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Finance officer reports higher interest earnings and modest sales-tax gain for Dell Rapids
Summary
Finance officer Claire reported a substantial increase in interest earned from local bank investments since mid-2023 and noted a $9,000 year-over-year increase in sales tax collections; council discussed whether to use investment returns to pay down debt but no action was taken.
The Dell Rapids finance officer reported to the council that the city's decision to move funds into six-month certificates of deposit and to add funds to First Interstate Bank led to materially higher interest earnings over the past 18 months.
Claire told the council that since mid-2023 the city earned about $103,000 in interest at First National Bank (from the funds invested there) and about $204,000 at First Interstate Bank, reflecting interest earned as CDs rolled every six months. The council had previously authorized investing $1.5 million into a six-month CD at First National and moving $500,000 to First Interstate. Claire said the earned interest is allocated across multiple city funds, not solely the general fund. She also said the city continues to roll interest into new six-month CDs.
On sales tax, Claire said the city’s sales-tax receipts for the most recent reporting period were $9,000 higher than last year; the council had budgeted $1.5 million for sales tax. Councilmembers asked whether it would make sense to withdraw CD funds early to pay down sales-tax-bond debt for city hall; staff said they review debt-service versus investment returns during annual reporting and budget processes and will provide more detailed figures when requested.
No formal action was taken; the item was an informational report.
