Submitted By: Marcella Hughes
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Presentation By: Peter Brill
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Department: Finance
FORMAL TITLE:
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Four-year renewal agreement with Truist Bank for comprehensive banking services through May 31, 2030
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OCALA’S RELEVANT STRATEGIC GOALS:
Operational Excellence, Fiscally Sustainable
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
The City receives comprehensive banking services from Truist Bank, a qualified public depository (QPD) institution that meets the criteria set forth in Chapter 280, Florida Statutes. The City’s banking services objectives are to secure the most efficient and effective banking services while maintaining sufficient liquidity and protection of all City funds. Truist has satisfactorily provided services to the City for over 20 years.
FINDINGS AND CONCLUSIONS:
Truist has proposed competitive increases to both the earnings credit rate (ECR), which is applied to the compensating balance, and the interest rate (IR) for excess funds, as well as a supplies credit and free cashing of City employees’ payroll checks.
• Earnings Credit Rate (ECR): The ECR under this extension period does not begin until June 1, 2026. As of today, and based on the current rate environment, the initial bank-managed rate would be 80 basis points. The ECR will be applied to all accounts under Group number *4475. The ECR will be a bank-managed rate and subject to change at any time at the bank's discretion without notice.
• Interest Rate (IR): The IR under this extension period does not begin until June 1, 2026. As of today, based on the current rate environment, the initial Bank-managed rate would be 270 basis points. The IR will be applied to all accounts under Group number *4475. The IR will be a bank-managed rate, subject to change at any time at the bank's discretion, without notice.
• Supplies Credit: Truist offers the City up to $3,000 in total for this extension period, to be used for supplies, including remote deposit capture machines for check scanning.
• Cashing of payroll checks: Truist offers the City free cashing of City employees’ payroll checks for the term of this extension period.
Staff recommends approval.
FISCAL IMPACT:
Fees for banking services will be deducted from ECR interest earnings based on the compensating balance calculation. The City is not expected to pay any fees, as the ECR interest earnings will exceed any fees incurred. Estimated banking interest revenue ranges from more than $50,000 annually to over $200,000 for the four-year term, depending on our cash investment management and the timing of expected federal funds target rate increases.
PROCUREMENT REVIEW:
These services were procured in compliance with the City’s Procurement Policy.
LEGAL REVIEW:
This Agreement has been reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny