R-62-97 Resolution authorizing execution of a contract for banking servicesRESOLUTION
RESOLUTION AUTHORIZING EXECUTION OF A
CONTRACT FOR BANKING SERVICES
WHEREAS, the Village of Lemont seeks to enter into a contract for banking services; and
WHEREAS, South Holland Trust & Savings Bank has provided the banking products and
services as requested by the Village of Lemont.
NOW, THEREFORE, BE IT RESOLVED that the attached contract for banking services
is hereby passed and approved.
PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL AND DU PAGE, ILLINOIS
ON THIS 27th day of October , 1997.
Barbara Buschman
Keith Latz
Connie Markiewicz
Richard Rimbo
Ralph Schobert
Mary Studebaker
AYF NAYS PASSED ABSENT
V
A ENE SMOLLEN, Village Clerk
Approved by me this 27th day of October ,1997.
Atte
ARLENE SMOLLEN, Village Clerk
r
South Holland Trust & Savings
Village of Lemont
418 Main Street
Lemont, IL 60439 -3788
Attention: Susan M. Wallace
The purpose of this contract is
provided by the South Holland 1
be„,k.
cor
-1524 (708) 333 -2600 FAX: (708) 210 -5997
October 14, 1997
iking services to be
t (Village).
This contract represents the Bo and outlined in its'
"Proposal of Banking Services The proposal is in
response to the Village's "Banking Services Request for Proposal for the Village of Lemont" dated August
19, 1997.
This contract will commence on November 1, 1997 and terminate on October 31, 2000. There is an option
to extend the contract for an additional three -year (3) period. The extension will be subject to an additional
contract, to be executed by both parties before October 31, 2000.
The Bank agrees to freeze all fees and costs at the levels indicated in their proposal. The Bank also agrees
to waive any start up fees involved in software licensing, training, or installation. Fees and costs will be a
negotiable item before the signing of the optional contract extension. This contract covers all current Bank
products including LockBox. New Bank products and services will be negotiated separately if the Village
decides to use them.
The contract may be terminated by either party by giving written notice to the other party no later than
ninety (90) calendar days before the proposed termination date. This provision may be exercised only
after the contract has been in effect for three (3) calendar months. The Bank shall be entitled to just and
equitable compensation for any work completed to the termination date.
Please confirm that the foregoing correctly sets forth the terms of our contract by executing this copy and
returning it to Bonnie Houdek at our Lemont Banking Center.
Confirmed as of the date written below:
Title:
Village President
Yours sincerely,
South Holland Trust & Savings Bank
By:
Name: Bonnie L. Houde
Title: Vice President
Date: 10/27 /97
Established 1911
October 21, 1997
To: Mayor Kwasneski and the Village Board of Trustees
From: Susan Wallack Assistant to the Village Administrator
Jean Nona, Village Treasurer
Re: Banking Services Contract
Banking Services proposals were received from four local financial institutions; Southwest
Financial, South Holland, First Chicago, and Lemont National Bank. Staff meet with each bank
to review the services offered, fee schedule and the implementation process. The criteria used in
evaluating the proposal included:
1. Complete response to all required items of the standard form;
2. Aggregate cost of services and corresponding compensating balances;
3. Ability to meet current and projected service requirements;
4. Best arrangement and interest rates offered for overnight investment;
5. Capability to provide numerous electronic banking services; and
6. Best availability schedule for deposit items.
At present, the Village does not pay any fees for banking services. Interest is not earned on the
monthly balances in the clearing and payroll accounts. Attachment I is a comparison of the
monthly fees and interest rates proposed by each institution. There are two methods to structure
the accounts, either pay fees monthly based on the activity in the accounts or maintain a non-
interest bearing compensating balance to off set the fees. Any amount in the account above the
compensating balance would be earning interest.
Attachment II demonstrates the difference in the amount of interest that would have been earned
during the period of May 1996 - April 1997 using both monthly fees and compensating balance.
The Village would earn more interest using a fee based structure. Using the proposed interest rate
from South Holland for the 12 month period of May 1996- April 1997, and subtracting fees, the
estimated income using the fee method would be $26,688.36 as compared to $23,478.66 using
the compensating balance method.
It is Staffs recommendation that South Holland Bank be offered the banking services contract
for a period of three years with an option to extend the contract for an additional three -year
period. Services would be on a fee base rather than using a compensating balance. South
Holland's proposed monthly fees would be $700.00 based on our projected activity.
