TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Cynthia Rockwell, Purchasing and Contracts Coordinator
SUBJECT:
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Agreement with J.P. Morgan for General Banking and Procurement Card Services
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RECOMMENDATION
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Approve a five year agreement for general banking and procurement card services provided by JPMorgan Chase Bank, N.A., with the option of two (2) one-year extensions; and
Authorize the City Manager to execute the agreement and all other necessary documents to implement banking products and services.
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PRIOR ACTION/VOTE
On September 6, 2016, the City Council approved Resolution No. 16-3615, approving a five-year agreement with Wells Fargo (Vote: 5-0).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
BACKGROUND
On October 28, 2015, staff issued a formal Request for Proposal for banking services and received two (2) proposals. After evaluating those proposals, Wells Fargo was chosen as the most qualified firm to handle the City of Murrieta’s (City) general banking needs.
On September 6, 2016, the City Council approved Resolution No. 16-3615, approving a five year agreement with Wells Fargo. Two (2) amendments extended the term of the Wells Fargo agreement. The first amendment extended the term period from 2021 through 2023. The second amendment extended the term period from 2023 through 2025, which is set to terminate on September 5, 2025.
On February 4, 2025, a formal Request for Proposal (RFP) was published by the City’s Finance Department for a General Banking, Merchant Services, and Purchasing Card Program. The City received six proposals in response to the RFP. The six firms that responded are listed below, in alphabetical order:
1. HCN
2. JP Morgan Chase Bank, N.A., (J.P. Morgan)
3. Pacific Premier Bank
4. PNC
5. US Bank
6. Wells Fargo
The proposals were evaluated by a selection committee, comprised of the City’s Director of Finance, Finance Manager, Accounting Supervisor, and Purchasing and Contracts Coordinator. The proposals were evaluated based on the following criteria, and scored as follows:
• Proper submission and completeness of proposal;
• Demonstrated understanding of the requested services;
• Overall capabilities to perform the required services;
• Demonstrated experience;
• Cost-effectiveness of the fees charged; and
• Favorable reference checks.
In-person and virtual demonstrations were conducted with the four highest-ranking firms. As part of the evaluation process, following proposal submission, demonstrations, and initial evaluations, the selection committee requested the top three firms to submit their best and final offers. These focused on key areas such as the purchasing card program, account analysis (armored services inclusion), pricing, sweep account interest rate, and other products aimed at enhancing service quality and cost efficiency.
After a comprehensive evaluation of the proposals, demonstrations, and final and best offer, J.P. Morgan was identified as the most responsive and most qualified firm to provide banking services to the City. J.P. Morgan is one of the world’s largest providers of cash management services, serving over 2,100 public sector agencies. The online banking services, reporting capabilities, and procurement card program provided by J.P. Morgan will be a substantial upgrade to the City’s current processes and services, creating increased efficiency and continuity. In addition to these solutions, J.P. Morgan has demonstrated their commitment to delivering a high level of customer service and further innovation in the City’s banking and cash management operations.
While J.P. Morgan did not submit the lowest-priced proposal, it scored the highest during evaluations conducted by the selection committee. Staff recognizes J.P. Morgan as possessing the most robust and beneficial services and platforms that best align with the City’s primary objectives of fiscal sustainability, efficiency, and transparency.
Purchasing Card Program
All proposals were evaluated with a focus on the purchasing card program and its supporting platform. The City uses a purchasing card program for small-dollar purchases. The current process is hybrid, with limited online capabilities and a manual process. Currently, two financial institutions issue credit cards to City employees and virtual cards for utility payments.
Following completion of the general banking services transition, the Finance Department plans to consolidate these programs into a single commercial card solution and platform to strengthen financial controls and reduce administrative workload. J.P. Morgan’s purchasing card solution offers a significant improvement by automating the approval and reconciliation of credit card transactions through its online platform. Employees can upload receipts and assign expense account codes electronically using either a desktop interface or mobile app.
Merchant Services
All proposals were evaluated based on the Merchant Services they offered. Staff felt that Wells Fargo's services met the City’s needs and provided staff from multiple departments with the highest level of functionality from their equipment and back-end support. Staff is working with Wells Fargo to maintain those services under a new or amended agreement. As such, Merchant Services are not included in the J.P. Morgan agreement.
The term of the Wells Fargo Agreement will expire prior to the implementation of the new banking services. Staff intends to work with Wells Fargo to enter into a short-term agreement for continued banking services or pay on a monthly basis until we complete the implementation.
Staff is proposing a five year agreement with J.P. Morgan, with the option of two (2) one-year extensions, for general banking and procurement card services.
FISCAL IMPACT
The banking services outlined in this RFP are projected to cost approximately $8,400 annually, totaling around $42,000 over five years. As part of J.P. Morgan’s final and best offer, their proposal includes a $8,000 fee waiver, reducing the net five year cost to approximately $34,000. Additionally, the proposal includes transition and implementation credits of $6,000 and $1,000, respectively, helping to offset any one-time costs.
The City currently pays approximately $18,500 annually for general banking services with Wells Fargo. By using J.P. Morgan for these services, the City will be saving approximately $10,100 annually. Funding is available in the Fiscal Year 2025/26 and Fiscal Year 2026/27 operating budgets for general banking services, and a budget request will be included in future biennial budgets for the remaining years of the agreement.
ATTACHMENTS
1. Banking Service Agreement
2. Proposal
3. Proposal Addendum