June 4, 2024

To: Mayor, Vice Mayor, and City Council

From: The Executive Board & Executive Director of Friends of Flagstaff’s Future (F3)

Subject: Draft Procurement Code Amendment for Banking Services (June 4 Agenda Item 10D)

We are disappointed in the lack of analysis of the three options that have been under consideration for the banking services procurement code amendments. The staff report provided no information about the other procurement categories that would also be scored for consideration in the City ratings process. The staff report did not address the number of banks in AZ and the US that could meet the criteria outlined in the three options. Without this information, F3 believes it is impossible for the Council to fully evaluate the options.

Last Tuesday Council gave direction to the staff that it supports Option 1, the weakest of the three options that staff provided. This will be under consideration today (Resolution No. 2024-26). This option gives only 10 points (10%) of the overall scoring for climate-related criteria. Moreover, the focus is on banks providing information to the City about their fossil fuel investments, but it does not clearly indicate how banks will lose or gain points in the City’s ranking of this information. Vague terms are used such as “evidence of commitment” to climate action, and “reducing relationships” with the fossil fuel industry, both of which can result in higher point earnings even if a bank is doing business with the fossil fuel industry. 

As written, it is very likely that banks with the largest investments in fossil fuels such as Wells Fargo, Bank of America, etc., could score 90+ points. An outcome such as this is in direct opposition to the City’s commitment to take actions that reflect the severity of the climate crisis. It’s a disservice to our community to allow taxpayers’ money to support investment in the fossil fuel industry. 

We understand that the City may not have time to do a thorough analysis, but the provision of basic information about the three options would provide important and necessary information for the Council’s consideration. In addition, our close examination of the language of the amendment wording that will be under consideration today highlights the vagueness of the ranking language; this creates a very weak amendment that provides only the appearance of consideration of the climate impacts of banks with whom the City will do business.

The decision of Council to allow only one week between discussion of the amendment and consideration of the resolution is therefore concerning. City Manager Clifton clearly stated on May 28 that there was no urgency to finalize the proposed amendments prior to the Council’s summer break in July. Manager Clifton further indicated that it would be helpful to receive direction from Council to guide staff’s work on the amendment during the summer break.

We urge Council to not make a decision today and instead to give direction to staff to provide additional information about the proposed Options 1, 2, and 3, as discussed above, prior to making a final decision on this topic. 

 As described above, all of the options require more clarity. Option 3, the most exclusionary, may be unrealistic. There are very few fossil-free banks in the country. 

To have a meaningful amendment that allows the city to take responsibility for the climate emergency, we need an amendment that can screen out the largest banks that are responsible for the vast majority of fossil fuel investments. As you know, top global banks that lend and underwrite investments in the fossil fuel industry include Wells Fargo, Bank of America, JPMorgan Chase, and Citi. 

We urge you to delay consideration of these amendments and to direct staff immediately to draft a meaningful and realistic amendment with teeth.

We thank you for your consideration.

Susie Garretson, Board President

Marie Jones, Board Secretary

Mary Poore, Board Treasurer

Kim Curtis, Board Member

Marilyn Weissman, Board Member 

Celia Barotz, Board Member

Dara Marks Marino, Board Member

Anthony Garcia, Board Member

Michele James, Executive Director