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Home My WebLink AboutC29641A Extension of Bankiing Services - MUFG Union Bank NAContract Nos. C29641A CITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT REQUEST: Approve the extension of the banking services contract with MUFG Union Bank, N.A. for an additional five years and authorize the Finance Director/City Treasurer to execute same. SUBMITTED BY: Paul S. Gibson, Finance Director DATE: May 28, 2015 CONTENTS: Letter Requesting Extension of Agreement Recommendation By Minute Motion, that the City Council: 1. Select Option 1 to approve an extension of the banking services contract with MUFG Union Bank, N.A. for five additional years with an additional 4.5% discount; and 2. Authorize the Finance Director/City Treasurer to execute the extension. Background On March 11, 2010, the City Council authorized staff to enter into Contract No. C29640A&B with MUFG Union Bank, N.A. (Union Bank) to provide banking services to the City of Palm Desert. The original contract was for a period of five years with an option to extend for an additional two years. Recently the City received a proposal to extend for five additional years with an additional 4.5% discount plus an enhanced earnings credit rate (ECR) allowance at 91-day T-bill rate with a floor of 25 basis points (0.25%) to help offset banking fees. The City currently has two options: Option 1: Accept the proposal to extend the contract with Union Bank for an additional five years and take advantage of the additional discounts offered to realize an approximate savings of $21,483 over current pricing. Staff Report Extension of Union Bank, N.A. Banking Services Contract Contract Nos. C29641A. Page 2of2 May 28, 2015 Option 2: Exercise the option in the current contract to renew for an additional two years at the current discounted pricing without added savings. Staff is in the process of converting to OneSolution software, and expects to be heavily involved in that project for the coming months. Extension of the contract would enable staff to fully implement the software and continue to utilize the supplies such as check stock, and maintain the procedures already in place for Union Bank accounts. Staff recommends Option 1, a five-year extension, as the most beneficial to the City from the standpoint of staff involvement and overall savings. California Government Code Sections 53649 and 53682 authorize local agency treasurers to enter into agreements with depositories concerning the terms and conditions for any public funds that are being deposited. Staff therefore requests that the City Council authorize the Finance Director/City Treasurer to execute all contract documentation with Union Bank for the extension of contract for banking services. Fiscal Impact By selecting Option 1, it is expected that by adding the 4.5% discount offered to our services