Agenda Packets - 1991/08/05 - Laserfiche WebLink

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TO: Mayor & Council FROM: Don Brager, Finance Director - Treasurer DATE: August 1, 1991 SUBJECT: Bank Service Charges I have been informed by Firstar Bank that they will be charging all of their public sector and non profit customers service charges effective today, August 1, 1991. Based upon an analysis performed by the bank our monthly service charges are estimated to be $276. In the past we technically did not pay service charges but were required to maintain a minimum balance of $50, 000 in our account. That in essence was a service charge in that if there was not a minimum balance requirement the money could have been invested and interest earned by it. I have had informal discussions with other Finance Directors and learned that other banks charge their public sector accounts service charges which are comparable to those charged by Firstar. I am of the opinion that we could not do better elsewhere. The bank has proposed that we maintain a minimum balance in our account of $65, 000 so that interest paid on the account would equal the monthly service charges. I believe that this is a reasonable method to offset the monthly service charges. In an effort to maximize our interest earnings on amounts of less than $100, 000 I propose opening a money market fund account. Money in the City's checking account would be transferred on an as needed basis into the fund which would earn a rate which is higher than the rate paid on our checking account. On an as needed basis money would be transferred back into our checking account. The money market fund would be a U. S. Government securities fund. All investments of the fund are permissible as individual investments of the City under current State laws governing the investment of public monies. Staff requests Council to adopt a resolution authorizing the opening of an account with the money market fund. DB/hs