section 1.02. The Principal represents and warrants that it is authorized under the laws of the
State of California to appoint the Bank as custodian and to transfer or cause to be transferred custody
of Custodial Assets to the Bank.
Section 1.03. The Principal may direct the Bank to establish one or more custodial sub -
accounts to hold such portions of the assets of the Custodial Account as the Principal shall direct,
along with the earnings and profits thereon.
ARTICLE II: AUTHORITY AND RESPONSIBILITY OF CUSTODIAN
• Section 2.01. The Bank is authorized to sign any documents which are now or may hereafter
be required in order for the Bank to perform its responsibilities under this Agreement.
Section 2.02. The Bank shall collect and receive the interest and other income, including
dividends, paid to it by any person or organization with respect to securities and other properties which
it holds as custodian under the terms of this Agreement. In the case of interest or dividends paid upon
any municipal bonds, federal book -entry eligible treasury issues, and debt obligations or equity
securities of any domestic corporation, the monies shall be credited to the Custodial Account and /or
Demand Deposit Account # (to be Provided) (hereafter referred to as the "DDA ") in accordance with
the Funds Payment Policy in effect from time to time. Interest or dividend income on all other assets
shall be credited to the Custodial Account, barring any direction from the principal to the contrary.
In the event the Bank fails to actually receive any monies which have been credited to the
Custodial Account and /or DDA as hereinabove described, the Bank shall notify the Principal within
twenty four 19A' : ^f °li " Y o° ^ ^n n ` ?nA chsii fin -entitled to inr°rae4 at o 2ir
and reasonable rate, as mutually determined by the Bank and Principal when such event happens, from
the date of credit to the Custodial Account until the date such credit is reversed.
Section 2.03. The Bank shall use its best efforts to collect, on behalf of the Principal, monies
which are due and owing to the Principal upon the maturity, redemption, principal payments, or sale
of securities or other property held in the Custodial Account, or at the dates of their calls for payment
of which the Bank has actual notice from the reporting services to which the Bank subscribes, and
proceeds of property so received shall be held in the Custodial Account, or forwarded upon the
direction of the Principal. The Bank shall not be obligated to institute or participate in any legal
proceedings to make such collection. Whenever the Bank has been unable to make a collection
. pursuant to this section, it will notify the Principal of its inability to make such collection, and the
reasons therefor, insofar as such reasons are known to the Bank.
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Section 2.04. The Bank will notify the Principal of any voluntary offering with respect to the
securities held in the Custodial Account and will forward to the Principal, upon request, such literature
and reports as may be received by the Bank pertaining to any securities held hereunder. The Bank,
absent directions, is under no duty to take any action with respect to any securities held in the
Custodial Account.
The Bank will execute proxies with respect to Custodial Assets held in its name or in its
nominee name and forward the proxies to the Principal without having voted the proxies.
Section 2.05. The Bank shall disburse cash and other property then held in the Custodial
Account and /or DDA in accordance with the instructions of the Principal. The Bank shall have no
responsibility to determine whether any such disbursements are in accordance with applicable law,
regulations, or any agreement other than this Agreement.
Section 2.06.
(a) The Principal hereby authorizes the Bank on a continuous and on -going basis to
deposit in the Federal Reserve /Treasury Book -Entry System (the "Book -Entry System ") and /or The
Depository Trust Company and /or The Participants Trust Company (the "Depositories ") all securities
eligible for deposit therein and to utilize the Book -Entry System and the Depositories to the extent
possible in connection with settlements of purchases and sales of securities, and other deliveries and
returns of securities.
(b) Where securities eligible for deposit in the Book -Entry System and /or the
Depositories are transferred to the Custodial Account, the Bank shall identify as belonging to the
Principal a quantity of Securities in a fungible bulk of securities shown on the Bank's account on the
books of the Book -Entry System or the Depositories. Securities and monies of the Principal deposited
in either the Book -Entry System or the Depositories will be represented in accounts which include •
assets held by the Bank of customers, including but not limited to accounts in which the Bank acts in
a fiduciary or agency capacity.
Section 2.07. The Bank will hold property in its nominee name; but no such registration or
holding will relieve the Bank of responsibility for the safe custody of such securities and investments
and at all times the assets will be shown on the Bank records as the property of the Principal.
Section 2.08. The Bank is authorized to deliver any instrument or document necessary to
register the securities in the Custodial Account, or to complete any sales or deliveries of them. The
Bank may execute on the Principal's behalf any declarations, affidavits, certificates of ownership or
other documents required to service the Custodial Account and guarantee that such documents have
been executed by the Principal. The Principal shall furnish the Bank with all documents, authorizations,
representations, or powers of attorney as may be reasonably required by the Bank to carry out its
obligations hereunder, but no such -_ :,, anent, authorizaii_;: , :,; .� ntation, or po :er of attorney shall
be construed to authorize the Bank to take any action not authorized by this Agreement.
Section 2.09. The Bank is authorized to sell fractional interests resulting from a stock split, a
stock dividend or any capital change on a security and to credit the Custodial Account with the
proceeds thereof.
ARTICLE III: INVESTMENT OF CUSTODIAL ACCOUNT
Section 3.01. The assets of the Custodial Account shall be invested and reinvested in .
accordance with instructions of the Principal, unless the Principal delegates investment responsibility
• and authority for all or a portion of the Custodial Account to one or more authorized representatives.
In addition to the powers and duties described in Article II, the Bank shall have the following powers
and duties which it shall exercise and perform only upon the Instructions of the Principal or its
authorized representatives:
(a) To pay for all securities which have been purchased upon receipt of such securities
by or for the Bank.
(b) To deliver securities which have been sold in accordance with generally accepted
street practices or any special directions of the Principal or its authorized representatives, including but
not limited to, the free delivery of securities. In acting upon instructions (on which the Bank is
authorized to rely) to deliver securities against payment, the Bank is authorized, in accordance with
customary securities processing practices, to deliver such securities to the purchaser thereof or dealer
therefor (including to an agent for any such purchaser or dealer) against a receipt, with the expectation
of collection payment from the dealer, purchaser or agent to whom the securities were so delivered
before the close of business on the same day. When the Bank delivers securities against a receipt in
accordance with the preceding sentence, the Bank shall not bear the risk associated with such
securities processing practice, provided that the Bank did not select the party to which such securities
were delivered.
(c) To convert, surrender, tender or exchange securities.
Section 3.02.
(a) Notwithstanding any other provision of this Agreement, if at any time there is
insufficient cash or securities in the Custodial Account and /or DDA with which to carry out the
instructions of the Principal or its authorized representatives, the Bank shall notify the party giving the
• instructions of such insufficiency as soon as practicable after receiving the instructions and shall have
no further responsibility for complying therewith until it receives sufficient cash or securities.
(b) Principal agrees that all investments executed through a broker - dealer will be in
compliance with all applicable laws and regulations and that sufficient cash will be available in the
Custodial Account to pay for any securities purchased without consideration given to the proceeds
from the sale of the same securities. Principal acknowledges that Bank will not pay for the purchase
of securities with the proceeds from the sale of the same securities.
Section 3.03. The Bank shall have no duty or responsibility:
(a) To supervise the investment of, or make recommendations with respect to the
purchase, retention or sale of, securities or other property relating to the Custodial Account.
io) For a y loss occaslonec cy oelay in the actuai receipt of notice by the bank of any
payment, redemption or other transaction in respect to which the Bank is authorized to take some
action pursuant to this Agreement, unless due to negligence or an intentional act of the Bank.
(c) For any act or omission, or for the solvency or notice to Principal of the solvency,
of any broker or dealer which is selected by Principal or any other person other than the Bank officers,
employees or agents, to effect any transaction for the Custodial Account.
Section 3.04. Principal may authorize Bank to invest a portion or all of the Custodial Assets
in shares of one or more registered investment companies ( "Funds ") made available by Bank to its
customers, Bank or its affiliates may not receive fees for services provided to the Funds. Bank shall
• provide to Principal copies of the prospectuses of the Funds. Bank shall have no investment authority
over those assets of the Custodial Account so invested or the Funds' which have been purchased with
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such assets, nor shall the Bank have any responsibility with respect to investment performance of the t
Funds or to make any recommendations with respect to the purchase or sale of such shares. •
ARTICLE IV: AUTHORIZED REPRESENTATIVES
The Principal may appoint in writing one or more authorized representatives for the Custodial
Account and shall contemporaneously give written notice of said appointment or appointments to the
Bank and shall instruct the Bank in writing with respect thereto. Selection of an authorized
representative shall be in the sole and absolute discretion of the Principal. The Bank shall follow only
the instructions of the authorized representatives in exercising the powers granted the Bank under
Articles II and III.
ARTICLE V: CUSTODIAN INSTRUCTIONS
Section 5.01. Except as hereafter provided, any directions, instructions or notices which the
Principal, or any other person designated by the Principal is required or permitted to give to the Bank
under this Agreement (the "Instructions ") shall be in writing. The Bank is authorized to record any
telephonic communications between authorized representatives and the Bank.
Section 5.02. The transmission of the Instructions by photostatic teletransmission with
duplicate or facsimile signatures or by affirmation via the national institutional delivery system shall be
authorized methods of communication until the Bank is notified by the Principal to the contrary.
Section 5.03. The Bank shall as promptly as possible comply with any direction given by the
Principal or any authorized representative.
ARTICLE VI: COMPENSATION AND EXPENSES OF THE BANK 40
The Bank shall receive reimbursement for any expenses, if any, incurred from the Principal's
Investment Manager. All expenses must be approved by the City's Finance Director, Deputy Finance
Director or City Manager in writing prior to incurring expenses.
