Banking Services
This page provides an overview of banking requirements for local governments in Washington State, along with sample RFPs/agreements and links to best practices and list of authorized depositaries.
Overview
RCW 39.58.080 requires local governments to bank with a qualified public depositary.
In code cities, the bank or credit union is designated by the council (RCW 35A.40.030). In other classes of cities and counties, the statutes allow the treasurer to select the bank or credit union—see RCW 35.38.010 for cities and towns and RCW 36.29.020 for counties. If a town issues checks instead of warrants, the town council selects the public depositary (RCW 35.27.345).
(See the definitions of "financial institution" and "public depositary" in RCW 39.58.010.)
Cities and counties may pay for their banking services by direct charges for each service, by compensating balances (funds the bank holds on which it pays no interest), or a combination of the two.
Special purpose districts: Most "special purpose districts"—such as fire protection districts, park districts, port districts, public hospital districts, public utility districts (PUDs), water-sewer districts, and many others—do not have their own treasurers and rely instead on the county treasurer to manage their financial and banking services.
However, some special purpose districts use their own treasurer and procure their own banking services.
Examples of Contracts and Solicitations
Although there is no statutory requirement to do so, local governments should periodically re-solicit their banking services through a request for proposals (RFP) to make sure they are getting the best services at a good price. Banking services are considered to be personal services contracts; below are a few selected examples.
GFOA checklist: The Government Finance Officers Association (GFOA) has published a Banking RFP Checklist that is intended as a helpful starting point.
Cities
- Carnation Banking Services RFP (2024) – Depository and other banking services, with possibility of adding merchant services. Includes banking services contract.
- Kirkland Banking Services RFP (2024) – Comprehensive banking services, including merchant services, lockbox services, purchasing cards, and safekeeping. Includes standard service agreement, IT cloud vendor security agreement, and addendum with examples of existing merchant statements.
- Liberty Lake Banking Services RFP (2024) – Includes short banking services agreement.
- Mount Vernon Banking Services RFP (2018)
- Poulsbo Banking Services RFP (2017) – Includes sample professional services agreement.
- Stanwood Banking Services RFP (2017) – Includes sample contract.
- Tacoma Banking Services RFP (2022) – Banking and merchant services; includes standard contract, insurance requirements, and terms/conditions.
Counties
- Kitsap County Banking Services RFP (2023) – Includes standard contract for goods and services.
- Skagit County Banking, Treasury, and Merchant Services RFP (2024)
Special Purpose Districts
- South Snohomish County Regional Fire Authority Banking Services RFP (2023) – Includes depository account, accounts payable clearing account, and payroll clearing account.
Recommended Resources
- WA State Treasurer: Qualified Public Depositaries – List of financial institutions currently authorized to accept public deposits.
- Government Finance Officers Association (GFOA) Treasury and Investment Management Best Practices – Click on the "Banking and Merchant Services" tab to see best practices related to procurement of financial services, bank account fraud prevention, payment cards, use of lockbox services, remote deposit capture, and other banking topics.
