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<br /> <br />. .... <br /> <br />flRP()RT <br /> <br />6.10 <br />Page 1 <br /> <br />September 8, 2008 <br /> <br />SUBJECT <br />Banking and cash management services agreement <br /> <br />RECOMMENDATION <br />By motion, approve a four-year agreement with Wells Fargo Bank for banking and cash <br />management services. <br /> <br />BACKGROUND <br />The City has had a long standing relationship with Wells Fargo Bank for the provision of <br />certain banking and cash management services. The City is and has been very <br />satisfied with the services provided and the responsiveness from the bank's staff <br />assigned to the City. <br />Examples of the services the City utilizes include: <br />. Daily cash balance reporting <br />. Controlled disbursement <br />. Positive pay <br />. Fraud prevention <br />. Automatic deposit for payroll <br />. Automated clearing house transactions <br />. Lockbox <br />. Wire transfer initiations <br />. Check issuance <br />. Depository services <br /> <br />A comprehensive list of services the City receives from Wells Fargo along with the <br />current proposed annual costs is attached for your review (Attachment 2- Wells Fargo <br />Treasury Management Proposal). <br /> <br />These services cost the City about $90,000 annually. The City pays for these services <br />either through maintaining non-interest bearing deposits (compensating balances) or by <br />direct payment. Recently Finance staff approached Wells Fargo and requested that the <br />bank reduce fees. The bank responded with an offer to reduce fees by 10% in return <br />for a four-year commitment from the City. Moreover, fees will not increase during this <br />four-year term, the result of which will be a savings of approximately $9,000 per year for <br />the City. <br /> <br />At the conclusion of the four year term of this agreement the City has the option to <br />renew for two one-year renewal periods with annual increases not to exceed greater <br />than 7% per year. <br />