HomeMy WebLinkAboutFCS-14-097 - Banking Services - Contract ExtensionStaff Report
rTC.�r R finance and Corporate Services Department www.kitchener.ca
REPORT TO: Council
DATE OF MEETING: May 26, 2014
SUBMITTED BY: Brenda Johnson, Director of Accounting, 519 - 741 -2200 Ext 7647
PREPARED BY: Brenda Johnson, Director of Accounting, 519 - 741 -2200 Ext 7647
Roger LeBrun, Manager of Accounting 519 - 741 -2200 Ext 7339
WARD(S) INVOLVED: All
DATE OF REPORT: May 20, 2014
REPORT NO.: FCS -14 -097
SUBJECT: Banking Services — Contract Extension
RECOMMENDATION:
THAT the City of Kitchener's current banking agreement with CIBC be extended by up to one
year to expire no later than August 31, 2016.
BACKGROUND:
The City of Kitchener has had a banking relationship with CIBC for the past nine years and the
contract will expire on August 31, 2015. The replacement process needs to commence now for
the City to be in a position to fully implement a new banking services provider upon the
expiration of the current contract. Council's approval is being sought to extend the contract by
up to one year as this is believed to be in the City's interest due to recent resource changes
within the Accounting Division as outlined below.
REPORT:
Any transition to a new bank requires a significant amount of staff time and effort to implement
due to the high degree of complex integration with the bank, which includes multiple bank
accounts, automated deposits, withdrawals, electronic transfers for payroll, tax and utility
customer payments, system integration testing, employee purchasing card changes, credit card
service provider changes, establishing a communication plan, etc. This is in addition to the
procurement timelines which include the preparation of detailed specifications, the development
of an RFP, a vendor response period, evaluation, selection and Council award. It is reasonable
to expend a total timeframe of 36 weeks to 72 weeks depending on the outcome of the RFP
process.
Accounting staff had originally planned to issue an RFP for banking services around this time.
This would represent a significant project over the next year for the two professional staff that
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manage the City's banking arrangements. Recently, those two staff members have left on
maternity /parental leaves and are expected to return in Spring 2015. The banking agreement
and subsequent implementation is a critical and time - consuming body of work, and it would not
be reasonable to assign this project to temporary staff. Their unfamiliarity with the City's
banking processes could result in a lower- quality RFP or award decision. It would also be
difficult to manage the transition of both new staff and a new banking implementation
simultaneously.
Staff propose the following timeline for the banking RFP project to coincide with return of
permanent staff.
Potential Implementation commencing
Initiate Banking RFP Spring 2015 Sep 2015 (6 -12 months)
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Award contract June 2015
This would extend the banking contract to August 2016 at the latest, but could be much earlier,
should the City's current bank be selected from the RFP. Timing is also dependent on the
implementation project plan of the new bank.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Efficient and Effective Government
FINANCIAL IMPLICATIONS:
The annual banking fees for the City are very competitive and are not expected to be
significantly different with another bank. Extending the contract by one year is not anticipated to
have a net financial impact to the City.
COMMUNITY ENGAGEMENT:
Inform - This report has been posted to the City's website with the committee agenda in
advance of this committee meeting.
ACKNOWLEDGED BY:
Dan Chapman, Deputy CAO Finance and Corporate Services and City Treasurer
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