Alameda Municipal Power may move business to bigger bank
After more than a decade of banking locally, Alameda Municipal Power appears prepared to move to a bigger bank.
Managers at the city-owned utility, which has done business with the Bank of Alameda since 2001, are seeking a move to U.S. Bank. The city’s Public Utilities Board is slated to vote on a $96,100, three-year contract with the bank at its regular meeting tonight – an amount that could increase as the utility investigates additional service enhancements.
Alameda Municipal Power had done its banking with the Bank of Alameda since August 2001, but its managers declined to automatically renew their existing agreement with the bank when it came up for renewal in February 2011, seeking out bids for that business in June. They sought core banking services, a web-based cash management system and a list of payment processing services.
In a staff report, the utility’s managers – who said they periodically review their longstanding relationships – said they wanted bidders to show they could offer high quality service and technological advances that could improve the utility’s management of its finances and customer service.
“U.S. Bank submitted the most comprehensive proposal, offering high quality of service, a sound technological plan and a full offering of banking services from a single provider,” the staff report says.
Proposals from U.S. Bank, the Bank of Alameda and Bank of America were selected for further review from a total pool of six proposals “based on their ability to provide comprehensive services, offer the highest quality of service and the proposed technological solutions for management of finances and customer payments,” the report says.
U.S. Bank presented the lowest bid of the three, offering its services for $3,100 a month compared to about $6,915 a month from the Bank of Alameda.
In addition to the low bid, U.S. Bank offered “multiple levels” of customer service, public sector experience, “substantial” investment in technology, along with full merchant service capabilities, the staff report says. Bank of Alameda offered the ability to address issues at a local level and a hometown back office; the bank uses a vendor for its technology solutions and AMP now uses a third party for credit card and electronic check transactions, the report says.
U.S. Bank also stressed its “strength and stability” and the utility’s positive experience with a 2010 bond issue the bank handled, the report says.
Bank of Alameda, meanwhile, notified the utility in September that it will cease lockbox collection and processing of payments at the end of this year, accelerating AMP’s planned transition of that service from 2013.
If the contract is approved, the utility would maintain an average balance of $6.7 million a month at the bank.
Heaquartered in Minneapolis, U.S. Bank is the fifth largest commercial bank in the country, with $353 billion in assets and branches in 25 states.
The board meets at 7 p.m. today at Alameda Municipal Power headquarters, 2000 Grand Street, in Conference Room A/B.