To: Mark R. Hafner, City Manager
From: Aaron Rector, Director of Administrative Services
Subject:
Title
Consider a resolution approving an agreement with Wells Fargo Bank, N.A. for depository services for the City of Keller, Texas, for three years, beginning July 1, 2022 through June 30, 2025, with a provision for two (2) one-year extensions under the same terms and conditions, with the mutual agreement of both parties, not to exceed a total of five (5) years; and further authorizes the City Manager to execute said Agreement on behalf of the City of Keller, Texas.
Action Requested:
Consider a resolution authorizing the City Manager to execute a contract with Wells Fargo Bank, N.A. for bank depository services.
Background:
The current contract for depository services is set to expire in July 2022 and a request for applications (RFA) was performed to find a bank for depository services. The process for selecting a depository bank is governed by the State of Texas Government Code and Local Government Code: Chapter 105 Municipal Depository Act; Chapter 2256 Public Funds Investment Act; and Chapter 2257 Public Funds Collateral Act. The city’s Investment Advisors, Valley View Consulting, L.L.C. (Valley View), although primarily responsible for providing investment advisory services, also provides assistance with bank depository services RFAs and created the RFA analysis for staff review.
The city is currently contracting with Frost National Bank (Frost Bank) for bank depository services and has been utilizing their services since April 2002. This includes RFA awards approved by Council in April 2007, May 2012, and May 2017.
For the current RFA, staff posted the required notices in the Fort Worth Star Telegram and Valley View contacted all 12 banks with a physical location within the city limits. A non-mandatory pre-application conference was held and three banks attended - Frost Bank, Regions Bank, and Wells Fargo Bank, N.A. Applications were received by three banks - Frost Bank, First Financial Bank, and Wells Fargo Bank, N.A. The initial RFA results are attached. After review of the initial results, staff requested a demo from Wells Fargo related to their on-line portal and electronic lock-box options. After the demo, staff requested Valley View seek best and final offers from Frost Bank and Wells Fargo Bank, N.A. The best and final results are attached.
After review of the best and final RFA results, staff recommends awarding the depository contract to Wells Fargo Bank, N.A. as they provide the best overall value to the city. While the costs are slightly higher over the three-year period, the on-line application, check scanning, and electronic lock-box features should provide increased efficiencies and customer service to the City. The electronic lock-box will shorten the turnaround time for posting payments received as paper checks from one week to next day and provides one consolidated payment for upload. For ACH payments received, staff will be able to consolidate multiple incoming files into one consolidated upload and posting. Finally, the Wells Fargo applications require only one log-in name per user versus multiple log-in names for one user required by Frost.
Financial Impact:
The estimated three-year term cost is $136,117 and the estimated five-year term cost is $258,528. The cost of banking services varies each year, because costs are based on actual volume of city and/or customer banking/lock box services used throughout the year. In addition the cost of service is reduced by the earned credit rating of 0.35% which will vary based upon funds kept at the bank.
Citizen Input/Board Review:
On March 22, 2022, the Finance Committee reviewed an analysis of the applications and recommended Wells Fargo Bank for the city’s depository.
Legal Review:
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Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial
Council Action:
City Council approval of resolution as presented.