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20 <br />MEMORANDUM <br />DATE: January 3, 2008 <br />TO: Mike Mornson, City Manager <br />FROM: Roger Larson, Finance Director <br />ITEM: BANKING/OFFICIAL DEPOSITORY FOR CITY FUNDS <br />This past October, request for proposals for banking services were sent to the four banks <br />located within the boundaries of St. Anthony. A list of the banks includes: <br />1) Bremer Bank <br />2) TCF <br />3) Wells Fargo <br />4) US Bank <br />Each of the banks demonstrated a willingness to work with the City, was professional in <br />their presentation and showed great enthusiasm towards the possibility of their bank <br />providing services to the City of St. Anthony. <br />Our present banking arrangement requires the City to maintain a minimum balance (often <br />referred to as a Peg Balance) that offsets the monthly banking charges and processing <br />fees. The City receives no interest earnings on these funds. <br />Three of the banking proposals required the City to continue to maintain a minimum <br />balance. A list of the minimum balance requirement is as follows: <br />1) Bremer Bank $360,000.00 <br />2) TCF $353,000.00 <br />3) Wells Fargo $181,500.00 (floating number based on monthly activity) <br />The proposal from US Bank required no minimum balance with 100% of the checking <br />account balance being swept daily into the 4/M Fund. All banking charges and fees are <br />paid for by the 4/M Fund. <br />When comparing the gain in interest earnings using the US Bank - 4/M Fund concept <br />versus the minimum balance concept, the annual gain on interest earnings is estimated at <br />approximately $7,260.00 - $14,400.00. <br />Recommendation: <br />The City Council approves resolution #08-003 designating US Bank, N.A. as the City of <br />St. Anthony's 2008 Official Depository of City Funds. <br />