HomeMy WebLinkAboutItem 10g - Commercial Banking Services
DATE: October 4, 2022
TO: Honorable Mayor and City Council
FROM: Hue C. Quach, Administrative Services Director
Henry Chen, Financial Services Manager/City Treasurer
SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH WELLS FARGO BANK
FOR COMMERCIAL BANKING SERVICES FOR FIVE YEARS WITH TWO
(2) ONE-YEAR RENEWAL OPTIONS
Recommendation: Approve
SUMMARY
A Request for Proposals (“RFP”) for commercial banking services was mailed to nine
financial institutions that have branches within the City’s corporate boundaries in May
2022, and four proposals were received. After an extensive review of the proposals, it is
recommended that the City contract with Wells Fargo Bank for five years of commercial
banking services, with two (2) one-year renewal options.
BACKGROUND
The City has been under contract with Wells Fargo since 2017 to provide commercial
banking services. Although satisfied with current services, the expiration of the existing
contract provides the City an opportunity to solicit proposals from other banks to ensure
that the City is receiving the best and most innovative services at the most competitive
prices. In May 2022, a Request for Proposals (“RFP”) was sent to nine financial
institutions that have branches within City limits. The RFP was also posted on the City’s
website and on the website of the California Society of Municipal Finance Officers.
Commercial banking services are an essential component of the City’s daily financial
activities, including maintenance of a general checking account for operations, a payroll
account through which personnel disbursements are paid, a deposit account for credit
card payments, an accounts payable disbursement account, and a checking account for
Worker’s Compensation and General Liability payments. In addition to the cost
component, a focus of the RFP was to learn of new services and products that the banking
Banking Services Agreement
October 4, 2022
Page 2 of 4
community has developed since the City last went through the process. With new ideas
and technologies, the City strives to increase efficiencies and reduce the risks for fraud.
The primary banking services required by the City include acceptance of daily deposits,
processing paid items, direct deposit capabilities for payroll, electronic funds transfers for
water utility accounts, wire transfers, payment of state and federal taxes electronically,
and corporate credit cards. It is the City’s intent to maintain all commercial banking
services with one financial institution to maximize cash flow and minimize administrative
costs. The level of capitalization and financial health of the institution are also critical
parts of the proposal process.
DISCUSSION
Following release of the RFP, the City received proposals from the following four banks:
• Wells Fargo Bank
• Bank of the West
• U.S. Bank
• J.P. Morgan
It was determined that all of the proposing banks could adequately provide the services
requested and that there were no significant differences in the level of services from each
bank. Included in each proposal were additional services that take advantage of
emerging technologies and new electronic banking services that would work together to
provide increased automation and efficiencies. In evaluating costs for commercial
banking services, two factors are significant: 1) Services Charges and 2) Earnings Credit
Rate (interest earned on investible balance). In addition, each bank has proposed some
credits to help offset the cost of transition as well as to help the City implement new
services. A comparison table for these factors is presented below:
Bank
Estimated
Annual Cost
Earnings Credit
Rate Conversion Allowance
J.P. Morgan
$25,100 0.50%
(variable)
$14,000 credit for
transition (12 months)
Wells Fargo $27,400
0.45%
(variable)
$3,000 credit for new
services (12 months)
Bank of the
West
$32,600
0.65%
(variable)
3 months of fee wavier
(up to $15,000)
U.S. Bank $40,400
0.65%
(variable)
$10,000 credit for
transition
$2,500 credit for new
services (24 months)
Banking Services Agreement
October 4, 2022
Page 3 of 4
Each bank was asked to provide a cost estimate based on the typical number of
transactions that the City incurs monthly. These service charges were annualized to
gauge how much banking services are expected to cost the City per year. The earnings
credit is a daily calculation of interest that the bank would pay for the monies that the City
maintains on deposit and is used to offset the service charges that the City incurs. Each
bank also provided a conversion credit allowance to assist with the expected expenses
from the transition to a new bank. The overall estimated costs for Wells Fargo are slightly
higher than JP Morgan. However, the City’s overall experience with Wells Fargo over the
past few years has been excellent and the services the City continues to receive are well
worth the minor additional costs.
When the City switched to Wells Fargo five years ago, it was done primarily to take
advantage of their technology offerings, add-on solutions, and online tools to help
manage the City’s bank and credit card accounts. The experience working with Wells
Fargo during the past five years has reinforced this initial evaluation. Their Receivable
Manager program has made researching payments a seamless process and has
simplified finding invalid account numbers. Wells Fargo has continued to update their
technological offerings, primarily in fraud prevention, and their staff has provided an
excellent level of customer service. Wells Fargo has also been proactive in bringing to
the City’s attention a variety of products and services that they feel would assist the City
in saving money, providing efficiencies, and reducing the City’s exposure to cybercrimes.
