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File Number: 17-663 <br />·Notifying all who wire funds into the City’s bank account (includes major sources such as <br />property tax, sales tax, credit card transactions, and investment pools); <br />·Updating authorized signers on all accounts and sub-accounts; <br />·Notifying every vendor that is authorized to debit City’s bank accounts; <br />·Replacing check stock, deposit bags, deposits slips, etc. as necessary; <br />·Modifying codes on payroll and accounts payable checks; <br />·Setting up main and all remote City locations that process cash deposits; <br />·Ensuring there is enough remaining funds with Wells Fargo to cover any uncashed checks <br />in transit during the transition between banks; <br />·Modifying pickup and delivery of City deposits to cash vault locations via armored car <br />services. <br />While staff understands and appreciates the concerns addressed in the attached letter from <br />citizens, staff does not see this as a simple process of divestiture. There is a complicated and <br />time-consuming process for changing banks. It should be noted that there are very few banks that <br />could meet the City’s needs, Investment Policy restrictions, and State law requirements and not in <br />some way be affiliated with the DAPL Project. There are many financial institutions involved in the <br />financing of the DAPL Project and Wells Fargo’s share is less than 5%. Other banks lending to <br />the DAPL Project are Union Bank, Citibank, Bank of America, BNP (Bank of the West), and <br />Royal Bank of Canada (City National Bank). These banks have branches in San Leandro and <br />could be considered full service banks that could meet the needs of the City. The other banks <br />funding DAPL are SunTrust, Mizuho, TD Securities, Credit Agricole, Intesa San Paolo, ING, <br />Natixis, Bayern LB, BBVA, DNB Capital, ICBC London, SMBC Nikko, and Societe Generale. <br />Third, many major banks such as Bank of America are dropping municipal clients in order to <br />focus on more lucrative private clients with fewer restrictions. This leaves a limited pool to select <br />from to ensure that payroll checks to employees and AP checks to vendors are paid on-time. <br />During 2017, nearby cities and local agencies have issued RFPs for banking services. Hayward <br />received five proposals on April 1, 2017 and has not yet chosen a new bank. South San <br />Francisco and Alameda County Water District also received five bids and each chose JP <br />Morgan Chase earlier this year. JP Morgan Chase is a funder of the DAPL project. <br />Banking fees tend to fall into three categories: monthly charges for basic banking services, credit <br />card processing fees, and armored car services. Credit card fees are the most significant. In <br />spite of those fees, San Leandro has elected to accept credit cards for many services and fees <br />because it offers a substantial convenience for residents and customers. <br />Through the RFP process, South San Francisco discovered that their bank’s credit card fees are <br />the primary cost, ranging from $8,000 to $16,000 per month. Basic bank service costs are <br />$4,000 to $6,000 per month, which includes the Brinks Armored car service. Under the current <br />arrangement with Wells Fargo, San Leandro also pays more for credit card transactions <br />($4,500/month) than basic banking services ($2,000/month). In San Leandro, the armored car <br />service costs approximately $1,400/month, which makes the total cost approximately <br />$3,400/month before including the cost of credit card transactions. <br />Page 3 City of San Leandro Printed on 11/14/2017 <br />247