CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the award of the second two-year extension to Contract 13-025A, Depository Banking Services, to BMO Harris for an amount not to exceed $367,000
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DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In February 2013, City Council approved the award of Contract 13-025 to BMO Harris Bank for a five-year term from August 1, 2013 through July 31, 2018 with consideration for two, two-year extensions. As part of this contract, BMO Harris is responsible for the following banking services:
* Domestic custody
* Monthly and annual financial statements
* Cost basis maintenance
* 24/7 Internet access via Portfolio Vision for client and managers
* Daily sweep assuming a BMO Fund managed by BMO Global Asset Management is used as the sweep vehicle
* Distributions
* Wire transfers
* All client meetings
In August 2018, City Council approved the first extension to the contract from August 1, 2018 to December 31, 2019. The City and BMO Harris agreed to a 16-month extension rather than a 2-year extension to align the contract with the City's fiscal year.
DISCUSSION:
During the first extension to the contract, staff was able to negotiate with BMO Harris to convert the City's account to a hybrid structure, meaning it offers an earnings credit rate, as well as an interest rate on the account balances the City maintains. Once the bank's monthly fees are offset by the earning credit rate, any remaining balances automatically earn interest. As a result of this new hybrid structure, the City received an additional $323,578 in interest revenues during the first extension period.
Based upon the vendor's performance, the Finance Department would like to extend the contract for the second and final two-year extension. BMO Harris requested a 3% increase to the overall monthly fees for the first year of the two-year extension and the option to implement a price increa...
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