Lebanon treasurer proposes RFP to shop banking services; council weighs local ties and potential rate gain

Lebanon’s treasurer introduced a request-for-proposals on July 21 to review the city’s banking relationship and seek more competitive interest earnings and stronger fraud protections.

The treasurer, Jessica, told the council she had prepared an RFP — not a formal sealed bid — so the city could evaluate banks on multiple factors and preserve flexibility. She said copies would be given to council members for feedback and that proposals would be available to local banks and any bank within a 10-mile radius that requests the materials.

“It does not mean that we are switching banks,” Jessica said, arguing the RFP was due to rising fraud risk and the city’s below-market interest rates. She said the process allows staff to evaluate security controls and overall value rather than simply picking the highest quoted interest rate under a mandatory bid rule.

Council members pressed for a clear timeline and earlier committee involvement. Jessica said the treasurer’s office expects proposal materials to be distributed next Monday, with materials due to the city by August 13 and a finance committee review scheduled for August 18; the RFP process could continue through August 22 if follow-up questions were required.

Several council members urged negotiating with local banks to preserve convenience for customers and town relationships. One council member noted an earlier email indicating First Federal had discussed raising its rate; Jessica confirmed she had met with Todd, First Federal’s CEO, and said the bank was willing to move from previously advertised rates of 0.35% to as much as 2.5% in response to competition.

Jessica estimated the difference in available interest across institutions could be substantial: “That is a difference of $104,000 a year in interest that we have left on the table by not shopping this out,” she said.

Council members also asked whether the city clerk would be part of the review; Jessica said office personnel who work with the bank would be consulted even though the treasurer is responsible for the process. The treasurer added she would share sensitive operational details privately with staff rather than on the public floor.

The committee did not take a formal vote. Council members asked for time to review the RFP text, suggested the clerk be involved in practical discussions, and instructed staff to proceed with the proposed timeline while leaving flexibility if additional information is needed.

Next steps: the RFP distribution (next Monday), a submission deadline (August 13), and a finance committee review (August 18). No contract award or bank change was approved during the meeting.