HomeMy WebLinkAbout7/7/1999 - STAFF REPORTS (13) DATE: July 7, 1999
TO: City Council
FROM: Procurement Manager and Director of Finance & Treasurer
BANKING SERVICES
RECOMMENDATION:
It is recommended that the City Council approve selection of Bank of America for the City's banking
services for three years, plus 2 one year options.
BACKGROUND:
For more than ten years, the City had utilized the services of First Interstate Bank (FIB) for its
banking needs. However, the wave of mergers and consolidations in the banking industry eventually
included FIB. Wells Fargo Bank took over FIB, and promptly divested several branches, including
the Palm Springs' branch, to Home Savings. Late last year, Home Savings was taken over by
Washington Mutual. The City has changed banks three times in the last four years without ever
moving its accounts.
In May, 1999, the City issued a Request For Proposal for Banking Services. All of the banks with
a branch in Palm Springs were sent a copy of the RFP, and a legal notice was published in the Desert
Sun. A total of 10 RFP's were mailed.
A pre-proposal conference was held on May 18, 1999, and again all the local banks were contacted
to make sure they were aware of the RFP.
By the June 15, 1999 deadline, the City's Procurement Division had received three proposals: from
Bank of America(B of A), Union Bank of California, and Wells Fargo Bank.
A committee comprised of the City's Deputy City Treasurer, Economic Development Coordinator,
Senior Procurement Specialist, and Director of Finance& Treasurer, and the Finance Director for
Leisure Management reviewed the responses.
The proposals were ranked for a number of factors, including thoroughness of the response to the
RFP, financial stability, services provided, community involvement and price.
The committee concluded that all three banks were excellent institutions, and that all could provide
more than a satisfactory level of services. The decision came down primarily to a comparison of
price.
Based on a typical month's banking activity, the banks provided estimates of the costs of providing
services. Union Bank of California's base cost was $2,536 per month, and Wells Fargo was$2,376.
Bank of America was lowest at $2,197. In addition, B of A scored well on community involvement
and range of services. All five of the review committee members rated B of A first.
The proposed contract would be for three years, with two additional years at the City's option. B
of A has guaranteed the rates quoted in their RFP for four years.
Besides the traditional banking services,the City and B of A will initiate a number of new procedures.
The City will begin to accept credit cards for payments in at least two locations. While credit card
processing fees cannot be passed on to the consumer, we should be able to reduce the number of
bad checks and to clear more of the NSF checks that we do receive.
The City will begin to receive its canceled checks on CD-ROM disks, eliminating the necessity of
sorting, filing and storing hard copy checks, and allowing much faster retrieval of information.
More and more of the City's financial business, both receiving and making payments, will be done
electronically via wire transfers directly from the City's computers. Ik 4 I
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In short, the City will enjoy increased services and efficiencies at about the same cost as today.
The transition from Washington Mutual to Bank of America should be substantially completed within
three months. B of A has also offered $1,500 to help cover the costs of transition.
The attached Minute Order authorizes the Treasurer to commit the City to Bank of America for Cash
Management Services and related documents (see attached).
Harold Good Thomas M. Kanarr
Procurement Manager Director of Finance & Treasurer
APPROVED:
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Rob W. Par ms
City Manager
Attachments: Minute Order
Cash Management Services - Terms & Conditions
Contract for Deposit of Moneys J t�
Funds Transfer Agreement
Reclear Agreement
Bank of America
City of PS Banking Service
AGREEMENT#4116
M06438, 7-7-99 Related
CASH MANAGEMENT SERVICES
Terms and Conditions
BankAmerica
Minute Order No.
APPROVING SELECTION OF THE BANK OF
AMERICA FOR THE CITY'S BANKING
SERVICES FOR AN INITIAL TERM OF 3 YEARS,
PLUS 2 ONE YEAR OPTIONS PER THE TERMS
AND CONDITIONS OF THE CASH
MANAGEMENT SERVICES AGREEMENT AND
RELATED DOCUMENTS.
I hereby certify that this Minute Order approving selection of the Bank of America for the City's
Banking Services for an initial term of 3 years, plus 2 one year options per the terms and conditions
of the Cash Management Services agreement and.related documents was adopted by the City Council
of the City of Palm Springs, California, in a meeting thereof held on the 7' day of July, 1999.
Patricia Sanders
Acting City Clerk