CITY OF HALLANDALE BEACH

MEMORANDUM

DATE:                        January 27, 2010

TO:                 D. Mike Good, City Manager

FROM:            Patricia M. Ladolcetta, Director of Finance

SUBJECT:     A Resolution of the City of Hallandale Beach, Florida, Authorizing an Agreement between the City and Commerce Bank, N.A. to Process Accounts Payable City Vendor Checks Electronically Through the Visa Network

PURPOSE:

The City Commission to adopt the attached resolution authorizing the City Manager to enter into an agreement with Commerce Bank, N.A. for electronic Accounts Payable processing.

DISCUSSION

The City has been trying to reduce the costs of doing business in many areas of our operations.  One of the areas we have found costs savings potential is in the processing of our weekly accounts payable checks.

ControlPay Advanced is an electronic accounts payable solution that allows the City to process our vendor payments, using our existing accounting software, and continuing to allow our current policies and rigorous controls to remain in place.  It does not change our procurement methods, only our payment method.  There is no cost for the program, or software to host.

The City will be able to process the weekly accounts payable, using less paper checks, resulting in decreased costs, and increased efficiency.  This process may be able to eliminate some use of wire transfers as well.  In addition, there will be monthly revenue-sharing, depending on volume of payments processed, that could bring approximately $90,000 - $100,000 in revenue annually.

Participating vendors will receive an electronic payment, via their Visa network, more quickly and efficiently than through the use of paper checks, and the impact of the City is virtually nil.  It is entirely voluntary for vendors to participate in this electronic payment method, unless the Commission or City Manager determine that it is in the City’s best interest to make it compulsory.

Several municipalities and school districts, who are already working with this accounts payable solution, were contacted to discuss their satisfaction with the program.  All had very positive experiences, confirming the ease of implementation and ongoing processing.

Staff has been in contact with other financial institutions, including our own local bank, regarding their offerings of similar services.  While virtually all banks offer some form of “Procurement Card” program, which changes the method of purchasing goods and services, few offered an electronic payment program.  Those that did were geared toward much larger clients with a much greater volume of vendors being paid electronically.  At this time, our volume of business would not qualify for any of those.

The City has been working with Commerce Bank, to determine such things as implementation needs, potential volume of payments to be processed, and anticipated revenue.  In order to begin transactions the Bank requires this resolution in order to complete the agreement package.

RECOMMENDATION:

The City Commission to adopt the attached Resolution authorizing the City Manager to execute an agreement with Commerce Bank, N.A. on behalf of the City.

Reviewed:

_______________________________                                                          __________

D. Mike Good, City Manager                                                                           Date

_____Approved                _____Disapproved                _____Hold for Discussion

PML:ba

Attachment