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From YouTube: Committee on Ways & Means on June 13, 2019
Description
Docket #0804 - Message and order authorizing the Collector-Treasurer for the City of Boston to enter into a compensation balance agreement with Citizens Bank, pursuant to Massachusetts General Law’s chapter 44, section 53F, for the provision of Banking Services
A
This
is
a
public
hearing
broadcast
and
recorded
on
our
CN
82
Comcast
channel
8,
Verizon
1964
and
streamed
at
online
I'd
like
to
ask
folks
to
silence
their
cell
phones
and
electronic
devices.
If
anybody
wishes
to
testify
publicly,
there
is
a
sign-in
sheet
to
my
left
by
the
door.
We
ask
that
you
state
your
name,
any
affiliation,
your
residence
and
please
check
the
box.
Yes,
if
you
do
wish
to
testify,
I
also
like
to
welcome
my
friends
and
colleagues
to
my
left.
B
Thanks
mr.
chairman
and
thanks
councillors,
I'm
drew
Smith.
I
am
head
of
Treasury
for
the
city
of
Boston.
Also
senior
deputy
treasurer
I
have
rich
tiana
with
me
who's
the
second
assistant
collector
treasurer
for
the
city
and
also
have
some
colleagues
from
Bank
IQ
firm.
That
helps
us
with
our
reporting
requirements,
as
mandated
by
statute
every
three
years.
The
city
is
required
to
reproduce
a
conservator,
and
this
requested
hearing
is
the
endpoint
of
that
training.
Whole
process
with
council
and
mayoral
approval
required
before
the
new
contract
can
be
executed
and
taken
force.
B
The
only
contract
the
city
currently
has
in
place
is
the
one
with
citizens.
That's
the
bank
that
currently
provides
all
of
the
city's
operational
banking
services.
This
contract
expires
at
the
end
of
this
fiscal
year
and
the
new
contract
would
go
into
effect.
The
one
you
have
before
you
on
July
1
for
an
ensuing
three-year
period.
I'd
first
like
to
give
you
an
overview
of
our
procurement
process
and
then
provide
a
bit
of
detail
on
the
results
of
that
process.
B
Late
in
calendar
2018,
the
city
made
public
its
RFP
for
banking
services
and
kicked
off
that
process.
With
the
bidders
conference
in
which
all
potential
bidders
were
encouraged
to
attend,
this
conference
is
held
for
the
purpose
of
giving
potential
bidders
an
overview
of
the
procurement
process,
as
it
is
expected
to
unfold
to
provide
detail
on
any
items
of
note,
particularly
those
items
that
may
have
changed
since
the
previous
procurement
and
to
answer
any
questions
any
bitter
might
have.
B
I
am
pleased
to
note
that
we
received
a
record
number
of
bidders
at
the
conference,
which
seem
to
be
an
indication
of
strong
interest
in
this
particular
procurement.
This
indication
of
interest
was
further
confirmed
in
the
city's
receipt
of
non
proposals.
After
disqualification
one
of
the
proposals
for
technical
reasons,
the
evaluation
team
set
about
to
score
the
remaining
proposals
against
six
categories:
one
scope
of
services
to
management
capability,
three
quality
control
for
disaster,
business
recovery,
5
references
in
6,
but
certainly
not
least,
the
cost.
B
B
The
primary
change,
however,
is
the
way
the
earnings
credit
rate
is
calculated
with
compensating
balance
agreements
rather
than
appropriating
and
then
paying
hard
dollars
for
banking
services,
which
can
be
notoriously
difficult
to
estimate.
The
city
leaves
amounts
on
deposit
in
those
accounts.
While
we
do
not
earn
interest
on
those
amounts,
we
do
earn
credits
that
are
essentially
used
to
pay
for
the
fees.
B
In
prior
years,
the
stable
ECR
earnings
credit
rate
was
agreed
to
at
the
outset
of
the
contract
and
was
left
fixed
over
the
life
of
the
contract,
regardless
of
what
the
market
has
done.
