REPORT TO COUNCIL
SUBJECT
Title
Action on an Agreement with Business Recovery Services, Inc., dba Bank Up Corporation, for Remittance Lockbox Processing Services for Utility Payments
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The Finance Department (Department) is responsible for collecting and processing all utility bill payments. While the majority of the City’s utility customers receive and pay their bills online through the City’s e-Bill Program, the City still receives approximately 10,000 utility remittance payments per month by mail. As an alternative to manual check processing performed by staff, the Department uses a third-party service to receive and process payments received by mail.
On January 10, 2017, City Council approved the award of contract to Business Recovery Services, Inc., dba Bank Up Corporation, following a competitive process. This agreement expires on June 30, 2021.
DISCUSSION
In January 2021, staff issued a competitive Request for Proposals (RFP) for Remittance Lockbox Processing Services utilizing the City’s e-procurement system. A total of 33 companies viewed the RFP, and two proposals were received from the following firms:
• Business Recovery Services, Inc., dba Bank Up Corporation (Alameda, CA)
• JPMorgan Chase Bank, N.A. (San Francisco, CA)
A three-member evaluation team with representation from the Finance Department and Information Technology Departments evaluated and scored the written proposals against the criteria and weights published in the RFP. The proposals were evaluated on experience, technical capability, and fee schedule.
Staff recommends award of contract to Business Recovery Services, Inc., dba Bank Up Corporation (Bank Up) as the most advantageous and best value proposal based upon the final evaluation ranking. Bank Up understands and is able to meet the City’s lockbox process, work types, and payment processing requirements. The Department is confident that Bank Up will continue to deliver quality lockbox services and provide excellent customer service.
Bank Up’s cost proposal is approximately 30% lower than the cost proposal submitted by JPMorgan Chase Bank, demonstrating the values of the competitive process. Bank Up maintained its current fees through June 30, 2024, which represents an average savings of 3% per year when compared to Consumer Price Index (CPI) adjustments over the past three years.
Bank Up’s compensation under the agreement includes fixed monthly fees for lockbox maintenance, electronic file transmission, and online portal access, and per item fees for check scanning and processing. The fee schedule also includes daily courier pick-up, check intercept services, and professional services as may be required. The initial term of the proposed agreement is three years with the option to extend the agreement for up to two additional one-year terms. Subject to the City’s approval, Bank Up may request adjustments to its fees after the initial term.
Based on past usage, the estimated cost for lockbox services is $40,000 per year. This amount may fluctuate depending on the number of payments processed.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
Staff is proposing a three-year agreement at a total not-to-exceed cost of $120,000 or approximately $40,000 annually. This funding is expected to address existing service needs. In addition, staff is requesting City Manager authorization to execute amendments to the agreement in an amount not-to-exceed $20,000 over the three-year period as contingency to cover any unanticipated service requirements including additional checks for processing. Annual funding for this contract is included in the General Fund Operating Budget for the Finance Department, however, the majority of these costs are recovered from utility funds through the City’s Cost Allocation Plan.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute an agreement with Business Recovery Services, Inc., dba Bank Up Corporation, for Remittance Lockbox Processing Services with an initial term starting on July 1, 2021 and ending on June 30, 2024 for a total maximum not-to-exceed amount of $120,000, subject to the appropriation of funds;
2. Authorize the City Manager to execute amendments over the initial term of the agreement, not-to-exceed $20,000 as contingency to cover any unanticipated service requirements including additional checks for processing, subject to the appropriation of funds; and
3. Authorize the City Manager to execute up to two (2) additional one-year options to extend the term through June 30, 2026, subject to the appropriation of funds.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Agreement for Services with Business Recovery Services, Inc., dba Bank Up Corporation