Laserfiche WebLink
Earnings credit is calculated and applied within the billing cycle and any excess <br />credit amounts can not be carried forward outside of the settlement period. <br />1. Can the City utilize compensating balances to cover or offset hard dollar fees <br />in whole or in part? Are there price differences related to the methods of <br />payment? Describe any policies or limitations related to the compensating <br />balance method. Describe the Bank's calculation of collected balances, and <br />calculation of charges for funds advanced. Also describe the methodology <br />that would be used to give credit to the City for Bank balances. <br />J.P. Morgan accepts compensation based on fees and /or balances, with no <br />difference in unit prices. <br />• Fee Compensation: If the City chooses a fee compensation plan, you <br />would manage your accounts to minimize collected balances and would <br />not use balances to offset any service charges. Total service charges are <br />debited from designated accounts, generally monthly. <br />• Balance Compensation: To offset service charges, the City may choose <br />to leave balances in your accounts and receive an earnings credit <br />allowance. <br />If the average available balances are sufficient, the earnings credit allowance <br />offsets the service charge. Should the level of balances not fully cover the fees, any <br />remaining service charges are debited from designated accounts at the end of the <br />settlement period. <br />(Monthly Fees * /Net Earnings Credit Rate *) x (Actual Days in the Year /Actual Days in the Month) <br />Monthly fees include maintenance and transaction fees quoted for banking and cash management services. <br />Net earnings credit rate is the variable rate ECR in effect minus the premium assessment fee that is charged. <br />2. Provide the Bank's Earnings Credit Rate (ECR) and how it is calculated and <br />applied. Is it tied to an index? If so, which one? <br />We are offering the City an enhanced managed earnings credit rate to float with <br />an ECR floor of o.6o %, for a current ECR of o.6o% to offset traditional Treasury <br />Services fees (does not include Merchant Service related fees) on your primary <br />depository accounts. The floor only applies to these primary depository accounts <br />and will remain in place for the initial three -year period of the contract (January <br />r, 2020). In addition, we are offering a managed ECR (currently 0.31%) on <br />balances held in a separate demand deposit account for the purpose of offsetting <br />credit card interchange and merchant processing fees (no floor applies to this <br />special purpose account). Please refer to Section T. #3b above for ECR related to <br />merchant services fees. <br />The ECRs we are offering are bank managed rates which are reviewed and <br />updated periodically by J.P. Morgan after considering a range of factors, <br />including the market rate environment and our demand for funds. Using a <br />Page 109 J.P.Mor an <br />55E -204 <br />