TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager/Chief Executive Officer
SUBJECT: Custody/Safekeeping Bank Services
ACTION ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider ratifying assignment of the custody/safekeeping bank services contract from Wells Fargo Institutional Retirement and Trust to Principal Custody Solutions and exercising one two-year option for the same contract with Principal Custody Solutions.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Custody/Safekeeping bank service provides investment services and safekeeping of district funds.
BUDGETARY/FISCAL IMPACT:
This contract offers a fee schedule with an annual maintenance base fee of $0 - $6,000 with a tiered discount pricing schedule based on the District's account balance. There will be no fees as long as balances of more than $20 million in Principal Custody Solutions' Principal Public Deposit Sweep Program (PPDSP) balances. The District has maintained combined PPDSP balances well over $20 million at least for the past five years, and therefore has incurred zero cost. Staff anticipates that similar balances will be maintained going forward.
BACKGROUND/RATIONALE:
On January 30, 2019, the District issued a Request for Proposals (RFP) - RFP No. 2019-1457 for Custody/Safekeeping Bank Services and awarded the contract to Wells Fargo Custody/Safekeeping Services. Subsequently Principal Custody Solutions (PCS), a division of Principal Financial Group, acquired Wells Fargo's Trust and Custody business in July 2020. The District agreed to the performance of the "Custodial Agreement" by PCS. All terms of Wells Fargo's contractual arrangements have remained unchanged. The transition including all online account changes from Wells Fargo to PCS were effectively...
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