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HomeMy WebLinkAboutMINUTES - 09131994 - 1.145 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA TO: BOARD OF COMMISSIONERS FROM: Richard J. Martinez, Executive Director DATE: September 13, 1994 SUBJECT: AUTHORIZING EXECUTION OF CONTRACT FOR DEPOSIT OF MONEYS WITH WESTAMERICA BANK SPECIFIC REQUEST(S) OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION I. RECOMMENDED ACTION: 1. ADOPT Resolution No. 3718 AUTHORIZING the Executive Director of the Housing Authority of the County of Contra Costa to execute a Contract for Deposit of Moneys with Westamerica Bank; and, 2. AUTHORIZE the Executive Director of the Housing Authority of the County of Contra Costa to close all Section 8 program bank accounts with Wells Fargo Bank and reestablish those accounts with Westamerica Bank, as recommended by the Advisory Housing Commission. II. FINANCIAL IMPACT: Westamerica Bank will provide the Housing Authority with approximately $8,013 in interest per year and approximately $524.00 in additional services per month at no real cost to the Housing Authority. III. REASONS FOR RECOMMENDATION/BACKGROUND: For the past several months, Housing Authority staff has been comparing proposals for banking services for the Section 8 programs. Since the inception of the Section 8 program, the Housing Authority has used the banki,ng services of Wells Fargo Bank for these programs. As a result of reduced levels of service, increased costs and lower interest earnings from Wells Fargo Bank during the past year, sta=ff has pursued updated proposals from Wells Fargo Bank and solicited a proposal from Westamerica Bank for these services. A summary of the comparisons of the two proposals is as follows: 1. Based on the February, 1994 activity of all Section 8 accounts, the cost advantage with Westamerica Bank would have been $-891.87. This advaKtage represents lower service fees within the account anaalysis plan offered by West m' erica Bank. We do not receive these savings as hard doll'a'rs, but we can use them to purchase more services from the bank at no real cost to the Housing Authority. , CONTINUED ON ATTACHMENT: YES SIGNATURE rn RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) : ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER VOTE OF COMMISSIONERS I I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT 1 TRUE AND CORRECT COPY OF AN ' AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF COMMISSIONERS ON THE DATE SHOWN. ATTESTED3�t P IL BATCHELOR, CLERK OF THE BOARD OF COMMISSIONERS AND COUNTY ADMINISTRATOR BY J-1 ( 'n 4a U , , DEPUTY Board of Commissioners September 13, 1994 Page -2- 2. The Earnings Credit Rate, which is the base rate for the bank to absorb service fees incurred, is significantly higher at Westamerica Bank than Wells Fargo. In a direct comparison between the two over the last 1.4 months, Westamerica has averaged 3.08% versus Wells Fargo 2.307%. Using our average collected balance less legal reserve for the last twelve months of $1,241,582, this difference means that the Housing Authority has more room to have Westamerica Bank pay for additional banking services of approximately $9,596 per year more than Wells Fargo Bank 3. Currently none of the checking accounts with Wells Fargo Bank is interest bearing. The new contract for deposit of monies issued by HUD requires interest bearing accounts. Based on today's interest rates and our average ledger balance for the last twelve months, we would earn approximatley $44,013 in actual interest per year with Westamerica Bank versus the quote from Wells Fargo of approximately $6,000 earned per year. Both banks offer on-line computer service to provide for better cash management for the Housing Authority. At its Regular Meeting on Monday, August 15, 1994 the Advisory Housing Commission voted to recommend: 1. Adoption of Resolution No. 3718 authorizing execution of a Contract for Deposit of Moneys with Westamerica Bank, and, 2. Authorize the Executive Director of the Housing Auth"ortty of the County of Contra Costa to close all Section 8 program accounts at Wells Fargo Bank an'd reestablish those accounts with Westamerica Bank. IV. CONSEQUENCES OF NEGATIVE ACTION: Should the Board of Commissioners elect to not adopt Resolution No. 3718, the Housing Authority would lose approximately $8,013 in add-itional annual interest and approximately $524 more in services per month at no real cost to the Housing THE BOARD OF COMMISSIONERS, HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA RESOLUTION NO. 3718 AUTHORIZING EXECUTION OF CONTRACT FOR DEPOSIT OF MONEYS WITH THE WESTAMERICA BANK WHEREAS, THE Housing Authority of the County of Contra Costa (herein called the "LHA") proposes to enter into an Agreement (herein called the "General Depositary Agreement") with Westamerica Bank (which is a member of the Federal Deposit Insurance Corporation and is herein called