Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
NOVEMBER 21, 2024
Subject
SUBJECT: CUSTODIAL BANKING SERVICES
Action
ACTION: APPROVE CONTRACT AWARD
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to award a firm fixed unit rate Contract No. PS124467000 to US Bank National Association (U.S. Bank N.A.) for custodial banking services in an amount Not-to-Exceed (NTE) $1,193,550 for the three-year base term and $397,850 for each of the two, one-year option terms, for a total NTE amount of $1,989,250, effective April 1, 2025, subject to the resolution of any properly submitted protest(s), if any.
Issue
ISSUE
Operating funds are the pool of revenue used to fund expenses for projects, programs and services. Metro's Investment Policy requires that securities purchased for the investment of operating funds and collateral be maintained in the trust department or the safekeeping department of a qualified bank that offers institutional custody services. The Treasurer is required to provide a quarterly report to the CEO and Board detailing investment compliance and performance information. The record keeping and pricing services provided by the custody bank are the basis for all reporting and accounting practices at Metro. The existing five-year banking custodial services contract with U.S. Bank N.A. will expire on March 31, 2025.
Background
BACKGROUND
Custody banks provide safekeeping of the securities as required by the California Government Code. The institutional accounts they manage often exceed billions of dollars. As a result, custody banks tend to be large and reputable banks. The top custody banks have trillions of dollars in global assets. Staff analyzed the minimum qualifications of large government agencies for similar services. It was determined that the minimum qualifications of eight years of experience providing custody services and current custody of one trillion dollars of assets are consistent with best practices ...
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