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Isanti extends Falcon National banking agreement while reviewing five RFP responses; council questions interest rate
Summary
Council approved a short extension of the city’s banking agreement with Falcon National to allow staff time to review five proposals received in response to an RFP. Council members expressed concern that the city’s current terms were well below market rates (described in the meeting as "3.8% below prime").
City staff asked the Isanti City Council to extend the city’s banking agreement with Falcon National for a short period while staff reviews five proposals received through a recent request for proposals (RFP); the council approved the extension as part of the consent agenda.
A council member raised concern that the city’s current deposit returns were low and said, “If right now, I can actually get a higher yield on a personal bank account starting with $5,000, a high yield checking account ... I can go in and get a higher interest rate right now than what the city gets on our millions of dollars of deposits.” Another council member pointed to the specific term shown in the packet and said the city’s deposits were receiving “3.8% below prime.”
Staff explained why the extension was requested: the RFP window closed with five proposals and staff needs more time to vet them and to allow for conversion logistics if the city changes banks. “The reason why I'm extending it with Falcon is because I need more time to review. We got 5 proposals in, and there just is not enough time for me to go through all of them to vet them all out by the time allotted,” staff said. Staff reported the current extension ran to June and they asked Falcon to continue the same terms for a short additional period; one council member said the extension would cover an anticipated short-term administrative gap while the city is without a permanent finance director.
The consent-agenda motion to approve the extension (part of the consent agenda vote) carried without recorded opposition. Staff did not provide a detailed rate-comparison in the meeting; council members asked staff to continue vetting proposals and return with a recommendation.