As
a
part
of
this
contract,
however,
the
city
had
dictated
that
the
ECR
would
be
a
floating
rate
pegged
against
the
13-week
t-bill,
ensuring
that
at
all
times,
the
city
is,
at
the
very
least,
receiving
a
market
rate
on
its
deposits,
rather
than
setting
that
rate
at
the
outset
and
hoping
the
market
moves
in
our
favor.
B
The
additional
benefit
of
this
structure
is
that
all
responses
were
put
on
a
level
playing
field
with
only
one
set
of
numbers
to
bid
rather
than
two,
so
that
we
might
better
be
able
to
drive
down
cost
of
actual
service,
rather
than
also
focusing
on
the
ECR.
As
far
as
total
expected
annual
cost
of
the
contract,
it
is
as
I
mentioned
difficult
to
say,
but
we
estimate
it
to
be
at
two
million
dollars
annually.
B
Currently,
it's
important
to
note,
however,
that
all
but
$300,000
of
that
is
made
up
of
credit
card
merchant
charges,
four
parking
meters
and
the
mobile
app,
which
are
simply
passed
through
by
the
bank,
rather
than
actually
retained.
Additionally,
we
expect
some
of
those
fees
to
go
away
over
the
course
of
this
year,
as
additional
merchant
charges
will
be
passed
along
rather
than
absorbed
by
the
city.
B
In
closing,
I
will
say
that,
while
the
city
has
enjoyed
a
fairly
lengthy
positive
working
relationship
with
citizens,
as
still
a
newish
member
of
the
City
Hall
team,
I
can
attest
to
the
fact
that
their
response
to
this
RFP
was
a
very
well-put-together
one
that
demonstrated
that
they
were
not
only
the
bank
best
positioned
to
continue
providing
the
contemplated
serve,
but
also
the
one
able
to
do
it
at
the
lowest
cost.
This
is
coupled
with
the
bank's
deep
involvement
in
the
city,
as
is
further
illustrated
in
the
cities,
link
deposit
report.
B
There
is
substantial
majority
of
the
dollar
volume
of
the
bank's
investment
transactions
was
focused
on
affordable
housing,
an
excellent
lending
activity
which
indicated
good
distribution
of
mortgage
loans
to
low
and
moderate
income
geographies,
and
borrowers,
as
well
as
good
small
business
lending,
and
with
that
I
am
happy
to
answer
any
questions
you
might
have.
Thank.
A
B
B
Million
altogether
and
a
big
portion
of
that
as
I
mentioned,
is
write
a
card,
the
credit
card
fees
that
are
really
just
passed
along.
So
those
come
in
to
us
they're
not
actually
charged
by
the
bank
they're
charged
by
the
merchants.
We
use
that
EC
are
earning
to
pay
those
off
and
then
the
other
set
of
fees.
The
300,000
is
truly
citizens
banking
charges
to
us,
so
the
cost
of
transfers
and
payments
out,
and
things
like
that
right
and.
A
B
Are
yes:
well,
they
manage
the
payroll
account,
they
manage
all
accounts
right.
So,
of
course,
we
run
payroll
operations
through
city
internal
systems,
but
as
far
as
the
amounts
actually
going
out,
those
are
coming
from
citizens
accounts
and
if
you're
curious
about
the
other
types
of
accounts
and
the
other
types
of
services,
they
offer
I'm
going
to
turn
it
over
to
rich.
Deep
Jana
who's
been
doing
this
for
a
number
of
years
now
and
he
could
detail
a
few
of
those.
C
C
They
also
provide
DDA
accounts,
which
are
checking
accounts
so
that
we
can
issue
checks
at
a
smaller
level
as
well
as
we
see
funds,
they
provide
wire
services.
They
provide
reporting
services
for
ACH
credits.
