Richland County CUSD 1 board rescinds Midland States Bank approval, orders rebid of district deposits

Richland County Community School District 1 board members voted unanimously to rescind a February decision approving Midland States Bank as the district’s depository and directed staff to rebid the district’s deposit business, the board said at a special meeting.

The rescission motion, made by board member Cindy Lockley and seconded by board member Dennis Anderson, returned the district to the status quo with Trust Bank as the depository “unless or until such additional action is taken,” and was approved in a roll-call vote with all seven members recorded as voting yes.

The move came after three community speakers urged the board to keep district deposits local. Bud Glover, a former board member and long-time local bank director, told the board, “you have taken 5% of the deposits of this County out of this community and sent it to Effingham.” Tom Fairbocker said, “When we take $30,000,000 out of Richland County and move it to a bank,” he warned, it could reduce local lending and economic activity. Walter Buss also urged caution and referenced past local banking decisions.

Why it matters: District deposits are a recurring source of local lending and community investment, speakers said; board members cited a financial trade-off between maximizing yield for the district and keeping deposits working in the local economy. Board member Jeff Wilson, who described his banking experience during the meeting, summarized the tension: “In a declining rate environment, the difference between the two banks get closer,” noting the need to weigh projected interest savings against local impact.

Board discussion and counsel input

Board members asked the district’s outside counsel, identified in the meeting as David, to advise on legal ramifications before taking final action. David joined the meeting by phone and said the board could rescind and rebid but warned there could be legal consequences depending on the contract language and timing; he advised review of the bid specifications and any contractual obligations.

Several board members said additional process steps were needed. Lockley and others argued the original process did not adequately notify all local banks; one board member said packets were hand-delivered to three local institutions but acknowledged First National Bank did not receive a packet and described that omission as an oversight. The board discussed the risk that rebidding could occur during a period of falling interest rates—citing the Federal Open Market Committee’s possible rate moves—potentially narrowing the financial gap between bids.

Next steps and timeline

After approving rescission, the board voted to solicit new bids. Board member Jake Anderson moved to rebid; the motion was seconded and the board set a schedule: rebid materials will be issued immediately, proposals will be due July 10, and the board will vote on the bids at its July 24 meeting. The district indicated Trust Bank’s existing contract runs through the end of the month and staff said they will seek an extension from Trust Bank if needed while rebidding.

Votes at a glance

- Rescind approval of Midland States Bank and return to Trust Bank as depository: motion by Cindy Lockley, second by Dennis Anderson; roll-call vote recorded as yes from Dennis Anderson, Jake Anderson, Jeff Wilson, Mrs. Bailey, Cindy Lockley, Mr. Coker, and Mr. Snyder; outcome: approved.

- Motion to rebid district deposit business: motion by Jake Anderson; second by Mr. Coker; board set rebid due date (July 10) and vote date (July 24); outcome: board directed rebid process (see timeline above).

Community comments and financial details

Members of the public raised specific financial figures during public comment. Tom Fairbocker said the district’s deposits being moved total $30,000,000. Board member Jeff Wilson cited district deposit totals of about $35,340,000 and said a 40-basis-point difference between bids would amount to roughly $120,000 a year; he and others discussed multi-year exposures and the tradeoffs of fixed- versus variable-rate proposals.

The meeting also included an executive-session item on personnel; no personnel actions were announced publicly after that session.

The board indicated it will publish the rebid packet and advertised notice and expects to present results at its July meeting.