already deeply discounted by 42%, the City will realize additional savings of $21,483 annually. Submitted by: Paul Gibson Finance Director PSG:nmo Aproval: J hn M. Wohlmuth ity Manager I / CONTRACT NO. C29641A (:*]) M U FG April 20, 2015 Paul S. Gibson, City Treasurer 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 RE: Contract Extension for Banking Services Dear Mr. Gibson: MUFG Union Bank, N.A. ("Union Bank") is offering to extend the City of Palm Desert's banking services contract for additional 5 years through June 30, 2020. With over 42% discount from our standard Government Services pricing plus additional 4.5% discount from existing pricing, Union Bank is also offering an enhanced earnings credit rate (ECR) allowance at 91-day T-bill rate with a floor of 25 basis points (.25%) to help off -set banking fees. Based on January 2015 transaction volume, the City is expected to realize additional savings of approximately $21,483 annually from combined discounted pricing and enhanced ECR allowance on balances. For your reference, we also included comparative pricing from 3 government agencies which we recently won through a formal bid process and/or contract renewal. All other existing terms, conditions and recitals found in the previous proposal and contract documents will be continued with this extension agreement plus any other additional disclosures from the attached bid sheet. Sincerely, Acceptance: �/'`) - M4A4, l,k-- Tito D. Ibarrola, CTP, AAP Paul S. Gibson, C.C.M.T. Date: Vice President - Relationship Manager City Treasurer CONTRACT NO. C29641A MUFG UNION BANK N.A. CITY OF PALM DESERT 5 YEAR CONTRACT EXTENSION JULY 1, 2015 - JUNE 30, 2020 Proposed Extended Proposed EXISTING PRICING CITYOF REDLANDS CITY OF HUNTINGT ON BEACH OTAY WATER I DISTRICT Unit Extended Variance Unit Unit Unit BILLABLE UNIT OF VOLUME Price $ Price $ Price $ Price $ Extended Price $ Price $ Price $ CODE DESCRIPTION MEASURE (A) (D) (E)=(A)•(D) (E) (A)'(E) UB - COMP (E) (E) (E) ACCOUNT ANALYSIS AAA003 ACCT MAINTENANCE -WEB $25.00/ACCOUNT 5 5.0000 25.00 5.0000 25.00 0.00 5.0000 10,0000 5.0000 SUBTOTAL 25.00 25.00 0.00 ACCOUNT RECONCILIATION ARP002 FULL RECON MONTHLY MAINT $110/ACCT/MONTH 4 50.0000 200.00 50.0000 200.00 0.00 30.0000 80.0000 75.0000 ARP006 POS PAY MONTHLY MAINT $00/ACCT/MONTH 4 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 ARP012 TRANSMISSION ISSUE INPUT -BASE $10/TRANSMISS'N 7 5.0000 35.00 5.0000 35.00 0.00 3.0000 5.0000 10.0000 ARP013 TRANSMISSION ISSUE INPUT -ITEM $.065/ITEM 545 0.0200 10.90 0.0200 10.90 0.00 0.0200 0.0300 0.0650 ARP031 CHECK PAID TRUNCATED Tierl: 1 to 5,000 1,002 0.1050 105.21 0.1050 105.21 0.00 0.0500 0.0400 0.0600 ARP051 DAILY PAID REPORT $0.00/RPT 4 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 ARP082 RECONSTOPPAYMENTS- RENEWAL $8.00/STOP 5 8.0000 40.00 8.0000 40.00 0.00 8.0000 8.0000 8.0000 ARP085 STALE DATE FEATURE - BASE $10.00/MONTH 1 10.0000 10.00 10.0000 10.00 0.00 5.0000 10.0000 10.0000 ARP086 STALE DATE LISTING -ITEM $.006/ITEM 415 0.0500 20.75 0.0500 20.75 0.00 0.0100 0.0200 0.0500 ARP113 TRANSMISSION OUTPUT- PER TX $12.501TRANS 1 10.0000 10.00 10.0000 10.00 0.00 10.0000 5.0000 10.0000 ARP114 TRANSMISSION OUTPUT - PER ITEM $.025/ITEM 476 0.0050 2.38 0.0050 2.38 0.00 0.0050 0.0050 0.0050 ARP143 IMAGE CD - ROM $50.00/CUTOFF 4 20.0000 80.00 20.0000 80.00 0.00 10.0000 30.0000 20.0000 ARP151 CHECK CAPTURE $.OS/ITEM 1,002 0.0200 20.04 0.0200 20.04 0.00 0.0300 0.0200 0.0200 ARP200 WEB POS PAY -ACCOUNT BASE $00.00/ACCOUNT 4 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 ARP235 WEB POS PAY -EXCEPTIONS $1.75/EXCEPTION 17 0.2000 3.40 0.2000 3.40 0.00 0.1500 0.1000 0.2000 ARP240 POSITIVE PAY-PNI EXCEPTIONS Tierl: 1to 24 17 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 ARP245 WEB POS PAY -IMAGES $0.50/IMAGE 2 0.5000 1.00 0.5000 1.00 0.00 0.5000 0.2500 0.5000 ARP260 WEB POS PAY -MANUAL ISSUE $0.25/ISSUE 3 0.2500 0.75 0.2500 0.75 0.00 0.2500 0.2500 0.2500 ARP265 WEB POS PAY -IMPORTED ISSUE $0.18/ISSUE 622 0.1800 111.96 0.1800 111.96 0.00 0.1800 0.1800 0.1800 ARP502 ACCT RECON CSV RPT MTHLY MNT $20.00/ACCOUNT 3 20.0000 60.00 20.0000 60.00 0.00 20.0000 20.0000 20.0000 SUBTOTAL 711.39 711.39 0.00 BANK -BY -MAIL BBM001 BANK BY MAIL DEPOSIT $2.00/DEPOSIT 14 2.0000 28.00 2.0000 28.00 0.00 2.0000 2.0000 2.0000 SUBTOTAL 28.00 28.00 0.00 BUSINESS CHECKING CHKO10 BRANCH DEPOSIT $2.00/DEPOSIT 117 1.0000 117.00 1.0000 117.00 0.00 1.0000 0.7500 1.0000 CHKO11 ELECTRONIC CREDIT $.15/EACH 173 0.1000 17.30 0.1000 17.30 0.00 0.0600 0.0400 0.1200 CHK020 PAID CHECK CHARGE Tierl: 1 to 500 9 0.1900 1.71 0.1900 1.71 0.00 0.1200 0.1900 0.19GO CHK021 ELECTRONIC DEBIT $.18/EACH 30 0.0000 0.00 0.0000 0.00 0.00 0.0600 0.0400 0.1200 CHK060 ACH BLOCK Tier2:2 to 5 2 5.0000 10.00 5.0000 10.00 0.00 4.0000 5.0000 5.0000 CHKlll BANK STATEMENT WEB $5.00/EACH 5 3.0000 15.00 3.0000 15.00 0.00 1.0000 2.0000 2.0000 CHK750 DEPOSIT ADMIN FEE (000's) $0.0894/1000 9,787.0 0.0894 874.96 0.0894 874.96 0.00 0.0894 0.1263 0.0894 SUBTOTAL 1,035.97 1,035.97 0.00 CHECK PROCESSING CKP002 UNENCODED COURIER DEPOSIT $2.50/DEPOSIT 5 1.0000 5.00 1.0000 5.00 0.00 1.5000 0.8000 1.0000 CKP120 UB CHECKS - BRANCH DEPOSIT $0.12/ITEM 90 0.0500 4.50 0.0500 4.50 0.00 0.0000 0.0200 0.0500 CKP137 LOCAL CUR.HSE./BRANCH DEP. $0.12/ITEM 474 0.0700 33.18 0.0700 33.18 0.00 0.0700 0.0300 0.0700 CKP138 LOCAL FED DIST 12-BRANCH DEP $.18/ITEM 666 0.0900 59.94 0.0900 59.94 0.00 0.0900 0.0300 0.0900 CKP139 OTHER FED -BRANCH DEPOSIT $.18/ITEM 554 0.1300 72.02 0.1300 72.02 0.00 0.1300 0.0300 0.1300 CKP150 UB CHECKS SERV. CTR DEPOSIT $.15/ITEM 17 0.0500 0.85 0.0500 0.85 0.00 0.0500 0.0100 0.0200 CKP167 LOCAL CUR. HSE./SER. CTR $.09/ITEM 15 0.0900 1.35 0.0900 1.35 0.00 0.0600 0.0200 0.0300 CKP168 LOCAL FED DIST 12-SERV CTR DEP $.09/ITEM 