ARTICLE VII: ADVANCES AND OVERDRAFTS
Section 7.01. In the event that (1) the amount on deposit in the Custodial Account, DDA
and /or any sub - account is insufficient to pay the total amount due upon the purchase or delivery of
securities therefor, or (2) an amount otherwise drawn against the Custodial Account, DDA and /or any
sub - account is in excess of the available balance on deposit therein, the Bank may, if practicable, elect
to advance funds to the Custodial Account, DDA and /or any sub - account in an amount necessary to
cover any resulting overdraft or, such account.
Section 7.02. If the Bank should advance funds to or on behalf of the Custodial Account or
any sub - account to cover such overdraft or for any other reason, the amount so advanced by the Bank
(less any amount deposited by the Bank to the Custodial Account or sub - account in lieu of monies
which have not been collected by the Bank on behalf of the Custodial Account or sub - account when
due because of the failure of the Bank to make timely presentment or demand for payment) shall
constitute a Loan hereunder. Each such Loan shall be payable on demand. Any Loan not repaid by
the Bank's close of business on the day of disbursement shall bear interest for each day until payment
in full at a rate per annum equal to "0" percent over the Bank's prime commercial lending rate in effect
from time to time, such rate to be adjusted on the effective date of any change in such rate but in no
event should the rate payable be less than six percent per annum. Interest on the Loans shall be
computed on the basis of a 360 -day year and actual days elapsed and shall accrue from and including
the day of disbursement to but excluding the date of payment. The Bank will notify the Principal of
any interest owed due to a Loan prior to recovering the principal and accrued interest of any Loan made
to the Custodial Account by the Bank hereunder.
Section 7.03. In order to secure the repayment of the principal and interest of any Loan to the
Custodial Account or any sub - account, the Principal hereby agrees that the Bank shall have a
continuing lien and security interest in and to any property specifically allocated to and held by the
Custodial Account or any sub - account to which such Loan is deemed to have been made. In this
regard, the Bank shall be entitled to all the rights and remedies of a pledgee under common law and
a secured party under the California Commercial Code as then in effect.
ARTICLE VIII: RECORDS AND ACCOUNTS
Section 8.01. The Bank shall keep accurate records and accounts with respect to all cash and
other assets held by it in the Custodial Account, and all receipts and disbursements and other
transactions involving such cash, securities and other assets. The Principal shall have access to all
such accounts, books and records at all reasonable times. All such accounts, books and records shall
be open for inspection and audit at all reasonable times by the Principal or by any person or persons
duly authorized by the Principal.
Section 8.02. The Bank shall furnish the Principal and the Principal authorized representatives
with monthly reports in the usual and customary manner and form, setting forth all receipts,
disbursements and transactions effected with respect to the Custodial Account.
Section 8.03. Upon agreement of the parties, the Bank shall periodically determine the market
value of the assets held in the Custodial Account. Market value for the purposes of this Agreement
means with respect to marketable securities the market price of each such security at the close of
business of the day as of which the valuation is being made, and in the case of all other assets the
market value shall be deemed to be cost.
In determining the market value of marketable securities, the Bank may utilize any one or more
sources of information deemed by the Bank to be reliable, including, but not limited to, a pricing
service, standard t nanc a� penouicais or pum cations, newspapers or general circulation, records of and
information from securities exchanges and brokerage firms.
ARTICLE IX: AMENDMENTS AND TERMINATIONS
Section 9.01. This Agreement may be modified at any time by a writing signed by the Principal
and the Bank, and may be terminated for any reason at any time upon thirty (30) days' written notice
delivered by any party to the other, provided, however, that this Agreement shall continue thereafter
for such period as may be necessary for the complete divestiture of all cash, securities, and other
instruments held hereunder by the Bank, but solely to the extent necessary to effect such complete
divestiture.
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Section 9.02. The Bank shall, immediately upon the receipt or transmittal notice of termination,
as the case may be, commence and prosecute diligently to completion the transfer of all cash and the
delivery of all securities and other instruments, duly endorsed, to the successor of the Bank.
The Principal shall select such successor within thirty (30) days after the receipt or transmittal
of such notice of termination, as the case may be, and shall forthwith notify the Bank of the selection
of such successor. In the event the Principal has not timely notified the Bank of the selection of a
successor, the Sank, in its discretion, may deliver to the Principal all securities and other instruments,
duly endorsed, and all cash.
Upon delivery to the Principal or successor of the cash, securities and other instruments held
by it hereunder, the Bank shall have no further liability or responsibility under this Agreement or
otherwise, or for any act or omission of the Principal or the successor.
Section 9.03. Upon termination of this Agreement and either after payment to the Bank of all
fees owed pursuant to this Agreement or the holding of sufficient funds or assets equal to any fees
in question, all monies, securities and other assets of every kind and nature held in the Custodial
Account shall be paid over, delivered or surrendered upon a written order or receipt signed by the
Principal or its appointed successor.
ARTICLE X: CONCERNING THE CUSTODIAN
Section 10.01. Agent shall defend, indemnify and hold harmless Principal and its officers and
employees, with respect to any claim, litigation, loss or damages (including reasonable attorneys' fees
and defense costs) to the extent caused by the negligence, fraud or willful misconduct on the part the
Agent; provided, however, Agent's duties pursuant to this paragraph shall not apply to any claim,
litigation, loss, or liability to the extent caused by the sole negligence, fraud or willful misconduct of
Principal and /or its officers or employees.
Section 10.02. The Bank shall not be liable for any delay or failure to act as may be required
hereunder when such delay or failure is due to fire, earthquake, any act of God, interruption or
suspension of any communication or wire facilities or services, war, emergency conditions or other
circumstances beyond its control provided it exercises such diligence as the circumstances may
reasonably require.
ARTICLE XI: MISCELLANEOUS
Section 11.01. Subject to any laws of the United States which may be applicable, this
Agreement shall be governed, construed, regulated and administered under the laws of the State of
California.
Section 11.02. It is not the intention of any party to this Agreement to violate any statute,
regulation, ruling, judicial decision, or other legal provision applicable to this Agreement or the
performance thereof. If any term of this Agreement, or any act or omission in the performance thereof,
is or becomes violative of any such provision, such term, act or omission shall be of no force or effect
and any such term shall be severed from this Agreement. Any such invalid term, act or omission shall
not affect the validity of any other term of this Agreement that is otherwise valid, nor the validity of
any otherwise valid act or omission in the performance thereof, unless such invalidity prevents
accomplishment of the objectives and purposes of this Agreement. In the event any such term, act
or omission is determined to be illegal or otherwise invalid, the necessary steps to remedy such illegality
or invalidity shall be taken immediately by the parties.
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• Section 11.03. Disclosure of Beneficial Owner Information Securities and Exchange
Commission Rule #14b -(c), enables corporations to learn the identity of their security holders whose
securities are held by Banks and registered in "nominee" or "street" name. According to the rule, the
issuing company would be permitted to use your name and related information for "corporate
communication" purposes only.
[ 1 I do not want any name, address, and securities positions disclosed to all the companies in
which 1 own securities that are registered in "nominee" or "street" name.
or
1X1 I want my name, address and securities positions disclosed to all the companies in which I own
securities that are registered in "nominee" or "street" name.
Section 11.04. Any controversy or claim between the parties and any claim based on or arising
from an alleged tort shall at the request of either party be determined by arbitration. It shall be
conducted in accordance with the rules of the American Arbitration Association ( "AAA "). The
arbitrator(s) shall resolve all claims and defenses or other matters in dispute in accordance with
applicable law, including without limitation thereto, all statutes of limitation. Any controversy
concerning whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The institution and maintenance of
an action for judicial relief or pursuit of provisional or ancillary remedies shall not constitute a waiver
of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any
other party contests such action for judicial relief.
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IN WITNESS WHEREOF, this Agreement is executed in State of .
California, as of the date first above written.
City of Newport Beach
By
Title
By
Title
Tax Identification No.
City National Bank
By
Title
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CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(714) 644 -3005
TO: )! INANCE DIRECTOR //-/ / - � Z-
FROM: CITY CLERK
DATE: November 19, 1992
SUBJECT: Contract No.
C -2382
Description of Contract Agreement for Banking Services
Effective date of Contract October 26 1992
Authorized by Minute Action, approved on October 26, 1992
Contract with City National Bank
Address 3388 Via Lido
Newport Beach CA 92663
Amount of Contract (See Agreement)
"X� s
Wanda E. Raggio
City Clerk
WER:pm
Attachment
3300 Newport Boulevard, Newport Beach
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CITY OF NEWPORT BEACH
FINANCE DEPARTMENT
Interdepartmental Memorandum
GflUMKIL AQWA
OCT 2 6 1992
October 14,1992 L
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dennis Danner, Director of Finance
SUBJECT: AWARD OF CONTRACT FOR BANKING SERVICES
The City's current contract for banking services with City National Bank will expire on October 31, 1992.
In anticipation of this, staff solicited bids from various banks in Newport Beach for all of the City's
banking services. Bids were received from the following financial institutions: Bank of America, First
Interstate Bank, City National Bank, Wells Fargo Bank, Sanwa Bank, and Bank of California. The
Request for Proposal completed by each of these banks was quite comprehensive in scope. Each bank was
asked to provide a schedule of charges for services as well as non - monetary criteria to enable the City to
make a decision of which bank would provide the best service to the City at a reasonable cost Based upon
an analysis of each bank's response and staffs interpretation of each proposal, the results of the bids are as
follows:
City National Bank $ 5,700.33 Monthly Service Charge
Bank of America $ 6,289.54 Monthly Service Charge
Sanwa Bank $ 6,801.88 Monthly Service Charge
Bank of California $ 6,882.60 Monthly Service Charge
First Interstate Bank $ 7,318.86 Monthly Service Charge
Wells Fargo Bank Incomplete Bid
Non monetary issues were considered in evaluating the bids. Some of these issues include: location of the
bank, procedures for handling the large volume of coins deposited by the City, reconciliation services and
evidence of scope of services to be provided to the City.