When the City’s previous utility payment processor unilaterally ended their contract with
the City, Wells Fargo was able to step in and set up an online portal to assist the City in
continuing to process payments. This allowed the City to continue providing a convenient
way for our customers to pay their utility bills with minimal disruptions. As the City worked
to transition a new claims administrator, Wells Fargo provided an entire team to assist the
City with the transition process. They worked with the new claims’ administrator and City
staff to setup an electronic process so that all the claim payments would be entered
automatically, and this relieved the City from having to manually enter all the payments.
Additionally, Wells Fargo was the first to pitch the City the idea of refinancing the City’s
General Obligation (“GO”) bonds. Even though in the end the City awarded the
refinancing to a different bank that provided a more competitive proposal, in bringing this
idea to the City, they showed themselves to be proactive in furthering the City’s interests
and exploring different avenues to save the City money. The GO bond refunding idea
ultimately saved Arcadia’s residents nearly $840,000 in interest payments over the
remaining life of the bonds.
Finally, Wells Fargo has mapped out several future enhancements that should further
assist the City in streamlining payments and reducing the opportunities for fraud.
While the estimated annual cost for Wells Fargo is not the lowest, the fees are fixed for
the duration of the contract. It is anticipated that as the City will continue to implement
additional services from Wells Fargo, overall efficiency will increase, and cost savings will
Banking Services Agreement
October 4, 2022
Page 4 of 4
be realized that will offset the minimal additional annual service charges. As such, it is
recommended that the City Council approve a new Professional Services Agreement with
Wells Fargo.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the
environment. Thus, this matter is exempt under CEQA.
FISCAL IMPACT
The annual bank service fees are estimated to be $27,400. Adequate funds are included
in the Fiscal Year 2022-23 Operating Budget to cover this expense.
RECOMMENDATION
It is recommended that the City Council determine that this action does not constitute a
project and is therefore, exempt under, the California Environmental Quality Act
(“CEQA”); and approve, direct, and authorize the City Manager to execute a Professional
Services Agreement with Wells Fargo for commercial banking services for five years, with
the option of renewing the contract for two (2) additional one-year extensions.
Attachments: Proposed Professional Services Agreement
Wells Fargo’s Proposed Modifications to Professional Services
Agreement
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CITY OF ARCADIA
PROFESSIONAL SERVICES AGREEMENT
FOR GENERAL BANKING SERVICES
1. PARTIES AND DATE.
This Agreement is made and entered into this ____ day of ______________, 20__
by and between the City of Arcadia, a charter city organized under the Constitution and
laws of the State of California with its principal place of business at 240 West Huntington
Drive, Arcadia, California 91066-6021 ("City") and Wells Fargo Bank, a national banking
association with an office located at 300 East Esplanade Drive, 19th Floor, Oxnard, CA
93036 ("Bank"). City and Bank are sometimes individually referred to as “Party” and
collectively as “Parties.”
2. RECITALS.
2.1 Bank.
Bank desires to perform and assume responsibility for the provision of certain
professional services required by the City on the terms and conditions set forth in this
Agreement. Bank represents that it is experienced in providing Banking services to public
clients, is licensed in the State of California, and is familiar with the plans of City.
2.2 Project.
City desires to engage Bank to render banking services as set forth in this
Agreement.
3. TERMS.
3.1 Scope of Services and Term.
3.1.1 General Scope of Services. Bank promises and agrees to furnish to
the City all labor, materials, tools, equipment, services, and incidental and customary
work necessary to supply the banking services necessary fully and adequately for the
Project ("Services"). The Services are more particularly described in Exhibit "A" attached
hereto and incorporated herein by reference. All Services shall be subject to, and
performed in accordance with, this Agreement, the exhibits attached hereto and
incorporated herein by reference, and all applicable local, state, and federal laws, rules
and regulations.
3.1.2 Term. The term of this Agreement shall be from December 1, 2022,
to November 30, 2027, unless earlier terminated as provided herein. Bank shall complete
the Services within the term of this Agreement and shall meet any other established
schedules and deadlines.
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3.2 Responsibilities of Bank.
3.2.1 Control and Payment of Subordinates; Independent Contractor. The
Services shall be performed by Bank or under its supervision. Bank will determine the
means, methods, and details of performing the Services subject to the requirements of
this Agreement. City retains Bank on an independent contractor basis and not as an
employee. Bank retains the right to perform similar or different services for others during
the term of this Agreement. Any additional personnel performing the Services under this
Agreement on behalf of Bank shall also not be employees of City and shall at all times be
under Bank's exclusive direction and control. Bank shall pay all wages, salaries, and
other amounts due such personnel in connection with their performance of Services under
this Agreement and as required by law. Bank shall be responsible for all reports and
obligations respecting such additional personnel, including, but not limited to: social
security taxes, income tax withholding, unemployment insurance, disability insurance,
and workers' compensation insurance.
3.2.2 Schedule of Services. Bank shall perform the Services
expeditiously, within the term of this Agreement, and in accordance with the Schedule of
Services set forth in Exhibit "B" attached hereto and incorporated herein by reference.