They
do
bank
with
they
provide
bank
reconciliation
reports
for
us
as
well
for
all
of
our
accounts
and.
A
C
C
With
respect
to
the
direct
deposit
account
it's
maybe
at
most
$20,000
in
that's
specifically
because
of
Rejects,
maybe
a
bank
account
might
have
been
closed,
or
maybe
the
rotary
number
for
that.
Bank
was
incorrectly
transposed
of
a
number
and
it
kicks
back,
and
then
we
would
do
the
research
and
then
reissue
the
check
to
the
employee
or
to
the
boat
or
to
the
customer.
The
paper
checks
payroll.
They
can.
It
usually
runs
above
maybe
a
million
dollars.
Okay,
I've
on
cash
checks,
right,
okay,.
A
B
A
B
Are
so
we
do
that's
actually
part
of
the
service
that
Bank
IQ
helps
provide
to
us
those
that
information
has
found
that
the
link
deposit
banking
report
citizens
receives
a
satisfactory
CRA
rating.
That
data
is
generally
about
two
years
old,
but
within
that
satisfactory
rating
you
have
it
split
between
a
service
test.
You
have
it
an
investment
test
and
then
a
lending
test,
and
as
a
part
of
that,
they
either
generally
receive
high,
outstanding
or
outstanding
marks
on
that.
So
that
is
something
we
look
at
great
and
that's.
B
Of
different
things,
so
we
actually
analyze
it
on
the
it's.
The
Boston's,
Suffolk
tract
I
believe
it's
called,
but
it
includes
Quincy
and
some
of
Greater
Boston,
and
so
it's
analyzing
that
data
in
particular
and
if
you'd
like
more
detail
on
that,
I
can
certainly
get
our
bank
IQ
folks
up.
But
that's
really
what
they're?
Looking
at
and
they're
looking
at,
not
just
lending
activities,
making
sure
that
you
have
enough
branches
in
areas
that
actually
really
need
the
service
but
they're.
B
A
D
B
Did
work
that
in
every
banks,
community
involvement
is
different.
Some
banks
have
heavier
community
involvement
because
they
have
larger
assets
and
they
have
the
ability
to
do
a
little
bit
more.
Some
banks
that
may
not
have
as
significant
assets
are
still
doing
a
lot
with
volunteer
hours.
It's
a
question
that
we
ask
of
all
the
banks,
it's
a
question
that
we
get
responses
from
and
we
look
at
that
as
a
part
of
the
scoring
process
and
that
would
be
looped
into
the
overall
final
score
in.
B
Joanna
is
that
something
that
would
actually
be
caught
specifically
in
the
report,
because
I'd
love
to
point
you
to
something
specifically
that
you
can
look
at.
If
that's
the
case,
citizens
part
of
their
involvement
in
the
community
comes
from
being
a
significant
bank,
headquartered
close
by
so
headquartered
in
rolled-out,
Rhode
Island,
with
significant
assets
in
Boston,
significant
city
assets,
and
so
you
see
them
everywhere,
and
they
are
involved
a
lot
of
different
community
groups
and
volunteer
efforts.
But
I
don't
have
specifics.
That
would
be
able
to
really
give
you
right
now
and
I.
D
B
B
Great,
that's
fine,
okay,
yeah
I
can
do
that.
Well,
as
I'd
mentioned,
those
are
the
types
of
things
that
we
generally
see
in
the
link
deposit
banking
report
that
we're
always
looking
at
okay.
When
we
go
out
to
it's
actually
a
good
question,
because
when
we
go
out
to
a
number
of
these
banks,
if
we're
ever
incepting
a
new
deposit
relationship,
our
practice
is
to
go
out
to
one
of
the
local
branches
speak
with
the
local
employees.
B
There
speak
with
senior
management
of
the
bank
and
a
lot
of
those
questions
revolve
around
exactly
what
they're
doing
in
the
community
it's
no
different
than
with
citizens.
