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HomeMy WebLinkAbout7A - Official City Bank STAFF AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: APRIL 17, 2000 8A RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROVAL OF RESOLUTION APPOINTING OFFICIAL CITY BANK Zr OOr DISCUSSION: Introduction The purpose for this agenda item is to consider appointing an official city bank for a time period of approximately 3 plus years that would formally begin effective June 1, 2000 and continue thru December 31, 2003. History In the past the City Council has always designated the official city bank, along with the normal list of annual appointments, during its first meeting of the year in January. Because there was an expressed interest by both Marquette Bank and U.S. Bank, the City Council approved Prior Lake State Bank as the City's official bank on an interim basis on 1/3/00 and directed Staff to prepare a request for proposals and bring back a final recommendation. Current Circumstances 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER . T H:IAGENDAIAOOO2.DOC was then sent out to all three local banking institutions with a response deadline of Friday March 10, 2000. Each financial institution completed the RFP and a compilation of their bank charges is indicated below: BANKING SERVICES SOLICITATION RESPONSE INTEREST RA TES:(quote as of 3/1/00 business day) [............................................................................................]...Marq.ii.ette..T'p.rior..La.ke.T'..U~.S.:"jiank....l i i Bank i State Bank i i .............................................................................................................................................................................................. [ Checking Account Interest Rate (Basic) [ (1) [ (2) [ (3) [ i i 5.385% i 5.350% i 2.90%/4.53% i r"(T)"Marquette'rate'pegg'ed'i'o'9'i"da'?frc':i'si'iry'siii"rai'e................................................................................1 r..C'i)"ii:-[....State.rate..pegge<i'to'3.Ci'd.a?freas.ury.si'ii'rate...................................................................................i i"cj)"iJ:S:'Bank'rate"{nci'udes'liiiSic'cheCid'iig'rate"pii'is"eamings.crc.dii..rate.................................................] r::~~~~~~~)~!~!~:~~:~~~~:!.~~~:~~:~~:~~:::::::::::::::::r:::::::::::::::::::::::::::r::::::::::::::::::::::::::1:::::::::::::::::::::::::::::] i $0 - $24,999 [ 3.885% [ 3.850% [ 2.90% [ r...........................$25";0.00.:.$4.(99.9...........................]".....4:-385%.....T.....~f3s.oo/~.....T........2.:9.0%.........1 r.........................$.sO';0'00.:.$99:999...........................j.......4:.S85o/~......r......4:.SS.0o/~......]"......T9.0%.........1 r.............................~bo~.e.$.100';0.00,.............................r....5:-38.5o/~......]"....T3S.0o/~.....T.......f9.0%.........1 .............................................................................................+............................................................+................................. f..~P.J.~~~~}~~~~~~~..~~~~..Q.x:).........................+.......?:?..~:.~........j........~:}.~~........j.........~.:?}.~.........i [)1.?~~i:!:1.~~~i.!::q?~~;:~~~~:::::::::::::::::::::::::::::::::::L::::::~:;~:?~::::::::L::::::~:.:~~~::::::::L:::::};?:?~:::::::::] BANK SERVICES: [..Descriptioo...............................................................T..Ma.rqueti'e...[..P.ri'or..L~ke...i....U:S:.Ba.iik....1 i i Bank i State Bank ~ i 10............................................................................................~..............................~.............................4.............................., i Automatic Payroll Deposit (annual cost) i $432.48 [ $531. 72 i $456.00 i r............................................................................................1..............................f..............................r..............................i rBiil.Proc.essiilg"(ann.i;;;il}:.~'(jstT........................j"......$'36:0.0.......T.......$3'0.:00........[.......$'i's6:oo.......1 nwai~r.iiiiiYiY.iili'is.on'jy.:.2'5"per.moii'iii).......................T...........................T.............................[..............................1 r............................................................................................1..............................f..............................f..............................i rCheck..Retii~u.meric~i"s.~rt..(~~~~~.i.~~~7j....j"'...$3'90:00'......r......