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Home My WebLink About5E Banking Services Agreement 2014-2016 o � PRIp� t� � v � 4646 Dakota Street SE Prior Lake, MN 55372 `�rNNSSO� CITY COUNCIL AGENDA REPORT MEETING DATE: DECEMBER 9, 2013 AGENDA #: 5E PREPARED BY: CATHY ERICKSON, ACCOUNTING MANAGER PRESENTED BY: JERILYN ERICKSON, FINANCE DIRECTOR AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION EXTENDING THE BANKING SERVICES AGREEMENT WITH US BANK FOR 2014-2016 DISCUSSION: Introduction The purpose of this agenda item is to consider approval of an extension of the banking services agreement with US Bank for 2014-2016. Hi StOry In January 2005 the City Council appointed US Bank as the City's official bank. An agreement was entered into for a four-year period ending 12/31/2008. The banking services agreement was extended for one year until 12/31 /2009. In September 2009, the City issued a RFP for Banking Services. Staff recommended, and the City approved renewing the banking services agreement with US Bank for the period 2010-2013 under Resolution 09- 160. The agreement could be renewed for an additional year upon mutual agreement of the parties. Current Circumstances The contract with US Bank for banking services will expire on December 31, 2013. The current agreement does provide for a one-year renewal. In January, the City must appoint an official city bank for the year 2014. Our most recent banking experience has been with US Bank. They have provided excellent service over the past nine years. They are on the leading edge of technology and have staff dedicated specifically to government clients. US Bank has agreed that pricing will remain the same as agreed upon in the proposal dated October 14, 2009 for the next three years. Any additional services will be priced at consistent reduced levels. US Bank has consistently waived any fees during the first year and charged reduced rates for subsequent years for any new services. US Bank has had a presence in the Prior Lake community for many years. They employ residents from the community and the surrounding area. In addition, US Bank's headquarters are located here in Minnesota. Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com Conclusion Based on US Bank's ability to deliver high quality banking services at 2009 pricing, and the excellent relationship that the City has had with them for the past nine years, Staff is recommending that the banking services agreement be renewed with US Bank for the period 2014-2016. ISSUES: While we are pleased with the service we have received from US Bank we also recognize the importance of periodically issuing an RFP for such services. Other banks should have the opportunity to compete for our account. However, in consideration of implementation of the ERP we are attempting to minimize the number of major financial relationship changes for the next few years in an effort to simplify the process to the extent that is possible. The extension of the existing relationship allows the staff to conserve its energy without paying more for the banking services we receive. Pursuant to the City Council bylaws, naming the official bank will also appear on the annual meeting agenda for the first meeting in January. �� FINANCIAL Based on the current services provided, the annual cost for banking IMPACT: services has been approximately $13,700 for the past three years. Year Amount 2011 $13,689 2012 $13, 627 2013 estimated $13,800 Staff doesn't anticipate the annual cost to significantly change during the ne� three years. ALTERNATIVES: 1. Approve a resolution extending the Banking Services Agreement with US Bank for 2014-2016. 2. Take no action at the time and direct the staff to provide additional information. RECOMMENDED Alternative #1 MOTION: O � PRI�� ti � U tr� 4646 Dakota Street SE �INNES�� Prior Lake, MN 55372 RESOLUTION 13-xxx A RESOLUTION EXTENDING THE BANKING SERVICES AGREEMENT WITH US BANK FOR 2014-2016 Motion By: Second By: WHEREAS, the City is interested in designating an official depository for public funds for a three (3) year period; and WHEREAS, the City has had a banking service agreement with US Bank for nine years; and I WHEREAS, US Bank has agreed pricing will remain the same as agreed upon in our prior three year � agreement (2010-2013), and all other pricing for services will be priced at consistent reduced levels; and WHEREAS, US Bank has delivered high quality banking services, and maintained an excellent relationship with the City for the past nine years; and WHEREAS, the City is interested in appointing a qualified banking institution that would serve the financial interests of the City. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The City Council hereby appoints US Bank as its official bank based on the considerations set forth in their proposal dated November 24, 2013 and effective January 1, 2014 through December 31, 2016. PASSED AND ADOPTED THIS 9th DAY OF DECEMBER 2013. YES NO Hedber Hedber Keene Keene McGuire McGuire Morton Morton Souku Souku Frank Boyles, City Manager ' � AGREEMENT For Banking Services Between The City af Prior La�e and U.S. Bank AN AGREEMENT between THE CITY OF PRIOR LAKE (CIT� and U.S. BANK NAT`IONAL ASSOCIATION (U.S. Bank) rnade and entered into this 24` day of � Novamber� 2013. � � In consideration of the mutual terms and conditia�ns, promises, covenants and . : payments hereinafter set forth, City and U.S. Bank agree to amend the contract as follows: ' i 1. U.S. Bank shall contznue to provide depository and banking services as described i in its proposal (The Proposal) dated October 14�` 2009 in accordance witli the I RFP response between the CITY and U.S. Bazik effective January 2010. 2. The services rendered by U.S. Bank shall continue for an additional three years ending December 3� g ` 2016. The agreement may be renawed for an additional year upon rnutual agreement of the parties. 3. U.S. Bank an.d the CITY a�ree pricing �vvi11 remain the same as agreed upon in the proposal dated October 14 2009. All other pricing for services will be priced at consistent reduced levels for specific sezvices. Earnings Credit Rate on deposits will be equal to the posted Fed Funds less 25 basis points with a floor of 20 basis points. 4. U.S. Bank an�d the CITY bo#h ha�e the right to modify or exit the contract within 60 days gi�ven written notice. 5. U.S. Banlc and the CITY agree that all of the terms asid conditions of the original agreement shall remain in fit11 force and effect during the contract unless the . agreement is amended by mutual consent. Approved: U.S. K N O L A.SSQCIATI N CITY OF PRIOR LAKE, MN -. . By; By: �