The URL can be used to link to this page

Home My WebLink AboutStaff Report 3.B 01/22/2007CITY OF PETALUMA, CALIFORNIA AGENDA BILL 3.B 7 January 22, 200 Agenda Title: Resolution authorizing the City Manager to enter into an agreement with Meeting Date: Exchange Bank to provide banking services to the City beginning 2007 January 22, 2007 through 2012. Meeting Time: lZJ 3:00PM 07:00PM Categon:: D Presentation 18] Consent Calendar D Public Hearing D Unfinished Business D New Rosiness DeJlartment: Director: Contact Person: Phone Number: Admin Services Steven~ichael Steven Carmichael 778-4352 Cost of ProJlosal: Account Number: $35,000 (estimate) 54320 -:Amount Budgeted: Name of Fund: $4U,OOO 'l_, vanous Attachments to Agenda Packet Item: Resolution authorizing City Manager to sign agreement for banking services. Summary of Monthly Bank Charges Summan: Statement: The City of Petaluma currently has five demand accounts with Wells Fargo Bank. The contract with Wells Fargo, which was entered into in 2001, expires the in 2006. Every five years, the City reviews its banking services and requests proposals from local banks to provide information on enhanced services and updated costs. A Request for Proposal (RFP) was sent to twelve local banks in September, 2006. A total of four written responses were received. Based on a review of all responses, staff is reco=ending that the City enter into an agreement with Exchange B\l?k to provide banking services beginning in 2007 through 2012. Recommended Ci!Y Council Action/Suggested Motion: Authorize City Manager to enter into a banking service agreement with Exchange Bank. ;t::cc:D Reviewed by Citv Attorney: AJlJlroved by Citv Manager: 0~ ~ Date: I h \0 1 Date: Date: \A.) ' I CITY OF PETALUMA, CALIFORNIA JANUARY 22, 2007 AGENDA REPORT FOR RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT WITH WELLS FARGO BANK TO PROVIDE BANKING SERVICES TO THE CITY BEGINNING 2007 THROUGH 2012 1. EXECUTIVE SUMMARY: The City of Petaluma's contract for banking services with Wells Fargo Bank is expiring. Every five years, the City reviews its banking services and requests proposals from local banks to provide services to the City. A Request for Proposal (RFP) was sent to twelve local banks in September, 2006. A total of four responses were received. Based on a review of all responses, staff is recommending that the City enter into an agreement with Exchange Bank to provide banking services for the next five years. 2. BACKGROUND: The City of Petaluma's bank has been Wells Fargo Bank since 2001. We currently maintain five demand accounts with them, two of them with overnight sweep features. Annual dollar volume in the General Operating Account is approximately $400,000,000. Approximately 10,000 checks are issued annually from this account. The City malces extensive use of electronic banking, as well as utilizing on-line banlc activity reporting. The City's banking agreements are written for a five year period. Our current agreement with Wells Fargo Bank expires the end of2006. Each five years we review our banking services and costs. Consequently, we recently solicited banking proposals from twelve institutions, with branches in the City. The following four banks provided written responses to our RFP: Exchange Bank Bank of Marin Wells Fargo Bank Westamerica Bank Our initial review of the written proposals consisted of evaluating the following criteria: I. Comprehensiveness of proposal 2. Ability to provide required services 3. Ability to provide desired future services 4. Cost of services 5. Relationship team 6. Public sector experience 7. Strength and stability 8. Community involvement Based on an initial review of the four submittals, staff selected two to banks to interview, Exchange Bank and Wells Fargo Banlc Du.ring our discussions with the two banks, staff focused on the following points: 1. Availability of required services 2. Availability of desired future services 3. Banking service costs 4. Other bank services offered to enhance the City's service delivery Availability of required and desired services Both Exchange Bank and Wells Fargo banlc offer all the City's required services. Wells Fargo currently also offers all the City's desired future services. Exchange Bank does not currently offer some of our desired services, but they envision enhancing their capabilities during 2007 to offer all services desired by the City. Cost of Services The forecasted monthly charges, proposed by each bank, are detailed on Attachment 1. An estimate of the total projected monthly cost is: Exchange Bank ............................................ $2,200 Wells Fargo Bank ....................................... $2,800 Credit Cards The City accepts credit cards at various locations and anticipates adding that service at the Police Department. Costs to the City include a percentage charge on the total credit card dollar amount, plus a transaction fees. Exchange Bank... . . . . . . . . . ... $.10 per transaction plus .19% Wells Fargo Bank .............. $.08 per transaction plus .23% Other Services to Enhance Service Delivery Exchange Bank provides a payroll deposit card program, which the City would lilce to institute in 2007. Exchange Bank envisions implementing point of purchase check conversion services during 2007, which the City is also interested in utilizing. Exchange Banlc imposes a maximum of two day float on deposited checks. They offer market rate earnings on the sweep accounts. Overall, staff feels that Exchange Bank offers the best value for our banlcing service needs. They will provide the lowest cost for our existing services and offer a competitive rate for our credit card services. Their rates for the overnight investments of our checking account balances are competitive with the other banlcs .. 3 3. ALTERNATIVES: A. Adopt the resolution authorizing the City Manager to enter into an agreement with Exchange Bank for banking services. B. Direct staff to choose another bank which responded to our RFP. C. Reopen RFP process. 4. FINANCIAL IMP ACTS: The City will incur costs of approximately $35,000 annually for banking services. This cost will be dependent on the level of account activity. Exchange Bank has agreed to provide requested services to the City for the next five years at the prices included in their current proposal. 5. CONCLUSION: Although both Wells Fargo and Exchange Bank provided very competitive bids, staff expects that Exchange Bank will provide an enhanced level of service, at a reduced cost, to the City. While it is never easy to change banks, the forecasted savings and improved service to the City, during the next five years, will mitigate the inconvenience incurred during the transition period. Based on interviews with Exchange Bank account managers, it is evident that they have the necessary resources both locally, and at their headquarters, to assist the City in providing a smooth transition and offering excellent service. 6. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL INDENTIFY SUCCESS OR COMPLETION: The project will be completed when the City transitions all of our banking services to Exchange Bank. 7. RECOMMENDATION: Adopt the Resolution S:/ngcnda/1-8~07 .bnnk rfp RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT WITH EXCHANGE BANK TO PROVIDE BANKING SERVICES TO THE CITYOFPETALUMABEGINNING2007THROUGH2012 WHEREAS, the City has solicited bids from various banking institutions to provide banking services for the City of Petaluma; and WHEREAS, the City has received proposals from four banking institutions; and WHEREAS, the City has reviewed these proposals and found that the proposal from Exchange Bank was the most advantageous to the City. NOW, THEREFORE BE IT RESOLVED that the City Council authorizes the City Manager to enter into an agreement with Exchange Bank to provide banking services for the City based up on their proposal. s filename:\accountant\cinde\excel\misc\bankrfp ATTACHMENT 1 January 22, 2007 Agenda Bill SUMMARY OF MONTHLY BANK CHARGES based upon average monthly transaction volumn Thomas Lee Charity Account acct main! Police Trust Account acct main! sweep Payroll Account acct main! ARP check pd elec credits posted elec debit posted ACH transit 2 day ACH on-us 2 day ACH return-fax advice General Operating Account acct main! sweep credits posted on us dep checks loc dep checks loc clearing dep checks region dep checks transit dep checks CV on us dep checks CV local dep checks CV local cir dep checks CV region dep checks CV transit dep checks return item return itern redeposit DDA checks pd elec credit elec debits ACH originated ACH received ACH 1 day ACH 2 day ACH batch release rec manager outgoing rec manager billpay stop payment wire in domestic wire out domestic cash manager exec CD cleared checks formatted electronic files 15.00 22.99 0.16 0.16 60.08 10.72 0.08 15.00 100.00 165.10 1.89 0.44 3.85 4.29 11.55 154.98 23.98 274.01 398.86 167.31 45.00 2.00 82.61 12.16 1.92 7.00 3.68 2.16 0.56 30.00 11.00 264.75 20.00 60.00 80.00 35.00 20.00 100.00 2,208.29