Subject: THIRD AMENDMENT TO THE GENERAL BANKING SERVICES AGREEMENT WITH BANK OF AMERICA

RECOMMENDATION

Approval of the third amendment to the general banking services agreement with Bank of America to extend the term of the agreement on a month-to-month basis, not to exceed a period of three months at existing rates.

BACKGROUND

Council approved the selection of Union Bank of California (Union Bank) as a new general banking services provider on March 21, 2000 and approved the general banking services agreement with Union Bank of California in October 2000. The City anticipates completing the conversion of all banking services to Union Bank before June 30, 2001; however, the City will need to extend the agreement with Bank of America to provide an additional three months for outstanding checks to clear. The term of the current agreement with Bank of America ends on June 30, 2001.

ANALYSIS

Staff has converted all banking services from Bank of America to Union Bank except for one department checking account and anticipates conversion of that account before the end of June 2001. This revised conversion schedule minimizes disruptions to City departments and customers by providing an additional three months for outstanding checks to clear through Bank of America before closing all Bank of America accounts by September 30, 2001. In the spirit of cooperation and consistent with the professional quality of the general banking services provided by it, Bank of America has agreed to continue providing the City with general banking services, at the same rates, pending the full transition to Union Bank.

PUBLIC OUTREACH

Not applicable.

COORDINATION

This memorandum has been coordinated with the City Attorney’s Office and the Manager’s Budget Office.

COST IMPLICATIONS

The City’s banking services costs are funded from the pooled investment interest income.

SCOTT P. JOHNSON

Director, Finance Department