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Home My WebLink AboutPR 21844: APPROVAL OF CONTRACT RENEWAL FOR DEPOSITORY SERVICES City of c, `v\\ nrt rtl>>ir Texas ti www.PortArthurTx.gov INTEROFFICE MEMORANDUM Date: 03/9/2021 To: The Honorable Mayor and City Council Through: Ron Burton, City Manager From: Kandy Daniel, Interim Director of Finance RE: PR No. 21844 -Approval of Contract Renewal for Depository Services Introduction: The intent of this Agenda Item is to seek City Council's approval to extend the Depository Services Agreement with Capital One Bank for the period beginning April 1, 2021 through March 31, 2022. Background: On March 27, 2018, the City Council approved Resolution No. 18-113 which authorized the City Manager to execute a Bank Depository Agreement with Capital One Bank, N.A. (Capital One) for the period beginning April 1, 2018 through March 31, 2020, with the option for three one-year extensions under the same terms and conditions. On March 17,2020,the City Council approved Resolution No. 20-085 which extended the contract through March 31, 2021. Due to the current interest rate environment, Capital One is requesting one modification to the current terms and conditions as set out in the original Bank Depository Contract. The original contract included a minimum interest rate of.75% for the life of the contract on funds held in interest bearing accounts. Interest rates have significantly declined over the past year and Capital One now wishes to remove this minimum. Capital One's Bank Managed Interest Rate will fluctuate with market conditions. The rate is currently .10% which is in line with current rates received from Government Pools. Capital One has provided excellent service during all contract periods. "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 City of 111"1 rthIt Texas www.PortArthurTx.gov Budget Impact: The City may realize less interest earnings due to the elimination of the interest rate floor. All other budget considerations have already been taken into account. Recommendation: It is recommended that City Council approve the extension of the Depository Services Agreement with Capital One Bank for the period beginning April 1, 2021 through March 31, 2022. "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 P. R. NO. 21844 3/9/2021 KD RESOLUTION NO. A RESOLUTION DESIGNATING CAPITAL ONE BANK, N.A. AS THE DEPOSITORY BANK FOR THE CITY OF PORT ARTHUR AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO IMPLEMENT THE CONTRACT RENEWAL TO BE EFFECIVE APRIL 1,2021. WHEREAS, per Resolution No. 18-113, the City Council authorized the City Manager to execute a Bank Depository Agreement with Capital One Bank, N.A. (Capital One) for the period beginning April 1, 2018 through March 31, 2020, with the option for three one-year extensions under the same terms and conditions; and WHEREAS, per Resolution No. 20-085, the City Council authorized the City Manager to execute a one-year extension to the Bank Depository Agreement with Capital One Bank, N.A. (Capital One) for the period beginning April 1, 2020 through March 31, 2021; and WHEREAS, Capital One is requesting to modify the original terms and conditions as set out in the original Bank Depository Contract by eliminating the minimum interest rate of .75% on funds held in interest bearing accounts. (See exhibit 1); and WHEREAS, the City Council deems it is in the City's best interest to exercise the second renewal option with modifications; and BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City does hereby designate Capital One Bank, N.A. as the Primary Depository of the City. Section 3. That the City Manager is hereby authorized to extend the Depository Services Agreement with Capital One Bank, N.A., under the same terms and conditions except as described in Exhibit 1 for the period beginning April 1, 2021 through March 31, 2022. Section 4. That Interim Director of Finance, along with the City Secretary when necessary, is hereby authorized to execute all documents to continue the services set forth in the agreement on behalf of the City. Section 5. That the initial agreement was for two years, with the City having the option to extend the agreement for three additional one-year periods, under the same terms and conditions. Section 6. That a copy of the caption of this Resolution shall be spread upon the Minutes of the City Council. READ, ADOPTED, AND APPROVED, this day of March, 2021, AD, at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: Mayor: Councilmembers: NOES: Thurman"Bill" Bartie, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED AS T FORM: Val Tizeno, City ttorne APPROVED FOR AVAILABILITY OF FUNDS: Kandy Daniel, I terim Director of Finance APPROVED FOR ADMINISTRATION: Ron Burton, City Manager AGREED TO: CAPITAL ONE BANK, N.A. By: Date Attest: Date Exhibit 1 Capita,Qe Capital One Bank PO Box 85619 Richmond,VA 23285-1619 March 10, 2021 Ron Burton, City Manager PO Box 1089 Port Arthur, TX 77641 Re: Modification to Contract for Banking Services for the City of Port Arthur Dear Mr. Burton: This letter agreement is intended to formalize the previously agreed upon revised interest rates and Earnings Credit Rates for the deposit accounts maintained by the City of Port Arthur(the "City") at Capital One, National Association ("Capital One") and to formally amend the contract between the City and Capital One evidenced by the proposal Capital One submitted in response to the City's Request for Application for Bank Depository Services (RFA#P18-036) on February 28, 2018 (the "Proposal") that was subsequently accepted by the City. As discussed, effective April 1, 2021, the following rates shall apply to the deposit accounts maintained by the City at Capital One, and they shall expire at the end of the contract term, March 31, 2022. • Interest bearing accounts will earn interest at a rate based on Capital One's Bank Managed Rate (BMR), currently 0.10%. • Analyzed accounts shall earn an Earnings Credit Rate of 0.75%. This was stated in the original contract. This letter agreement supersedes and cancels all prior written and oral agreements and understandings, including but not limited to the Proposal, with respect to the subject matter hereof only. All other terms and conditions of the Proposal and other depository agreements shall remain in full force and effect. The undersigned represents and warrants that they have full authority to execute this letter amendment on behalf of the respective parties. Should you have any questions, please do not hesitate to contact the undersigned at 225-394-5571. Regards, CAPITAL ONE, NATIONAL ASSOCIATION By: TPalmer diUM L Name: Tamara Palmer Title: Government Banking Officer ACKNOWLEDGED AND AGREED TO: CITY OF PORT ARTHUR By: Name: Title: