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Minutes for the Depository Board meeting on September 22, 2009.
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Board members Mayor Perrin, chair, City Clerk Donna Jackson and City Collector Becky Sharp were in attendance. Also in attendance were Finance Director Jim Barksdale and Assistant City Accountant Jim Eagan.
Discussion was held concerning topics from the previous meeting. Mr. Barksdale explained they will be letting out the bank bids asking for multi-year contracts that are renewable yearly, similar to the recently approved contract with Sprint. Chairman Perrin questioned whether the Liberty Bank accounts are still at 1.55% interest. Mr. Barksdale answered yes. Chairman Perrin then questioned if anything has been done about the operating account at BanCorp, which contained $2 million but only earned 0.59% in interest. Mr. Eagan explained they discussed moving the account, but decided not to move it unless it was part of the bidding process and is worthwhile due to possible problems with checks.
Ms. Sharp motioned, seconded by Ms. Jackson, to approve the minutes from the August 25, 2009, meeting. All voted aye.
Discussion was then held regarding the daily cash balances reports. Mr. Eagan stated he changed the way the reports are set up so they’ll show the ending cash balances and the First Security balances, which wasn’t included in the previous cash balances reports. He added he would also like to include charts to show cycles. Chairman Perrin questioned whether he was able to compare the data to last year. Mr. Eagan explained comparing the data is difficult due to problems with consistency. He further explained if comparing roughly similar accounts this time last year the City had $32.5 million, while this year the City has $21.8 million. Mr. Barksdale noted it will take a few years to build historical data in order to show trends because the City is just now setting things up in a way that would allow for such research to be done.
Mr. Eagan referred to the deposit collateralization report and pointed out $690,633 was reported as being uncollateralized in Liberty Bank. He added he contacted Liberty Bank after learning about the uncollateralization and Liberty Bank fixed the problem. He noted BanCorp contacted them recently about decreasing the amount of pledges they have for the City’s money in their bank because those accounts were overcollateralized. Chairman Perrin stated when the City puts the bank bids out they should ask banks to collateralize the highest amount that will be in those accounts in order to avoid problems with having uncollateralized funds. He added there should never be an uncollateralized amount when it comes to the City’s money. Mr. Eagan explained part of the problem is Liberty Bank only looks at the accounts at the end of the month when they should be keeping up with it on a daily basis. He added there also doesn’t seem to be any sort of in-house monitoring system to alert Liberty when there’s an uncollateralized amount.
Discussion was then held regarding the interest earnings report. Mr. Eagan stated the maintained average balance for the month of August was $20.3 million with an overall interest rate of 1.54%. Chairman Perrin noted MPO received 1.62% interest. Mr. Eagan explained that was the overall interest rate on their average balance.
Mr. Eagan explained they are still working on reconciling the operating account, but the rest of the accounts have been reconciled through the end of August.
With no further business, Chairman Perrin motioned, seconded by Ms. Jackson, to adjourn the meeting. All voted aye.