Bank represents that it has the professional and technical personnel required to perform
the Services in conformance with such conditions. In order to facilitate Bank's
conformance with the Schedule, City shall respond to Bank's submittals in a timely
manner. Upon request of City, Bank shall provide a more detailed schedule of anticipated
performance to meet the Schedule of Services.
3.2.3 Conformance to Applicable Requirements. All work prepared by
Bank shall be subject to the prior written approval of City.
3.2.4 Substitution of Key Personnel. Bank has represented to City that
certain key personnel will perform and coordinate the Services under this Agreement.
Should one or more of such personnel become unavailable, Bank may substitute other
personnel of at least equal competence upon prior written approval of City. In the event
that City and Bank cannot agree as to the substitution of key personnel, City shall be
entitled to terminate this Agreement for cause. As discussed below, any personnel who
fail or refuse to perform the Services in a manner acceptable to the City, or who are
determined by the City to be uncooperative, incompetent, a threat to the adequate or
timely completion of the Project or a threat to the safety of persons or property, shall be
promptly removed from the Project by the Bank at the request of the City. The key
personnel for performance of this Agreement are as follows: Jeannie Kabilafkas, Vice
President, Government Relationship Manager
3.2.5 City’s Representative. The City hereby designates Henry Chen,
Financial Services Manager/City Treasurer, or his or her designee, to act as its
representative for the performance of this Agreement (“City’s Representative”). City’s
Representative shall have the power to act on behalf of the City for all purposes under
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this Contract. Bank shall not accept direction or orders from any person other than the
City’s Representative or his or her designee.
3.2.6 Bank’s Representative. Bank hereby Jeannie Kabilafkas, Vice
President, or his or her designee, to act as its representative for the performance of this
Agreement (“Bank’s Representative”). Bank’s Representative shall have full authority to
represent and act on behalf of the Bank for all purposes under this Agreement. The
Bank’s Representative shall supervise and direct the Services, using his best skill and
attention, and shall be responsible for all means, methods, techniques, sequences and
procedures and for the satisfactory coordination of all portions of the Services under this
Agreement.
3.2.7 Coordination of Services. Bank agrees to work closely with City staff
in the performance of Services and shall be available to City's staff, consultants, and other
staff at all reasonable times.
3.2.8 Standard of Care; Performance of Employees. Bank shall perform
all Services under this Agreement in a skillful and competent manner, consistent with the
standards generally recognized as being employed by professionals in the same
discipline in the State of California. Bank represents and maintains that it is skilled in the
professional calling necessary to perform the Services. Finally, Bank represents that it,
its employees and subcontractors have all licenses, permits, qualifications and approvals
of whatever nature that are legally required to perform the Services, including a City
Business License, and that such licenses and approvals shall be maintained throughout
the term of this Agreement. As provided for in the indemnification provisions of this
Agreement, Bank shall perform, at its own cost and expense and without reimbursement
from the City, any services necessary to correct errors or omissions which are caused by
the Bank’s failure to comply with the standard of care provided for herein. Any employee
of the Bank or its sub-Banks who is determined by the City to be uncooperative,
incompetent, a threat to the adequate or timely completion of the Project, a threat to the
safety of persons or property, or any employee who fails or refuses to perform the
Services in a manner acceptable to the City, shall be promptly removed from the Project
by the Bank and shall not be re-employed to perform any of the Services or to work on
the Project.
3.2.9 Laws and Regulations. Bank shall keep itself fully informed of and
in compliance with all local, state and federal laws, rules and regulations in any manner
affecting the performance of the Project or the Services, including all Cal/OSHA
requirements, and shall give all notices required by law. Bank shall be liable for all
violations of such laws and regulations in connection with Services. If the Bank performs
any work knowing it to be contrary to such laws, rules and regulations and without giving
written notice to the City, Bank shall be solely responsible for all costs arising therefrom.
Bank shall defend, indemnify and hold City, its officials, directors, officers, and employees
free and harmless, pursuant to the indemnification provisions of this Agreement, from any
claim or liability arising out of any failure or alleged failure to comply with such laws, rules
or regulations.
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3.2.9.1 Immigration Reform and Control Act. Bank
acknowledges that Bank, and all subcontractors hired by Bank to perform services under
this Agreement, are aware of and understand the Immigration Reform and Control Act
("IRCA"). Bank is and shall remain in compliance with the IRCA and shall ensure that any
subcontractors hired by Bank to perform services under this Agreement are in compliance
with the IRCA. In addition, Bank agrees to indemnify, defend and hold harmless the City,
its directors, officials, officers and employees, from any liability, damages or causes of
action arising out of or relating to any claims that Bank's employees, or the employees of
any subcontractor hired by Bank, are not authorized to work in the United States for Bank
or its subcontractor and/or any other claims based upon alleged IRCA violations
committed by Bank or Bank's subcontractor(s).
3.2.10 Insurance.
3.2.10.1 Time for Compliance. Bank shall not commence Work
under this Agreement until it has provided evidence satisfactory to the City that it has
secured all insurance required under this section. In addition, Bank shall not allow any
subcontractor to commence work on any subcontract until it has provided evidence
satisfactory to the City that the subcontractor has secured all insurance required under
this section; provided, however, that in lieu thereof, the Bank may provide evidence to the
City that all subcontractors are additional insureds under the Bank’s policies of insurance.