Based upon the above criteria, it is recommended that the City award a contract for banking services to
City National Bank for a three year period commencing on October 1, 1992 and expiring on September
30, I995.
0S)
IM ®CITY NATIONAL BANK
LIDO VILLAGE OFFICE
3388 VIA LIDO
NEWPORT BEACH, CALIFORNIA 92663
(800) 336 -7707 (714) 675 -9940
November 6, 1992
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
Attn: Dennis Danner
Dear Mr. Danner:
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Enclosed is the finalized EFT Agreement which Robin Flory,
Assistant City Attorney and Colette Hebert, Attorney for City
National Bank agreed upon. Please have the agreement signed and
return it at your earliest convenience.
Bob and I are available if there are any further questions.
Sincerely, -
Ju a chambers
Ass st'ant Vice President
4p ations officer
Encl.
Member FDIC
0 G -23X2-
CITY NATIONAL BANK
ELECTRONIC FUNDS TRANSFER AGREEMENT
(COMPANY)
This Agreement is made as of October 26 , 1992 between The City of Newport Beach ( "Company')
and City National Bank, a national banking association ( "CNB "), with reference to the following:
A. CNB offers certain of its customers the services described in the attached Services and Security Addendum.
B. Company wishes to utilize, and CNB is willing to provide, one or more of those services, subject to the terms
of this Agreement and the Operating Rules, as amended from time to time, of the National Automated Clearing
House Association and the Calwestern Automated Clearing House Association (the "Rules ").
NOW, THEREFORE, the parties agree as follows:
1. DEFINED TERMS. Unless otherwise defined in this Agreement, capitalized terms have the meanings provided
in the Rules, which are incorporated in this Agreement by this reference. The definition of "Entries' in the Rules is
expanded for purposes of this Agreement to include entries for credit or debit to an account maintained at CNB ( "On -Us
Entries ") and Prenotification. A "CNB Business Day" is defined, for purposes of this Agreement, as any day, other than
a Saturday or Sunday, on which CNB is open for general banking business in California.
2. SERVICES.
2.1 Selection. Subject to the terms and conditions of this Agreement, CNB agrees to provide the services
selected by Company on the "Services and Security Addendum" attached as Exhibit "A" and incorporated into this Agree-
ment by this reference (the "Services "). Company and CNB may add or delete Services from time to time by executing
a new Services and Security Addendum. CNB reserves the right to modify the Services from time to time, and will notify
Company, in advance, of any such modification that affects Company's use of the Services.
2.2 Commencement. This Agreement will be effective as to a selected Service when both Company and
CNB have executed the Services and Security Addendum for that Service. The estimated commencement date for each
Service will be specified in the Services and Security Addendum, subject to change by CNB in its sole discretion and
without liability.
3. TERM AND TERMINATION. Either party may discontinue any Service upon thirty (30) days' prior written
notice to the other. This Agreement will remain in effect until all Services have been discontinued, or until terminated
as follows:
3.1 By either party, upon thirty (30) days' prior written notice;
32 By CNB, immediately upon written notice if (a) Company breaches any of the terms of this Agreement,
any other Agreement with CNB, or any agreement involving the borrowing of money or the extension of credit; (b) any
bankruptcy, reorganization, insolvency, dissolution or similar proceeding is instituted with respect to Company, or
Company makes any assignment for the benefit of creditors; (c) Company terminates its business, fails generally to pay
its debts as they become due, sells, leases, or disposes of a substantial portion of its business or assets, or liquidates,
dissolves, merges into or consolidates with any other entity or (d) any material adverse change occurs in Company's
financial condition or ability to perform its obligations under this Agreement.
Notwithstanding any such termination, this Agreement will remain in full force and effect as to all transactions that occur,
services that are rendered, and Entries that are initiated, prior to the date of termination.
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4. ENTRY DATA.
1J
4.1 Form. From time to time after completion of any required implementation testing, Company will deliver
to CNB data for Entries ( "Entry Data "). All Entry Data will be delivered to CNB at its facility or such other delivery
location as may be agreed upon by the parties, in the form and content prescribed by CNB ( "Entry Data Requirements "),
and in compliance with the Security Procedures set forth in Section 11. Included among the Entry Data Requirements
is the requirement that Company properly identify all Entry Data as to description and amounts, and verify the total of
all such amounts. All Entry Data must balance, that is, credits equal debits. The Entry Data Requirements will be
provided to Company upon execution of this Agreement, and may be amended from time to time by CNB upon written
notice to Company. In the event of a conflict between the Entry Data Requirements and the Rules, the Entry Data
Requirements will govern. CNB will not be liable for the accuracy, completeness or authenticity of Entry Data, including
but not limited to the duplication or omission of Entry Data, and will have no obligation or responsibility to audit, check
or verify Entry Data.
4.2 Delivery. Company's primary method of delivery of Entry Data ( "Primary Method of Delivery") is
specified in Exhibit "A." Company may also specify on Exhibit "A" a back -up method of delivery ( "Back -Up Method of
Delivery"), in the event the Primary Method of Delivery is not available. Entry Data must be received by CNB no later
than the established cut -off time ( "CNB Deadline "). Entry Data will not be deemed to be received until the entire file
in which the Entry Data are included has been received by CNB in accordance with this Section 4 and recorded in CNB's
processing area. Company's request to change the method of delivery of Entry Data must be received by CNB at least
60 days prior to the requested change date. Any fee or charges due to a change in the method of delivery of Entry Data
will be in accordance with CNB's then - current fee schedule. If Entry Data is delivered by any method other than that
agreed upon in writing by the parties, CNB may, in its sole discretion, refuse to process such Entry Data. Any CNB
Deadline may be changed by CNB from time to time upon written notice to Company; notice of any such changes will
be given to Company as soon as practicable.
4.3 Processing. Subject to the provisions of Section 5, and except as provided in Section 6 for On -Us
Entries, if CNB receives Entry Data by the CNB Deadline which conforms to the Entry Data Requirements and the
Security Procedures, CNB will process the Entry Data, forward the Entries to the ACH processor selected by CNB by
the next applicable ACH deadline based upon the Effective Entry Date specified by Company, and settle for such Entries
in accordance with the Rules. If the Effective Entry Date specified by Company is not a CNB Business Day, the Effective
Entry Date will be the next CNB Business Day. If Entry Data is received by CNB after the applicable CNB Deadline,
CNB may, in its sole discretion, process the Entry Data the next CNB Business Day.
4.4 Reversals. CNB will have no obligation to reverse, adjust, or stop payment or posting of any Entry Data
received by CNB or any Entry processed from Entry Data. Company acknowledges that it may not cancel or amend any
Entry Data after receipt by CNB. Company may deliver Entry Data to CNB for reversing Entries ( "Reversals ") pursuant
to the Rules; however, CNB has no liability if such Reversals are not completed.
5. REJECTION OF ENTRY DATA OR ENTRIES AND RETURNS.
5.1 Rejection. CNB may reject any Entry Data or Entry which (a) does not meet the Entry Data
Requirements, (b) is out -of- balance, or (c) will result in the exceeding of Company's pre - established dollar limit for
amounts outstanding for process at any one time under this Agreement, or (d) for any other reason for which an Entry
may be returned under the Rules. CNB also will have the right to reject any Entry Data if CNB has attempted, but is
unable to, verify the authenticity of the Entry Data in accordance with the chosen Security Procedure or if Company has
failed to satisfy its obligations under Section 10 of this Agreement. In the event that CNB rejects any Entry Data or
Entry, or receives rejected or returned Entries through the ACH, CNB will attempt to notify Company of same, utilizing
any method selected by CNB, in its sole discretion, and return the Entry Data to Company.
5.2 Resubmission. In the event any Entries are rejected or returned by CNB or the ACH for any reason
whatsoever, it will be Company's responsibility to correct and resubmit the Entry Data if such Entries are to be
reprocessed by CNB. Any reprocessing required under this Section will be at Company's expense, in accordance with
CNB's then - prevailing fees and charges. If any Entries are returned or rejected by the ACH due to errors made solely
16456.CFH:120391
9 0
by CNB and sufficient data is available to CNB to reprocess the Entries, CNB will remake such Entries without additional
charge to Company. Company will provide to CNB, upon its request, all information necessary to remake any Entries.
5.3 Liability. CNB will have no liability to Company for the rejection of any Entry Data or Entry as
permitted under this Agreement, and CNB will have no obligation to pay interest to or otherwise compensate Company
for any interest or interest equivalent for the period before Company receives the notice of rejection.
6. ON -US ENTRIES. Subject to CNB's right to reject any such Entry as provided in Section 5, CNB will debit or
credit the amount of each On -Us Entry processed from Entry Data that complies with the Entry Data Requirements,
to the appropriate Receiver's account maintained at CNB. CNB will have the right, in its sole discretion, to reject any
On -Us Entry for any reason. CNB's only obligation will be to notify Company of any rejected On -Us Entries.
7. ACCOUNT. Company will maintain an account ( "Account ") with CNB, which CNB may use for debiting or
crediting related to all Entries and related adjustments and fees under this Agreement. The Account is identified in the
attached Exhibit "B," incorporated into this Agreement by this reference. Company will maintain in the Account
immediately available funds for all credit Entries and debit Reversals related to Entry Data delivered to CNB by
Company.
