Greater Dandenong Council could be slugged an estimated $500,000-plus a year for banking services, as part of a new contract with Commonwealth Bank (CBA).
In a tender process, the bank offered the cheapest price – $531,379 a year – compared to NAB ($555,651) and Westpac ($533,100).
The estimate far exceeds Greater Dandenong’s budgeted $342,000 a year, with the shortfall managed through “future financial planning”, a council report stated.
The actual cost is based on usage and expected to be less than the estimate, according to the report.
Bank charges have risen over the past three years, driven by changed “transaction volumes and service requirements” including more credit-card transactions.
In 2025-’26, the charges are estimated at $410,000, up from $370,000 the previous year.
This was partially offset by decreased Australia Post transaction costs, the report stated.
At an 8 December council meeting, Cr Rhonda Garad asked why the new contract’s estimated 40 per cent rise from 2025-’26 was not itemised.
Acting chief financial officer Kirsten Geri said tender estimates were based on “projected transaction volumes and fee structures, which can vary depending on usage patterns”.
The figure allowed for increases in “high-volume” transactions such as credit card, which have grown steeply in the past five years, Geri said.
CBA is the council’s current banking service provider. Its renewed contract ensured “minimal disruption and continuity”, according to the council report.
The new two-year-and-nine-month contract begins on 1 January, with a two-year extension option from 30 September 2028.
The contract includes banking transaction services, customer payment services as well as expanding customer payment facilities and identifying “innovative solutions” for ratepayers and service users.
A banking analyst assisted the tender evaluation process. The winning tenderer was endorsed by councillors on 8 December.
Aside pricing, CBA also scored highly for product offering, relationship management, innovation, implementation and local engagement.