3.2.10.2 Minimum Requirements. Bank shall, at its expense,
procure and maintain for the duration of the Agreement insurance against claims for
injuries to persons or damages to property which may arise from or in connection with the
performance of the Agreement by the Bank, its agents, representatives, employees,
subcontractors and volunteers. Bank shall also name and obtain insurer’s consent to
naming City, its directors, officials, officers, and employees as an additional insured with
proof of certificate of insurance that they are an additional insured. Such insurance shall
meet at least the following minimum levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be when
commercially available (occurrence based) at least as broad as the latest version of the
following: (1) General Liability: Insurance Services Office Commercial General Liability
coverage for premises and operations, contractual liability, personal injury, bodily injury,
independent contractors, broadform property damage, explosion, collapse, and
underground, products and completed operations (2) Automobile Liability: Insurance
Services Office Business Auto coverage for any auto owned, leased, hired, and borrowed
by Bank or for which Bank is responsible; and (3) Workers’ Compensation and Employer’s
Liability: Workers’ Compensation insurance as required by the State of California and
Employer’s Liability Insurance.
The City, its directors, officials, officers, and employees shall be listed as additional
insured. Any deductibles or self-insured retentions must be declared to and approved by
City and conform to the requirements provided in Section 3.2.10.6 herein.
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(B) Minimum Limits of Insurance. Bank shall maintain
limits no less than: (1) General Liability: $1,000,000 combined single limit per occurrence
for bodily injury, personal injury and property damage, with an aggregate limit of
$2,000,000. If Commercial General Liability Insurance or other form with general
aggregate limit is used, either the general aggregate limit shall apply separately to this
Agreement/location or the general aggregate limit shall be twice the required occurrence
limit; (2) Automobile Liability: $1,000,000 combined single limit per accident for bodily
injury and property damage; and (3) Workers’ Compensation and Employer’s Liability:
Workers’ Compensation limits as required by the Labor Code of the State of California.
Employer’s Liability limits of $1,000,000 per accident for bodily injury or disease.
3.2.10.3 Professional Liability. Bank shall procure and
maintain, and require its sub-Banks to procure and maintain, for a period of three (3)
years following completion of the Project, errors and omissions liability insurance
appropriate to their profession. Such insurance shall be in an amount not less than
$1,000,000 per claim, and shall be endorsed to include contractual liability.
3.2.10.4 Insurance Endorsements. The insurance policies shall
contain the following provisions, or Bank shall provide endorsements on forms supplied
or approved by the City to add the following provisions to the insurance policies:
(A) General Liability. The general liability policy shall be
endorsed to state that: (1) the City, its directors, officials, officers, and employees shall
be covered as additional insured with respect to liability arising out of Services operations
and for completed operations performed by or on behalf of the Bank, including materials,
parts or equipment furnished in connection with such work; and (2) the insurance
coverage shall be primary insurance as respects the City, its directors, officials, officers,
and employees, or if excess, shall stand in an unbroken chain of coverage excess of the
Bank’s scheduled underlying coverage. Any insurance or self-insurance maintained by
the City, its directors, officials, officers, employees and volunteers shall be excess of the
Bank’s insurance and shall not be called upon to contribute with it in any way.
(B) Automobile Liability. The automobile liability policy
shall be endorsed to state that: (1) the City, its directors, officials, officers, and employees
shall be covered as additional insureds with respect to the ownership, operation,
maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by
the Bank or for which the Bank is responsible; and (2) the insurance coverage shall be
primary insurance as respects the City, its directors, officials, officers, and employees, or
if excess, shall stand in an unbroken chain of coverage excess of the Bank’s scheduled
underlying coverage. Any insurance or self-insurance maintained by the City, its
directors, officials, officers, and employees shall be excess of the Bank’s insurance and
shall not be called upon to contribute with it in any way.
(C) Workers’ Compensation and Employers Liability
Coverage. The insurer shall agree to waive all rights of subrogation against the City, its
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directors, officials, officers, and employees for losses paid under the terms of the
insurance policy which arise from work performed by the Bank.
(D) All Coverages. Each insurance policy required by this
Agreement shall be endorsed to state that: (A) coverage shall not be, reduced or
canceled except after thirty (30) days prior written notice by certified mail, return receipt
requested of cancellation, of intended non-renewal or endorsement reduction in limit or
scope of coverage; provided, however, that in the event of cancellation due solely to non-
payment of premium, ten (10) days notice of cancellation for non-payment of premium
may instead be given to the City.; and (B) any failure to comply with reporting or other
provisions of the policies, including breaches of warranties, shall not affect coverage
provided to the City, its directors, officials, officers, and employees.