8. PROVISIONAL PAYMENTS AND PRE - FUNDING.
8.1 Provisional Payments. Company agrees to be bound by that section of the Rules which makes payment
of a credit Entry by a Receiving Depository Financial Institution ( "RDFI ") to a Receiver provisional until receipt by the
RDFI of final settlement for such credit Entry. If final settlement is not received by the RDFI, the RDFI will be entitled
to a refund from the Receiver of the amount credited and Company will not be deemed to have paid the Receiver the
amount of the credit Entry. Company also agrees that any payment by CNB to Company for any debit Entry, returned
credit Entry or credit Reversal is provisional until receipt by CNB of final settlement for such Entry. If final settlement
is not received, CNB is entitled to a refund from Company of the amount credited and CNB may charge Company's
Account for the amount credited. CNB may refuse to permit the use of any amount credited for a debit Entry or credit
Reversal if it believes that there may not be sufficient clear and collected funds in Company's Account to cover
chargeback or return of such Entry or Reversal.
8.2 Pre- Funding. CNB reserves the right, in its sole discretion, to require Company to pre -fund prior to
the processing of any credit Entry.
9. AUTHORIZATION AND PRENOTIFICATION. Prior to the initiation of any Entry, including an On -Us Entry,
to an account of a Customer, Company will:
9.1 Authorization. Obtain a properly executed authorization from Customer empowering Company to
initiate one or more Entries, including any On -Us Entries, to Customer's account. Company will retain the original, a
microfilm copy or a copy equivalent to a microfilm record of such authorization for a period of 2 years, or longer if
specified by the Rules, after the termination or revocation of such authorization. Company will provide a copy of such
authorization to: (a) CNB, upon its request and, (b) except for On -Us Entries and other such Entries excluded by the
Rules, the RDFI, upon its request.
9.2 Prenotification. Except for On -Us Entries and other such Entries excluded by the Rules, initiate
Prenotification through the Services to the RDFI that it intends to initiate one or more Entries to a particular account
pursuant to the authorization of Customer. Company will comply with the Rules regarding requirements for
Prenotification, including but not limited to time limits. If a Prenotification is rejected by a RDFI, Company will not
submit Entry Data initiating any Entries to such account, until such time as a new Prenotification has been initiated by
Company and accepted by the RDFI and the appropriate tome limits specified in the Rules have elapsed. If the RDFI
accepts the Prenotification but finds incorrect or outdated information, Company will resubmit to CNB corrected Entry
Data prior to initiating Entries to such account.
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10. PAYMENT WITH RESPECT TO ENTRIES.
10.1 Debit Entries. Except for rejected or returned debit Entries, CNB will credit Company's Account with
the amount of each debit Entry processed through the ACH and for each On -Us Entry debited by CNB to a Customer's
account at CNB. Crediting of the Account will occur at the time of settlement. In the event a debit Entry is returned
for any reason, Company agrees that CNB may immediately debit its Account for the amount of such Entry. If there
is insufficient clear and collected funds in the Account to cover such debit, Company will immediately pay to CNB the
amount of such debit Entry.
10.2 Credit Entries. All credit Entries and debit Reversals will be debited against the Account. If there is
insufficient clear and collected funds in the Account to cover such debit, Company will immediately pay to CNB the
amount of such debit Entry. CNB will re- credit the Account with the amount of each On -Us Entry which is rejected by
CNB as provided in this Agreement, and each other Entry debited against the Account which is returned by an RDFI
in accordance with the Rules.
11. SECURITY PROCEDURES.
11.1 Selection. The Services and Security Addendum identifies Company's selections of Services and the
security procedure (the "Security Procedure ") to be used in connection with each Service. "Security Procedure" means
both the Primary and Back -Up Security Procedures selected by Company for each Service.
11.2 Reliance by CNB. Company and CNB agree that the purpose of the Security Procedure is to verify the
authenticity of Entry Data delivered to CNB in the name of Company and not to detect an error in the transmission or
content of any Entry Data. Company agrees that CNB may act upon, and Company assumes full responsibility for, any
Entry Data, the authenticity of which has been verified by CNB through the use of the Security Procedure.
11.3 Confidentiality. Company understands that all passwords, codes, devices and instructions (collectively
"Security Items ") provided by CNB to Company in connection with the Security Procedure are confidential. Company
agrees to safeguard the Security Items at all times and to establish and maintain procedures to assure their confidentiality.
Company agrees not to disclose the Security Items to any person, firm, corporation or governmental entity, except
Company's authorized personnel. Company will not make or allow anyone else to make any copies, in whole or in part,
of any Security Items or to disassemble or reverse - engineer any security device. Company will notify CNB immediately
if the confidentiality of any of the Security Items is breached. If any Service is terminated for any reason, Company will,
with respect to that Service, (i) immediately cease using the related Security Items, (u) return to CNB any related CNB -
provided security devices and, (iii) at the option of CNB, either return to CNB or destroy all physical embodiments of
any other related Security Items.
12. RISK OF LOSS.
12.1 Electronic Transmission. If Company elects to transmit its Entry Data electronically, Company will
obtain, maintain and operate, at its own expense, all necessary devices, software and services required, including but not
limited to hardware, software, installation and maintenance services and telephone lines. All such devices, software and
services will be compatible with CNB operations and conform to CNB specifications and the Rules.
12.2 Messenger. Company will be solely responsible for and will bear all costs associated with having a
messenger service transport Entry Data on magnetic tape, or any other information related to Company or the Services,
to and from CNB's facility or other agreed -upon delivery location. The messenger of such materials will be deemed to
be the agent of Company.
12.3 Limitation. CNB WILL NOT BE LIABLE OR RESPONSIBLE FOR ANY LOSS OR DELAY OF
ENTRY DATA OR ANY OTHER INFORMATION WHICH PERTAINS TO COMPANY OR THE SERVICES
DURING ANY PERIOD OF TRANSIT OR ELECTRONIC TRANSMISSION TO AND FROM CNB'S FACILITY,
OR OTHER AGREED -UPON DELIVERY LOCATION, REGARDLESS OF THE CAUSE OF SUCH DELAY OR
LOSS.
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13. FEES. Company agrees to pay to CNB the fees ( "Fees ") specified in Exhibit "B." The method of payment is
also identified on Exhibit "B." CNB may amend the Fees from time to time upon 30 days' prior written notice to
Company, except that any increase in Fees due to an increase in the rate charged to CNB in connection with the Services
by a third -party supplier, licensor or governmental agency will become effective immediately. Any Fees not paid when
due will bear interest at the rate of 12% per annum until paid. In addition to such Fees, Company will pay all sales, use
or other taxes applicable to this Agreement or the Services, excluding taxes based on CNB's net income. If any payment
of any nature authorized in this Agreement is not received by CNB when due, CNB is authorized to debit any account
that is maintained at CNB by Company for the overdue amount in addition to any other remedies to which CNB may
be entitled, including but not limited to the right to terminate this Agreement.
14. COMPLIANCE WITH RULES AND LAWS. In addition to the requirements set forth in this Agreement,
Company and CNB will comply with, and be bound by, the Rules with respect to all Entries, whether or not a particular
Entry is distributed through the ACH, except as may otherwise be provided in this Agreement. Company further agrees
to comply with all applicable state or federal laws in connection with its use of the Services. Without limiting the
generality of the foregoing, Company agrees, if it originates a preauthorized debit Entry from a consumer's account which
varies in amount from the previous debit Entry, to comply with the notice requirements of the Rules, the Electronic
Funds Transfer Act and Regulation E of the Board of Governors of the Federal Reserve System, as applicable. CNB
will act as an Originating Depository Financial Institution and Company will act as an Originator with respect to all
Entries.
15. FORCE MAIEURE AND LIMITATION OF LIABILITY.
15.1 Force Majeure. CNB will not be liable for any loss, expense, error or delay, including but not limited
to delays in processing or any inability to provide the Services, caused by accidents, strikes, flood, fire, electrical or
mechanical failures or software defects, exclusive of those electrical, mechanical or software systems under CNB's
exclusive control, acts or omissions of Company, the ACH or any other third party (including but not limited to acts or
omissions of any telephone or telecommunications carrier), legal constraints, acts of God or any other causes or
conditions which are beyond CNB's reasonable control.
15.2 Limitation of Liability. As a condition precedent to any liability of CNB, Company must notify CNB
in writing of any alleged negligence or breach of this Agreement as promptly as reasonably possible, but in no event later
than five (5) business days following the day on which such alleged negligence or breach was, or could reasonably have
been, discovered by Company. CNB's entire liability and Company's sole remedy under this Agreement, including but
not limited to liability for processing errors or negligence, will not exceed an amount which is the lesser of (i) $25,000;
(ii) the Fees for the applicable Service during the 6 month period preceding the date of the alleged negligence or breach,
but if the Agreement has not been in effect for 6 months preceding such date, then during such fewer number of
preceding months as this Agreement has been in effect; or (iii) interest, for the period of delay, on the amount of any
debit Entry which CNB delayed crediting to Company's Account, calculated as follows: (a) If Company's Account is
interest - bearing, at the interest rate for the Account, or (b) If Company's Account is non - interest bearing, at the current
Fed Funds rate. IN NO EVENT WILL CNB BE LIABLE FOR SPECIAL, GENERAL, CONSEQUENTIAL,
INCIDENTAL, EXEMPLARY OR SIMILAR DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS,
EVEN IF CNB HAS BEEN ADVISED OF THE POSSIBILITY THEREOF. FURTHERMORE, CNB WILL NOT
BE LIABLE OR RESPONSIBLE FOR ANY DELAYS IN PROCESSING OF, OR MISSING APPLICABLE ACH
DEADLINES FOR, ANY LATE OR NONCONFORMING ENTRY DATA. This Section also limits the liability of
any agent, employee or affiliate of CNB.
