After more than an hour of discussion about the city's banking services, members of the Lodi City Council admitted they were confused and needed more time to navigate the complex financial world.
"I haven't had this much fun since water meters. ... This is not my primary focus in life; I do not throw these numbers around like these financial experts do," Mayor Bob Johnson said.
The council members considered whether to move the city's banking services from F&M Bank to Bank of the West. City staff said the city could save almost $72,810 a year while also receiving new services.
But things got confusing when F&M — a company the city has banked with for 60 years — disputed several of the cost comparisons and Bank of the West then shot back with different numbers.
The four councilmen said they needed more time to sit down with the proposals and evaluate if the city would save significant money by switching from F&M. Councilwoman JoAnne Mounce was absent.
About a year ago, the city wanted to formalize an agreement with F&M, but the two could not reach a contract, according to the staff report. So the city decided to put it out to bid to see if it could save money with another company, city spokesman Jeff Hood said.
"It is all part of the city looking for savings throughout, whether it is cell phones, vehicles or vendor contracts. We are turning over every rock," Hood said.
The city asked companies to submit bids for mandatory services, like deposits, checking, payroll, wire transfers and special accounts for liability, workers' compensation and the groundwater contamination cleanup.
F&M came in third for these services at $218,155, while Bank of the West came in at $101,524 and JPMorgan Chase bid $174,615.
The city also asked companies to bid on five other optional services.
F&M representatives said they felt the city was not using the correct measurements to compare banks, and said there was confusion over what the city was looking for in its bids.
Christa Steele, a senior vice president for F&M, said that Lodi also needs to look at the service the bank provides, not just the cost. She used the example of former City Manager Blair King asking the bank for a $3 million line of unsecured credit in 2006 to prevent the city from losing its bond rating. She said the city had it in 24 hours.
"If you switch, how long do you think it will take you to get your loan approved? I'm going to guess it's a little longer than 24 hours," she said.
She also pointed out that F&M is headquartered in Lodi, has 200 local employees and has contributed millions to the city's non-profits. She mentioned that Bank of the West's owners are located in Paris, France.
That fact did not sit well with Jerry Ferrero, a local winemaker, who attended the meeting to say his family has worked with F&M for four generations.
"I'm very pro-American, and it irks me that from the federal level to the local level we are dealing with foreign entities, and let's face it: The Bank of the West is a foreign entity," he said.
Dan Campbell of Bank of the West said his bank specializes in government accounts with 440 public agencies that have more that $1.1 billion in deposits.
Campbell said the bank tailored the bid to be significantly lower.
"We knew that in order to unseat a relationship like this, we have given you a reason to move. And I believe we have given you a reason to move," he said.
Councilman Alan Nakanishi said the city should stick with F&M because it is local.
"The employees and director contribute to the Boys and Girls Club and philanthropy. I don't just look at the bottom cost. Relationships are very, very important," he said.
Even though F&M is good corporate citizens, Johnson said that doesn't mean they get a pass when the city is looking at saving every penny to prevent employee reductions and layoffs.
"They are the backbone of the community. That being said, they've made some pretty good money off the community too," Johnson said.