Item Description:
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Authorization to negotiate terms and conditions for a master banking agreement with U.S. Bank N.A., to begin April 1, 2024, based on its proposal to the county’s RFP issued on July 20, 2023
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Resolution:
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BE IT RESOLVED, that the Director of the Office of Budget and Finance, in conjunction with the County Attorney, be authorized to negotiate terms and conditions for a master banking agreement with U.S. Bank N.A., to begin April 1, 2024, based on its service pricing and economic incentive proposals to the county’s Request for Proposals, and
BE IT FURTHER RESOLVED, that the Chair of the Board and the County Administrator be authorized to sign, and amend as needed, the master banking agreement with U.S. Bank N.A., and
BE IT FURTHER RESOLVED, that the Director of the Office of Budget and Finance be authorized to sign, and amend as needed, service operating schedules which will be attachments to the master banking agreement, and
BE IT FURTHER RESOLVED, that the Controller be authorized to accept and disburse funds as directed.
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Background:
This Board Action Request asks for renewal of a master banking agreement with U.S. Bank, N.A., headquartered in Minneapolis, with updated pricing, terms and conditions, to encompass four operating service categories:
1. General banking services for deposits, payments and reporting,
2. Commercial card services for staff purchasing cards and virtual card payments to vendors,
3. Retail payment card services for employee payroll deposits and client payments,
4. Custody and delivery services for county investment portfolio securities.
For this RFP, the Office of Budget and Finance updated and refined operational requirements for each of the four service categories, based on current banking industry standards and offerings, and county business needs. The RFP allowed proposals for one of more of the service categories. The county received proposals from five banks: US Bank, JPMorgan Chase Bank, Wells Fargo Bank, Huntington Bank, BMO Harris Bank. Except for US Bank, which made proposals for all four service categories, the remaining banks offered services in fewer service categories.
To assist in the analysis of the proposals, we engaged the treasury consulting group from our contracted financial advisor, Public Financial Management (PFM). Using scoring based on weighted evaluation criteria, we determined that US Bank is the most responsive provider in each of the four service categories.
The three most influential scoring criteria that resulted in the decision to request Board permission to negotiate a master banking agreement with US Bank as the county’s banking provider in all service categories were:
1. Overall cost of services including economic incentives,
2. Costs of IT transition services to a new bank, and
3. The bank’s presence and investments in Hennepin County.
This new agreement will require contracted prices for five (5) years, after which there can be three (3) optional two-year extension periods.
The new agreement will also include and extend US Bank’s provision of credit and debit card payment processing. Card payments were not included as a service category in this RFP because of pricing restrictions placed on the county as a deputy registrar for the State of Minnesota’s Driver and Vehicle Services. Those transactions occur at Hennepin County Service Centers.
Regarding the third criteria of community presence and investment, we note, in particular, a relationship that US Bank has with First Independence Bank, a Black-owned financial institution, recently established in Hennepin County. We believe that this partnership represents an alignment with the county’s disparity reduction goals.
U.S. Bank has partnered with First Independence Bank under the U.S. Treasury’s Bank Mentor-Protégé Program (TBMPP) that was established in 2018 by the Department of the Treasury, Bureau of the Fiscal Service to recognize and promote the important role played by minority-owned and women-owned banks, and small banks and financial institutions (FIs) in the nation’s economy and financial system.
The TBMPP provides a platform for large commercial financial institutions such as US Bank to partner with a protégé and provide management and/or technical assistance to help minority/women-owned banks and small FIs in low-income communities to strengthen their balance sheets and better serve their customers.
OBF and Housing and Economic Development will work with US Bank and the community to determine activities and programming that support First Independence Bank in Hennepin County.
recommendation
Recommendation from County Administrator: Recommend Approval