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