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City manager recommends changing bank contract and using idle cash to create cushion for rising costs
Summary
Staff reported about $17 million of city cash earning no interest under the current banking agreement, described a pending bank RFP response offering yield on those funds, and proposed reserving potential new revenue to help cover budget gaps such as a higher health insurance renewal.
Cooper City staff told commissioners their current operating cash position includes approximately $17 million that the city said is not earning meaningful interest under its existing bank agreement, and presented a plan to select a new banking services vendor to improve returns.
The City Manager described a recent RFP for banking services and said the current account holding approximately $17 million is effectively earning zero; vendors responded with proposals that would pay interest and/or compensation on those balances. The manager said responses indicated a prospective return in the low‑to‑mid single digits on that cash under a new agreement and that the commission will see a formal vendor selection on the August agenda.
Staff connected the banking recommendation to other budget items: the manager proposed using any additional revenue from a new banking agreement to create a stabilization reserve the commission could deploy to offset near‑term spikes in health insurance premiums or to fund other one‑time needs. He suggested assigning, for budget projection purposes, conservative numbers until the bank contract is formally approved but noted the additional revenue would increase the city’s available cushion at the September budget review.
Commissioners pressed staff about the duration of the prior RFP and how long the city had left funds idle; staff said a previous RFP was delayed and that the city had been with Bank of America for decades. The manager said earlier procurement problems cost months of forgone interest and that the new vendor's offer in the RFP produced a substantially better yield than the status quo.
What commissioners asked staff to do: bring the recommended banking contract to the August meeting for approval, show the anticipated interest/compensation schedule under the proposed contract, and model how those additional revenues would be assigned (for example, to a health‑plan rate stabilization account) in the FY26 budget.
No formal vote was taken at the workshop; staff said a final vendor recommendation and a proposed banking contract approval will appear on the August agenda.