3.2.10.5 Separation of Insureds; No Special Limitations. All
insurance required by this Section shall contain standard separation of insureds
provisions. In addition, such insurance shall not contain any special limitations on the
scope of protection afforded to the City, its directors, officials, officers, and employees.
3.2.10.6 Deductibles and Self-Insurance Retentions. Any
deductibles or self-insured retentions must be declared to and approved by the City. Bank
shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or
eliminate such deductibles or self-insured retentions as respects the City, its directors,
officials, officers, and employees; or (2) the Bank shall procure a bond guaranteeing
payment of losses and related investigation costs, claims and administrative and defense
expenses.
3.2.10.7 Acceptability of Insurers. Insurance is to be placed with
insurers with a current A.M. Best’s rating no less than A:VII, admitted or approved to do
business in California, and satisfactory to the City.
3.2.10.8 Verification of Coverage. Bank shall furnish City with
complete and accurate copies of current certificates of insurance and endorsements
effecting coverage required by this Agreement on forms satisfactory to the City. The
certificates and endorsements for each insurance policy shall be signed by a person
authorized by that insurer to bind coverage on its behalf, and shall be on forms provided
by the City if requested. Copies of all certificates and endorsements must be received
and approved by the City before work commences. The City reserves the right to require
complete, certified copies of all required insurance policies, at any time.
3.2.10.9 Safety. Bank shall execute and maintain its work so as
to avoid injury or damage to any person or property. In carrying out its Services, the Bank
shall at all times be in compliance with all applicable local, state and federal laws, rules
and regulations, and shall exercise all necessary precautions for the safety of employees
appropriate to the nature of the work and the conditions under which the work is to be
performed. Safety precautions as applicable shall include, but shall not be limited to: (A)
adequate life protection and life saving equipment and procedures; (B) instructions in
accident prevention for all employees and subcontractors, such as safe walkways,
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scaffolds, fall protection ladders, bridges, gang planks, confined space procedures,
trenching and shoring, equipment and other safety devices, equipment and wearing
apparel as are necessary or lawfully required to prevent accidents or injuries; and (C)
adequate facilities for the proper inspection and maintenance of all safety measures.
3.2.10.10 Material Breach. Lack of insurance does not negate
Bank’s obligations under this Agreement. Maintenance of proper insurance coverage is
a material element of this Agreement and failure to maintain or renew coverage or to
provide evidence of renewal may be treated by the City as a material breach of the
Agreement.
3.3 Fees and Payments.
3.3.1 Compensation. Bank shall receive compensation, including
reimbursements which receive the City’s prior written authorization, for all Services
rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and
incorporated herein by reference. The total compensation shall not exceed $27,400
without written approval of the City Manager. Extra Work may be authorized, as
described below, and if authorized, will be compensated at the rates and manner set forth
in this Agreement.
3.3.2 Payment of Compensation. Bank shall submit to City a monthly
itemized statement which indicates work completed and hours of Services rendered by
Bank. The statement shall describe the amount of Services and supplies provided since
the initial commencement date, or since the start of the subsequent billing periods, as
appropriate, through the date of the statement. City shall, within forty-five (45) days of
receiving such statement, review the statement and pay all approved charges thereon.
3.3.3 Reimbursement for Expenses. Bank shall not be reimbursed for any
expenses unless prior written authorization is obtained from the City.
3.3.4 Extra Work. At any time during the term of this Agreement, City may
request that Bank perform Extra Work. As used herein, "Extra Work" means any work
which is determined by City to be necessary for the proper completion of the Project, but
which the parties did not reasonably anticipate would be necessary at the execution of
this Agreement. Bank shall not perform, nor be compensated for, Extra Work without
prior written authorization from City's Representative.
3.4 Accounting Records.
3.4.1 Maintenance and Inspection. Bank shall maintain complete and
accurate records with respect to all costs and expenses incurred under this Agreement.
All such records shall be clearly identifiable. Bank shall allow a representative of City
during normal business hours to examine, audit, and make transcripts or copies of such
records and any other documents created pursuant to this Agreement. Bank shall allow
inspection of all work, data, documents, proceedings, and activities related to the
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Agreement for a period of three (3) years from the date of final payment under this
Agreement.
3.5 General Provisions.
3.5.1 Termination of Agreement.
3.5.1.1 Grounds for Termination. City may, by written notice
to Bank, terminate the whole or any part of this Agreement at any time and without cause
by giving written notice to Bank of such termination, and specifying the effective date
thereof, at least seven (7) days before the effective date of such termination. Upon
termination, Bank shall be compensated only for those services which have been
adequately rendered to City, and Bank shall be entitled to no further compensation. Bank
may not terminate this Agreement except for cause. A termination without cause by City
shall not act as or be deemed a waiver of any potential known or unknown City claims
associated with Bank’s performance prior to the date of termination.
3.5.1.2 Effect of Termination. If this Agreement is terminated
as provided herein, City may require Bank to provide all finished or unfinished Documents
and Data and other information of any kind prepared by Bank in connection with the
performance of Services under this Agreement. Bank shall be required to provide such
document and other information within fifteen (15) days of the request.
