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Finance director reports stronger interest earnings after bank change; general fund remains thin
Summary
Finance staff reported increased interest earnings after changing banks (monthly interest receipts listed) and recommended renewing several CDs at 4.07% while warning the general fund balance was under $20,000 and that the city may seek a line of credit.
Lebanon Citys finance staff (Speaker 11) reported to council on April 30 that a change in where the city banks has produced higher interest earnings so far in 2026, while cautioning that the general fund balance remains low.
Staff said the city continues to receive a 3.75% interest rate on certain accounts and provided monthly interest receipts: January $12,732.66, February $11,007.37, March $13,902.77, producing a cumulative headline increase of roughly $43,750 across accounts compared with prior-year totals cited in the presentation. The finance presenter said these gains have helped but the general fund balance was ‘‘less than $20,000," and that payroll and year-end payouts will raise near-term cash needs.
To manage liquidity and earnings, staff recommended renewing several certificates of deposit for 12 months at an estimated 4.07% and sought council approval to renew those CDs. Council approved the motion to renew the CDs and discussed the citys progress on supporting a potential line-of-credit application; staff said the city must demonstrate capacity to afford payments on such a credit.
Staff also reviewed account balances and reminded the council that some funds (for example, the business-district account) are restricted by ordinance and cannot be used for general fund expenses without formal action.
The council approved the CD renewals by roll call as presented. Staff said they will provide follow-up documentation on balances, ordinance restrictions on specific funds, and next steps for a possible line-of-credit if the information supports application.
