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HomeMy WebLinkAbout2007-09-10 07-299 ORDERItemno, 07 299 Date: September 10, 2007 Item/Subject: ORDER, Authonang Contract Award for Banking Services Responsible Department: Rnance On August 10, 2007, the City received s responses to its Banking Services Request for Proposal. As we moved through the RFP process, we were extremely pleased that the frontrunners were two of our local banks. Both Bangor Savings Bank and Camden National Bank are strong Onandal institutions with a proven commitment to not only our City but the region. Both are outstanding examples of corporate cimzens as demonstrated timeand again through theircontnbuffonsof time, expertise, and financial support to a long list of area agencies and causes. As active members of our community, the represeMatrves of each institution are well known to staff. While it was clear Mat both Onallets would be capable of providing the services requiretl "a City, there is a cost difference between them. On September 5, 2007, the Rnance Committee reviewed and approved staff recommendation to execute a contract with Camden National Bank for the a" banking services. The cid award recommendation must be Wowed and approved by the City Council as It is over $100,000. Department Head Recommend approval. 41491y/ City Manager Associated Information: Finance Commitee Memorandum Passage First Reading Page _ of _ _ Referral 07 299 Qmili asscee.a co cowcuor almcnecco sceceaae. to, zooa CITY OF BANGOR (TITLE.) Order, Authorizing Contract Award for Banking Services By the Oty Couml of th City ofBdngw.- ORDERED, THAT, Deborah Cyr, Finance Director, is hereby authorized to execute a three year contract with Camden National Bank for banking services. M CIW C CIL S ptr er 10, 2007 ffitl mde eod Seeaaded A 07-999 fo PaSav - 0enaa P sed ��yq�Au[hozisivg Cwtra c "aro f" CtIR CL8[4 I SHaea^�tlf�nCB etv cee Aed�eJroC999tllot. 07 299 To: Finance Committee From: Debbie Cyr Date: August 30, 2007 RE: RFP— Banking Services The City recently issued a Request for Proposals for Banking Services. Core Services The City's core services were defined as follows: • Depository Services — the maintenance and management of nine (9) separate bank accounts including processing deposits, payment of checks, stop payments, ACH transactions, reconcilement services, etc. • On-line banking -- enables the City to view collected and available balances, send wires, issue stop payments and voids, and to query items. • Credit/Debit Card services -- the equipment ro accept both credit and debit cards as well as the processing and settlement of bansacions. • Investment services — investing, on a longer term basis, any available rash generated within the City (excluding the Airport Investment portfolio, which is contracted for separately). • ATM(s) at BIA. (This would replace our current ATM at that location, which has not been part of the Ciry's banking contract.) This will provide a per transaction revenue stream to the Airport. In addition, the Citymay ask the respondent to Install ATM(s) at other suitable City locations. • There were a variety of other services the City specifically requested including an armored transport service to pick up deposits at City Hall and the use of that service for change orders on an as needed basis. Additional Potential Services Lastly, we asked each respondent to provide information on potential changes that were under consideration to our current processing methods, more specifically the imagining of checks deposited and/or their conversion to an electronic transaction. This is more fully discussed below. Responses The City received responses from the following: Bangor Savings Bank, Bank of America, Camden National Bank, Key Bank, Machias Savings Bank, and TO Banknorth (our current provider of banking services). Proposal copies were provided to five members of City staff for a multiple stage review. n7 zss Ability to Provide Core Services Based upon the initial review of services proposed, Bank of America did not offer Investment services. These services are vital to the City's banking relationship; therefore, no further consideration was given to their response. The next area reviewed was "exceptions" taken to the RFP. While most banks listed some exceptions, the exceptions from Machias Savings were such that no further consideration was given to their response. At this point, we determined that the respondents still under consideration could meet the Cty's bask requirements. The evaluation then turned to proposed costs. Cost Analysis The annual cost of current core services, as proposed by each of the firms that remained under consideration, is as follows: BSB CAM Key TDB Depository Services 15,395 14,344 14,203 16,857 On Line Banking 960 120 1,500 465 Credit/Debit Card 29,563 32,693 35,259 30,013 Investment Services 16,000 10,000 40,000 24,000 ATM Concession (9,000) (91000) (8,520) 0 Transport Service 9,600 0 7.250 0 Subtotal Net Costs $62.518 448.157 M.692 $71335 Projected 3 Yr Cost 187,554 $144,471 $269,076 $214.005 Based on this analysis, Key Bank and TO Banknorth were eliminated from further consideration on the basis of their proposed pricing. The selection committee then spent a considerable amount of time reviewing the responses from Bangor Savings Bank and Camden National Bank. Bangor Savings Bank/Camden National Bank We vrere extremely pleased that, as we moved through the RFP process, it became clear that the front runners were two of our local banks. Both Bangor Savings Bank and Camden National Bank are strong financial institutions with a proven commitment to not only our City but the region. Both are outstanding examples of corporate citizens as demonstrated time and again through their contributions of time, expertise, and financial support to a long list of area agencies and causes. As active members of our community, the representatives of each institution are well known to staff. p7 299 As such, staff has no reservations or concerns about our ability to work productively, efficiently and effectively with either Institution. Check Imaging and Electronic Transactions As part of the RFP process, the City asked for costs related to the Imaging of checks received. While the ability to convert checks to an ACX transaction is appealing at first glance, there are some limitations as to the types of checks that qualify as well as some notification requirements. For example, commercial checks and checks In excess of $25,000 are not eligible for ACH treatment. We estimate that the checks that the City processes are evenly divided between noncommercial and commercial checks. However, the majority of the value of the checks received is significantly higher within the "wmmerclal check" category. Based upon the additional costs to implement such a change in process (in excess of $20,000/year) and the limited positive Impact R would have on the City's cash Row, staff has determined that we would not recommend implementing imaging/ACH processing at this time. Additional Costs The only additional costs related to the City's core seMrrs shown above are for credit/debit card services. Theses costs include replacing the City's credit card machines with IP based equipment, allowing for PIN based debit Ord transactions, and the resuldng annual operating costs associated with credtt/debtt Ord services. When these costs are added to the cost summary above, this results in an estimated three (3) year contract cost of $202,809 for Bangor Savings Bank and $151,781 for Camden National Bank. Penobscot County/City of Brewer Within the RFP, the City requested that the selected firm make the pricing quoted for Bangor available to both the City of Brewer and Penobscot County. Bangor Savings Bank agreed to this request, but Camden National Bank indicated that pricing for those relationships would need to be based on each entity's service and product needs and that they could not simply make Bangor's pricing available to them. Recommendation While it is dear that both finallsts are capable of providing the services required by the Cry, there is a cost difference between them. Based on this d8ferential and after a detailed review of all the available information, 1 recommend that the City award the contract for Banking Services to Camden National Bank.