HomeMy WebLinkAbout12- Finance CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: David C. Kennedy, Subject: Resolution of the Mayor and Council
City Treasurer j� f"` r authorizing the execution of an agreement
Dept: Finance �+ r 1 between the City and Wells Fargo N.A. for
p the provision of banking services and the
Date: July 10,2000 deposit of monies.
Synopsis of Previous Council action:
3/8/93 Resolution 93-46 authorizing agreement with First Interstate Bank for banking services(First Interstate
was acquired by Wells Fargo in August of 1996)
12/6/99 Mayor and Council authorize Director of Finance to solicit Requests for Proposals (RFP's)for
banking services and authorize the use of a banking consultant in the RFP process.
Recommended motion:
Adopt Resolution
dC ��
Signature
Contact person: Barbara Pachon,Director of Finance Phone : ext. 5242
Supporting data attached: Yes Ward:
FUNDING REQUIREMENTS: Amount: No new cost,oneoin2 service paid out of interest earnings(approx.
$60,600 annually
Source: (Acct.No.) 772-121-2314
Acct.Description) Special De osits Interest Apportionment
Finance:
Council Notes:
Agenda Item No.
7/a?y 1&T
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
SUBJECT
Resolution of the Mayor and Common Council authorizing the execution of an agreement
between the City of San Bernardino and Wells Fargo Bank, N.A. for the provision of banking
services and deposit of monies.
BACKGROUND
At the December 6"' Council Meeting, the City Treasurer and the Finance Department were
given authorization to solicit Request for Proposals (RFP's) for banking services. Because the
banking industry is constantly changing and it had been over (6) years since the City last
requested RFP's for banking services, the Mayor requested that the City go through the RFP
process to ensure that the City received the most efficient and advantageous banking services
available. As outlined in the December 6`' staff report, the City utilized the services of a
banking consultant to assist with the RFP process.
The Request for Proposal Process
Staff worked with the banking consultant to develop a list of potential bidders that would be
able to handle the specialized and high volume needs of the City. On January 5`h, 2000,
requests for proposals were sent to eleven-(11) banks. Nine (9) out of the eleven (11) banks
receiving RFP's were either based in San Bernardino or had branches in San Bernardino. Six
(6)proposals were received by the deadline of February 10", 2000 from the following banks:
Bank of America(San Bernardino location)
Business Bank of California(San Bernardino location)
California Federal (San Bernardino location)
Citizens Business Bank(San Bernardino location)
Union Bank of California(no San Bernardino location)
Wells Fargo,N.A. (San Bernardino location)
The six (6) proposals were initially reviewed by an evaluation committee comprised of the
following: David Kennedy, City Treasurer; Barbara Pachon, Finance Director; Gary Silvius,
Accounting Manager; Edy Rose, Administrative Operations Supervisor (Treasurer's Office);
John Murphy, San Bernardino Municipal Water Department; and, the banking consultant,
Susan Cotton.
Factors considered during the review process included availability and quality of services and
cost. Availability and quality of services included: current day reporting, positive pay, CD
ROM imaging, branch hours and location, established specialized government services
division, and check truncation. Cost factors evaluated included: estimated monthly fees,
earnings credit rate, and length of pricing guarantee. For your reference, a schedule
comparing the pricing and services of the six- (6) respondents is attached.
All factors listed on the attached matrix were considered, however the following factors were
weighted more importantly:
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• Branch in the City —Five of the six respondents (including Wells Fargo) were either based
in San Bernardino or had branches in San Bernardino.
• Monthly Cost — Wells Fargo's monthly costs (based on transaction quantities specified in
the Request for Proposal) were $392 less per month than the next lowest bidder ($4,704
annually).
• Price Guarantee — Wells Fargo offered a price guarantee of five (5) years. All of the other
bidders offered guarantees of three (3)years or less.
• Positive Pay—A system that aids in the prevention of fraudulent activity against the City's
accounts. Three of the six respondents (including Wells Fargo) have this service available.