South Holland Bank is equipped and prepared to provide the Village with the services we
requested immediately, i.e. an interest bearing sweep account, direct deposit, and computer
banking service. Future services such as lockbox service and ACH debit payments for bill
ITEM V.C.
payment are available. Staff was comfortable with the support and training services that will be
provided to assist us in implementing the new systems. South Holland has suggested additional
services that could be added in the future and continues to keep current on new services as they
become available.
cc: Steve Jones, Village Administrator
ATTACHMENT I
VILLAGE OF LEMONT
COMPARISON OF MONTHLY FEES,
INTEREST WHICH WOULD HAVE BEEN APPLICABLE
FROM MAY 1996 TO APRIL 1997
Southwest
South Holland
First Chicago
Lemont National
Account Maintenance
Deposits
Checks Paid
Checks Deposited
Coin Counting
ACH Debits originated
Incoming Wire Transfers
Outgoing Wire Transfers
Sweep Services
Direct Deposit Payroll
Acct Reconcilation Service
Computer Banking
Other Fees
Total Monthly Fees
Start Up Fees *
0.00
0.00
0.00
0.00
N/A
0.00
0.00
0.00
N/A
0.00
0.00
0.00
0.00
0.00
Annual Interest Less Fees **
* First year expense only
* *Balances from 5/96 - 4/97
17,442.99
60.00
45.00
120.00
340.00
2.64
25.00
7.00
9.50
25.00
12.50
10.00
168.88
8.81
834.33
0.00
19,641.59
42.00
45.00
192.50
600.00
3.30
40.00
15.00
30.00
N/A
30.00
100.00
0.00
3.00
1,100.80
250.00
21,868.76
ATTACHMENT 11
VILLAGE OF LEMONT
12 MONTH FEE ANALYSIS
Comparison of Yearly Income Less Fees
Monthly Balance
Southwest
Apr -97
Mar -97
Feb-97
Jan -97
Dec -96
Nov -96
Oct -96
Sep-96
Aug-96
Jul -96
Jun -96
May -96
535, 550.12
1,390,387.78
918,601.08
704, 035.16
351,661.69
957, 846.48
1,178,259.22
266, 311.34
383, 917.59
246,093.58
484,752.96
955,220.37
1,115.73
2,896.64
1,913.75
1,466.74
732.63
1,995.51
2,454.71
554.82
799.83
512.69
1,009.90
1,990.04
Yearly Income
17,442.99
South Holland
First Chicago
Lemont National
1,959.22
4,935.88
3,230.41
2,464.12
1,239.61
3,384.39
4,163.18
952.06
1,356.51
877.73
1,724.91
3,375.11
2,365.35
5,851.22
3,773.92
2,927.61
1,488.70
4,038.92
4,870.14
1,116.29
1,590.06
1,056.15
2,027.88
3,972.12
29,663.15
35,078.36
Monthly Fees
0
8,400.
10, 011.96
13,209.60
Income Less Fees
17,442.99
19,651.19
21, 868.76
This chart is a comparison of the income that would have been received for the period May -96 to Apr -97 less the
estimated annual fees proposed by each bank.
COMPARISON OF COMPENSATING BALANCE
Monthly Balance
Southwest
South Holland
First Chicago
Lemont National
Compensating Balance
$0.00
$250,633.00
$220,000.00
$302,000.00
Apr -97
Mar -97
Feb-97
Jan -97
Dec -96
Nov -96
Oct -96
Sep-96
Aug -96
Jul -96
Jun -96
May -96
535,550.12
1,390,387.78
918,601.08
704, 035.16
351,661.69
957,846.48
1,178,259.22
266, 311.34
383, 917.59
246,093.58
484,752.96
955,220.37
Yearly Income
1,115.73
2,896.64
1,913.75
1,466.74
732.63
1,995.51
2,454.71
554.82
799.83
512.69
1,009.90
1,990.04
17,442.99
1,154.39
4,281.67
2,555.72
1,770.76
481.66
2,699.29
3,505.63
169.42
599.67
95.46
968.55
2,689.68
20, 971.90
1,031.51
4,807.05
2,723.32
1,775.66
219.34
2,896.66
3,870.14
(157.62'
361.80
(246.92:
807.16
2,885.06
20,973.15
10/14/97