the "Bank") with respect to any Projects as defined in the' Consolidated Annual Contracts, as amended, with the Department of Housing and urban Development, and which at any time now or hereafter is incorporated under the terms of such Contracts; and, WHEREAS, in the interests of conformity and efficiency of administration, it is proposed to add this Bank to the present depositaries of the LHA; NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Housing Authority of the County of Contra Costa as follows: 1. The General Depositary Agreement, in substantially the form of Agreement hereto attached, is hereby approved and accepted both as to form and substance, and the Executive Director of th'e -Housing Authority of the County of Contra Costa if hereby authori-zed and directed to impress and attest the of` fici-al seal of the LHA to each such counterpart and to furnish executed countero-'a•rts thereof to the Department of Housing and Urban Development, to.get�her with such other documents evidencing approval and authorizing, the execution thereof as may be required by the Department of Housing and Urban Development for their approval . 1. Immediately upon approval of the General Depositary Agreement by the Department of Housing and Urban Development, this Resolution shall take effect. PASSED ON _ . 9/13/94 by the following vote of the Board of Commissioners: AYES: Commissioners ,smit� Bishop, DeSaulnier, Torlakson and Powers NOES: None ABSENT: None ABSTAIN: None U.S:Department of Housing General DepOSlt01'�/ Agreement . and Urban.Development. ,. g . Office of Public and Indian.Housing.. i r. This Agreement,entered into this day of ' 19 by and between (herein called the"PHA/IHA'),a.duly organized and existing public body corporate and.politic of the of and (herein called the"Depository"),located at Witnesseth: Whereas,the Department of Housing and Urban Development(herein called."HUD")has entered into one or more contracts(herein called: the"Contract"with the PHA/IHA.for the purpose of providing financial assistance to develop and operate Iower income housing projects;as authorized by the United States Housing Act of.1937,as amended(42 USC 1437,et seq.);and Whereas,under the terms of the Contract the PHA/IHA is required to select as depositories of its funds financial institutions whose deposits oraccounts are insured by either=the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance-Fund' as long as this Agreement is in force and effect Now Therefore,in consideration of the mutual covenants hereinafter set forth,the parties hereto agree as follows: 1. The deposits and accounts of the Depository shall continue to be 4. Any securities.received from the PHA/IHA or purchased by the insured by either—the Federal Deposit Insurance Corporation or the Depository with monies from the Accounts shall be considered to be a National Credit Union Share Insurance Fund. partof the Accounts and shallbe held by the Depository in safe-keeping 2.. Allmonies deposited by:the PHA/IHA with the Depository shall for the PHA/IHA until sold. Interest on such securities.and the proceeds be credited to the PHA/IHA in a separate interest bearing.deposit or from the sale thereof shall be deposited in the.Account upon receipt. interest bearing accounts,designated S. If the Depository received written notice from HUD that no withdrawals by the PHA/IHA from the Accounts are io.be permitted, the Depository shall not honor any check or other order.to pay:frorn the Accounts" Accounts or directive to purchase or sell securities, or permicarly (herein the"Accounts"). Any portion of PHA/IHA Funds not insured withdrawals by the PHA/IHA from said Accounts until the Depository by a Federal insurance organization'shall be fully(100%)and continu- is authorized to do so by written notice from HUD. ously collateralized with specific and identifiable U.S.Government or b. The Depository isnotobligated to be familiar,and shall not be Agency securities prescribed byHUD. Such securities shall be pledged charged,with knowledge of the provisions of the Contract,and shall be and set aside in accordance with applicable law or Federal regulations. under no duty to investigate or determine whether any action taken by The PHA/IHA shall have possession of the securities(or the PHA/IHA either the PHA/IHA or HUD in respect of the Accounts are consistent will take possession of the securities)or an independent custodian(or . with or are authorized by the Contractor whether either PHA/IHA or an independent third party)holds the securities on behalf of the PHA/ HUD is in default under the provisions of the Contract. The Depository IHA as a bailee (evidenced by safe keeping receipt and a written shallbe fully justified in accepting and-acting on,without investigation, bailment for hire contract)and will be maintained for the full term of any certificate or notice furnished to it pursuant to the provisions of this deposit. The Depository may,substitute other securities as collateral to. Agreement and which the Depository shall in good faith believe to have equal or increase the value. If PHA/IHA is an agency of an Indian tribe, been duly authorized and executed on behalf of the partyiri Vose nares the collateral shall be in United States bonds and otherwise as may be prescribed for public funds by the United States Secretary of the the same purports to have been made or executed. _ Treasury. 