Report to: General Committee Report
Date: April 26, 2010
SUBJECT: Banking Services
Contract Extension 006-R-02
PREPARED BY: Paul Wealleans, Director Taxation
Ext
4734
RECOMMENDATIONS:
1) THAT the report “Banking Services Contract Extension 006-R-02” be received;
2)
AND THAT the staff be authorized to extend contract 006-R-02 with TD Commercial
Banking (TD Bank) for a period of 5 years to April 30, 2015 for banking services in the
estimated annual cost of $92,000;
3) And THAT the Request for Proposal process be waived in
accordance with Purchasing By-Law 2004-341, Part II, Section 7, 1(c),
Non-Competitive Procurement, when the extension of an
existing contract would prove more cost-effective or beneficial;
4) AND
THAT the funds for Banking Services be drawn from the
Financial Services Operating Account # 410-440-5750;
AND THAT staff be
authorized and directed to do all things necessary to give effect to this
resolution.
This report seeks the approval of Council to extend
the current general banking contract 006-R-02 between the Town of Markham and TD Commercial
Banking for additional 5 years to April 30, 2015.
TD Bank has
been the bank of record for the Town of Markham
since 1994 and for the Markham Energy Corporation since 2002. It is also the
bank for Markham District Energy Inc.
In 2002,
Council approved the award of contract 006-R-02 to TD Bank (Highest ranked
bidder) for an initial three year period, expiring on April 30, 2005. The contract
(006-R-02) and Council approval included two extensions which were undertaken:
from May 1, 2005
to April 30, 2007
and then again from May 1,
2007 to April
30, 2010. The current contract (006-R-02) and Council approval
permits a 2 year extension, however, the bank has offered a five year extension
of the current contract with fees and charges at the same rate as currently. It
is recommended that staff be authorized to extend the current contract 006-R-02
for the five year period, ending in 2015.
The bank has
agreed to continue the provisions of the existing contract until Council’s
approval of this extension is obtained.
OPTIONS / DISCUSSIONS:
TD Bank has
provided full banking services for the Town since 1994. The Town has been
satisfied with the service provided and the fees and charges are competitive.
The proposed
contract extension retains the fees and charges at the same level as currently.
In fact, these charges have not increased since the 2002 contract which is a
significant benefit for the Town and a main reason the extension is being
recommended.
The key costs
include:
·
Fixed Monthly Fee: $0 (Bank has waived the $3000 fee)
·
Term: 5
years – expires April 30,
2015
·
Interest Rates: Prime
less 1.75% (Canadian Accounts)
·
Cancellation/Amendments:
Either party may cancel these arrangements by providing 60
days written notice to the other party. Either party may re-open negotiations
should deposit content volumes vary by more than 10% +/- within a 12 month
period.
The annual
cost to the Town for banking services is approximately $92,000. The two largest
charges relate to the processing of post dated cheque payments, mainly for
property tax, and the electronic funds transfer of payments, mainly for the
pre-authorized payments of property tax. Both of these charges remain the same
over the next 5 year period and the charge for electronic funds transfer is the
same rate as charged in 2003. As part of its review of the Town’s services
during the contract period in 2005, TD Bank recommended that the Town convert a
committed operating line facility to an uncommitted operating line facility
that has resulted in annual savings to the Town of $7500 or $35,000 since 2005.
The costs proposed by TD Bank in this extension are less than or similar to
comparable municipalities’ banking services.
The
continuation of these costs at these levels provides a
benefit to the Town and is an example of the excellent
partnership the Town has had, and continues to have, with TD Bank.
Although
unrelated to the award of the contract, the TD Bank has been a partner with the
Town in a number of endeavors and / or has provided funding for specific
initiatives, including: funding for Markham Music Festival; Markham Stouffville Hospital Foundation; Mayor’s “Explosion of
Culture” gala; Ministry of the Environment and Energy Demonstration Pond;
Markham Miracle and a donation for new trees as part of the Friends of the
Environment.
Cost for
services provided by TD Commercial Banking for the last two years have been
approximately $92,000 and sufficient funds are available in the Financial
Services Account 410-440-5750.
None
None.
Q:\Finance\SHARED\2010 General Committee Finance\1014
Banking Services Extension.doc
COMMITTEE/COUNCIL
ITEM TRACKING FORM
Revised: September 2009
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