Title
Consider/Discuss/Act on a Resolution to Extend the American National Bank Depository Contract
Summary
MEETING DATE: June 19, 2012
DEPARTMENT: Finance
CONTACT: Rodney Rhoades, Finance Director
RECOMMENDED CITY COUNCIL ACTION:
· Adopt the Resolution.
ITEM SUMMARY:
· The existing three-year depository contract for the custody of City funds with American National Bank (ANB) expires June 30, 2012 and allows for two one-year extensions.
· Staff is satisfied with American National Bank's performance and recommends an extension of the current contract with mutually agreed upon provisions.
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 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 $20 million at ANB's Public Fund Money Market Rate plus 25 basis points, with a floor of .30%
|
Current Agreement |
1 Year Extension |
Interest |
155 bp above the Federal Rate (currently 1.81%) |
25 bp above ANB's Public Fund MM Rate only on investment account (currently .30%) |
Banking Fees |
None |
None |
Safekeeping Fees |
None |
None |
Pledged Securities |
$30 million on interest bearing operating accounts |
$40 million (50/50 split of non-interest bearing accounts and investment account) |
BOARD OR COMMISSION RECOMMENDATION: N/A