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J.P.Morgan Kerwin Deese Vice President & Relationship Manager Government Banking attached proforma. This should further reduce the City's pricing by approximately $6070.28/yr. 3) Optimizing Compensating Balances: a. The City has indicated its desire to reduce excess balances held at the bank. By optimizing the City's compensating balances, the City will realize additional savings via a reduced Premium Assessment Fee (PAF). The PAF line item found on Attachment 6B of the Cost/Bid Proposal Form ($27,176.50) was calculated on the average 12mo. Collected Balance of $21,195,352.50 provided by the City. By calculating the City's optimal compensating balance (see Section V. Cost of Providing Services (Fees) — B1. on pg. 109 of our proposal), the City would need to keep approximately $8,157,287.23 after accounting for the service fee credit and reduction in bulk coin /strap pricing as outlined above. This would result in a PAF reduction of approximately $16,572.03/yr. Total Potential Savings: $25,975.64/yr.* * Please see the summary below and the attached proforma. Please note that volumes and balances are estimated and actual volumes and balances may be different, which will result in different charges and resulting savings. Additionally, we found two line items (Online Account Maintenance & Electronic Book Debit SIT) that had incorrect totals on our original Cost/Bid Proposal Form submitted in our proposal. We have corrected these line items in the attached revised Cost/Bid Proposal Form, which results in an additional $2358.00 reduction in annual fees not included in this total of potential savings. Price Reduction Summary: Combined Extended Unit Price Total $ 77,277.36 Incorrect Line Item Totals $ < 2,358.00> Revised Combined Extended Unite Price Total $ 74,919.36 Premium Assessment Fee 4 $ <27,176.50> Service Fee Credit $ <3,333.33> Fed -Ready Bulk Coin /Strap Deposits $ <6,070.28> Revised Annual Banking Services Fees net of PAF $ 38, 339.25 Revised Premium Assessment Fee $ 10,604.47 Revised Combined Extended Unit Price Totalo $ 48,943.72 ' Attachment. 6B —J.P. Morgan's Cost/Bid Proposal Form 3 Incorrect line item totals of Online Account Maintenance & Electronic Book Debit Srr 5, Revised Total from Revised Cost/Bid Proposal Form Attachment 6A &B ° Remove PAF based on bid sheet balances of $21,195,352.50 $10,000.00 Service fee credit applied to analysis evenly over Syr contract term 8. Assumes an industry standard of 60% Standard Coin Bags /Currency Straps and 40% Partial /Mixed Bags /Straps 7� Revised PAF is calculated on the City's estimated compensating balance requirement to offset service fees of $8,157,287.23. Required compensating balances and PAF will vary depending on actual service volumes and changes in balance levels. s. Please see attached proforma based off of volumes included on Attachment 6A & B of the City's Banking Services RFP. These volumes and balances are estimated and actual volumes and balances may be different, which will result in different charges. 3 Park Plaza. Sj,a 800. Irvine. CA 92511 T [ T' 919 833 5061 1 F. 949 254 1093 C_ 310 7309355 kerwin.o.deesemiomoraan.com J PPdorgan Chase Bank \1 A.