3.5.1.3 Additional Services. In the event this Agreement is
terminated in whole or in part as provided herein, City may procure, upon such terms and
in such manner as it may determine appropriate, services similar to those terminated.
3.5.2 Delivery of Notices. All notices permitted or required under this
Agreement shall be given to the respective parties at the following address, or at such
other address as the respective parties may provide in writing for this purpose:
Bank:
Wells Fargo Bank
300 E. Esplanade Drive, 19th Floor
Oxnard, CA 93036
Attn: Jeannie Kabilafkas, Vice President, Government
Relationship Manager
City:
City of Arcadia
240 West Huntington drive
Arcadia, CA 91007
Attn: Henry Chen, Financial Services Manager/City
Treasurer
Such notice shall be deemed made when personally delivered or when mailed, forty-eight
(48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the
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party at its applicable address. Actual notice shall be deemed adequate notice on the
date actual notice occurred, regardless of the method of service.
3.5.3 Ownership of Materials and Confidentiality.
3.5.3.1 Documents & Data; Licensing of Intellectual Property.
This Agreement creates a non-exclusive and perpetual license for City to copy, use,
modify, reuse, or sublicense any and all copyrights, designs, and other intellectual
property embodied in plans, specifications, studies, drawings, estimates, and other
documents or works of authorship fixed in any tangible medium of expression, including
but not limited to, physical drawings or data magnetically or otherwise recorded on
computer diskettes, which are prepared or caused to be prepared by Bank under this
Agreement (“Documents & Data”). Bank shall require all subcontractors to agree in
writing that City is granted a non-exclusive and perpetual license for any Documents &
Data the subcontractor prepares under this Agreement. Bank represents and warrants
that Bank has the legal right to license any and all Documents & Data. Bank makes no
such representation and warranty in regard to Documents & Data which were prepared
by design professionals other than Bank or provided to Bank by the City. City shall not
be limited in any way in its use of the Documents and Data at any time, provided that any
such use not within the purposes intended by this Agreement shall be at City’s sole risk.
3.5.3.2 Confidentiality. Except as otherwise required by
California law, all ideas, memoranda, specifications, plans, procedures, drawings,
descriptions, computer program data, input record data, written information, and other
Documents and Data either created by or provided to Bank in connection with the
performance of this Agreement shall be held confidential by Bank. Such materials shall
not, without the prior written consent of City, be used by Bank for any purposes other than
the performance of the Services. Nor shall such materials be disclosed to any person or
entity not connected with the performance of the Services or the Project. Nothing
furnished to Bank which is otherwise known to Bank or is generally known, or has become
known, to the related industry shall be deemed confidential. Bank shall not use City's
name or insignia, photographs of the Project, or any publicity pertaining to the Services
or the Project in any magazine, trade paper, newspaper, television or radio production or
other similar medium without the prior written consent of City.
3.5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one
another, and shall take any additional acts or sign any additional documents as may be
necessary, appropriate or convenient to attain the purposes of this Agreement.
3.5.5 Indemnification.
3.5.5.1 To the fullest extent permitted by law, Bank shall
defend, indemnify and hold the City, its officials, officers, and employees free and
harmless from any and all claims, demands, causes of action, costs, expenses, liability,
loss, damage or injury, in law or equity, to property or persons, including wrongful death,
in any manner arising out of or incident to any alleged acts, omissions or willful
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misconduct of Bank, its officials, officers, employees, agents, Banks and contractors
arising out of or in connection with the performance of the Services, the Project or this
Agreement, including without limitation the payment of all consequential damages and
attorney’s fees and other related costs and expenses. Notwithstanding the foregoing, to
the extent Bank’s Services are subject to Civil Code Section 2782.8, the above indemnity
shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise
out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the
Bank. Bank shall defend with Legal Counsel of City’s choosing, at Bank’s own cost,
expense and risk, any and all such aforesaid suits, actions or other legal proceedings of
every kind that may be brought or instituted against City, its directors, officials, officers,
and employees. Bank shall pay and satisfy any judgment, award or decree that may be
rendered against City or its directors, officials, officers, and employees, in any such suit,
action or other legal proceeding arising from Bank’s performance of the Services, the
Project or this Agreement; except to the extent that liability is caused by the active
negligence or willful misconduct by the City or its directors, officials, officers, and
employees. Bank shall reimburse City and its directors, officials, officers, and employees,
for any and all legal expenses and costs incurred by each of them in connection therewith
or in enforcing the indemnity herein provided. Bank’s obligation to indemnify shall not be
restricted to insurance proceeds, if any, received by the City, its directors, officials,
officers, and employees, and shall take effect immediately upon execution of this
Agreement.
3.5.5.2 The duty to defend and to hold harmless, as set forth
above, shall include the duty to defend as established by Section 2778 of the California
Civil Code, and the duty to defend shall arise upon the making of any claim or demand
against the City, its respective officials, officers, agents, employees and representatives,
notwithstanding that no adjudication of the underlying facts has occurred, and whether or
not Bank has been named in the claim or lawsuit.
