|Council reverses course on banking
|Posted: Wednesday, January 18, 2012 10:00 pm
|By CHRIS MENEES
The City of Union City will not be changing banks after all for two of its checking accounts.
The Union City Council voted Tuesday night to rescind previous action to move the checking accounts for the General Fund and the Water/Sewer Fund and to leave them at Commercial Bank & Trust Co.
The action reverses a decision made at the Jan. 3 council meeting to move the checking accounts to First State Bank. Bids had recently been solicited from local banks for those accounts, with city manager Kathy Dillon asking for an interest rate with no service charges.
The bids presented at the last council meeting were from First State Bank and Commercial Bank.
The council revisited the issue Tuesday night after it was realized that figures discussed at the last meeting possibly did not give council members an accurate comparison of what was offered.
First State’s bid was an unconventional one and offered a 0.7 percent interest rate with a $140 flat monthly fee and cost for checks and deposit slips after receiving a starter package for each account. Commercial Bank, which currently holds the checking accounts, offered no service fees and a 0.4 percent interest rate plus the Wall Street 30-day CD rate subject to change on the first day of each month using said rate as published on the last Tuesday of the previous month.
Because city attorney Jim Glasgow Jr. serves on Commercial Bank’s Community Board, to avoid any conflict, Dyersburg city attorney John Lannom was on hand to answer any questions.
Ms. Dillon explained the accounts are currently with Commercial and said the two bids offered at the last meeting were very close. She said there is no way to predict the variable rates of Wall Street and said Lannom gave a spread sheet run based on the last 12-month checking actual statement balances, giving the new criteria for the coming year based on old balances for the last 12 months and those Wall Street indexes for the last 12 months.
She said she believes the city’s accountant shows figures that the difference between Commercial Bank is presented at $10,033.92, while First State, under the criteria of 0.7 percent plus service fees, is $9,840.06. She cautioned it was based on the Wall Street index variable from last year. She said Commercial Bank comes in slightly higher when those rates are figured and questioned if it would be easier to keep the accounts where they are for the $90 for the calculated estimate.
“It’s so close,” she said.
Councilman Bill “Rat” Harrison said the decision two weeks ago was made based on a lot of assumptions and there is no way of knowing what the interest rate will do this year. He said he realizes the 0.7 sounds bigger than 0.4, but with $140 per month deducted for service fees, it drops to about a 0.6 percent rate. He said if you take the January through December interest paid vs. the lower service charge, Commercial Bank comes out ahead; plus, the bank supplies checks.
Harrison made the initial motion to leave the accounts with Commercial Bank due to the little difference, drawing agreement from councilman Billy Jack Cranford.
The council voted 6-0 to rescind the previous action to change banks and then voted 6-0 to stay with Commercial Bank.
In other action during Tuesday night’s near 40-minute long meeting, the council:
• Approved a resolution authorizing the financing of the construction of a wastewater facilities project — including applications, contractual agreements and other related items — for the rehabilitation of the A.L. Strub Wastewater Treatment Plant.
The plant was built in 1986 and Ms. Dillon has explained that the savings the city will realize each month from electricity and chemicals alone will be more than the city will pay in loan payments each month. The rehab project is a budgeted item.
• Voted to proceed with securing bids for the construction of an overhead water tank in the city’s industrial park. Grant funding is being utilized for the near $950,000 project, with the city’s share estimated at about $250,000. The funds are budgeted and this is the last year the city is eligible for the grant, Ms. Dillon said.
• Approved a number of reappointments to city boards, including Larry Baker to the Municipal/Regional Planning Commission; John Horner to the Beer Permit Board; Harold Cozart to the Personnel Advisory Board; Grover P. Schleifer Jr. to the Perpetual Care Cemetery Board; Mike Daniel to the Board of Equalization; Angie Searcy and Mark Ward to the Parks and Conservation Board; Britt Barkley to the Municipal Board of Examiners; Barry Adams and Jimmy White to the Health, Education and Housing Facility Corp.; Kathy Johnson, Nancy Durham and Tracy Boucher to the Insurance Advisory Committee; Bill Dahnke, Karl Ullrich and Hugh Wade to the Museum Committee; Laura Shepherd to the Civic Auditorium Committee; and Ray Burden and Robert Nichols to the Board of Housing Appeals.
Some other appointments to fill vacancies on various boards are still pending.
• Heard concerns from several residents of Union City Manor Apartments on Lynn Street in regard to increasing electric bills for low-income apartment residents. They said there had been some meter problems in the past, but they don’t know the reason for recent increases, including some which occurred while residents were not home for extended periods.
Both Union City Mayor Terry Hailey and Harrison suggested they speak with Union City Electric System manager Jerry Bailey. They mentioned Ms. Dillon could help arrange a meeting with Bailey and records could be reviewed to try to determine if there is a problem.
• Heard a question from councilman Danny Leggett regarding a truck with a large flashing sign parked at a business on South First Street. Ms. Dillon said she will ask code enforcement to check on it.
• Learned the final walk-through is scheduled for Thursday for the new walking track at the industrial park off Everett Boulevard at Clover Street. Ms. Dillon said work, made possible by grant funding, is nearly complete and an official ribbon-cutting will be scheduled in the future.
Hailey said he visited the new walking track recently and noted it is very nice.
Councilman Judy Robin-son was absent from Tuesday night’s meeting, which was opened with prayer led by Glasgow. There was special mention of the family of Earl Johnson, a former Union City Council member who recently died.
Published in The Messenger 1.18.12