City Council Report

Date: December 9, 2019 To: City Council Through: Michael Kennington, Deputy City Manager/Chief Financial Officer From: Edward Quedens, Business Services Director Matt Bauer, Procurement Administrator Subject: Five-Year Term Contract with Five Years of Renewal Options for Banking Services (Service Groups 1, 2 and 4) for the Department (Citywide)

Recommendation

Council is requested to approve the award as recommended.

A committee representing Financial Services Department and Purchasing evaluated responses. The evaluation committee recommends awarding the contracts to the highest scored proposals from the following vendors: General Banking – JP Morgan Chase at $120,000 annually; Merchant Card Processing – U.S. / Elavon at $18,000 annually; and Paying Agent Services – UMB Bank, N.A. at $18,000 annually; with an annual increase allowance of up to 5% or the adjusted Consumer Price Index.

Background / Discussion

The City of Mesa makes extensive use of banking services to collect, disburse and manage its cash and investments. Comprehensive banking services includes general banking services, merchant card processing, institutional custody and payment agent services. General banking services includes cash services, deposit services, disbursement services, electronic transfer of funds and general reporting - JP Morgan Chase is the incumbent for general banking services. Merchant card services represent the City’s ability to process transactions - US Bank / Elavon is the incumbent for merchant card services. Institutional custody services represent the safekeeping of the assets/securities in the City’s investment portfolio - Wells Fargo Bank, N.A. is the incumbent for institutional custody services. The City requires the services of a qualified paying agent, registrar, transfer agent, filing agent, and trustee for current and future bond issues - US Bancorp is the incumbent for Paying agent services.

Because the City believes that prudent business and procurement practices require the reevaluation of banking services on a periodic basis, a Request for Proposal (RFP) was released in order to have one or more qualified financial institution provide the City with comprehensive banking services. The RFP asked that the proposal(s) be divided into service groups in order to gain the most flexibility and best pricing. were allowed to propose on one or more of the service groups that the City was considering.

The City received responses from nine banks bidding on all of the banking services (See Proposal Responses – Service Groups 1, 2, 3 and 4).

PFM Asset Management LLC (PFM) was engaged by the City to assist in the development of the RFP and to review the proposals. In addition to PFM, a local banker, James Christensen, was asked to join the panel. Staff from both Financial Services and Business Services made up the rest of the panel.

For General Banking Services, the highest scored proposal, JP Morgan Chase, is being recommended for this award. For Merchant Card Processing, the highest scored proposal, U.S. Bank / Elavon, is being recommended for this award. For Paying Agent Service, the highest scored proposal, UMB Bank, is being recommended for this award. Council awarded Institutional Custody Services, to the highest scored proposal, U.S. Bank, on November 18, 2019.

Purchase Information

Action: Award Procurement Type: Request for Proposals Contract Number: 2019115 Local Consideration: Policy did not apply to this procurement method Protests Received: None Initial Contract Term: Five years (1/1/2020 to 12/31/2024) Possible Renewals: Up to a maximum of five years, renewals subject to Administrative review and approval Funding Source: General Banking and Custodial Services: The total estimated amount of $120,000 is available in Financial Services Department operating budget. Merchant Services: The total estimated amount of $53,000 (plus pass through 3rd party charges for Visa, Mastercard, and Discover) is available in the operating budget for each department that accepts credit cards.

Proposal Responses

Accelerated Card Company, LLC dba Certified Payments - Fort Worth, TX Banc of America Merchant Services, LLC dba Merchant Services - Charlotte, NC BMO Harris Bank - Phoenix, AZ Compass Bank/First Data Corporation, dba First Data Merchant Services LLC - , GA JPMorgan , N.A. - Columbus, OH The Bank of New York Mellon Trust Company, N.A. - Los Angeles, CA UMB Bank, N.A. - City, MI U.S. Bank National Association dba U.S. Bank / Elavon - Cincinnati, OH Wells Fargo Bank, N.A. - Phoenix, AZ

Proposal Responses (Service Group 1 – General Banking)

BMO Harris Bank - Phoenix, AZ JPMorgan Chase Bank, N.A. - Columbus, OH U.S. Bank National Association dba U.S. Bank - Cincinnati, OH Wells Fargo Bank, N.A. - Phoenix, AZ

2 Final Scoring (Service Group 1 – General Banking)

Respondent Total Score / Possible 100 JPMorgan Chase Bank, N.A. 88.8 (Recommended) Wells Fargo Bank, N.A. 82.5

BMO Harris Bank 71.1

U.S. Bank 64.9

Proposal Responses (Service Group 2 – Merchant Card Processing)

Accelerated Card Company, LLC dba Certified Payments - Fort Worth, TX Banc of America Merchant Services, LLC dba Bank of America Merchant Services - Charlotte, NC BMO Harris Bank - Phoenix, AZ Compass Bank/First Data Corporation dba First Data Merchant Services LLC - Atlanta, GA JPMorgan Chase Bank, N.A. - Columbus, OH U.S. Bank National Association dba U.S. Bank / Elavon - Cincinnati, OH Wells Fargo Bank, N.A. - Phoenix, AZ

Final Scoring (Service Group 2 – Merchant Card Processing)

Respondent Total Score / Possible 100

U.S. Bank / Elavon (Recommended) 83.1

Wells Fargo Bank, N.A. 80.6

JPMorgan Chase Bank, N.A. 73.1

Bank of America Merchant Services 69.0

BMO Harris Bank 66.2

BBVA / First Data 50.5

Certified Payments 30.2

Proposal Responses (Service Group 3 – Institutional Custody)

BMO Harris Bank - Phoenix, AZ The Bank of New York Mellon Trust Company, N.A. - Los Angeles, CA UMB Bank, N.A. - Kansas City, MI U.S. Bank National Association dba U.S. Bank - Cincinnati, OH Wells Fargo Bank, N.A. - Phoenix, AZ

3 Final Scoring (Service Group 3 – Institutional Custody)

Respondent Total Score / Possible 100

U.S. Bank (Awarded 11/18/2019) 84.70

Wells Fargo Bank, N.A. 77.00 The Bank of New York Mellon Trust 71.80 Company, N.A. BMO Harris Bank 68.30

UMB Bank, N.A. 59.00

Proposal Responses (Service Group 4 – Paying Agent Services)

The Bank of New York Mellon Trust Company, N.A. - Los Angeles, CA UMB Bank, N.A. - Kansas City, MI U.S. Bank National Association dba U.S. Bank - Cincinnati, OH Wells Fargo Bank, N.A. - Phoenix, AZ

Final Scoring (Service Group 4 – Paying Agent Services)

Respondent Total Score / Possible 100

UMB Bank, N.A. (Recommended) 81.5

U.S. Bank 80.2 The Bank of New York Mellon Trust 75.3 Company, N.A. Wells Fargo Bank, N.A. 55.9

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