HomeMy WebLinkAbout1984-06-19; City Council; 7797; San Diego Trust and Savings Bank Banking Servicesz
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CIT' ~)F CARLSBAD -AGENDj JILL
AB# 779? I.lil,.E;
.MTG. 6J19/-84
DEPT._F_I_N __
RECOMMENDED ACTION:
AWARD OF OANKIHG SERV!.CES
TO SAN DIEGO TRUST AND
SAVINGS BANK
By minute motion, approve the City Treasurer's and staff's
recommendation and authorize the selection of San Diego Trust and
Savings Bank as the City's depository.
ITEM EXPLANATION:
On January 24, 1984, at an adjourned council meeting, the City
Treasurer informed the Council of his intent to place the City's
banking services up for bid. On March 28, 1984, a request for
proposal (RFP) for banking services was mailed to all commercial
banks and savings and loans having full service branches located
within Carlsbad's city limits.
Proposals were received from the following institutions:
Bank of America
1st Interstate Bank
San Diego Trust & Savings Bank
The Bank of San D Lego
La Jolla Bank & Trust Co.
Security Pacific Bank
The City's review committee evaluated all proposals and has
recommended that the C.lty accept the proposal of San Diego Trust
and Savings Bank.
FISCAL IMPACT:
Under the proposed agreement, the City will be able to earn
interest on all funds on deposit with San Diego Trust and Savings
Bank. Based on past experience, the City could earn from $10,000
to $12,000 in interest above the amount necessary to cover service
costs on the account. This is a departure from past practices
where excess funds left in the account did not earn interest for
the City. The City will also be required to pay for all serv lees
provided by the bank rather than receiving free services as in past
years. Based on a computation of costs, the City's banking
expenses will be about $12,000 per year plus about $3,000 for the
purchase of check stock.
EXHIBITS:
Memo from City Banking Services Review Committee dated June 5,
1984.
June 5, 1984
TO: crry COUNCIL
FRCM: Banking Services Review Corrmittee
AWARD OF CITY BANKING SERVIC£5 TO SAN DIEGO TRUS'l', SAVINGS BANK
BACKGROUND
On January 24, 1984, at an adjourned council ~etingr the City Treasurer
informed the Council of his intent to place the City's banking services up for
bid. On March 28, 1964, a request for proposal (RFP) for banking services was
mailed to all oornnercial banks and savings and loans having full service
branches located withi~ Carlsbad's city limits. A copy of this proposal is
attached for your information. The reason for soliciting proposals was based
primarily on the fact that the City's accounts have been with the Bank of
Anerica, Carlsbad for S01re ten years and the latest unsigned oontract between
the bank and city is dated Septent>er 20, 1978. A current review appeared
appropriate.
The City's RFP was mailed on March 28, 1984. A pre-proposal oonference was held
in'City Hall on April 6, 1984 to answer questions of prospective bidders. It
was attended by representatives of ten OOIIVTercial banks.
By proposal closing date, April 25, 1984, six proposals were received as
follows:
Bank of America
1st Interstate Bank
San Diego Trust & Savings Bank
The Bank of San Diego
La Jolla Bank & Trust co.
Security Pacific Bank
No proposals were received from savings and loans. Although savings and loan
associations can legally provide the requested services, responses generally
stated that they are not cperationally in a position to respond to our needs.
The Banking Services Review Comnittee is conposed of:
F~ank N. Mannen -Assistant City Manager/Administration
J~s F. Elliott -City Finance Director
William c. Esterline -City Treasurer
The Cormtl.ttee rret on several occasions to review aiil analyze the six proposals
in detail. Proposals from La Jolla Bank & Trust C:,. and the Bank of San Diego
were oonsidered not to ~et the minirrum required services set forth in the RFP.
They were, therefore, not considered further. The remaining four proposals were
considered to rreet all of the RFP requirements.
Follow-up interviews were o:>nducted with key personnel from those four
institutions. Subsequently, additional information was requested from all four
via telephone to clarify all areas of each proposal and to answer CX>ITITlittee
questions generated by the interviews.
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FINDING.S
All four proposals rreet the City's requirement except for the payment of
interest as indicated below.
Only 1st Interstate Bank and San Diego Trust & Savings of the four proposals
offer interest payable on demand account balances (one of our requirernents).
1st Interstate' s systems and charges for this service were costly and
somewhat conplicated.
The City could waintain its accounts at any one of these institutions with
confidence.
Flexibility and a willingness to rreet the City's current and future banking
needs were rrore clearly evident in San Diego Trust & Savings' written
proposal and in subsequent discussions than in any of the other three.
San Diego Trust & Savings is a rruch smaller bank in assets, branch size ( 43
branches, all in San Diego County) and less experienced in handling
corporate and goverrurent accounts than are Band of America, First Interstate
Bank and Secuirty Pacific Bank. However, their key personnei have assured
us on several occasions of their capability to handle all our banking
needs.
Financial Conparison.
San Diego Trust & Savings Bank has offered the City a three year contract
with an annual 10% cost increase option.
The Comnittee talked with several of the San Diego Trust & Savings Bank
references and found them well satisfied with the bank. These include the
City of San Marcos.
RECC'MMENDATICN
That the City Council award the City's banking services to San Diego Trust &
Savings Bank for a three year period beginning on or about Septerrber 1, 1984
with a three year contract to be prepared and signed prior to that date.
AIJl'ERNATIVE-S
To enter into a contract with San Diego Trust & Savings Bank for a shorter
time period.
To award the (X)ntract to one of the other three banking institutions.
These are the review
Frank N. Mannen
cc: City Manager
City Attorney
James F. Elliott wnuam c. Esterline