We
always
like
to
keep
a
you
know
kind
of
finger
on
the
pulse
of
what
they're
doing
so
I
can
get
you
more
specifics
on
that
Oh.
D
B
B
D
Yet,
thank
you
and
my
final
question.
I
know:
council
councillor,
sabe
Jorge
has
worked
on
on
this
issue
before,
but
what?
What
type
of
outreach
do
you
have
working
closely
with
the
elderly
or
or
other
residents
to
make
sure
that
their
accounts
may
not
be
manipulated?
Also
is
is
that
more
of
an
IT
question
or.
D
We
need
any
type
of
an
account.
Maybe
someone
someone,
a
senior
citizen-
might
have
I'm
always
concerned
about
our
senior
citizens,
someone
trying
to
take
advantage
of
them
for
maybe
getting
their
password
or
getting
their
account
number
exploiting
them
in
some
certain
way
a
sophisticated
way.
Even,
but
what
are
we
doing
in
terms
of
outreach
to
our
elderly
to
make
sure
that
this
type
of
fraud
doesn't
occur
so.
B
Treasury,
is
it
any
given
time
developing
a
number
of
different
new
initiatives
and
we've
come
and
talk
to
you
about
a
couple
of
those
I
think
that
there
is
a
really
big
opportunity
for
the
City
of
Austin
or
for
the
Treasury
Department,
specifically
to
engage
in
financial
education
and
kind
of
be
a
watch
of
things
like
that.
I
think
there
may
be
other
city
departments
that
are
probably
a
little
bit
more
involved
in
that
than
Treasury
is
currently
in
just
kind
of
taking
advantage
of
folks
generally
but
from
a
financial
perspective.
B
Treasury
is
looking
for
all
sorts
of
different
ways
to
engage
with
the
community
to
make
sure
that
anything
money
related.
You
know
we're
able
to
help
provide
assistance
on
so
we're
not
doing
anything.
We
don't
have
any
formal
program
rolled
out
yet,
but
I
think
there
may
be
other
city
departments
that
might
you.
D
Know
I'd
like
to
I'd
like
to
get
some
more
information
on
that
program
if
I
may
and
I
just
want
to
make
sure
that
that
program
that
we're
also
reaching
out
to
elderly-
and
you
know
in
languages
other
than
English
as
well
to
us,
non-english
speaking
residents,
I'll
get
you
information
on
that
all
right.
Thank
you
drew
and
thank
you
rich.
Thank
you.
Thank
you.
Sabe
Jorge.
A
E
Chair
and
I,
thank
you
both
for
being
here
and
I
appreciate
that
education,
because
I
don't
think
I've
participated
in
the
hearing
where
we've
had
this
topic
before
us,
so
appreciate
the
education
and
you
had
thoughtfulness
and
your
responses
to
the
chair.
First,
in
your
presentation
to
the
chairs
questions
and
to
councillor
Flynn's,
so
I
don't
have
any.
Thank
you.
A
And
I'm
I'm
done
with
my
question.
I
would
just
say
what
just
one
last
thing
is:
is
it
safe
to
assume
that
since
they
provide
payroll
services
and
the
City
of
Boston's
payroll
was
what
70
percent
of
the
whole
budget,
so
two
billion
dollars
go
through
this
payroll
process
every
year,
mm-hmm
fair
to
say,
correct
and
there's
not
many
banks
that
can
actually
provide
that
kind
of
service.
A
B
B
If
it's
a
big
payroll
week,
we
may
be
acquiring
eighty
million
dollars
through
an
account
and
it
immediately
comes
out
and
they're
responsible,
for
you
know
kind
of
distributing
that,
in
accordance
with
the
larger
files
that
we
send
them
telling
them
exactly
where
all
that
money
should
go.
So
it
takes
a
bit
of
a
lift
and
to
have
an
operation
like
that.