AgdaPkt 2008-02-11 Clsd and Reg - Laserfiche WebLink

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6.18 Page 2 Under the proposed pnclng, the non-negotiable VISA and MasterCard fees will represent about 87% of the total cost of these services, while these fees represent about 71 % of the existing total cost. The term of the recommended agreement is for three years. Should the agreement between Wells Fargo and the state be changed or not extended beyond June 2008, Wells Fargo. has committed to honoring the proposed terms and pricing throughout the duration of the agreement with Redwood City. The rate quoted by Wells Fargo will not increase over the duration of the agreement and could decrease in the event Wells Fargo reduces the rate charged to the state. This matter was brought before the City Council Finance Committee on Tuesday, January 8, 2008. The committee reviewed the proposed business terms and unanimously supported the recommendation to enter into this agreement provided that the rate offered by Wells Fargo would not increase over the duration of the agreement and would decrease in the event that Wells Fargo reduces the rate charged to the state. AL TERNA TIVES Council may elect not to accept this proposed pricing arrangement and may direct staff to obtain prices from other banks. Given that the proposed pricing is the result of a competitive process undertaken by the state, it is unlikely that the City will be able to obtain a lower price on its own. FISCAl IMPACT The City currently spends about $190,000 per year for merchant services fees. Under the proposed pricing arrangement this should decrease 19% to about $154,000 per year. The following is an estimate of the annual savings by fund: General Fund Water Fund Parking Fund $ 9,500 26,000 500 $36,000 ~ Peter Ingram Interim City Manager 13 {p~ Brian Ponty Director of Finance and Financial Planning ATTACHMENTS 1. Wells Fargo Merchant Services - Pricing Terms (Schedule A) RELATED DOCUMENTS IN CITY CLERK'S OFFICE None