Title
Consider a memorandum/resolution awarding Request for Proposal #25-05, Custody Services, to US Bank, in the estimated amount of $17,100 annually.
Body
DATE: January 7, 2025
TO: Kent Cagle, City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Request for Proposal - Bank Custody Services
BACKGROUND AND FINDINGS:
On October 24, 2023, the City Council approved the transition of the City of Killeen's banking depository from PNC Bank to JP Morgan Chase Bank. As a result of this change, PNC Bank will discontinue its custody services with the City of Killeen.
In partnership with Meeder Public Funds Inc., the City's investment consultant, staff developed and conducted a Request for Proposal (RFP) process to identify and evaluate qualified financial institutions for custody services. RFP No. 25-05 was issued in accordance with the specified terms, conditions, and requirements, advertised in the Killeen Daily Herald on October 6 and 13, 2024, and posted on OpenGov, the City's e-bidding platform, on October 7, 2024.
Two proposals were received: one from US Bank and one from Extraco Bank. The proposals were evaluated based on the following criteria:
1. Proposal Responsiveness (35%)
2. Proposal Responsibility (40%)
3. Proposal Cost (25%)
Both banks offer comparable basic services, but US Bank has over 120 years of experience providing custody services to institutional clients and manages $680 billion in assets. In comparison, Extraco Bank has over 20 years of custody service experience and manages $2.4 billion in assets.
The evaluation scores were as follows:
* US Bank: 94
* Extraco Bank: 73.6
Service fees were evaluated based on the fee schedules provided by both banks. Extraco Bank proposed a fee of 1.95 basis points, while US Bank proposed a fee of 0.75 basis points, making Extraco's fees more than double those of US Bank.
THE ALTERNATIVES CONSIDERED:
There are three alternatives to consider:
1) Do not award the custody services...
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