15.3 California Commercial Code, Division 11. Notwithstanding any other provision of this Agreement,
CNB's liability in connection with Entries subject to Division 11 of the California Commercial Code, governing funds
transfers, will in no event exceed that required to be paid under Division 11.
16. AUTHORIZED CONTACTS. Company will, prior to its first use of any Service, provide CNB with a written
list in the form attached as Exhibit "D" and incorporated into this Agreement by this reference (the "Authorized Contact
List "). The Authorized Contact List will contain the names and telephone numbers of those persons who are authorized
by Company to provide the required Entry Data information for purposes of verifying the authenticity of Entry Data in
accordance with the Security Procedures (the "Authorized Contacts "). CNB may assume that only the Authorized
16456.CFH:120391
Contact will answer the phone number designated on the Authorized Contact List, and may rely on Entry Data
information and any confirming instruction from any person CNB believes to be an Authorized Contact. Company may
amend the telephone number(s) and names(s), from time to time, by submitting a new Authorized Contact List.
17. REPRESENTATIONS AND WARRANTIES.
17.1 Corporate Authority. Company represents and warrants to CNB that it has the corporate power and
authority to execute, deliver and perform this Agreement.
17.2 Account Authority. Company represents and warrants to CNB that it has obtained the appropriate
authorization from each person owning or holding an account named in Entry Data delivered by Company to CNB, and
Company's instructions to CNB conform to that authorization, and that the authorization will be valid and operative at
the time CNB sends the Entry to the ACH or debits or credits the On -Us Entry to the Receiver's account.
17.3 Warranties under the Rules. Except as specified below, Company makes the same representations and
warranties to CNB with respect to Entries made pursuant to this Agreement, as CNB is deemed to make under the
Rules, and CNB will have no responsibility with respect to the matters so represented and warranted by Company.
Unless such warranties become effective earlier under the Rules, such warranties will apply as of the time such Entries
are processed by CNB. The foregoing does not, however, apply to any representation or warranty contained in the Rules
relating to the power of CNB under applicable law to transmit Entries or the conformity of Entries to the file
specifications contained in the Rules.
18. INDEMNIFICATION. Company will, at all times, defend, indemnify and hold CNB (which for purposes of this
Section and Section 20.4 will include the shareholders, officers, directors, employees, representatives and agents of CNB)
harmless from and against any and all liabilities, claims, demands, causes of action, losses, damages, costs, expenses and
attorneys' fees (including those fees allocable to CNB in -house counsel), settlements, judgments or recoveries arising out
of or relating to: (i) a breach of any representation or warranty in Section 17 of this Agreement; (ii) any Entry Data or
Entry delivered or authorized by Company, or any Entry Data the authenticity of which was verified pursuant to the
Security Procedures; (iii) any claim that CNB is responsible for any act or omission of Company or any third party
pertaining directly or indirectly to this Agreement, including but not limited to the delay or failure of Company to initiate
any Entry, or of a financial institution to debit or credit the amount of an Entry; (iv) any act or omission by CNB which
is based upon Entry Data or other information supplied to CNB by Company, or (vi) CNB's performance or failure to
perform hereunder, provided that CNB acted in good faith and without negligence.
19. INCONSISTENCIES IN PROVIDED INFORMATION.
19.1 Between Receiver Name and Account Number. In the event there is an inconsistency in the Entry Data
supplied by Company between the Receiver's name and account number, Company acknowledges and agrees that
payment of the Entry may be made by the RDFI (or CNB in the case of an On -Us Entry) on the basis of the account
number alone.
19.2 Between RDFI Name and Number. In the event there is an inconsistency in the Entry Data supplied
by Company between the RDFI's name and identifying number, Company acknowledges and agrees that payment of the
Entry may be made by CNB on the basis of the identifying number alone.
20. THIRD PARTY DATA
20.1 Entry Data. Company may elect to have CNB accept Company's Entry Data directly from third party
data processors ( "Data Processor(s) ") by (a) submitting a Services and Security Addendum and an authorization in the
form attached to this Agreement as Exhibit "C" and (b) submitting, or causing the designated Data Processor(s) to
submit, an Authorized Contact List, as described in Section 16. Company may amend any form, from time to time, by
submitting new forms to CNB. All Entry Data received from such Data Processor(s) must comply with the Entry Data
Requirements set forth in this Agreement. Written notification of changes in the Data Entry Requirements will be
provided by CNB directly to Data Processor(s), and any nonconforming Entry Data will be returned to Data Processor(s)
without notice to Company.
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20.2 Processing. Entry Data received from Data Processor(s) will be processed as set forth in this Agree-
ment. All Entry Data, information regarding such Entry Data, and any other information regarding the Services or this
Agreement which is provided to CNB by Data Processor(s) will he deemed to have been approved by Company. CNB
will not be liable for the accuracy, completeness or authenticity of the Entry Data received from Data Processor(s),
including but not limited to the duplication or omission of Entry Data, and will have no obligation to audit, check or
verify Entry Data. If Entry Data is provided to CNB by Data Processor(s) on magnetic tape, Company acknowledges
that similar data from other customers of CNB and Data Processor(s) may also be contained on such magnetic tape.
20.3 Risk of Loss. If Company sends all Entry Data to CNB through Data Processor(s), Company will not
be subject to the provisions of Section 12.1 of this Agreement with respect to obtaining, maintaining and operating at its
own expense software and hardware for the electronic transmission of Entry Data to CNB. CNB will not be responsible
for transporting, or arranging the transportation of, Entry Data, or any other information related to the Services, between
CNB and Data Processor(s). Section 12.3 of the Agreement will also apply to any period of transit or electronic
transmission between CNB and Data Processor(s).
20.4 Indemnification. In addition to Section 18 of this Agreement, Company will, at all times, defend and
indemnify and hold CNB harmless from and against any and all liabilities, claims, demands, causes of action, losses,
damages, costs, expenses, and attorneys' fees (including those fees allocable to CNB in -house counsel), settlements,
judgments or recoveries which may be directly or indirectly caused by any act or omission of Data Processor(s) pertaining
directly or indirectly to this Agreement.
21. GENERAL.
21.1 Recording of Communications. Company agrees that CNB may electronically record any telephone
communications related to the Services or this Agreement.
21.2 Notices. Any notice required or permitted to be given under this Agreement will be in writing and will
be deemed effective (a) if to CNB, upon receipt, and (b) if to Company, upon personal delivery or three days after
mailing, if mailed with sufficient postage, properly addressed, to Company at the address set forth below, or such other
address subsequently provided to CNB by written notice.
21.3 Headings. The headings used in this Agreement are for convenience only and will not be used in
construing the provisions hereof.
21.4 Entire Agreement and Amendments. This Agreement contains the entire agreement of the parties with
respect to the matters covered. No other agreement, statement or promise made by either party or by any employee,
officer, or agent of either party that is not in writing and signed by both parties is binding, except that CNB may amend
the terms and conditions of this Agreement, Exhibits "A," "B," or "C" or any other Addenda upon thirty (30) days' prior
written notice to Company.
21.5 Assignment. This Agreement will inure to the benefit of and be binding upon both parties, their
successors and assigns. No assignment may be made by Company without the prior written consent of CNB. Nothing
in this Agreement limits or restricts the right of CNB to effect an assignment by merger, reorganization, sale of corporate
assets or other corporate change.
21.6 Survival or Sections. Sections 12.3, 15, 17, 18 and 20.4 will survive the termination of this Agreement.
21.7 Governing Law, Jurisdiction and Attorneys' Fees. This Agreement is governed by the laws of the State
of California. Any action brought which is related, directly or indirectly, to this Agreement will be brought in a court
of appropriate jurisdiction in Orange County, California. The successful party in any such action will be entitled to
recover from the unsuccessful party, in addition to any other relief to which it may be entitled, reasonable attorneys' fees
(which may be the allocable cost of in -house counsel) and costs incurred by it in prosecuting or defending such action,
which will be included as a part of any judgment rendered in such action.
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21.8 Severability. If any provision of this Agreement, or part of a provision, is held to be invalid, illegal, void
or unenforceable, the remainder of the Agreement, or other parts or applications of such provision, will not be affected
thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized
officers on the dates set forth below.
"CNB„
City National Bank
1730 W. Olympic Boulevard
Los Angeles, California 90015
Attention: Cash agemeut Services
By r GC
Its:
"Company"
1 '1: C � ■
X By: -- -
Its: Mayor
Date: Date: 11 -19 -92
CORPORATE CERTIFICATION
I hereby certify that the Board of Directors of ( "Compan '), at a mee�
duly called and held on adopted resolutions that aut orize [be omppan to: (al
enter into the foregoing Electronic un s raps er greemen ( "Agreement ") with City National Bank ( "CNB"), �b) from
time to time, obtain credit and other financial accommodations from CNB, and grant security for such credit or other
financial accommodations, upon the terms and conditions of the Agreement and such additional terms and conditions
as CNB may require, and (c) delegate to the authorized officer sing this Agreement, the authority to designate, from
time to time, the Authorized Contacts to provide information and instructions to CNB regarding Entry Data.
I also hereby certify that or , the
and respectively, of the Company, are 6-affi au onze o execute
such greement for and on be o ompany.
