Finance staff presented a proposal to the Board of Aldermen to change the city’s cash-management and investment structure to increase interest income on reserves.

Dustin told the board the city will move its primary checking to a Regions Bank sweep account that invests overnight and returns balances each morning, while preserving FDIC protections and bank-collateralization requirements. Dustin said the sweep could generate materially higher interest than the accounts currently earn: “If we did that for 31 days in July, our estimated interest income is gonna be about $12,000 per month,” he told the board.

Dustin also proposed consolidating duplicate investment relationships: closing MBS accounts, using Edward Jones for higher CD rates and MOSIP for a higher money-market yield (he cited a MOSIP money-market rate of 4.2% on June 18). He proposed using the city’s required fund balance (he cited a required fund-balance figure of $1,330,000) to invest in a mix of liquid money-market funds and laddered certificates of deposit to preserve liquidity while increasing yield. Dustin said the strategy would allow the city to park planned surpluses into short-term CDs or MOSIP and let interest income help fund future capital projects.

Board members asked whether Dustin could execute approved investments without returning to the board for each transaction; Dustin said routine investments would use previously approved depositories, but would bring a new depository to the board if needed. Dustin noted that if a long-term counterparty closed or a new depository was required, he would seek board approval per code.

Dustin said preliminary modeling suggested the change could add roughly $100,000–$140,000 in annual interest income based on balances and prevailing rates at the time of his estimate.

The board did not vote on an immediate transfer at the meeting but approved the finance director to proceed with state-approved investments and to report investment earnings monthly in the financial packet.