sr-081412-3bCity Council Meeting: August 14, 2012
Agenda Item: 31B
To: Mayor and City Council
From: Gigi Decavalles- Hughes, Director of Finance
Subject: Third Modification for Contract with Bank of America for Banking Services
Recommended.Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a third modification to Contract #8372 in the amount of $70,000 with Bank of
America, a North Carolina -based company, to provide banking services on a month -to-
month basis no later than March 31, 2013, until a Request for Proposal process can be
completed. The quarterly expenditures vary based on activity.
Executive Summary
The City currently uses Bank of America for its primary banking services. The City's
current contract with Bank of America terminates on September 30, 2012. Staff is in the
process of conducting a Request for Proposal process for banking services. Extension
of the current contract's term is necessary to ensure a prudent and efficient selection
process as well as to allow sufficient time for contract negotiation and transition to a
new bank, if required.
Background
The City's current contract with Bank of America was authorized by Council on July 27'
2004. The contract provides a term of four years followed by two options to extend the
contract by two additional years each. The First Modification of the contract was
executed in September 2008 extending the agreement to September 30, 2010. On
October 1, 2010, the term of the contract was extended to September 30, 2012.
Discussion
The City's current contract with Bank of America terminates on September 30, 2012.
Staff is in the process of conducting a Request for Proposal process for banking
services. Due to the changes in bank account structures required as a result of the
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dissolution of redevelopment, staff chose to remain with the City's current bank until the
dissolution legislation was finalized in order to ensure consistency in practices and allow
for maximum flexibility in meeting the requirements of the new statute. This delay will
result in the need for a contract modification with Bank of America to maintain
appropriate and required banking services during the selection process, contract
negotiation, and transition to a new bank, if applicable. If a new bank is selected, the
contract negotiation and transition process would likely take three to six months.
Financial Impacts and Budget Actions
The total contract compensation is based on a fee structure agreed to between the City
and the bank. The current fee structure for banking services would remain in effect
during the contract extension period. Expenditures for bank charges vary based on
activity and average approximately $30,000 - $35,000 per quarter. Therefore, increasing
the contract by an amount not -to- exceed $70,000 would cover costs during a transition
period to a new bank, if necessary. Bank fees are allocated to object number 522180 in
various business units and funds. Funds are available in the FY 2012 -13 Adopted
Budget in all applicable funds and business units.
Prepared by: David Carr, Treasury Administrator
Approved:
Gigi Decavalles- Hughes
Director of Finance
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Forwarded to Council:
Rod Gould
City Manager
Reference Amended
Contract No. 8372 (CCS)