Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Contract with J.P. Morgan Chase of Dallas, Texas for Primary Depository Banking Services
Summary
COUNCIL GOAL: Financially Sound Government
(4A: Provide funding and organizational framework to ensure continual economic improvements)
MEETING DATE: June 18, 2019
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Chief Financial Officer
Trudy Mathis, Director of Finance
Kelvin Bryant, Investment and Treasury Manager
RECOMMENDED CITY COUNCIL ACTION:
• Approval of Resolution.
ITEM SUMMARY:
• This Resolution authorizes the City Manager to execute a contract with J.P. Morgan Chase of Dallas, TX for Primary Depository Banking Services.
• The contract is for a three-year term and includes a provision for two one-year continuations under the same terms and conditions of the contract, subject to the mutual agreement of both parties.
BACKGROUND INFORMATION:
• Section 110 of the City of McKinney Charter authorizes the City to receive sealed proposals from any bank doing business in the City of McKinney, Texas.
• Section 105.017 of the Local Government Code states that a municipal depository contract should not exceed five years.
• All pertinent requirements of Section 110 of the City City Charter; Section 105 of Local Government Code; Chapter 176 of Conflict of Interest Act; Chapter 2256 of Public Funds Investment Act; and Chapter 2257 of Public Funds Collateral Act have been complied with.
• The existing depository contract with American National Bank of Texas, will expire on June 30, 2019.
• The City engaged a consulting firm, Valley View Consulting, L.L.C., to provide depository contract advisory services.
• The City issued a Request for Application for Primary Depository Banking Services (19-23RFA) on March 10, 2019.
o Advertised in McKinney Courier Gazette and posted on McKinney TV
o 147 of matching eBid supplier notifications
• Purchasing received (10) ten responses from financial institutions with branch locations within city limits and were analyzed by the consulting firm.
• An evaluation team of (5) five staff members of the Finance Department and (1) one staff member of the Utility Customer Operations Department further reviewed the ranked proposals based on the following criteria:
o Cost of Required Service and Earnings potential in Differing Account Structures - 30%
o Terms and Capabilities to Provided Required Services - 15%
o Financial Strength of the Institution - 25%
o Customer Service Structure - 25%
o Collateralization - 5%
• The evaluation team interviewed the top (5) five scoring financial Institutions.
• J.P. Morgan Chase emerged as the best value application and is recommended by staff and consultant.
FINANCIAL SUMMARY:
• J.P. Morgan Chase Bank will provide all required banking services at an estimated cost of $141,000 over the initial three (3) year period which will be covered by an earnings credit rate of 2.10% on a compensating balance.
• J.P. Morgan Chase Bank will also provide an interest rate on all other accounts at 2.00% yielding an estimated net return (minus fees) and best value of $677,000.
BOARD OR COMMISSION RECOMMENDATION:
• N/A
SUPPORTING MATERIAL
• Resolution
• City of McKinney Scoring Analysis
• Valley View Consulting, L.L.C. Summary