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:
* 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 :
o 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
o 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 COMMISS...
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