Explanation
BACKGROUND
The Division of Income Tax currently has two banking service contracts for the processing of income tax remittances. The Huntington National Bank provides banking services for processing of direct deposit remittances. A second contract for the purpose of providing banking services related to the processing of employer withholding remittances is with the National City Bank.
The relocation of National City Bank's operation center to the Cleveland area resulted in its inability to perform those services necessary for the accurate and timely processing of withholding lockbox remittances pursuant to a contract addenda previously agreed to by both parties. The Income Tax Division must immediately cancel the contract with National City Banks and arrange for another service provider to provide for the specified processing of withholding remittances to insure the efficient and accurate posting of revenue for the City. The expansion of the Huntington National Bank lockbox services contract to include the processing of withholding remittances will allow for an uncomplicated transition of banking services. The Huntington has considerable experience processing the direct deposit payments having processed large volumes of income tax remittances during the last eight tax seasons. Additionally, the specifications for the processing of direct and withholding remittances are similar in nature. The cost for banking services charged by National City Bank is equivalent to the new cost presented by the Huntington Nation Bank. By utilizing an experienced local depository, the City minimizes the processing error rate and benefits from the ability of Income Tax personnel to more closely monitor and direct the processing of income tax revenue. Finally, the City benefits from greater investment earnings as tax receipts are deposited in a more efficient and timely manner. The continued outsourcing of this task also relieves the Division's employees from the time consuming task of opening and sorting a large volume of mail.
FISCAL IMPACT
The funds for this modification and increase are included in the Division of Income Tax budget for 2004. Of the $181,000.00 budgeted for lockbox services, $61,000.00 was originally applied to the prior modification passed by Council on March 1, 2004. An additional $55,000.00 will be applied to this modification and increase from the cancellation of the contract with National City Banks and from other available services appropriations.
In order to provide uninterrupted service, this ordinance is being submitted as an emergency.
Title
To authorize and direct the City Auditor to modify and increase Contract No. CT-17228 with The Huntington National Bank for certain banking services to be performed for the City Auditor, Division of Income tax through February 28, 2005 and to authorize the expenditure of $55,000.00 from the general fund, ($55,000.00), and to declare an emergency.
Body
WHEREAS, due to relocation of its processing service location, National City Bank is unable to perform those services required for the processing of withholding remittances as originally contracted, and
WHEREAS, in order to maintain appropriate and timely deposit of withholding remittances, it is necessary to modify and increase Contract No. 17228 with the Huntington National Bank to include the processing of withholding remittances and to pay for the same, and
WHEREAS, an emergency exists in the usual daily operation of the Income Tax Division in that it is necessary to modify and increase CT 17228 for the inclusion of additional banking services from Huntington National Bank to avoid interruption in essential services, thereby preserving the public health, peace, property, safety and welfare, now, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS
Section 1. That the City Auditor be and is hereby authorized and directed to modify and increase Contract No. CT17228 with Huntington National Bank for "lockbox" services for the income tax remittances through February 28, 2005.
Section 2. That the expenditure of $55,000.00 or so much thereof as may be necessary is hereby authorized from the General Fund 010, Auditor's Office/Income Tax Division 22-02, OCA Code 220541, PCA Code 22104, Object Level Three 3348.
Section 3. That for the reasons stated in the preamble, which is hereby made a part of, this ordinance is hereby declared to be emergency measure and shall be in force and after its passage and approval; by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.