42 0.0900 3.78 0.0900 3.78 0.00 0.0700 0.0200 0.0300 CKP169 ENCODING FEE -SERV. CTR. DEP. $.OS/ITEM 89 0.0500 4.45 0.0500 4.45 0.00 0.0325 0.0200 0.0200 CKP170 OTHER FED - SERV CTR DEPOSIT $.11/ITEM 15 0.1100 1.65 0.1100 1.65 0.00 0.1000 0.0200 0.0300 SUBTOTAL 186.72 186.72 0.00 CLEARPAY CPY006 DIRECT SEND MONTHLY BASE FEE $125/SET UP 2 30.0000 60.00 30.0000 60.00 0.00 25.00OO 20.0000 25.0000 CPY007 DIRECT SEND CREDIT TRANSACTION Tierl: 1 to 500 346 0.0400 13.84 0.0400 13.84 0.00 0.0200 0.0100 0.0200 CPY032 INPUT - DATA TRANSMISSION $20/PER SEND 4 5.0000 20.00 5.0000 20.00 0.00 4.0000 5.0000 4.0000 CPY035 ADDENDA RECORDS $.05 EACH 4 0.0500 0.20 0.0500 0.20 0.00 0.0500 0.0500 0.0500 SUBTOTAL 94.04 94.04 0.00 0 CONTRACT NO. C29641A MUFG UNION BANK N.A. CITY OF PALM DESERT 5 YEAR CONTRACT EXTENSION JULY 1, 2015 - JUNE 30, 2020 BILLABLE CODE DESCRIPTION CITY OF OTAY CITY OF HUNTINGT WATER I Extended EXISTING PRICING REDLANDS ON BEACH DISTRICT Unit Extended Variance Unit Unit Unit Proposed Proposed UNIT OF VOLUME Price $ Price $ Price $ Price $ Extended Price $ Price $ Price $ MEASURE (A) (D) (E)=(A)•(D) (E) (A)*(E) UB - COMP (E) (E) (E) CASH VAULT SERVICES CSH007 AUTOMATED ORDER-WEB/VRU $3.25 EACH CSH008 CURRENCY ORDERED-(000'S) (000's) $1.00/$1000 CSH009 ROLLED COIN (INDIVIDUAL ROLLS) $.15/ROLL CSH025 DEPOSIT -MIXED CASH CHECK $3.00/DEPOSIT CSH028 DEPOSIT - CASH OR COIN ONLY $1.45/DEPOSIT CSH030 CURRENCY DEPOSITED -UNSTRAPPED (000's) $1.20/$1000 CSH035 DEPOSIT ADJUSTMENT $7.00/ADJ. CSH109 FIT CURR FURN - PARTIAL STRAP $2.00 /STRAP SUBTOTAL CUSTOMER SERVICE ACTIVITIES CUS170 DEPOSIT RECEIPT $1.50/RECEIPT CU5301 NON -CUSTOMER CASH PAID ON -US $5.00 PER CHECK SUBTOTAL ELECTRONIC PAYMENT AUTHORIZAT EPA006 EPA MONTHLY MAINTENANCE Tierl: 1 to 1 EPA006 EPA MONTHLY MAINTENANCE Tier2: 2 to 10 EPA007 EPA TRADING PARTNER SETUP PER INSTRUCTION EPA010 EPA FILTER MAINTENANCE $5.00/CHANGE EPA037 EPA DAILY REPORT $10.00/MONTH SUBTOTAL IMAGE CHECK ICK221 REMOTE DEPOSIT MONTHLY MAINT $125/MONTH ICK222 REMOTE DEPOSITADD'LACCT Tierl: 1 to 5 ICK223 RD SCANNER P50/50 LEASE $60.00/MONTH ICK240 REMOTE DEPOSIT ON US $.08/ITEM ICK241 REMOTE DEPOSIT PER TRANSIT $.10/ITEM ICK291 REMOTE DEPOSIT PER DEPOSIT $1.00/DEPOSIT SUBTOTAL CHECK IMAGE IMG401 IOD MONTHLY MAINTENANCE FEE $5.00 PER MONTH IMG402 IOD PER ITEM FEE Tierl: 1 to 100 SUBTOTAL INFORMATION REPORTING INF408 WEB PRIOR DAY REPORT ACCOUNT Tierl: 1 to 1 INF408 WEB PRIOR DAY REPORT ACCOUNT Tier2: 2 to 10 INF411 WEB PD BAL/SUM UPDATED $0.15/ITEM UPDT INF412 WEB PD TRANSACTIONS UPDATED $0.15/ITEM UPDT INF413 WEB CD BAL/SUM UPDATED $0.20/ITEM UPDT INF414 WEB CD TRANSACTIONS UPDATED $0.20/ITEM UPDT INF429 WEB CURRENT DAY REPT ACCOUNT Tierl: 1 to 1 INF429 WEB CURRENT DAY REPT ACCOUNT Tier2: 2 to 999,999,999 INF442 WEB SWEEP REPORT ACCOUNT Tierl: 1toI SUBTOTAL ONLINE BUSINESS CENTER OBC207 ISSUE PASSWORD - BANK $.00/EACH OBC213 ACCT