SR-03-19-2013-3DCity of City Council Report
Santa Monica*
City Council Meeting: March 19, 2013
Agenda Item: 3-
To: Mayor and City Council
From: Gigi Decavalles- Hughes, Director of Finance
Subject: Fourth 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 fourth modification to Contract #8372 in an amount not to exceed $75,000
with Bank of America, a North Carolina -based company, to provide banking services on
a month -to -month basis no later than July 31, 2013.
Executive Summary
The City currently uses Bank of America for its primary banking services. The current
contract expires on March 31, 2013. Subsequent to an RFP process conducted last
year, on November 27, 2012, Council authorized a contract with Wells Fargo Bank to
provide banking services. The City and Wells Fargo are currently working on a
transition plan to move the City's banking services to Wells Fargo Bank. However, to
allow time to Complete the transition, an extension of the current contract with Bank of
America is required until no later than July 31, 2013.
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, a second modification of the contract extended the term to September
30, 2012. On August 14, 2012, a Third Modification to the contract extended the term,
on a month to month basis, to no later than March 31, 2013. On November 27, 2012,
Council authorized staff to negotiate and execute a contract with Wells Fargo Bank to
provide banking services.
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Discussion
The City's current contract with Bank of America terminates on March 31, 2012. At its
November 27, 2012 meeting, Council authorized the change to Wells Fargo. At that
time, staff noted that an orderly transition typically takes up to six months. While staff is
working to transition banking services from Bank of America to Wells Fargo Bank by
April 1, 2013, an orderly transition requires that both accounts be open simultaneously
for approximately four months. Extending the term through July 31, 2013 would allow
sufficient time for all Wells Fargo systems to be operating efficiently as well as provide
the minimum disruption possible to members of the public, City vendors, entities
disbursing tax payments and other funds to the City, and City staff.
The current fee structure for banking services would remain in effect during the contract
extension period. Increasing the Bank of America contract by an amount not -to- exceed
$75,000 would cover costs during the transition period to Wells Fargo Bank.
Financial Impacts and Budget Actions
The contract amendment to be awarded to Bank of America is $75,000. 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, Assistant City Treasurer
Approved:
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Gigi Decavalles- Hughes
Director of Finance
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Forwarded to Council:
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Rod Gould
City Manager