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REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />July 25, 2016 <br />SUBJECT <br />Wells Fargo Banking Agreement <br /> <br />RECOMMENDATION <br />By motion, approve and authorize the City Manager to execute a banking services <br />agreement with Wells Fargo Bank in an amount not to exceed $450,000 for five years, <br />with an option for a two-year extension <br /> <br />BACKGROUND <br />The annual budget of the City is approximately $180 million, resulting in a similar <br />amount in bank deposits and payments. The City uses a commercial bank with a local <br />branch to handle all the deposits, payments, and associated services. Wells Fargo Bank <br />has, for many years, been the provider of banking services. The last extension of this <br />agreement occurred in August 2014 and expires in August 2016. The banking services <br />in this contract include: check issuance, depository services, daily cash balance <br />reporting, controlled disbursement, positive pay, fraud prevention, automatic deposit for <br />payroll, automated clearing house transactions, lockbox, and wire transfer services. <br /> <br />ANALYSIS <br />The City’s Purchasing Ordinance permits the selection of a vendor from another public <br />agency’s valid list provided that agency has followed a competitive bidding process <br />substantially equivalent to that of Redwood City. Staff recommends the City follows this <br />course of action for efficiency and expediency reasons for the banking services <br />agreement. <br /> <br />The City of Morgan Hill, after undertaking a competitive process and receiving bids from <br />three banks, selected and switched to Wells Fargo Bank in October 2015 based on the <br />bank’s ease of implementation, availability of 24/7 customer service, advanced <br />functionality of online services, and ease of use compared to the other two bidding <br />banks. <br /> <br />The City has been satisfied with the services provided by Wells Fargo Bank and having <br />both banking services and credit card services through one bank provides an efficient <br />way for staff to resolve problems with credit card payments that also involve the City’s <br />checking account. <br /> <br />6.1.H. - Page 1