C. Review Requests for Proposals, Banking Services
CITY OF
CHANHASSEN
7700 ivlarket Boulevard
POBox147
Chanhassen, MN 55317
Administration
Phone 952.227.1100
Fax 952.227.1110
Building Inspections
Phone 952.227.1180
Fax 952.227.1190
Engineering
Phone 952.227.1160
Fax 952.227.1170
Finance
P;lone 952.227.1140
Fax 952.227.1110
Park & Recreation
Phone 952.227.1120
Fax 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax 952.227.1404
Planning &
Natural Resources
Phone 952.227.1130
Fax 952.227.1110
Public Works
1591 Park Road
Phone 952.227.1300
Fax: 952.227.1310
Senior Center
Pholle 952.227.1125
Fax 952.227,1110
Web Site
w\vw,ci .chanhassen, mn. us
c
MEMORANDUM
TO:
Mayor & City Council Members
FROM:
V'
DATE:
Greg Sticha, Finance Director
May 11,2009 J<;J
SUBJ:
Banking Services Contract
BACKGROUND
As palt of our review process, it is the city's practice to request proposals for
banking services every three years. This is a GFOA recommended best practice
and allows the city to continually receive competitive bids for banking services.
Our current banking services contract resides with Americana Community Bank.
Our relationship with them over the past three years can only be described as
exceptional. They provided the highest level of professional and customer
service that could have been expected in all cases.
We had five of the seven local banks submit proposals. Those proposals were
reviewed by the banking services selection committee and two banks were
selected for an on-site visit and interview. The two banks selected were US
Bank and M & I Bank.
The criteria used to evaluate the proposals included the following: fees charged,
minimum balance requirements, interest rate offered, wire and deposit cut-off
times, online services provided, financial stability, and ability to provide
excellent customer service.
In the current economy, the financial stability or health of a bank certainly is
something to be concerned about. In the past year, all the banks have been
through some challenging times. Based on the information we received from
the banks and some external research, it is the committee's judgment that
although all the banks have had some struggles in the past year, that none of
them appear to have any long term viability issues. Therefore none of the
proposals were rejected for that reason.
Based on the remaining criteria, there were two clear proposals that made more
sense for the city to pursue. The US Bank proposal was very attractive because
of their relationship with the 4M. That relationship included the 4M fund
paying for most fees and a sweep mechanism that swept all available funds into
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrol/I
Mayor & City Council
May 11,2009
Page 2
the city's 4M account at the end of each business day. However, when all the
criteria were evaluated by the selection committee, the proposal by M & I Bank
was clearly the best proposal for the city to pursue.
By far, the M & I proposal offered the best interest rate for the balances
maintained in the account. The proposal offers a minimum of 1.4% on the
account balance and .15 basis points above the 90 day T-bill if it exceeds the
1.4%. Comparing that to the US Bank proposal was a little difficult because of
the 4M fund rate not tied to any particular indicator. However, based on current
market conditions, the proposal from M & I should offer a better rate of return
(between $12,000 -$18,000 per year) than US Bank, and would offer a better
rate ofretum (over $20,000 per year, based on current market conditions) based
on the proposal submitted by our current provider Americana Community Bank.
In addition, the fees proposed by M & I were minimal and the cut-off times were
also acceptable. During our on-site interview, the committee was gi ven every
expectation that our customer service needs will be more than met.
Attached is the grading sheet for all five proposals that were submitted. Staff
will be happy to discuss any of the proposals on Monday. This item is
scheduled for award on the consent agenda later this evening.
A TT ACHMENTS
1. Banking Services Grade Sheet.
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