Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Council committees approve CD reinvestment leeway and $45,000 microloan
Summary
Finance committee delegated short-term reinvestment authority to the finance officer for maturing CDs and approved a $45,000 microloan for a local applicant with a five-year term at 3% below prime.
The finance committee delegated temporary authority to the finance officer to reinvest or withdraw funds from seven certificates of deposit maturing between October and December to take advantage of best local rates, members agreed Monday night.
Liz, the finance officer, told the committee that the CDs include city hall, economic development, street, electric, gas and MFT accounts and recommended a mix of actions: cash in the economic development CD to cover upcoming Red Bud Business Park expenses; reinvest the city hall and electric CDs for the same term; reinvest $600,000 of the streets CD (not the full $1 million); increase the gas CD reinvestment to $200,000; and cash one MFT CD while reinvesting $500,000 of the other. She asked that the council give the finance officer limited leeway to act over the coming three months rather than calling repeated special council meetings.
"Instead of having a special city council meeting after each committee meeting, I would like to ask the council to give the finance officer approval to reinvest at the best rate offered by the three local banking institutions or withdraw monies from the upcoming CDs as presented above," Liz said.
Committee members said they supported the plan and the committee approved the recommendation by voice vote.
At the same meeting, the committee approved a microloan application for a local business owner, authorizing a $45,000 loan to be disbursed now (leaving a $1,000 minimum reserve in the microloan account) with an interest rate set at 3 percentage points below prime and a five-year repayment term. The committee discussed alternatives — offering a smaller immediate amount or transferring funds between municipal accounts — but members raised concerns about setting a precedent for interaccount transfers without policy changes.
"I think 45 (thousand) and the rest down the road is what makes sense," one committee member said before the motion carried by voice vote.
What happens next: Staff will document the reinvestments and report renewals to the council as CDs mature, and the loan will proceed with the terms approved; the committee did not record a roll-call tally in the minutes for either action.