$120':0'0......'['......$5'9.9:40.......1 f............................................................................................1..............................f..............................r..............................i [..SafetY..i5eposit.B.ox.(1f(an.~u~T~'(j~i).............j"'Fee..;ai'ved..T'Fee"w~ived"'["'u'ii~va'ii~ble"'l ..............................................................................................................................................................................................f TRANSACTION SERVICES: r..Desc.riPtioii.................................................................i:: ...M~~queti'e..rPrior..L~ke..T...u:s:.Ba.iik.......i i . Bank i State Bank i . r..Deposit..Charge"(p~;:.ite~.~h;j;:g~r................T.........$:06...........r..........$:0'8"......."1'.......'$':0'4s..........1 r............................................................................................1..............................[..............................~..............................~ r..NS.F..Charg.e'(p.e~.iiem.a;;;~ieT.......................T.......$2S.:0.0........r....no.charge.....[........$25.:0.0........1 r............................................................................................l..............................r..............................~..............................~ rStop..Paymeii:t'Charge"(p~;:.ite;;..~h~.;:g~T.....j"......$.i's.:o.o........r-......$'i'5'.'00........[........$2s.:0.0........1 r............................................................................................1..............................r..............................~..............................1 r..Wife..Charge.(pe;:.iie~.a;;;~ieT......................T.......$'i's.:O'o.......r..no.charge....r......'$'4.:00'.........1 ............................................................................................................................................................................................. MISCELLANEOUS: [..Descriptioii.................................................................rM~~qileti'e...f..P~i.or..L~ke...~....U:S:.Bank....! ~ i Bank i State Bank 1 [ [~:~:~:~~~:~:=~::~~:::=:~::~:~::~:~::::::::::::::::::]~~~~~II~II~J~~~~~~~iiiii[:illlli[i[:ii[i[j[l[i[i[iiill;;;I[li[liiil H:IAGENDAIAOOO2.DOC . r..............................................................................................u1..............................r..............................i..............................~ [~~j=~~~~~':":;~~~;::~;::!!!!!!!! , Internet Account Access .....yes:...................yes..............~......Me.$j&j;........ l..........................................................................................J~;;;;~i,.j~~~~;~~;;;;;~,~.i;;;;;~;;;;;;m2;)j;;j;;jj~;;;;;;1 ~ [ ~~ I ~~ I ~ i I available 3rd I available I I l............................................................................................L.....9.!!...?qQq.......L.~~~.~~~.?.~qq...L............................J EFFECTIVE DATE OF SERVICE: r~~::::::~~~~~~~~~~~~~~~~~~~~~~!:~~~~~~~~~~~~~~~~~~~~~~J~~~~~~~~~~~~~~~~~~~~~~E~~~~~~~~~~~~~~~~~~~~~~~~E~~~~~~~~~~~=~~~~] Uiinuary 1,2001 thru Dec. 31, 2003 I ~ I = I==-[ L:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::1:::::::::::::::::::::::::::::r::::::::::::::::::::::::::::r:::::::::::::::::::::::::::1 In addition to the above banking and transaction service charge areas each bank identified additional charges unique to their account maintenance fee structure which were included when calculating a total monthly service cost amount. In the case of U.S. Bank, they proposed an earnings credit interest rate which would be applied as an offset credit to reduce their net monthly service charges plus an overall checking account rate that would earn interest dollars as well. Financial Imoact A comparison of the three proposals based upon an estimated $500,000 daily cash balance and business volume, upon which each bank calculated its service fees, the City would earn the following Income: [.............Ba.ii.i{.............r..'inter.est"..T.....Sc.rvlcc......r..Net.Mo.:....[.......Ailii.uaC....] l........~.~.~.!~.!.~~~.?~.......i.......~~~~~~.......l.........~.........t-..}.~.~~.~~.....1......~~~~.~.~~......1 ~..Prior'Lake..S.tiite..r.$2';:l'i9}7"...[...<i39.6..'63.;..r$'i-;sj9:i4''T''$2'i:069'.'6's'''1 I.................................................................................................................................1..............................4 I Marquette Bank 1 $2,243.75 ~ <$457.30> I $1,786.45 ~ $21,437.40 [ nj:s:..i3iilik..............r...