Tuesday April 13, 2004
Mayor Jerry Abramson today announced that two banks have been selected to provide banking for Louisville Metro Government – a process that will result in savings over the next five years of more than $800,000.
The two banks – Republic Bank and Bank One – were among six that bid for the business, Abramson said. Before merger, several banks had different pieces of banking business with the city and county, ranging from general banking services to payroll.
Under the new contract, Republic Bank will provide general banking services for Metro Government. Bank One will handle credit card transactions and security services for government investments.
General banking services currently cost the government $185,000 annually. The new contract will result in an annual savings of $160,000 each year over the course of the five-year contract that will start in the next few months.
“Our banking business is another example of merger giving us the opportunity to create savings and provide more efficient service,” Abramson said. “We’ll be saving taxpayers more than $800,000 through the consolidation of these services. And, at the same time, we’ll be offering new, additional services to our more than 6,500 employees.”
Abramson said the much of the savings for taxpayers is being achieved by taking advantage of new technologies now available in banking such as on-line transactions. Abramson said it had been more than 10 years since either government had bid out banking business.
“The savings and efficiencies that can be achieved through technology in the banking industry have changed dramatically in the past 10 years,” Abramson said. “As with so many departments and functions in government, merger gave us the impetus to examine whether we could conduct this business better and more efficiently.”
Abramson said the savings resulting from the consolidation of banking services is one more example in a growing list of efficiencies gained through merger. In the first year of merged government, nearly $14 million in cost savings were identified, including reductions in the size of government, changes to fleet operations and the moving departments from leased into government-owned space. Abramson said that as part of its proposal, Republic Bank also will offer Metro Government employees expanded services.
For example, Republic Bank will set aside $10 million for a special home loan program for home purchases and refinances for Metro Government employees.
Other services to employees will include:
· Free checking with no minimum balance required
· Discounts on home loans
· Greater access by adding ATMs at or near government buildings
The process for selecting the vendors also was different, Abramson said. Utilizing a grant from the Brown Foundation, Louisville Metro officials worked with PFM Asset Management, a financial and investment consultant based in Pennsylvania, to design a more comprehensive Request for Proposals that sought to gain efficiencies and savings.
PFM developed the set of criteria used to evaluate the bids and made recommendations about which vendors to select, which were adopted by Metro Finance officials and Abramson.
“This process will result in significant savings to taxpayers while also providing better service to our employees,” Abramson said. “That’s what merger was designed to do – provide more efficient, cost-effective service. This is another example of how merger is paying off.”