Dated:
ype name below signature Secretary
CERTIFICATION
The undersigned are all the general partners of ( "Partnership "), and
hereby certify that we have fully adopted and approved reso utlous t at aut
or t e ar[ners p to: (a) enter into the
foregoing Electronic Funds Transfer Agreement ( "Agreement ") with City National Bank ( "CNB hom time to time,
obtain credit and other financial accommodations from CN ,and gran[ security for such ere 't or other financial
accommodations, upon the terms and conditions of the Agreement and such additional terms and conditions as CNB may
require, and (c delegate [o the authorized person s�gn�ng this Agreement, the authority to designate, from time to time,
the Authorized Contacts [o provide information and ins[ructious to CNB regarding Entry Da[a.
We also certify that or , the
and respectively, of the Fartnership, are eac au onzed to
execute such greemen or and—on—NM of the ners p.
Dated:
or print
or
type or print)
type or print)
16456.CFH:120391
signature
Signature
EXHIBOA - SERVICES AND SECURITY ADDEN& TO
CITY NATIONAL BANK ELECTRONIC FUNDS TRANSFER AGREEMENT (COMPANY)
Name of Company
Primary Method of Delivery:
Back -Up Method of Delivery:
CITY OF NEWPORT BEACH
This Services and Security Addendum (the "Addendum ") is incorporated by this reference into the Electronic
Funds Transfer Agreement dated Octob 26 1992 between the parties (the "Agreement ") to which it is
attached. Capitalized terms useA ]s 1Vdden�um which are not defined herein have the meanings given in the
Agreement.
1. Security Procedures. The Security Procedures for verifying the authenticity of Entry Data delivered
in the name of Company to CNB are the Primary and Secondary Security Procedures selected by Company and described
below. The Security Procedures are not used to detect an error in the transmission or content of the Entry Data.
Company represents that it has determined that the Security Procedures are a satisfactory method of verifying the
authenticity of Entry Data in view of Company's requirements.
2. Primary Security Procedure. Company must select one or more of the security procedures generally
described below as its Primary Security Procedure, for each Processor.
Security Procedure Descriptions:
A. Tape Pouch Security Procedure: Company delivers Entry Data to CNB on the scheduled date in
a securely sealed CNB- supplied tape pouch, with authorized File Identification data, and with actual
file totals for Company's Entry Data written on an external tape label or accompanying Transmittal
Report. CNB will call Company and /or Processor as an alternative control to any portion of
Company's Security Procedure for the Service.
B. Extract Security Procedure: CNB dials into Company's designated system on the scheduled date
and Company's designated system delivers Entry Data to CNB upon connection. CNB will call
Company and /or Processor as an alternative control to any portion of Company's Security
Procedure for the Service. [Additional Charge]
C. Dial -Up Security Procedure: Company and /or Processor dials into CNB's designated system on
the scheduled date and Company and /or Processor's system delivers Entry Data. CNB will call
Company and /or Processor as an alternative control to any portion of Company's Security
Procedure for the Service.
D. Dedicated Line Security Procedure: Company and /or Processor delivers Entry Data to CNB's
designated system on the scheduled date using a dedicated lease fine. CNB will call Company
and /or Processor as an alternative control to any portion of Company's Security Procedure for the
Service.
3. Secondary Security Procedure. If Company and /or Processor is unable to deliver Entry Data using
Company's Primary Method of Delivery, Company may designate a Back -Up Method of Delivery, provided that, each
time prior to delivery, Company and /or Processor notifies CNB of the need to transfer to the Back -Up Method Company
has selected. When using the Back -Up Method of Delivery, Company agrees to the use of the Secondary Security
Procedure to verify the authenticity of Entry Data.
16456.CFH:120391
Services and Security AddeAkm for •
Electronic Funds TYtnsfer Agreement Pw 2 d 2
Selection of Services and Security Procedures
check the appropriate boxes
Service Description
Service
Selection
Commencement
Date •
Security Procedure
Selection
1
2
3
General ACH Service
(For multiple Processors, complete Exhibit "C ")
MicroLink Automated Payments and Collections
B
MicroUnk Internal Transfers
B
"
**
Banktink Depository Transfer System
B
**
Business Banker Internal Transfers
B
**
**
* Commencement of services is subject to successful completion of any required implementation testing.
** Given the nature of the products, Back -Up Metbods of Delivery and Secondary Security Procedures are not available
with MicroLink, BankLink or Business Banker.
Check box if applicable:
❑ This Service Addendum replaces in its entirety the previous Service Addendum dated:
D_, effective , 19
CITY OF NEWPORT BEACH
Company Name
(signature)
City National Bank
By: .,°
Name: Phil Sansone Name:
Title: Mayor Title:
Date: 11 -19 -92 Date:
16456.CFH:120391
• EXHIBIT B - FEES •
CITY NATIONAL BANK ELECTRONIC FUNDS TRANSFER AGREEMENT (COMPANY)
ACCOUNT INFORMATION:
All debit Entries will be credited against, and all credit Entries will be debited against, the
following business account maintained by Company at CNB:
( "Account ")
METHOD OF PAYMENT OF FEES:
❑ Debit the Account each month for the previous month's Services.
❑ Debit CNB Account #
each month for the previous month's Services.
❑ Debit to Account Analysis for the Account each month for the previous month's Services. (CNB may, within its
sole discretion and without prior notice, discontinue this option with respect to Company. In that event, payment
will be made by direct debit to the Account.)
FEES:
16456.CFH:120391
0 EXHIBIT C - DATA PROCESSORS 0
CITY NATIONAL BANK ELECTRONIC FUNDS TRANSFER AGREEMENT (COMPANY)
1.
2.
Security Procedure
(P):
(S):
Security Procedure
(P):
(S):
3.
Security Procedure
(P):
(S):
4.
Security Procedure
(P):
(S):
Security Procedure
(P):
(S):
5.
Security Procedure
(P):
(S):
6.
7.
Security Procedure
(P):
(S):
8.
9.
Security Procedure
(P):
(S):
10.
Security Procedure (P):
(S):
Effective Date:
Check box if applicable:
Security Procedure (P):
(S):
❑ This Exhibit C replaces in its entirety the previous Exhibit C with the Effective Date of:
CITY OF NEWPORT BEACH
Company Na
By:
(Signature)
Name: Phil Sansone
Title: Mayor
Date: 11 -19 -92
16456.CPH:120391
S]
Security Procedure
(P):
(S):
Security Procedure
(P):
(S):
Security Procedure
(P):
(S):
Security Procedure
(P):
(S):
Security Procedure (P):
(S):
❑ This Exhibit C replaces in its entirety the previous Exhibit C with the Effective Date of:
CITY OF NEWPORT BEACH
Company Na
By:
(Signature)
Name: Phil Sansone
Title: Mayor
Date: 11 -19 -92
16456.CPH:120391
S]
SIBIT D - AUTHORIZED CONTACT I
CITY NATIONAL BANK ELECTRONIC FUNDS TRANSFER AGREEMENT (COMPANY)
1. Name:
Telephone Number:
2. Name:
Telephone Number:
3. Name:
Telephone Number:
4. Name:
Telephone Number:
Effective Date:
Check box if applicable:
❑ This Exhibit D replaces in its entirety the previous Exhibit D with the Effective Date of: 199_.
CITY OF NEWPORT BEACH
Company Nam
By:
Signature)
Name:
Phil Sansone
Title:
Mayor
Date:
11 -19 -92
16456.CFH:120391
0 6
CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(714) 644 -3005
7
TO: FINANCE DIRECTOR
FROM: CITY CLERK
DATE: March 23, 1989
SUBJECT: Contract No. 2382
Description of Contract Agreement for Banking Services
Effective date of Contract April 1, 1989
Authorized by Minute Action, approved on March 13, 1989
Contract with City National Bank
Address 3388 Via Lido
Beach,.CA 92663
Amount of Contract (See Agreement)
Z� " 6'e 4e
Wanda E. Raggio
City Clerk
WER:pm
Attachment
3300 Newport Boulevard, Newport Beach
0 0
DYTF!'',ITYCOUNCIL
CITY 7F NEWPORT BEACI`
COUNCIL AGENDA N0. F -3(b)
MAR 13 1989 CITY OF NEWPORT BEACH
FINANCE DEPARTMENT
TO: Mayor and City Council
FROM: George Pappas, Finance Director
SUBJECT: AWARD BID FOR BANKING SERVICES (f - 7 3�'c
Recommendation:
March 13, 1989
1. That the City Council extend the current agreement with City National Bank
thru March 31, 1992.
Discussion:
The City Council on November 9, 1970, authorized a "One Bank -One Account"
policy for future City banking service with awards being made for three year
periods. The present agreement with City National Bank expires on March 31,
1989. Requests for bids were solicited from five banks in close proximity to
City Hall to provide banking services through March 31, 1992. Bids were received
from four of the five banks contacted. The results of the bids are as follows:
Bidder
City National Bank
First Interstate Bank
Security Pacific
Base Bid
$1,825.00 Monthly Service Charge
$3,694.75 Monthly Service Charge
$3,766.50 Monthly Service Charge
Bank of America $6,246.105 Monthly Service Charge
Based on the above, City National a 1 should be' "aw _ ded th bid on the
basis of low bid, which is to provide spiking service or the 1 er monthly
service charge.
Finance
GP:dp
(3,j)
AGREEMENT FOR BANKING SERVICES
THIS AGREEMENT dated the 21st of March, 1989, is between the
CITY OF NEWPORT BEACH, hereinafter "City," located at 3300
Newport Boulevard, Newport Beach, California, and CITY NATIONAL
BANK, hereinafter "Bank," located at 3388 Via Lido, Newport Beach,
California is made with respect to the following facts, the
materiality of which is hereby agreed to between the parties:
RECITALS
A. Bank, pursuant to a request therefor by City, has
submitted a proposal to provide certain banking services.