$1';:ij"i3(...[...*<$4'8:43.;..!"$1':I's3':os...[...$14)9'6'.'96'''1 L:~:~~(?I.~~~!~i.~:~F.~?~L::::::::::::::::::::::::::::::::::::::::::::::~:::::::::::::::::::::::::::::::::::::::::::::::::::::::::1 On the basis of the interest earnings/service fee analysis Prior Lake State Bank provides the most responsive bid which best serves the financial interests of the city from a cost and service perspective. Also, because the City stores its microfilmed asbuilt plans, microfiched file documents and meeting minutes and all monthly computer data backup media offsite for security and fire protection a safety deposit box for such storage is required. This performance standard eliminates U.S. Bank since their safety deposit boxes are only available at their downtown office location which makes it impracticable from a convenient access perspective. (Staff typically accesses the deposit box bi-weekly.) T H:IAGENDA IAOOO2.DOC ALTERNATIVES: RECOMMENDED MOTION: REVIEWED BY: Attachments: Conclusion The new proposal from Prior Lake State Bank is significantly better than what we now enjoy. On an annual basis the following savings will be realized by the City as a result of Prior Lake State Bank improving its relationship banking services: i...................BANK'sERvIC.E.............sAVINGs...............................................................) ~ CATEGORY AMOUNT Comments ~ l..........-..........................................................................................-.........................................................~ [...C...-..SafetY.Deposit"Box......................fif6'o.........F.e.e.~nn)e'~a'ived""""""""""~ [..i........invest"Wire..Chai:g-es.................fi2'o.:6'o.........F.c.e.~ni'be'~a'ived""""""''''''''l [..3:....-..CheCidng..i'iite~est.................$26'j06':OO...._..i5i.fierence"betwee~"'c'urre~t"l [ $21,495.00 rate of 1.21 % and 5,35% on [ L........_.............................................................................................~~!:..~?~.~~~.~~..~~!~x..~.~.~~~:~....l This is a marked improvement over our existing account features and Prior Lake State Bank should be acknowledged for stepping up its proposal to the point where it has basically deferred its interest earning potential to the City of Prior Lake and is managing the account for the most part on a service charge basis. 1. A motion and second to approve Resolution OO-XX Appointing Prior Lake State Bank as Official City Bank. 2. Take no action at this time and direct the staff to provide additional information. A motion and a second to adopt Resolution OO-XX Appointing Prior Lake State Bank as Official City Bank. Staff is requesting the Council to make the changeover on April 4, 2000 rather than the June 1 date contemplat in the RFP to maximize the benefit to the City immediately. 1. Official Solicitation of Banking Services RFP' 2. Resolution OO-XX Appointing Prior Lake State Bank as Official City Bank. WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, if RESOLUTION oo-~ MAR QUfT16 APPOINTING PRftm:..LAI~ fiT.4. 'l'E BANK AS OFFICIAL CITY BANK the City is interested in designating an official depository for public funds for a three year time period; and the City wishes to obtain the most competitive and cost effective service to process its municipal financial transactions; and the City has formally solicited request for proposals from the local banking institutions; and the City has evaluated all proposals with respect to service charge costs, availability of safety deposit box security and the potential for earned investment income based upon quoted interest rates that will be pegged to the U.S. Treasury; and the City of Prior Lake is interested in appointing the banking institution which would best serve the financial interests ofthe City. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that the City of Prior Lake hereby appoints Prior Lake State Bank as its official bank, based upon the interest rates and service fees set forth in their proposal and stated in the April 3 and April 17th, 2000 Staff report effective May 1, 2000 until December 31, 2003. Passed and adopted this 17th day of April, 2000. {Seal} Mader Ericson Gundlach Petersen Schenck YES ~ ~~::~n Gundlach Petersen Schenck NO x City Manager City of Prior Lake 16200 Eagle Creek Ave, S,E" Prior Lake, Minnesota 55372-1714 / Ph, (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER . --.-----.---, "-.------------------