Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Contract with J.P. Morgan Chase Bank, N.A. of Dallas, Texas for Primary Depository Bank Services
Summary
COUNCIL GOAL: Financially Sound Government
(4B: Provide funding and organizational framework to ensure continual economic improvements)
MEETING DATE: May 21, 2024
DEPARTMENT: Financial Services
Procurement Services
CONTACT: Mark Holloway, Chief Financial Officer
Trudy Mathis, Director of Finance
Kelvin Bryant, Investment and Treasury Manager
Tonya Hall, Procurement Services Supervisor
RECOMMENDED CITY COUNCIL ACTION:
• Approval of Resolution
ITEM SUMMARY:
• This Resolution authorizes the City Manager to execute a contract with J.P. Morgan Chase Bank, N.A. of Dallas, Texas for Primary Depository Bank 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 applications 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 (5) years.
• All pertinent requirements of Section 110 of the City City Charter; Section 105 of the Local Government Code; Chapter 176 of the Conflict of Interest Act; Chapter 2256 of the Public Funds Investment Act; and Chapter 2257 of the Public Funds Collateral Act have been complied with.
• The existing depository contract with J.P. Morgan Chase Bank will expire on June 30, 2024.
• The City engaged with a consulting firm, Valley View Consulting, L.L.C., to provide depository contract advisory services.
• The City issued a Request for Applications (RFA) for Primary Depository Bank Services (24-36RFA) on February 11, 2024.
o Advertised and appeared in McKinney Courier Gazette and Dallas Morning News
o Notified seventeen (17) financial institutions withing the municipal boundaries of the City
o Posted on McKinney TV
o 209 matching eBid suppliers were notified which included five (5) Historically Underutilized Business (HUB) suppliers
• Procurement Services received eight (8) applications from financial institutions with branch locations within city limits and were analyzed by Valley View Consulting.
• An evaluation team of five (5) staff members of the Financial Services Department further reviewed and ranked the applications based on the following criteria:
o 30 Points - Cost of Required Banking Services and Earnings Potential in Differing Account Structures
o 15 Points - Terms and Capabilities to Provided Required Services
o 25 Points - Financial Strength of the Institution
o 25 Points - Customer Service Structure
o 5 Points - Collateralization
• The evaluation team interviewed and scored the top three (3) highest ranked financial institutions and ranked the demonstrations on the following criteria:
o 25 Points - Demonstration
§ Presentation
§ Applicant Experience
• J.P. Morgan Chase Bank, N.A. emerged as the best value application and is recommended by staff and consultant.
FINANCIAL SUMMARY:
• J.P. Morgan Chase Bank will provide all required services at an estimated cost of $182,000 over the initial three (3) year period which will be covered by an earnings credit rate of 3.85% on a compensating balance.
• J.P. Morgan Chase Bank will also provide an end of day sweep that currently pays 4.80%
SUPPORTING MATERIAL:
• Resolution
• City of McKinney Scoring Summary
• Valley View Consulting Summary