TRANSFER CHG USER -BANK $5.00/EACH SUBTOTAL 3 3.2500 9.75 3.2500 9.75 0.00 3.2500 3.2500 3.2500 9.1 1.0000 9.10 1.0000 9.10 0.00 1.0000 1.0000 1.0000 25 0.1500 3.75 0.1500 3.75 0.00 0.1500 0.1500 0.1500 26 3.0000 78.00 3.0000 78.00 0.00 3.0000 3.0000 1.0000 126 1.0000 126.00 1.0000 126.00 0.00 1.4500 0.9000 1.0000 114.8 1.0000 114.83 1.0000 114.83 0.00 0.6000 0.7000 0.9500 4 7.0000 28.00 7.0000 28.00 0.00 7.0000 7.0000 7.0000 3 2.0000 6.00 2.0000 6.00 0.00 2.0000 2.0000 2.0000 375.43 375.43 0.00 35 1.5000 52.50 1.5000 52.50 0.00 1.5000 1.5000 1.5000 5 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 52.50 52.50 0.00 1 10.0000 10.00 10.0000 10.00 0.00 10.0000 10.0000 15.0000 2 10.0000 20.00 10.0000 20.00 0.00 10.0000 10.0000 10.0000 4 15.0000 60.00 15.0000 60.00 0.00 15.0000 15.0000 15.0000 1 5.0000 5.00 5.0000 5.00 0.00 2.0000 5.0000 5.0000 3 10.0000 30.00 10.0000 30.00 0.00 10.0000 10.0000 10.0000 125.00 125.00 0.00 1 75.0000 75.00 100.0000 100.00 (25.00) 50.0000 75.0000 75.0000 1 75.0000 75.00 75.0000 75.00 0.00 5.0000 75.0000 75.0000 1 60.0000 60.00 60.0000 60.00 0.00 60.0000 60.0000 60.0000 11 0.0800 0.88 0.0800 0.88 0.00 0.0500 0.0800 0.0800 316 0.1000 31.60 0.1000 31.60 0.00 0.0500 0.1000 0.1000 13 1.0000 13.00 1.0000 13.00 0.00 0.5000 1.0000 1.0000 255.48 280.48 (25.00) 1 5.0000 5.00 5.0000 5.00 0.00 5.0000 5.0000 5.0000 7 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 5.00 5.00 0.00 1 20.0000 20.00 25.0000 25.00 (5.00) 10.0000 20.0000 20.0000 4 20.0000 80.00 25.0000 100.00 (20.00) 10.0000 20.0000 20.0000 1,931 0.0300 57.93 0.0500 96.55 (38.62) 0.0200 0.0300 0.0300 1,619 0.0300 48.57 0.0500 80.95 (32.38) 0.0200 0.0300 0.0300 194 0.0300 5.82 0.0500 9.70 (3.88) 0.0200 0.0300 0.0300 132 0.0300 3.96 0.0500 6.60 (2.64) 0.0200 0.0300 0.0300 1 20.0000 20.00 25.0000 25.00 (5.00) 10.0000 20.0000 20.0000 4 80.00 100.00 (20.00) 20.0000 25.0000 10.0000 20.0000 20.0000 1 20.0000 20.00 25.0000 25.00 (5.00) 10.0000 20.0000 20.0000 336.28 468.80 (132.52) 1 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 1 5.0000 5.00 5.0000 5.00 0.00 5.0000 5.0000 5.0000 5.00 5.00 0.00 2 CONTRACT NO. C29641A MUFG UNION BANK N.A. CITY OF PALM DESERT 5 YEAR CONTRACT EXTENSION JULY 1, 2015 - JUNE 30, 2020 CITY OF OTAY CITY OF HUNTINGT WATER Extended EXISTING PRICING REDLANDS ON BEACH DISTRICT Proposed Proposed Unit Extended Variance Unit Unit Unit BILLABLE UNIT OF VOLUME Price $ Price $ Price $ Price $ Extended Price $ Price $ Price $ CODE DESCRIPTION MEASURE (A) (0) (E)=(A)"(0) (E) (A)`(E) UB - COMP (E) (E) (E) DEPOSITED ITEMS RETURNED RET063 DEPOSITD ITEMS RETURND-CHRGBK $9.00/ITEM 3 4.0000 12.00 4.0000 12.00 0.00 3,0000 1.2500 1.5000 RET421 WEB RI I&D ITMS AVL FOR INQ $1.50/ITEM 3 1.5000 4.50 1.5000 4.50 0.00 1.5000 1,5000 1.5000 RET422 WEB RI I&D ITMS AVL FOR DEC $2.50/ITEM 4 2.5000 10.00 2.5000 10.00 0.00 2.5000 2.5000 2.5000 RET470 WEB RI - MONTHLY MAINTENANCE $5.00 PER MONTH 1 5.0000 5.00 5.0000 5.00 0.00 5.0000 5.0000 5.0000 SUBTOTAL 31.50 31.50 0.00 OFFICE CASH SERVICES R00015 DEPOSITED CURRENCY(000's) $1.50/$1000 22.2 1.5000 33.36 1.5000 33.36 0.00 1.5000 1.4000 1.5000 SUBTOTAL 33.36 33.36 0.00 TEAM STOP PAYMENTS TSP418 WEB STOP PAYMENT RENEWAL $10.00/RENEWAL 15 5.0000 75.00 5.0000 75.00 0.00 2.0000 5.0000 3.0000 TSP994 WEB NUMBER STOP ACCOUNTS STOP ACCOUNT 5 0.0000 0.00 0.0000 0.00 0.00 0.0000 0.0000 0.0000 SUBTOTAL 75.00 75.00 0.00 WIRE TRANSFERS WIR001 INCOMING DOMESTIC REPETITIVE $10/WIRE 3 5.0000 15.00 5.0000 15.00 0.00 5.0000 8.5000 10.0000 SUBTOTAL 15.00 15.00 0.00 ELECTRONIC WIRE TRANSFER WTM442 WIRE TRANSFER MONTHLY FEE/WEB $50.00/EACH 2 25.0000 50.00 25.0000 50.00 0.00 20.0000 10.0000 20.0000 WTM443 OUTGOING DOMESTIC WIRE/WEB Tierl: 1 to 100 11 6.0000 66.00 6.0000 66.00 0.00 7.0000 5.0000 6.0000 WTM447 INTERNAL TRANSFER INTRADAY/WEB $5.00/EACH 2 3.0000 6.00 3.0000 &00 0.00 3.0000 2.0000 2.0000 SUBTOTAL 122.00 122.00 0.00 TOTAL 3,512.67 3,670.19 (157.52) Additonal Notes: 1 Projected Annual Savings of $21,483.19 - additional discounts from existing pricing combined with enhanced Earnings Credit Rate allowance - see below for calculations 2 Comparables Not Using Like Services Listed Proposed 3 42% Discount from Standard Pricing with additional 4.5% discount from existing pricing. 4 Services volumes taken from January 2015 analysis statement 5 Comparables Not Using Like Services Listed Proposed 6 Please refer to Govermmnet Services Schedule of Fees for additional service fees and charges not listed on the Pro -forma above. Anticipated Savings: Proposed Existing Savings Monthly Bank Charges $ 3,512.67 $ 3,670.19 $ 157.52 Earnings Credit Rate Allowance increased to 25 bps $ 1,813.47 $ 180.72 $ (1,632.75) Deficit Charges $ 1,699.20 $ 3,489.47 $ (1,790.27) Projected Annual Savings $ (21,483.19) Contract Renewal Terms: Through June 30, 2020 S year fixed pricing + 2 one-year extention ECR at 90-day t-bill flat with a floor of 25 basis points While MUFG Union Bank, N.A. does not have immediate plans to access charges for collateralization Public funds, the cost of collateral is expected to increase due to changes in FDIC insurance coverage rules and Basel III accounting standards, and other foreseen and unforeseen regulatory environments. We reserve the right to assess charges for increased collateral costs related to changes in the regulatory environment. Additionally, MUFG Union Bank, N.A. reserves the right to assess or increase fees and charges related to the increased costs of providing any of its products or services to the public agency when incurred by MUFG Union Bank, N.A. as result of changes in the legal or regulatory environment ACCEPTED: CITY OF PALM DESERT MUFG UNION BANK, N.A. BY: PAUL S. GIBSON, CITY TREASURER DATE BY: TITO IBARROLA, VICE PRESIDENT/SENIOR RELATIONSHIP MANAGER DATE 0