7. The rights and duties of.the Depository._under this Agreerizent 3. Except as stated in Paragraph 5,the Depository shall honor any shall not be transferred or assigned by the Depository without the prior (a)check or other order to pay from the Accounts,or(b)directive to `Written approval of the PHA/IHA and HUD. This Agreement maybe purchase investment securities with monies from the Accounts or to sell terminated by either party hereto upon thirty days'written notice W the securities,if such order or directive is in writing and signed on behalf other party, and HUD. The rights and duties of the DeposiSaty . hereunder shall not be transferred or assigned nor shall this AgreeMML of the PHA/IHA by an officer or member designated by resolution of the Board of Directors of thePHA./IHA to have such authority.To assist be terminated during any period in which the Depository is requ'ttd to the Depository in its obligation,the PHA/IHA shall furnish the Deposi refuse to permit withdrawals from the Accounts as provided.in Para'- tory with a certified copy of the resolution. graph 5. Form HUD-52000 and previous editions of this form are obsolete. -form HUD-51999(6/91y ref.Handbook 74754 s . S:HUD is intended to be a third.party beneficiary of this Agreement btif shall be held by the Depository as custodian or trustee for.the PHA/ and may sue to enforce its provisions and to recover damages for failure IHA in`a I separate account established for that puipose�-sy' the to carry out its terms. Depository(herein the"Securities Account'). The Securities Account 9. The Depository shall promptly notify the PHA/IHA of crediting shall be designated: or depositing of any monies in the Accounts. 10.The provisions of this Agreement may notbe modified by either Party without the prior written approval of HUD. Income or other proceeds from securities held in the Securities Account 11. Previous General Depository or Savings Depository Agree- shall,as directed by the PHA/IHA,upon receipt,be paid to or on behalf ments,if any,entered into between the Depository and the PHA/IHA of the PHA/IHA;provided,however,that such proceeds shall,to the are hereby terminated and all monies and securities of thePHA./IHA on extent consistent otherwise with the provisions of this Paragraph,be deposit with or held by the Depositories pursuant to the terms of said deposited in the Accounts. If the Depository receives written notice. Agreement shall continue to be held for account of the PHAAHA from HUD pursuant to Paragraph 5 hereof that no withdrawals by the pursuant to and in accordance with the provisions of this Agreement. PHAAHA from the Accounts are to be permitted,the Depository shall not honor any directive from the PHA/IHA to sell securities,or permit. 12. At no time shall the PHA/IHA Funds in the Accounts be any withdraws by the PHA/IHA,from the Securities Account until the permitted to exceed the amount insured by Federal deposit insurance Depository is authorized to do so by written notice from HUD. During (herein the"insured Amount").At any such time as the amount of funds the pendency of such restrictions on the Accounts and the Securities in the Accounts reach the Insured Amount,whether by the accrual of Accoun-i the Depository,except as directed in writing by HUD,shall interest or otherwise,the Depository shall promptly,as directed by the . not remit any payment to the PHA/IHA.for the purpose of limiting the PHA/IHA, and in an amount sufficientto limit the funds in the amount of funds in the Account to the Insured Amountbut shall instead Accounts to the Insured Amount,either. (a)remitpayment to the PHA/ purchase securities approved for investment by the PHA/IHA and hold IHA or,(b) on behalf of the PHA/IHA,purchase securities approved such securities in the Securities Account. for investment by the PHA/IHA. -Such securities shall not be (For use only in certain States that have statutes that prohibit Public considered to be a part of the Account pursuant to Paragraph 4 hereof Housing Agencies and Indian Housing Authorities from implementing paragraph 2.) In.Witness Whereof,the PHAAHA and the Depository have caused this Agreement to be executed in their respective names and their respective seal to be impressed hereon and attested as of the date and year fust above written. PHA/IHA (SEAL) ATTEST: By Chairman Secretary. Depository By (SEAL) ATTEST: Note: Strike paragraphs 11 and 12 if not applicable. form HUD-51999