HomeMy WebLinkAbout15.F.7. Bank Custodial Services
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CITY OF SHAKO PEE
Memorandum CONSENT
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
SUBJ: Bank Custody Services
DATE: December 16, 2004
Introduction
The City uses a bank to hold its investments for safety. The same bank
has been used for several years and staff sent out RFP's to see what
the competition had to offer.
Background
The City has used Wells Fargo for several years for trust and custody
services. This is a specialty service in the banking industry. There
are two banks in the metro area that provide the bulk of this type of
service. The City had $62 million in securities in the accounts at the
end of November.
RFP's were sent to US Bank and Wells Fargo Bank. While Wells Fargo has
provided excellent service, US Bank was judged to be able to provide
the same level of service.
With other factors essentially equal, the remaining factor is price.
Based on estimated activity levels provided by staff, the estimated
cost from Wells Fargo is $8,185 for a year and $5,665 for US Bank. IF
the cost difference were small, I would deem it not worth changing.
However, approximately $2,500 per year for a minimum of three years is
considered worth changing providers. Rates quoted are fixed for three
years.
Alternatives
1. stay with Wells Fargo.
2. Change to US Bank.
3. Do not use custodial services.
Recoromendation
Alternative number 2.
Action
Move to authorize the appropriate city officials to enter into an
agreement to utilize US Bank for corporate custody services.
c&J
afegg Voxland
Finance Director
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