3.5.6 Entire Agreement. This Agreement contains the entire Agreement
of the Parties with respect to the subject matter hereof, and supersedes all prior
negotiations, understandings or agreements. This Agreement may only be modified by
a writing signed by both Parties.
3.5.7 Attorney’s Fees. If either party commences an action against the
other party, either legal, administrative or otherwise, arising out of or in connection with
this Agreement, the prevailing party in such litigation shall be entitled to have and recover
from the losing party reasonable attorneys’ fees and all other costs of such action.
3.5.8 Governing Law. This Agreement shall be governed by the laws of
the State of California. Venue shall be in Los Angeles County.
3.5.9 Time of Essence. Time is of the essence for each and every
provision of this Agreement.
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3.5.10 City's Right to Employ Other Banks. City reserves right to employ
other Banks in connection with this Project.
3.5.11 Successors and Assigns. This Agreement shall be binding on the
successors and assigns of the Parties.
3.5.12 Assignment or Transfer. Bank shall not assign, hypothecate, or
transfer, either directly or by operation of law, this Agreement or any interest herein
without the prior written consent of the City. Any attempt to do so shall be null and void,
and any assignees, hypothecates or transferees shall acquire no right or interest by
reason of such attempted assignment, hypothecation or transfer.
3.5.13 Construction; References; Captions. Since the Parties or their
agents have participated fully in the preparation of this Agreement, the language of this
Agreement shall be construed simply, according to its fair meaning, and not strictly for or
against any Party. Any term referencing time, days or period for performance shall be
deemed calendar days and not work days. All references to Bank include all personnel,
employees, agents, and subcontractors of Bank, except as otherwise specified in this
Agreement. All references to City include its elected officials, officers, and employees
except as otherwise specified in this Agreement. The captions of the various articles and
paragraphs are for convenience and ease of reference only, and do not define, limit,
augment, or describe the scope, content, or intent of this Agreement.
3.5.14 Amendment; Modification. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing and signed by
both Parties.
3.5.15 Waiver. No waiver of any default shall constitute a waiver of any
other default or breach, whether of the same or other covenant or condition. No waiver,
benefit, privilege, or service voluntarily given or performed by a Party shall give the other
Party any contractual rights by custom, estoppel, or otherwise.
3.5.16 No Third Party Beneficiaries. There are no intended third party
beneficiaries of any right or obligation assumed by the Parties.
3.5.17 Invalidity; Severability. If any portion of this Agreement is declared
invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the
remaining provisions shall continue in full force and effect.
3.5.18 Prohibited Interests. Bank maintains and warrants that it has not
employed nor retained any company or person, other than a bona fide employee working
solely for Bank, to solicit or secure this Agreement. Further, Bank warrants that it has not
paid nor has it agreed to pay any company or person, other than a bona fide employee
working solely for Bank, any fee, commission, percentage, brokerage fee, gift or other
consideration contingent upon or resulting from the award or making of this Agreement.
For breach or violation of this warranty, City shall have the right to rescind this Agreement
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without liability. For the term of this Agreement, no member, officer or employee of City,
during the term of his or her service with City, shall have any direct interest in this
Agreement, or obtain any present or anticipated material benefit arising therefrom.
3.5.19 Equal Opportunity Employment. Bank represents that it is an equal
opportunity employer, and it shall not discriminate against any subcontractor, employee
or applicant for employment because of race, religion, color, national origin, handicap,
ancestry, sex, sexual orientation or age. Such non-discrimination shall include, but not
be limited to, all activities related to initial employment, upgrading, demotion, transfer,
recruitment or recruitment advertising, layoff or termination. Bank shall also comply with
all relevant provisions of City's Minority Business Enterprise program, Affirmative Action
Plan or other related programs or guidelines currently in effect or hereinafter enacted.
3.5.20 Labor Certification. By its signature hereunder, Bank certifies that it
is aware of the provisions of Section 3700 of the California Labor Code which require
every employer to be insured against liability for Worker's Compensation or to undertake
self-insurance in accordance with the provisions of that Code and agrees to comply with
such provisions before commencing the performance of the Services.
3.5.21 Authority to Enter Agreement. Bank has all requisite power and
authority to conduct its business and to execute, deliver, and perform the Agreement.
Each Party warrants that the individuals who have signed this Agreement have the legal
power, right, and authority to make this Agreement and bind each respective Party.
3.5.22 Counterparts. This Agreement may be signed in counterparts, each
of which shall constitute an original.
3.5.23 Exhibits and Recitals. All Exhibits and Recitals contained herein are
hereby incorporated into this Agreement by this reference.
3.6 Subcontracting.
3.6.1 Prior Approval Required. Bank shall not subcontract any portion of
the work required by this Agreement, except as expressly stated herein, without prior
written approval of City. Subcontracts, if any, shall contain a provision making them
subject to all provisions stipulated in this Agreement.
In witness whereof the Parties have executed this Professional Services
Agreement on the date set forth below.
