Memorandum

City of Lawrence

Finance Department

TO:	Dave Corliss, City Manager
FROM:	Ed Mullins, Finance Director
Date:	June 11, 2009
RE:	Banking services

The following information is in response to Mayor Chestnut’s questions concerning the responses to the banking services RFP issued by the Finance Department.

1)  Was there any analysis regarding cash availability differences between institutions?  The analysis on interest earned is highly dependent on the each institution's rules regarding deposits and when they become available.  The fact is that the average cash balances will not be static across all institutions.

Response:  Commerce Bank provided a schedule of when deposits would be available in our account.  The times varied from immediately to 2 days.  Only in a very few set of circumstances were the funds not available within one day.  Commerce Bank met or exceeded the deposit schedule of the other responders.

2) Are we sure that bids are consistent with handling of FDIC insurance?

Response:  The banks were to itemize and describe any other fees that would be associated with the City’s account in their proposal.  US Bank was the only respondent to list FDIC insurance.  Commerce Bank’s response stated that "Fees for the services included in the exhibits of this proposal will remain fixed for the term of the contract."

3) Was local support for services provided considered?  The questionnaire asked for number of branch locations in Lawrence.  Honestly, I believe this is less important than the access to cash management support within the institution.  These are the personnel that will interface most with City staff.

Response:  Because of the number of city locations accepting deposits, the number and location of the branches was a concern.  The longer it takes to get to the bank, the less time city employees can spend on other duties, and the city will incur higher fees for our courier service. 

      The location of the support service was not a consideration.  For the past six years most of the support services, such as ACH and wire transactions, are provided out of Junction City.  The Finance Department has not experienced any service problems due to the Junction City location.  Since the majority of our service requests are handled by email or telephone, there has not been a need for face to face communication.  All cash handling transactions have been provided locally and will continue to be handled locally by Commerce Bank.  

      In the case of Commerce Bank, most of our service requests will be handled by Mark Heider, a Lawrence resident for the last 21 years, and the President of the Lawrence branches.  The Finance Department has experienced better customer service from smaller banks, since we are typically one of their largest accounts.  The city's banking services have been managed by smaller Kansas banks over the last nine years.  During their presentation, Commerce Bank representatives emphasized the importance the bank has placed upon customer service, including the dedication of a group of employees that handle service requests from the bank's customers.  Their dedication to customer service was also confirmed when we contacted their references.