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r It <br /> • <br /> MEMORANDUM <br /> DATE: January 7, 1999 <br /> TO: Mike Mornson, City Manager <br /> FROM: Roger Larson, Finance Director <br /> ITEM: OFFICIAL BANK/SERVICE FEES <br /> Periodically, Finance conducts a review of the City's fees and service charges for <br /> banking services. The process is done to assure that: 1) our present provider (Firstar <br /> St. Anthony Bank) remains competitive in the market place and 2) new marketing and <br /> industry trends for banking services are periodically reviewed. <br /> Currently, all of the City's checking accounts are on a "waived fee" status. On the <br /> surface one could assume that the City is receiving free checking. However, this <br /> assumption would be incorrect. Monthly, service charges and transaction fees are paid <br /> • with a portion of interest earnings earned on the account. <br /> Each year there are approximately 6,000 to 7,000 transactions that take occur in the <br /> City's checking accounts that are subject service fees. <br /> This year, I compared Firstar St. Anthony to First Bank/US Bank offered through the <br /> 4/M Fund sponsored by the League of Minnesota Cities. Like Firstar St. Anthony, <br /> First Bank (4/M Fund) offers a "free checking services" program. As is the case with <br /> Firstar St. Anthony, the fees for checking transactions are paid for with a portion of <br /> interest earnings earned on the account. <br /> A comparison of the service fees is as follows: <br /> Interest allocated for service fees: <br /> Firstar St. Anthony .14% <br /> First Bank/US Bank .13% <br /> Interest earned on account (sweep account): <br /> Firstar St. Anthony 4.50% to 5.25% <br /> First Bank/US Bank 4.50% to 5.25% <br /> Both firms offer the sweep account concept and are relatively equal in their charges for <br /> • services and interest earnings. <br />