HomeMy WebLinkAboutRes2006-067
Sponsored by: Corbridge
CITY OF SEWARD, ALASKA
RESOLUTION 2006-67
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING A SINGLE ELECTRONIC SIGNATORY FOR
ELECTRONIC BANKING TRANSACTIONS WITH THE STATE OF
ALASKA AND OTHER GOVERNMENT ENTITIES
WHEREAS, the Seward City Council and City administration have heretofore required two
signatures to appear on all checks, drafts, notes or orders drawn against the City of Seward's bank
accounts, including dual electronic endorsements of electronic funds transfers, in order to ensure
internal control and to safeguard public funds; and
WHEREAS, the City of Seward is required by the State of Alaska to utilize various State
electronic payment mechanisms such as ACH and myAlaska, in order to make payments to the
Department of Motor Vehicles, Public Employees Retirement System, etc., and these payment
systems require only one individual to electronically release funds from the City's Bank accounts,
and provide no mechanism by which further security features can be required; and
WHEREAS, the City has been notified by the State of Alaska Department of Administration
that failure to utilize the specific programs required by the State of Alaska will subject the City to
revocation of the City's contract to provide DMV motor vehicles services in Seward, which is a
service that has been provided by the City on behalf of the State of Alaska for decades, and is a
highly valued service to the community; and
WHEREAS, the City administration will continue to require two written signatures to
authorize an electronic transfer, prior to one individual being given the authorization to release funds
from the City's bank accounts, in order to maintain internal controls.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The City will require two City officials authorized to release funds from the City's
bank accounts to affix their signature to documents approving the electronic release of funds from
the City's bank accounts, but only one individual is required to electronically authorize the transfer
of funds to the State of Alaska or other governmental entities, when those entities require electronic
forms of payments.
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Council Agenda Statement
Meeting Date: June 12, 2006
Through: Clark Corbridge, City Manager
From: Kristin Erchinger, Finance Director
Agenda Item: Single Electronic Signature Authorized for Banking
Transactions with Governmental Entities
BACKGROUND & JUSTIFICATION:
The City has previously required two signatures to appear on all checks, drafts, notes or orders drawn
against the City’s bank accounts. With the advent of electronic banking, the City has also required dual
electronic endorsements of electronic funds transfers, in order to ensure internal control and to safeguard
public funds.
In the past few months, the State of Alaska Division of Motor Vehicles notified the City that it would be
required to pay DMV fees to the State daily, utilizing a program called myAlaska. Unfortunately, this
payment mechanism, and others utilized by the State of Alaska and other governmental agencies, have
limited security controls, and enable one individual to transfer funds electronically. These systems are less
secure than the City’s current practice of requiring two electronic signatures before funds can be released
from the City’s accounts.
The State Department of Treasury was willing to work with the City to accept payment in any one of a
variety of ways. However, the Department of Administration, as well as the Governor’s Office, was
unwilling to work with the City to respect our need for a higher level of control of public funds. The State
informed us that if we were unwilling to utilize the myAlaska system, our contract to provide DMV services
in Seward would be terminated effective July 1, 2006.
The Seward City Council was notified of this matter at its meeting of May 22, 2006, and directed the City
administration to forward a resolution authorizing a single person to initiate electronic banking transactions,
so that the City’s DMV contract would not be in jeopardy. The administration intends to work to resolve
this matter with future State administrations, to provide a higher level of safeguarding of public funds. In
the meantime, rather than to give the State a justification for terminating our contract, we have no choice
but to concede to their single methodology for payment.
The City of Seward has provided motor vehicle services to the Seward community for decades, and we
believe this is a highly valued service. Therefore, the administration will continue to require two written
signatures to authorize an electronic transfer, prior to one individual being given the authorization to release
funds from the City’s bank accounts, in order to maintain internal controls.
FISCAL NOTE:
The new contract requires daily payments to the State of Alaska which adds more work for the finance
department staff, but is not expected to result in added bank transaction fees.
Approved by Finance Department: ___________________________
RECOMMENDATION:
Recommend City Council approve Resolution 2006-, authorizing a single electronic signature as sufficient
for transferring funds electronically from the City to governmental entities.