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Lebanon treasurer outlines why city shifted to an appointed treasurer and explains bank RFP process
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Summary
City Treasurer Jessica explained at a Sept. 22 meeting why the treasurer role was changed from elected to appointed, described a sealed request-for-proposal process that drew four bids, said she recused herself when her employer submitted a proposal, and defended the committee recommendation to pursue a bank offering fraud protection and higher checking rates.
Jessica, the city treasurer, told the council on Sept. 22 that prior councils voted to move the treasurer from an elected to an appointed position so the city could hire for financial expertise rather than rely on unopposed elections. She said she applied and was the only candidate and described her business and insurance background as relevant experience.
"When it's an elected position, we have treasurers that run for the position, and most of the time, it's unopposed," Jessica said. "That doesn't mean they're qualified. This change lets us make sure we get someone with some financial background to come in and help us." (Jessica, speaker 2)
Jessica described the request-for-proposal process used to seek a new banking partner. She said about 10 packets were sent (some hand-delivered, some emailed), the city advertised eligibility to banks within 10 miles of the city, and four sealed proposals were received. She said proposals were opened simultaneously by the head of finance, the mayor, the administrative assistant and herself so no single person could share information in advance.
Jessica explained positive pay — an automated fraud-prevention service that matches check numbers, amounts and payee names to a submitted file and flags mismatches before funds leave an account — and said banks that offered positive pay were ranked higher. "Positive pay is an automated cash-management service and fraud-prevention technique offered by banks that help businesses detect and prevent fraudulent transactions with checks and ACH payments before they hit their accounts," she said. (Jessica)
On rates and fees, Jessica summarized the proposals provided to council in a chart. She said interest-rate guarantees in the proposals were limited in duration (all banks guaranteed rates only through Dec. 31) and that projected returns depend on how the city would structure deposits (checking versus sweep accounts versus CDs). Jessica said the committee recommended bank #4 (identified in materials as Bank of Springfield) because it offered competitive interest on checking and a robust fraud-prevention package.
Jessica addressed questions about conflicts of interest and said she removed herself from discussion when she saw her employer had submitted a proposal. She said an attorney reviewed a concerned-citizen letter and told the council that the proposal process had been followed and she had not acted unethically.
"As soon as we opened it and I saw that it was my employer that had submitted the proposal, I did tell them that I was not gonna make any comments," she said. (Jessica)
Jessica also responded to questions about operational details: remote deposit units and how bonded staff would handle cash deposits, and how the city would limit online-transfer authority to viewing for some staff while keeping transfer authority with the treasurer, clerk and mayor.
The Mayor and council members asked follow-up questions about the number of banks solicited, how fees would affect net returns, and the mechanics of switching balances; staff said some accounts (CDs and investments totaling about $1.7 million) are not planned to be moved out of town. Jessica said the recommendation was intended to protect taxpayers by reducing fraud risk and improving returns.
The council referred several banking housekeeping items to ordinance and approved actions later in the meeting to formalize signing authorities and account-access roles.