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CITY OF ARCADIA WELLS FARGO BANK
By __ By ____________________________
Dominic Lazzaretto Signature
City Manager
Date: ______________________ ______________________________
Print Name and Title
ATTEST: Date: _________________________
___________________________ By____________________________
City Clerk Signature
APPROVED AS TO FORM: ______________________________
Print Name and Title
___________________________ Date: _________________________
Stephen P. Deitsch
City Attorney CONCUR:
______________________________
Hue Quach, Administrative Services
Director
A-1
EXHIBIT "A"
SCOPE OF SERVICES
1. Bank account. Bank will provide banking services for the following
type of bank accounts.
General account for non-credit card deposits and transfers.
Zero Balance sweep account for Payroll disbursement
Zero Balance sweep account for credit card deposits only
Zero Balance sweep account for Accounts Payable disbursements
Savings account (or Money Market)
Checking account for Workers’ Compensation payments
Checking account for General Liability payments
Checking account for Golf Course payments
Checking account for Flexible Spending payments
2. Web-Base Application. The Bank shall provide a web-based on-line
application to allow the City to perform most of the banking transactions and
inquires online, including Electronic check Deposit, ACH Deposited
returned items image inquiry, image on demand, information reporting,
business statements, stop payments, Wire transfer, ACH debit and credit
transfer, Payee Positive Pay, account balance inquiry, transaction inquiry,
deposit history, and other on-line web applications. The Bank shall have
the ability to tailor web based banking applications to the needs of the City.
More details on some of the services are described as follows:
Remote Check Deposit. The City will deposit checks through a
scanning process into the bank accounts electronically.
Full Account Reconciliation. The City shall be able to transmit check
issued information to the Bank online, and the Bank provides a daily
detailed report, by account, of checks paid, and a monthly detailed
report of checks outstanding.
Payee Positive Pay. The Bank will provide Payee validation service
in conjunction with positive pay for check disbursement.
Money Transfer Services. Bank will provide the City with a money
transfer service that allows the City to initiate on-line wire transfers,
ACH transfers, and intra-book transfers among the City’s accounts.
Information Reporting Services. The Bank must provide on-line
monthly account reconciliation reports, Bank statements, account
analysis statements, confirmation tickets and other report related
features normally associated with municipal government accounts.
The Bank must also be willing to customize such reports where
feasible to accommodate the City's preferences.
3. Training Services. As part of the conversion period and as necessary
thereafter, the Bank must provide on-site training to City personnel for the
operation and use of the Bank's services and automated systems for all
A-2
areas of service. The training must be sufficient to ensure that City
personnel are proficient with all systems and procedures prior to the
conversion date, and anytime thereafter. Training, operating manuals, and
on-going support are to be supplied by the Bank for all services provided.
4. Cash Management. The Bank shall have the capitalization
necessary to accommodate the City’s depository and cash flow needs, and
provide a daylight overdraft facility to accommodate the City’s cash
management activities.
5. Armored Car Services. The Bank must provide armored car service
between City Hall, and the Bank.
6. Commercial Credit Cards. The Bank must provide a credit card program
with online access of credit card activity and credit card account
management.
7. Disaster Recovery. The Bank shall have a disaster contingency plan
and backup systems to allow the city to continue operations in the event of
systems breakdowns or other emergencies.
8. Service Management. The Bank shall provide both proactive and
responsive consulting services to the City. Bank shall notify the City
whenever the Bank becomes aware of potential problems that may occur
to City accounts. Additionally, the Bank shall provide the City with
information concerning new and updated technology in the banking
industry, which can improve the City’s banking or business activities.
9. Additional and Other Services. City shall have assessed to all other
services that the Bank customarily provided to corporations and
governmental entities.
10. The following services are part of this work scope and detailed descriptions
are referenced in Exhibit “E” contained herein.
Commercial Depository Service Description
Check Collection Services Description
Electronic Receivable Service Description
ACH and related services Service Description
Wire Transfer Service Description
Information Reporting and Image Delivery Service Description
Check Disbursement and Fraud Prevention Services Service
Description
Check Cashing Service Description
B-1
Exhibit "B"
SCHEDULE OF SERVICES
Bank shall perform those services described in Exhibit “A” (Scope of Services) during
the term of the contract.
C-1
Exhibit "C"
COMPENSATION
All banking services shall be charged based on the unit prices listed in the following. The
earning credit calculated based on the investible account balance shall be deducted from
the fees.
C-2
D-1
Exhibit "D"
COMMERCIAL ACCOUNT AGREEMENT AND MASTER AGREEMENT FOR TREASURY
MANAGEMENT SERVICES
E-1
Exhibit "E"
DETAILED DESCRIPTION OF ENUMERATED SERVICES
Commercial Depository Service Description
Check Collection Services Description
Electronic Receivable Service Description
ACH and related services Service Description
Wire Transfer Service Description
Information Reporting and Image Delivery Service Description
Check Disbursement and Fraud Prevention Services Service
Description
Check Cashing Service Description