• Current Day Reporting—The ability for the City to review activity and cash flow on a daily
basis. Three of the six respondents (including Wells Fargo)have this service available.
• Government Services Group—Because the City is a large governmental entity with specific
needs related to governmental accounting and reporting, it was important to have a bank
with a specialized Government Services Group or Division. Out of the six respondents,
only Wells Fargo and two other banks offered this service.
After this initial review, three (3) banks were selected to be interviewed — Bank of America,
Union Bank and Wells Fargo. Interviews were conducted on May 3`d,2000 by the evaluation
committee: David Kennedy, City Treasurer; Barbara Pachon, Finance Director; Gary Silvius,
Accounting Manager; Edy Rose, Administrative Operations Supervisor (Treasurer's Office);
John Murphy, San Bernardino Municipal Water Department; and, the banking consultant,
Susan Cotton.
Based upon their availability and quality of services, pricing, and five- (5) year pricing
guarantee, the evaluation committee recommended entering into a five-year contract (with an
option to renew for two additional years upon receipt of Council approval) with Wells Fargo
for the provision of banking services.
Wells Fargo is the City's current provider of banking services and as a result of this RFP
process, lowered some of the fees that the City is currently paying. Because fees are based on a
per transaction basis, the amount of savings will fluctuate with the number of transactions.
However, yearly savings are estimated to be approximately $5,700.
FINANCIAL IMPACT
No additional cost to the City at this time. The City currently banks with Wells Fargo and as a
result of this RFP process, Wells Fargo lowered some of their existing costs and guaranteed the
price for 5 years. Currently, the City pays approximately $66,300 annually for banking related
services. Implementing this new agreement is estimated to reduce the estimated annual cost for
banking services to $60,600. Additionally, Wells Fargo will be providing the City with one-
time conversion/upgrade allowance of$2,500 to upgrade the City's banking related software.
Payment for bank fees is paid from interest earnings.
RECOMMENDATION
That the Mayor and Common Council adopt resolution authorizing the execution of an
agreement between the City of San Bernardino and Wells Fargo Bank, N.A., for the provision
of banking services and the deposit of monies.
2
WOMMONNOW
RESOLUTION NO.
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
2 CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN
AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND WELLS
3 FARGO BANK, N.A. FOR THE PROVISION OF BANKING SERVICES AND
4 THE DEPOSIT OF MONIES.
5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF
6 THE CITY OF SAN BERNARDINO AS FOLLOWS:
7 SECTION 1. The Mayor of the City of San Bernardino is hereby
8 authorized and directed to execute on behalf of said City an agreement with Wells
9 Fargo Bank, N.A. for the provision of banking services to the City of San
10 Bernardino, and the deposit of monies, a copy of which is attached hereto as
11
12 Exhibit"A" and incorporated herein by reference.
13 SECTION 2. The authorization to execute the above referenced
14 agreement is rescinded if the parties to the agreement fail to execute it within sixty
15 (60) days for the passage of this resolution.
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`&o . �z
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
1 CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN
AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND WELLS
2 FARGO BANK, N.A. FOR THE PROVISION OF BANKING SERVICES AND
THE DEPOSIT OF MONIES.
3
4
I HEREBY CERTIFY that the foregoing resolution was duly adopted by
j 5 the Mayor and Common Council of the City of San Bernardino at an
i
6 meeting thereof, held on the_day of , 2000, by the following vote to
7
wit:
8
9 COUNCIL MEMBERS AYES NAYS ABSTAIN ABSENT
10 ESTRADA
11 LIEN
12 MC GINNIS
13 SCHNETZ
3 14
15 SUAREZ
�
16 ANDERSON
17 MC CAMMACK
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19
Rachel G. Clark, City Clerk
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21 2000. The foregoing resolution is hereby approved this_day of ,
22
23 Judith Valles, Mayor
City of San Bernardino
24 Approved as to form
25 and legal content:
26 JAMES F. PENMAN
27
City ttorney
28 By:
2
�Q
CITY OF SAN BERNARDINO
AGREEMENT FOR BANKING SERVICES
THIS AGREEMENT, made and entered into this day of
2000, by and between the CITY of San Bernardino, a municipal corporation, hereinafter referred
to as "CITY" and WELLS FARGO BANK, hereinafter referred to as "BANK".
