Levelland awards three-year depository contract to Citibank after debate over rates and services

Levelland — After a lengthy debate over interest rates, online banking features and the cost of switching, the City Council adopted Resolution 2024-11 awarding a three-year depository contract to Citibank for the period beginning Oct. 1, 2024, through Sept. 30, 2027, with two one-year extension options.

Cynthia (city finance staff and mayor pro tem) presented the evaluation and walked the council through the bidders’ services, mobile access, cutoff times for wire transfers, and positive-pay fraud-protection features. She explained positive pay as a reconciliation control that flags exceptions for staff to review, saying it “compares the payee information on the check to the endorsement on the back” and can produce exceptions that require staff review.

Staff compared Citibank and Sundown Bank across service capabilities and financial size; Citibank was described as offering a more robust portal, longer daily cutoff times for some transactions, and payee-name verification in its positive-pay tool. Sundown Bank offered a more competitive interest scenario on some balances; staff noted that the difference in earnings could be roughly $1,000 a month in the scenarios shown but emphasized that the depository evaluation used multiple criteria beyond yield.

Council members expressed divergent views. One councilmember said he would have difficulty explaining to the public why the city would choose a bank that could cost about $1,000 a month in foregone earnings, while others stressed the operational and cybersecurity benefits and the consultant’s recommendation. Staff emphasized that Citibank’s platform expedited recovery of past transactions and that Citibank supported staff during an earlier financial-records issue.

Councilmember Speaker 8 moved to adopt Resolution 2024-11 awarding the contract to Citibank; the motion was seconded and carried. Staff said an implementation plan will be required if the city transitions depository services and noted staff will also consider moving portions of idle cash into the TexPool (the state’s local government investment pool) to capture higher yields where appropriate.

The contract award is administrative and sets the bank as the city’s primary depository subject to standard implementation steps and mutually agreed transition planning. The council did not appropriate any additional budgeted funds in the motion; staff will return with details about implementation timelines and any operational tasks required for the transition.