CITY OF HALLANDALE BEACH, FLORIDA

MEMORANDUM

DATE:            June 4, 2008

TO:                  D. Mike Good, City Manager

FROM:            Patricia M. Ladolcetta, Director of Finance

SUBJECT: Banking Services Request for Proposal (RFP) #2007-2008-001

                        CR #10/07

PURPOSE:

Seek financial/banking services from various banking institutions in order to compare services and select one or more in the best interest of the City.

BACKGROUND:

Mayor Cooper requested that staff research the financial/banking services opportunities available to the City, to which CR#10/07 was created.  Discussions were held and it was determined that it was in the best interest for a request for proposal (RFP) for Banking Services to be conducted. 

The City’s current banking arrangements include accounts currently held in three financial institutions with branches within Hallandale Beach: Bank of America, City National Bank and Wachovia Bank. 

RFP packets were e-mailed/sent to various banking institutions within the City of Hallandale Beach and surrounding areas on April 3, 2008.  The City received proposals from six (6) banks:  City National Bank, Bank of America, Wachovia Bank, Great Florida Bank, Commerce Bank, and Bank Atlantic.  Staff established a selection committee comprised of members of the Finance Department, City Manager’s office, and Risk Management to review the different proposals and exchange ideas in order to select the best candidate from the six proposals received. 

DISCUSSION:

The proposals received were distributed to each of the members of the selection committee.  Each member reviewed the proposals independently and several meetings were held.  The different topics that were discussed during the meetings included a review and discussion of cost/earnings comparisons to which questions and answers were exchanged, and other items stipulated on page 17 of 34 of the RFP, Evaluation Factors, in order to render a consensus recommendation.

It was determined that each of the six (6) responding banks offered similar services and would be capable of providing all of the services requested adequately, as well as any additional to be considered in the future.  All of the banks have local branches either within the City or various areas of the Tri-County area.  All of the respondents were part of larger National or Statewide organizations.  All of the banks offered attractive City employee banking programs.  Most have ties to the community in one way or another and are very involved in charitable and/or community organizations and activities in various ways.

In short listing to the final three, much consideration was given to the financial stability of the banks, convenience to the City, costs, earnings, and other factors.  The three banks selected were also considered to have the best reputation by an impartial internet bank rating resource.  Those at the far edges of the above factors were eliminated from further consideration.

ANALYSIS

Surrounding cities were surveyed to determine their experience with Banking RFP’s, and transitioning from the existing bank to a different bank.  Experiences varied, but most agreed that any transition would be difficult.  There were helpful suggestions for the transition process, should that be necessary.  Should a transition to a bank(s) different from our existing bank(s) be required:

• New software would need to be installed on accounting staff’s computers in order to effect online data transmission, reconciliation, access, etc.

• There would be duplicate costs for six to nine months or longer during which there would be two sets of accounts open, while the former bank clears outstanding checks even as the new bank begins operations.  

• Staff would be required to perform duplicate duties on both sets of banks during this time

• All of our electronic payment arrangements with customers, grantor agencies, the county and the state would need to be revised to reflect the new banking information

• All of our banking information with our investment vehicles, the SBA and PFM, would need to be revised as well.

• If the payroll account is affected, every direct deposit employee would have to be pre-noted prior to live transmittal, which may result in one or more payrolls on paper checks

. 

• Procedures would be changed, and implemented with the corresponding learning curve.

• Armored car services arrangements would have to be changed.

After the complete review of the submitted proposals, three, City National Bank, Wachovia and Bank of America were selected to be further evaluated and interviewed. 

A detailed comparison was reviewed which revealed that one of the three banks, City National Bank, excelled in a number of factors.  It was the highest rated by the bank rating resource, as being extremely financially stable.  Its loan history to the City was examined and it has been very involved in CRA area affordable housing loans.  When inquired of their foreclosure history, there have been none in the whole of Broward County and only one in the entire corporation.  It has a branch locally located within the city limits, and their community involvement both within and outside of the City is admirable.  In addition, their fees were the lowest, their interest earnings rate the highest, and there is no balance reserve requirement for any of the accounts.  This cost/earnings difference results in a monthly increase in interest revenue of approximately $8,000 or more; almost $100,000 annually.  Obviously, the duplicate costs during transition months would reduce this somewhat the first year, however the subsequent years of the contract would reflect the anticipated revenue increases indicated.

The total and average ranking scores are as follows:

Bank Total Score

           City National Bank                                            586, average 97.7

           Bank of America                                              539, average 89.8

           Wachovia Bank                                                539, average 89.8

Based upon all of the factors discussed in the RFP responses by the banks, the banking services selection committee has selected City National Bank as our recommendation for award of contract for Banking Services.  Pursuant to Commission approval, staff will then negotiate an implementation schedule, the specific services and accounts to be implemented, and other specific terms of the contract.

RECOMMENDATION:

Pursuant to Chapter 23, Section 23-104, Formal Contract Procedure, Hallandale Beach Code of Ordinances, the City Commission approve award of RFP 2007-2008-001 Banking Services Contract, to City National Bank and further authorize the City Manager

to proceed with execution of the contract agreement and subsequent contract renewals in the best interest of the City.

Reviewed:

___________________________                              _______________     

D. Mike Good, City Manager                                                   Date

_____  Approved                     _____  Denied             _____  Hold for Discussion

COMMENTS: 

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