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• • <br />A few comments about the proposals are: <br />Bayshore National - Their proposal is very similar to the last one they <br />submitted. They have increased costs in a few areas and items <br />that we currently receive free (i.e. check stock) will now be <br />charged on an actual use basis. A portion of their expense is <br />based on our average daily balance. On the other side of the <br />analysis, they increased the interest rate they pay on our daily <br />balances to the T-Bill average plus ten (10) basis points. <br />Baytown State - Their proposal is geared to a fixed cost for each specific <br />item. A mayor variance in our daily balance will not have a mayor <br />impact on our expense. The Interest rate they propose is 65.78$ <br />of the daily Federal Funds rate. <br />Because Bayshore National's proposal includes factors for both revenue and <br />expense that are dependent on our daily balances, I looked to see if there was <br />a break even point where Baytown State would be more favorable. The break <br />even point is when interest rates for T-Bills reach 4$. <br />Recommendation <br />I recommend that the City execute a two year contract with Bayshore National <br />Bank to provide banking services to the City of La Porte. <br />