B. City wishes to accept Bank's proposal to provide services
for an estimated average monthly cost of $1,825.00 with demand
deposit and money market accounts earning credit utilized to
reduce the estimated monthly cost on a semi - annual basis.
1. Term. This Agreement shall be for a term of three (3)
years, commencing on the 1st day of April, 1989, and ending on the
31st day of March, 1992, subject to earlier termination as
provided in Paragraph 3.
2. Services to be Furnished by Bank. Bank agrees to provide
the following services to City:
a. Bank and City agree that Bank shall act as the sole
demand depository of City (City reserves the right to place term
01
Af
deposits with other institutions or to invest in securities of the
United States Government and Federal agencies as may be determined
by City to be in its best interest) as follows:
(1) General Account. Bank shall accept deposits of
City, endorse and photograph all checks deposited and return to
City all paid checks, in numerical order, with an automated
account reconciliation.
(2) Payroll Account. Bank shall accept deposits of
City or honor other authorized transfer of funds to the account.
Each payroll check drawn will be paid by Bank and returned with an
automated account reconciliation, on a regular schedule, to be
determined by City.
(3) Checks and Supplies. Bank shall furnish to
City, pre - printed at City specifications, all checks, deposit
slips and other instruments pertaining to transactions for
different accounts.
(4) Depository for Funds. Deposits to the credit of
City will be provided for as stated below. Every check received
will be endorsed by Bank, and all previous endorsements will be
guaranteed. A photocopy of each deposited check will be taken and
maintained by Bank for a period of two (2) years.
(5) Reconcilement Services. The City will require
at least the following reconcilement services:
(a) A monthly statement for the period ending
the last day of each month showing all deposit transactions,
returned items transactions, redeposit transactions, check
2
clearing transactions, and any other transactions affecting the
account.
(b) Statement shall be supported by an account
reconcilement recap and a detailed listing of checks in number
sequence, and listings of paid and outstanding checks.
(c) Statements, cancelled checks and supporting
documents for the month are to be received by the Finance
Department within fifteen (15) calendar days after the end of the
preceding month.
(6) Investment Counsel. It is the policy of the
city to invest any surplus funds on deposit in the checking
account. In order to carry out an effective cash management and
investment program, the successful bidder will be required to
provide the Finance Director or authorized employee, by 8:30 a.m.
each working day, with up -to -date information concerning the
status of the checking account. The Bank will assist the City in
developing a comprehensive cash management and investment program
utilizing Repurchase Agreements, Time Certificates of Deposit and
other authorized securities directly through the Bank. The goal
is to invest all available funds at the highest rate of return.
The successful bidder should have the capacity to make it possible
for the City to invest its idle funds in any and all authorized
investments. It has been the policy of the City to place some of
its excess funds with other local financial institutions at
competitive rates. The City reserves the right to continue this
practice.
3
(7) Night Depository Services. Night depository
services will be provided by Bank for, but not limited to, the
following City uses:
(a) Parking Meter Receipts. These receipts, it
is understood, will consist of coins, to be counted by Bank. A
deposit slip for these monies will be prepared by Bank and
forwarded daily to City.
(b) Parking Lot Receipts. These receipts, it
is understood, may or may not be accompanied by a deposit slip,
depending on circumstances and the discretion of City. A deposit
slip will be prepared, or the accompanying one will be verified by
Bank and forwarded daily, to City.
In handling of night deposits, which
consist largely of currency, Bank will provide thirty (30)
depository bags and secure seals to be used by personnel in making
such deposits. Additional bags will be available for purchase.
(8) Line of Credit. Bank will extend a One Million
Dollar ($1,000,000) line of credit to City for a three (3) year
period. Interest on borrowings will be at Bank's prime rate, as
charged from time to time. Conditions of the line will require
City to be in a non (line) borrowing position for a minimum of
thirty (30) consecutive days during each (line) year. Bank will
require that City's budget is in balance for each fiscal year.
3. Termination. City reserves the right to terminate
this Agreement in the event Bank fails to perform any of the
duties required by this Agreement. City shall give Bank written
4
notice of its intent to terminate at least ninety (90) days prior
to the effective date of termination.
CITY OF NEWPORT BEACH
a Municipal Corporation
BY: ' ow. w
MAYOR
APPROVED AS TO FORM:
City Attorney
ATTEST:
1
City Clerk '
CITY NATIONAL BANK
Rope, . ockwell
Sr. Vi Pre ident and Manager
Kar96 L. Klein
BY •
Assistant Vic President
Operations Officer
E
0 0
TO: FINANCE DIRECTOR
FROM: CITY CLERK
CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
(7141640-2251
DATE: March 24, 1986
SUBJECT: Contract No. C -2382
YL72G2 -Y 2.G -� --
3/' (I/m
Description of Contract Agreement for Banking Services
Effective date of Contract March 21, 1986
Authorized by Minute Action, approved on March 10, 3986
Contract with City National Bank
Address 3388 Via Lido
Newport Beach, CA 92663
Amount of Contract (See Agreement)
katw&
Wanda E. Andersen
City Clerk
WEA:lr
attach.
City Hall • 3300 Newport Boulevard, Newport Beach, California 92663
COUNCIL AGENDA NO. �(,o
CITY OF NEWPORT BEACH
FINANCE DEPARTMENT
March 10, 1986
BY THE CITY COUNCIL
CITY CV
Discussion:
The City Council on November 9, 1970, authorized a "One Bank -One
Account" policy for future City banking service with awards being made
for three year periods. The present agreement with City National Bank
expires on March 31, 1986. Requests for bids were solicited from four
banks in close proximity to City Hall to provide banking services through
March 31, 1989. Bids were received from two of the four banks contacted.
The results of the bids are as follows:
Bidder Base Bid
City National Bank $1,432.50 Monthly Service Charge
Security Pacific $2,400.00 Monthly Service Charge
Bank of America Did not respond
First Interstate Bank Did not respond
Based on the above, City National Bank should be awarded e—trd atT
the basis of low bid, which is to provide being servic or the lower
monthly service charge. / /
(� n
Georrge Pa
Finance D
GP:dp
MAR 10 1986
TO:
Mayor and City Council
IF1'rkW VF D
FROM:
George Pappas, Finance Director
Ct r� / is
SUBJECT:
AWARD BID FOR BANKING SERVICES G'-
2.5", 2
Recommendation:
1.
That the City Council award the bid for
banking services to
City National Bank
2.
Adopt a resolution authorizing the Mayor
and City
Clerk to
execute the agreement with City National
Bank.
Discussion:
The City Council on November 9, 1970, authorized a "One Bank -One
Account" policy for future City banking service with awards being made
for three year periods. The present agreement with City National Bank
expires on March 31, 1986. Requests for bids were solicited from four
banks in close proximity to City Hall to provide banking services through
March 31, 1989. Bids were received from two of the four banks contacted.
The results of the bids are as follows:
Bidder Base Bid
City National Bank $1,432.50 Monthly Service Charge
Security Pacific $2,400.00 Monthly Service Charge
Bank of America Did not respond
First Interstate Bank Did not respond
Based on the above, City National Bank should be awarded e—trd atT
the basis of low bid, which is to provide being servic or the lower
monthly service charge. / /
(� n
Georrge Pa
Finance D
GP:dp
0 6
RESOLUTION NO. 86 -16
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AN AGREEMENT BETWEEN THE
CITY OF NEWPORT BEACH AND CITY NATIONAL BANK
IN CONNECTION WITH THE CITY'S BANKING SERVICES
WHEREAS, the current Agreement for Banking Services
between the City and City National Bank expires March 31, 1986;
and
WHEREAS, the City Council has reviewed the terms and
conditions of a new Agreement for Banking Services between the
City of Newport Beach and City National Bank, a copy of which is
attached to this Resolution, and finds the proposed Agreement to
be satisfactory.
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Newport Beach that the Agreement for Banking
Services, attached as Exhibit "A," is hereby approved and the
Mayor and City Clerk are hereby authorized to execute the same on
behalf of the City of Newport Beach.
ADOPTED this 10th day of March , 1986.
ATTEST:
City Clerk f/
1•
AGREEMENT FOR BANKING SERVICES
jr
THIS AGREEMENT dated the li — of , 19869
is between the CITY OF NEWPORT BEACH, hereinafter "City," located
at 3300 Newport Boulevard, Newport Beach, California, and CITY
NATIONAL BANK, hereinafter "Bank," located at 3388 Via Lido,
Newport Beach, California is made with respect to the following
facts, the materiality of which is hereby agreed to between the
parties:
RECITALS
A. Bank, pursuant to a request therefor by City, has
submitted a proposal to provide certain banking services.
B. City wishes to accept Bank's proposal to provide
services for an estimated average monthly cost of $1,432.50 with
demand deposit and money market accounts earning credit utilized
to reduce the estimated monthly cost on a semi - annual basis.
1. Term: This Agreement shall be for a term
of three (3) years, commencing on the 1st day of April, 1986, and
-1-
0 0
ending on the 31st day of March, 1989, subject to earlier termi-
nation as provided in Paragraph 3.
2. Services to be Furnished by Bank: Bank agrees
to provide the following services to City:
a. Bank and City agree that Bank shall act
as the sole demand depository of City (City reserves the right to
place term deposits with other institutions or to invest in
securities of the United States Government and Federal agencies
as may be determined by City to be in its best interest) as
follows:
(1) General Account. Bank shall accept
deposits of City, endorse and photograph all checks deposited and
return to City all paid checks, in numerical order, with an auto-
mated account reconciliation.
(2) Payroll Account. Bank shall accept
deposits of City or honor other authorized transfer of funds to
the account. Each payroll check drawn will be paid by Bank and
returned with an automated account reconciliation, on a regular
schedule, to be determined by City.
