Fiscal Management Conference Georgia Office of the State Treasurer (OST) Scott Austensen, Deputy Treasurer September 25, 2018

Procurement Process? The goal of OST’s bank procurement process is to deepen bank relationships in order to reduce bank fees and increase risk adjusted returns on invested funds. This process has led to expedited bank evaluations and more choices for Merchant Card Services. Each year the four Primary Banks are selected based on a competitive process measuring overall benefit to the State.

OST Bank Program 112% Reduction in Net Bank Fees over FY10-FY18 Year Bank Fees ECR Interest Total Earnings Net Bank Fees FY10 $8,591,021 $0 $481,190 $8,109,831 FY11 $6,385,129 $695,886 $216,832 $912,718 $5,472,412 FY12 $4,157,074 $1,407,862 $488 $1,408,350 $2,748,723 FY13 $3,723,568 $1,463,104 $396 $1,463,500 $2,260,068 FY14 $3,504,166 $1,466,658 $212,258 $1,678,916 $1,825,250 FY15 $3,439,503 $1,324,533 $284,722 $1,609,255 $1,830,248 FY16 $3,584,638 $1,549,109 $287,918 $1,837,027 $1,747,611 FY17 $3,585,708 $1,713,161 $590,754 $2,303,915 $1,281,793 FY18* $3,077,859 $2,440,192 $1,589,704 $4,029,896 -$952,037 To add another fiscal year’s data point to this chart, click inside the chart and then right click to select Edit Data in Excel. The line chart is pulling from the three row table in green. The YoY savings tables on this slide must be manually edited (not in Excel). Just click on the chart, add another row and then the data for the new row can be automatically calculated in the Excel spreadsheet linked to the graph. Total Bank Fees (64% Reduction over 8 Years) $0 Total Bank Fees Net of Earnings (112% Reduction over 8 Years) 6/30/2018

Procurement Evaluation Process The four Primary Banks for FY18 were: JP Morgan PNC SunTrust Wells Fargo The new Primary Banks for FY19 will be: Bank of America SunTrust Bank Wells Fargo Bank The MCS providers are: BB&T, SunTrust and Wells Fargo

Bank Evaluation Calendar Fiscal Year 2019 July 2018-Oct 2018 Oct 2018-Dec 2018 Jan 2019-Mar 2019 Apr 2019-Jun 2019 Council of Superior Court Judges Dept. of Early Care and Learning Dept. of Economic Development Dept. of Defense Dept. of Law Dept. of Education Dept. of Juvenile Justice Dept. of Public Safety Dept. of Behavioral Health and Developmental Disabilities Georgia Forestry Commission Technical College System of Georgia Dept. of Natural Resources Dept. of Corrections Secretary of State Vocational Rehabilitation

What you should know about the OST Instruction Sheet for Agencies OST will send agencies a communication reflecting our record of accounts (from the latest Bank Registry). Agencies will also see Bank Services Schedules for OST Bank Program accounts listing current bank services. Agencies must forward Bank Services Schedules for all Non-OST Bank Program accounts to incumbent banks for completion and submission to OST.

OST Review of Bank Proposals OST uses Bank Services Schedules to solicit pricing from the Primary Banks and, as necessary, incumbent banks. OST Bank Program accounts can only be bid on by Primary Banks. Non-OST Bank Program accounts can only be bid on by Primary Banks and respective incumbent banks.

Bank Fee Analysis (by Account) OST will send agencies Bank Fee Analysis following its review of the bank bids for all accounts. OST will send a letter of explanation as well as a summary spreadsheet with bank analysis. The summary spreadsheet may have up to three sections: CTAS, Other Bank Program Accounts and Non-OST Bank Program Accounts. Circles are shown on the summary sheet to indicate lowest cost selections.

Bank Fee Analysis (CTAS Accounts) The first section (Section A) of the analysis reflects OST Bank Program Accounts that will go into the CTAS Program.

Bank Fee Analysis (Other Bank Program Accounts) The next section (Section B) deals with OST Bank Program Accounts that will not be in the CTAS Program.

Bank Fee Analysis (All OST BP Accounts) The next section (section C, in green) shows the lowest cost consolidated bank offer for all OST Bank Program Accounts. Primary 1 Primary 2 Primary 3 Primary 4 Incumbent In this example, agencies can select A and B, or C

Bank Fee Analysis (Non-OST BP Accounts) The next section (Section D) of this analysis reflects Non-OST Bank Program Accounts.

Bank Fee Analysis (All Non-OSTBP Accounts) The final section (Section E, in green) shows the lowest cost consolidated offer for all Non-OST Bank Program Accounts. In this example, agencies can select by account in Section D, or all accounts consolidated with one bank in Section E.

Banking Evaluation System of Treasury (BEST) OST is designing a new system to add effectiveness and efficiency to the banking evaluation process. Automating calendars and communications with our banking contacts and State Agencies. Expect roll-out during the second quarter of FY 2019.

Banking Evaluation System of Treasury (BEST)

What OST needs from Agencies for BEST An agency contact to serve as agency’s BEST administrator (contact information, etc.). Contact lists of banking partners. List of employees for BEST system training.

Merchant Card Services Providers Who are the Providers Merchant Card Services Providers Who are the Providers? and How Many entities have signed up? We now have three MCS Providers: BB&T – 10 entities SunTrust – 49 entities Wells Fargo – 15 entities

Merchant Card Services Pricing Previous vs. Current 2003 SunTrust Merchant Card Services 14 cents per transaction 2010 SunTrust Merchant Card Services 7 cents per transaction 2012 Bank of America Merchant Card Services 2 cents per transaction 2016 SunTrust Merchant Card Services 1.7 cents per transaction 2017 SunTrust Merchant Card Services 1.0 cents per transaction 2017 BB&T Merchant Card Services 1.7 cents per transaction 2017 Wells Fargo Merchant Card Services 1.7 cents per transaction

Merchant Card Services Policy

New Application Instructions using DocuSign Merchant Card Services Process What’s the new application process? New Application Instructions using DocuSign To complete the application online, please go to the OST website at ost.georgia.gov.  Right column - At Your Service  First link - Statewide Merchant Card Services Policy  Second link - Exhibit A, Part 1 application for all State Entities (Part 2 is now limited to Local Governments)  Power Form Signer Info - enter your name and email address; and then click Begin Signing ; DO NOT change or remove Craig Cannon’s name  Application is grey; X the Track Location box at bottom (if displayed)  Agree to the Terms (if displayed)  and then Click Continue  Click Start on the application (all fields have to be completed including 8. A, B and C and the GTA Questionnaire)  You have to complete the application in one session; there is no capability to save a partially completed application Click Finish to start the routing to Craig Cannon in OST OST will review and forward to OPB, which will review, approve and forward to GTA, which will review, approve and forward to the State Treasurer.

https://ost.georgia.gov

DocuSign Application Process Put in name and email Click Here Click Here

Questions?