File #: 13-502    Name: Bank Depository Extension
Type: Resolution Status: Approved
In control: City Council Regular Meeting
On agenda: 5/21/2013 Final action: 5/21/2013
Title: Consider/Discuss/Act on a Resolution to Extend the American National Bank Depository Contract
Attachments: 1. Agenda Item Summary, 2. Resolution, 3. Agreement
Title
Consider/Discuss/Act on a Resolution to Extend the American National Bank Depository Contract
 
Summary
 
MEETING DATE:      May 21, 2013
 
DEPARTMENT:       Financial Services
 
CONTACT:        Rodney Rhoades, Chief Financial Officer
 
RECOMMENDED CITY COUNCIL ACTION:      
ยท      Adopt the Resolution.
 
ITEM SUMMARY:  
  • The original three-year depository contract for the custody of City funds with American National Bank (ANB) allowed two one-year extensions.
  • The primary one-year extension was signed with modified provisions on June 19, 2012 and will expire June 30, 2013.
  • Staff is satisfied with American National Bank's performance and recommends a secondary extension of the current contract with mutually agreed upon provisions which will expire June 30, 2014.
 
BACKGROUND INFORMATION:  
  • Section 105.017 of the Local Government Code states that a municipality may approve, execute, and deliver any depository service contract whose term does not exceed five (5) years.
  • All pertinent requirements comply with Section 110 of the City of McKinney City Charter and Section 105.017 of the Local Government Code.
 
FINANCIAL SUMMARY:  
  • All contract terms remain as stated in the original contract with the exception of :
    • ANB will provide all banking services and safekeeping at no cost in lieu of an average $20 million in Collected Non-Interest Bearing Compensating Balance Accounts
    • City will maintain an investment account not to exceed $30 million at  ANB's Public Fund Money Market Rate (PF/MM) plus 15 basis points (bp), with a floor of .20%
 
 
Current Agreement
1 Year Extension
Interest
25 bp above ANB's PF/MM rate only on investment account (currently .30%)
15 bp above ANB's PF/MM rate only on investment account (currently .20%)
Banking Fees
None
None
Safekeeping Fees
None
None
Pledged Securities
$40 million (50/50 split of non-interest bearing and investment accounts)
$50 million (40/60 split of non-interest bearing and investment accounts)
BOARD OR COMMISSION RECOMMENDATION:    N/A