WITNESSETH
WHEREAS, BANK is recognized as a qualified banking institution which was selected by the
CITY through competitive procedures;
NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants
hereinafter contained,the parties hereto agree as follows:
1. TERM. Unless terminated earlier or cancelled as provided for herein, the term of this
Agreement shall be for the each of the five fiscal years ending June 30, 2001 through 2005
with the option to.renew upon approval of the Mayor and City Council for the fiscal years
ended June 30, 2006, and 2007.
2. SCOPE OF SERVICES. The BANK agrees to provide services and perform all work
necessary in a manner satisfactory to the CITY as set forth in the following:
A. The BANK's proposal dated February 8`h, 2000 and said pages of which are for
an election to be made by the City Treasurer of CITY. The City Treasurer may
also elect to delete any of the services set forth in the above-designated portion of
the BANK's proposal.
B. Appendix "A" the "Application and Agreement for Cash Management Services"
fully executed by BANK and CITY;
C. The Request for Proposal (RFP) for banking services dated January 5, 2000.
These documents are attached hereto and by reference incorporated herein and made a
part hereof.
3. COMPENSATION. Compensation to BANK for the services provided pursuant to this
Agreement shall be as set forth in the pricing provisions in the BANK's attached proposal
dated February 8h, 2000, said provisions of which are incorporated herein by this
reference. In the event that services not specified in the BANK's proposal are requested
by CITY the fees for such services shall be negotiated at the time they are added. BANK
shall reserve the right to pass on direct costs associated with Federal and State
Regulations, including Federal Deposit Insurance Corporation charges. Revisions to the
compensation hereunder shall be approved by the City Council of the City of San
Bernardino. BANK agrees to maintain prices referenced in BANK's proposal for a period
of five (5) years for each of the five fiscal years ending June 30, 2001 through 2005.
1
4. TERMINATION. Any other provision herein to the contrary notwithstanding, and in
addition to other methods of termination provided for herein or available under the laws of
the State of California, it is agreed that this Agreement shall terminate ninety (90) days
after written notice of termination, which may be given by either party to the other party to
this Agreement with or without cause. After the expiration of such ninety- (90) day
period, BANK shall immediately cease all services hereunder except as may be
specifically approved by the CITY. BANK shall be entitled to compensation for all
services rendered prior to the termination and for any services authorized by CITY
thereafter in accordance with the aforementioned section regarding compensation.
5. NOTICES. Any notice required to be given hereunder shall be in writing with copies as
directed herein and shall be personally served or given by mail. All notices by mail shall
be deemed to have been given when received by the party to be served. Mail notices are to
be sent by United States mail, certified and postage prepaid, addressed to the party to be
served as follow:
TO CITY: City of San Bernardino
David C. Kennedy, City Treasurer
300 North D Street
San Bernardino, CA 92418-0001
TO BANK: Wells Fargo Bank
Mark C. Hewlett, Vice President
Government and Educational Banking
707 Wilshire Blvd. 16'h Floor
Los Angeles, CA 90017
Either party may change its address by notifying the other party of the change of address in
writing. Notice shall be deemed communicated when received by the party to be served if
served as provided in this section.
6. INSURANCE. The BANK shall procure and maintain, at its cost, comprehensive general
liability and property damage insurance, including automobile and excess liability
insurance, against all claims for injuries against persons or damages to property resulting
from BANK's negligent acts or omissions rising out of or related to BANK's performance
under this Agreement. BANK shall also carry Workers' Compensation Insurance in
accordance with State Workers' Compensation laws. BANK agrees to maintain
professional liability insurance to protect CITY from BANK'S negligent acts, errors or
omissions of a professional nature. If any claim related to the performance hereunder be
asserted against either party hereto, the party claimed against shall receive all reasonable
assistance from the other. The requirements herein for subrogation may be waived by the
CITY with respect to such professional liability insurance.
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The insurance required hereunder shall be kept in effect during the term of this Agreement
and shall not be subject to reduction in coverage below the limits established herein, nor
cancellation or termination without thirty (30) days prior written notice by registered letter
to the CITY. The insurer shall waive the right of subrogation against CITY, its officers,
employees and agents, and the coverage shall be primary for losses arising out of BANK's
performance hereunder and neither the CITY nor its insurers shall be required to
contribute to any such loss. A certificate evidencing the foregoing and naming the CITY as
an additional insured shall be delivered to and approved by the CITY prior to
commencement of the services hereunder. The procuring of such insurance or the delivery
of policies or certificates evidencing the same shall not be construed as a limitation of
BANK'S obligation to indemnify the CITY, its officials and employees.
The amount of insurance required hereunder shall be as follows:
1. Workers Compensation to statutory limits;
2. Commercial General Liability:
Each occurrence $1,000,000
Personal injury $1,000,000
Aggregate limit $2,000,000
3. Hired Auto and Non-Owned Auto Liability:
Each occurrence $1,000,000
Aggregate limit $1,000,000
4. Professional Liability:
Each claim and in the aggregate $1,000,000
7. PREVAILING PARTY. If any court action occurs as a result of a dispute between the
parties concerning any element of this agreement, the prevailing party shall be entitled to
reasonable attorney's fees. The costs, salary and expenses of the City Attorney and
members of his office in enforcing this agreement on behalf of the CITY shall be
considered as "attorney's fees" for the purpose of this paragraph.
8. ASSIGNMENT; SUBCONTRACTS
The experience, knowledge, capability and reputation of BANK, its principals and
employees were a substantial inducement for CITY to enter into this Agreement.
Therefore, BANK shall not subcontract, assign or otherwise transfer its rights and
obligations under this Agreement without prior written consent of CITY. Any such
subcontractor or assignment without such consent shall be void and shall, at the option of
CITY, terminate this Agreement. It is understood and agreed that for any such services
provided to CITY, with the CITY's written consent the full cost of such services are not
fixed for any period of time as are BANK provided services, and will be passed along to
the CITY. Such services include but are not limited to armored carrier, deposit courier,
and messenger service.
9. AUTHORITY TO EXECUTE AGREEMENT. Both CITY and BANK do covenant that
each individual executing this Agreement on behalf of each party is a person duly
authorized and empowered to execute agreements for such party.
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above. In WITNESS WHEREOF, the parties have executed this Agreement as of the date stated
s
CITY OF SAN BERNARDINO
Judith Valles, Mayor
ATTEST:
City Clerk of the
City of San Bernardino
APPROVED AS TO FORM
AND LEGAL CONTENT:
CK ttorney of the
C of San Bernardino
WELLS FARGO BANK
Mark Hewlett, Vice President
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lz U cn a U C U W U U a Q:
July 27, 2000
Mark C. Hewlett, Vice President
Wells Fargo Bank
Government and Educational Banking
707 Wilshire Blvd., 16th Floor
Los Angeles, CA 90017
Dear Mr. Hewlett,
At the Mayor and Common Council meeting of July 24, 2000, the City of San Bernardino
adopted Resolution 2000-228 — Resolution authorizing an agreement between the City of San
Bernardino and Wells Fargo Bank, N.A.for the provision of banking services and the deposit of
monies.
Enclosed is one (1) original agreement. Please sign in the appropriate location and return the
original agreement to the City Clerk's Office, Attn: Michelle Taylor, P.O. Box 1318, San
Bernardino, CA 92402, as soon as possible.
Please retain a copy of the executed agreement for your files.
Please be advised that the resolution and agreement will be null and void if not executed by
September 22, 2000.
If you have any questions, please do not hesitate to contact me at (909)384-5002.
Sincerely,
Michelle Taylor
Senior Secretary