-2-
0 0
(3) Checks and Supplies. Bank shall
furnish to City, pre - printed at City specifications, all checks,
deposit slips and other instruments pertaining to transactions
for different accounts.
(4) Depository for Funds. Deposits to
the credit of City will be provided for as stated below. Every
check received will be endorsed by Bank, and all previous
endorsements will be guaranteed. A photocopy of each deposited
check will be taken and maintained by Bank for a period of two
(2) years.
(5) Reconcilement Services. The City
will require at least the following reconcilement services:
(a) A monthly statement for the
period ending the last day of each month showing all deposit
transactions, returned items transactions, redeposit
transactions, check clearing transactions, and any other transac-
tions affecting the account.
(b) Statement shall be supported by
an account reconcilement recap and a detailed listing of checks
in number sequence, and listings of paid and outstanding checks.
-3-
(c) Statements, cancelled checks
and supporting documents for the month are to be received by the
Finance Department within fifteen (15) calendar days after the
end of the preceding month.
(6) Investment Counsel. It is the poli-
cy of the City to invest any surplus funds on deposit in the
checking account. In order to carry out an effective cash
management and investment program, the successful bidder will be
required to provide the Finance Director or authorized employee,
by 8 :30 a.m. each working day, with up -to -date information
concerning the status of the checking account. The Bank will
assist the City in developing a comprehensive cash management and
investment program utilizing Repurchase Agreements, Time Certifi-
cates of Deposit and other authorized securities directly through
the Bank. The goal is to invest all available funds at the
highest rate of return. The successful bidder should have the
capacity to make it possible for the City to invest its idle
funds in any and all authorized investments. It has been the
policy of the City to place some of its excess funds with other
local financial institutions at competitive rates. The City
reserves the right to continue this practice.
-4-
(7) Night Depository Services: Night
depository services will be provided by Bank for, but not limited
to, the following City uses:
(a) Parking Meter Receipts. These
receipts, it is understood, will consist of coins, to be counted
by Bank. A deposit slip for these monies will be prepared by
Bank and forwarded daily to City.
(b) Parking Lot Receipts. These
receipts, it is understood, may or may not be accompanied by a
deposit slip, depending on circumstances and the discretion of
City. A deposit slip will be prepared, or the accompanying one
will be verified by Bank and forwarded daily, to City.
In handling of night deposits,
which will consist largely of currency, Bank will provide thirty
(30) depository bags and secure seals to be used by personnel in
making such deposits. Additional bags will be available for
purchase.
(8) Line of Credit: Bank will extend a
One Million Dollar ($1,000,000) line of credit to City for a
three (3) year period. Interest on borrowings will be at Bank's
-5-
prime rate, as charged from time to time. Conditions of the line
will require City to be in a non (line) borrowing position for a
minimum of thirty (30) consecutive days during each (line)
year. Bank will require that City's budget is in balance for
each fiscal year.
3. Termination: City reserves the right to
terminate this Agreement in the event Bank fails to perform any
of the duties required by this Agreement. City shall give Bank
written notice of its intent to terminate at least ninety (90)
days prior to the effective date of termination.
CITY OE NEWPORT BEACH
a nic' a�YCo�Kporation
APPROVF AS FO� � V
City Attorney
ATTEST:
City Clerk
C I TYiI AT ANK,
B v
Vice re i nt- E. Stockwell
r
Assistant Vice Pr sident
Gordon D. Elmqu' t
0 a
CITY OF NEWPORT BEACH
P.U. BOX 1768,NEWPORT BEACH, CA 92663 -3884
OFFICE OF THE CITY CLERK
(714) 640 -2251
TO: FINANCE DIRECTOR
FROM: CITY CLERK
DATE: April 11, 1983
SUBJECT: Contract No. C -2382
Description of Contract Agreement for Newport Beach 'Banking
Services
Effective date of Contract April 11, 1983
Authorized by Minute Action, approved on March 28, 1983
Contract with City National Bank
Address 3388 Via Lido
Newport Beach, CA 92663
Amount of Contract $383,000.00 average collected
/Z" ` '
Wanda E. Andersen
City Clerk
WEA:lr
attach.
balance
3300 Newport Boulevard, Newport Beach
r
COUNCIL AGENDA N0.`7
CITY OF NEWPORT BEACH
FINANCE DEPARTMENT
March 28, 1983
TO: Mayor and City Council
FROM: George Pappas, Finance Director
SUBJECT: AWARD BID FOR BANKING.SERVICES
Recommendation:
That the City Council award the bid for banking services to
City National Bank.
nisrussinn-
On January 10, 1983, the City Council by resolution authorized the
Mayor and City Clerk to execute an agreement between the City of Newport
Beach and Wells Fargo Bank for banking services. However, during the
discussions that followed the handling of the parking meter coins became
a point of disagreement. The bank wanted the City to deliver and bag
the coins. The bank withdrew it's proposal when it was pointed out that
it was the bank's responsibility to bag the coins.
The next low bid was City National Bank. Preliminary discussions
have been held with City National Bank in order for them to understand
exactly what are their responsibilities. City National Bank has assured
the staff it will perform to the City's expectations. Therefore City
National Bank should be awarded the bid.
GP:dp
l
r
0 ORIGINAL 0
AGREEMENT FOR BANKING SERVICES
CITY CLERK COPY
THIS AGREEMENT dated the ��� day of 1983, is
between the CITY OF NEWPORT BEACH, hereinafter "City," located at
3300 Newport Boulevard, Newport Beach, California, and CITY
NATIONAL BANK, hereinafter "Bank ", located at 3388 Via Lido,
Newport Beach, California is made with respect to the following
facts, the materiality of which is hereby agreed to between the
parties:
RECITALS
A. Bank, pursuant to a request therefor by City, has
submitted a proposal to provide certain banking services.
B. City wishes to accept Bank's proposal to provide
services for an average collected daily balance of Three Hundred
Eighty -Three Thousand Dollars ($383,000.00).
1) Term: This Agreement shall be for a term of
three (3) years, commencing on the 1st day of April, 1983, and
ending on the 31st day of March, 1986, provided, however, that
either party to this Agreement may terminate said Agreement upon
giving the other party ninety (90) days' prior written notice of
its intention to terminate.
•
2) Services to be Furnished by Bank: Bank agrees to
provide the following services to City:
A) Bank and City agree that Bank shall act as the
sole demand depository of City (City reserves the right to place
term deposits with other institutions or to invest in securities
of the United States Government and Federal agencies as may be
determined by City to be in its best interests, as follows:
i) General Account. Bank shall accept depo-
sits of City, endorse and photograph all checks deposited and
return to City to City all paid checks, in numerical order, with
an automated account reconciliation.
ii) Payroll Account. Bank shall accept depo-
sits of City or honor other authorized transfer of funds to the
account. Each payroll check drawn will be paid by Bank and
returned with an automated account reconciliation, on a regular
schedule, to be determined by City.
iii) Checks and Supplies. Bank shall furnish
to City, pre - printed at City specifications, all checks, deposit
slips and other instruments pertaining to transactions for dif-
ferent accounts.
iv) Depository for Funds. Deposits to the
credit of City will be provided for as stated below. Every check
received will be endorsed by Bank, and all previous endorsements
will be guaranteed. A photocopy of each deposited check will be
taken and maintained by Bank for a period of two (2) years.
B. Night Depository Services: Night depository
services will be provided by Bank for, but not limited to, the
following City uses:
i) Parking Meter Receipts. These receipts,
it is understood, will consist of coins, to be counted by Bank.
A deposit slip for these monies will be prepared by Bank and
forwarded daily to City
ii) Parking Lots Receipts. These receipts,
it is understood, may or may not be accompanied by a deposit
slip, depending on cirumstances and the discretion of City. A
deposit slip will be prepared, or the accompanying one will be
verified, by Bank and forwarded, daily, to City.
In handling of night deposits, which will
consist largely of currency, Bank will provide thirty (30)
depository bags and secure seals to be used by personnel in mak-
ing such deposits. Additional bags will be available for pur-
chase.
C. Bank will extend a Five Hundred Thousand
Dollar ($500,000) line of credit to City for a three (3) year
period. Interest on borrowings will be at Bank's prime rate, as
charged from time -to -time. Conditions of the line will require
City to be in a non (line) borrowing position for a minmium of
thirty (30) consective days during each (line) year. Bank will
require that City's budget is in balance for each fiscal year.
Executed the day and year first above written.
CITY OF NEWPORT BEACH
A Municipal Corporation
APPROVED AS TO FORM:
i y Attorney
ATTEST.
pity Clerk
CITY Z BANK
By
Vic President
By
Assistant Vice P esi ent
A5G /Bank
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L7-
CITY OF NEWPORT BEACH
March 31, 1983
P.O. BOX 1768, NEWPORT BEACH, CA 92663 -3884
City National Bank
3388 Via Lido
Newport Beach, CA 92663
Subject: Agreement for City Banking Services
OFFICE OF THE CITY CLERK
(714) 640 -2251
On March 28, 1983, the City Council of Newport Beach approved the
Agreement for Banking Services between the City of Newport Beach and
City National Bank in connection with the City's banking services.
Enclosed are the original and two copies of the Agreement whic4 iaeed
to be executed by the Vice President and Assistant Vice President of
City National Bank. Please have all documents executed, retain your
copy, and return the original and one copy to us at your earliest
convenience.
If you have any questions, please do not hesitate to call.
Sincerely,
Wanda E. Andersen
City Clerk
WEA:lr
encs.
cc: Finance Dept.
3300 Newport Boulevard, Newport Beach