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
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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
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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......'$'4.:00'.........1
.............................................................................................................................................................................................
MISCELLANEOUS:
[..Descriptioii.................................................................rM~~qileti'e...f..P~i.or..L~ke...~....U:S:.Bank....!
~ i Bank i State Bank 1 [
[~:~:~:~~~:~:=~::~~:::=:~::~:~::~:~::::::::::::::::::]~~~~~II~II~J~~~~~~~iiiii[:illlli[i[:ii[i[j[l[i[i[iiill;;;I[li[liiil
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r..............................................................................................u1..............................r..............................i..............................~
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, Internet Account Access .....yes:...................yes..............~......Me.$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.)
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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
.
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