HomeMy WebLinkAbout10/7/2025 Item 6f, Jackson - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: October 7, 2025
TO: Mayor and Council
FROM: Emily Jackson, Finance Director
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6f – JP MORGAN BANKING SERVICES CONTRACT
Staff received the following questions, regarding the item to request approval of the JP
Morgan Banking Services contract. The questions are below with staff’s response shown
in italics:
1) Were there any areas where JP Morgan was going to cost more than the
other two vendors?
On an individual service-by-service comparison, there were some services that
cost more with JP Morgan. These were generally services that are infrequently
used by the City and given the City’s transaction volumes, the overall costs with
JP Morgan are competitively priced and represent good value to the City. One
example of a service that cost more with JP Morgan is the Account Maintenance
Fee, which is paid on a monthly basis. JP Morgan’s fee for this service is $5.00 a
month higher than another respondent to the City’s Request for Proposals- a total
increase of $60.00 per year compared to another proposer.
2) Please provide a little more explanation for the recommendation of the 7 -
year contract (with three possible extensions) rather than the typical practice
of five years?
Staff have found through market research that 10 -year contract terms are
increasingly becoming the industry norm for municipal banking services, as
demonstrated by comparable long-term agreements adopted by other
municipalities. A longer-term contract at 10 years provides stability to the City for
banking services, and reduces administrative and solicitation costs associated with
frequent rebidding, enables financial institutions to offer enhanced pricing, loyalty
credits, and technology investments, like JP Morgan has provided in its bid for the
contract.
ITEM 6F – JP MORGAN BANKING SERVICES CONTRACT Page 2
In addition to the responses provided above, staff is providing a correction to the Council
Agenda Report:
Correction to Recommended Term - JP Morgan Banking Services Contract
The Council Agenda Report inadvertently stated the agreement with JP Morgan would be
a seven-year term with a three-year extension, which reflected an earlier version of the
agreement options considered before the agreement was finalized. The recommended
term is being updated via this Agenda Correspondence to a ten-year term with no option
for extension. This longer term does not increase risk to the City, as the agreement
includes standard provisions that allow the City to terminate the contract at any tim e with
adequate notice, though this option is not anticipated, given the positive and productive
working relationship that the City has enjoyed with JP Morgan. This termination flexibility
ensures the City can retain control over the relationship and adjust as needed based on
performance or changing needs.