(10)AR 041508 Contract-Bank of America

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CITY OF COLTON ITEM #10 AGENDA REPORT FOR CITY COUNCIL MEETING OF APRIL 15, 2008 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: AURELIO DE LA TORRE, CITY TREASURER DILU DE ALWIS, FINANCE DIRECTOR %%- SUBJECT: EXTENTION OF BANKING SERVICES CONTRACT WITH BANK OF AMERICA FOR 12 MONTHS EFFECTIVE APRIL 1, 2008 DATE: APRIL 7, 2008 BACKGROUND Subsequent to a request for proposal process undertaken by the City Treasurer's office in 2000, the City Council approved the continuance of banking services with Bank of America. DISCUSSION/ ANALYSIS On March 21, 2000 the City Council approved the continuance of banking services with Bank of America as a result of a request for proposal process undertaken by then City Treasurer Mike Williams. As part of that contract approval there was provision for that contract to be extended through April 2008. Bank of America has provided excellent services to the City of Colton and continues to partner with us in introducing services that are cost effective and time -saving. Bank of America has proposed a pricing structure that will save the City 5.62% over the current banking services price if the City Council approves the contract extension. As the national economic picture continues to show signs of weakening Bank of America through its conservative financing model has demonstrated to be a stable banking institution. The City Treasurer and the Finance staff will begin the process of a request for information (RFI) for future banking services which will take time to formulate. Staff feels it would be in the best interest of the City to extend the existing banking services agreement for an additional twelve months. ALTERNATIVE Not extend the banking services agreement and direct staff to immediately go through the RFI process while continuing with Bank of America on a month-to-month basis. FINANCIAL IMPACT Continuing with Bank of America for banking services will not have any significant financial impact as the fees paid for a year will be reduced by $2,660. The banking fees are paid through the City Treasurer's professional services account 100-6060-6060-2350. Budget Year -to -Date Expenditures Oen Encumbrances = Available Funds $15,000 1 $8,600 $0 1 $6,400 ENVIRONMENTAL IMPACT N/A RECOMMENDATION Staff recommends that the City Council authorize the City Manager to execute a twelve month extension of banking services with Bank of America effective April 1, 2008 through March 31, 2009. Additionally staff recommends Council authorize staff to proceed with a RFI for banking services during the upcoming months and bring the results back to Council for a new contract effective April 2009 .. r W TEAM ONLY orney• C"' Finance Director: nag OTHER: