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Select Board agrees to index town deposits to prime rate with Machias Savings Bank
Summary
The Select Board agreed to change town deposit terms with Machias Savings Bank from a flat rate to a rate indexed to the prime; the bank told the board it does not set a minimum floor on variable accounts but the town can renegotiate for a fixed rate if terms become unacceptable.
The South Thomaston Select Board voted to accept new interest-rate terms reported by Machias Savings Bank, switching selected town accounts from a fixed flat rate to a variable rate indexed to the prime rate.
Board members asked whether the bank would guarantee a minimum (a "floor") for the indexed accounts. According to the board's account of the conversation, the bank does not place a minimum on variable-rate accounts, but told the town it can return to the bank to renegotiate and request a fixed rate if market movements make the indexed rate unacceptable.
A board member moved to accept the indexed-rate arrangement and the motion passed in voice vote. The board asked staff to monitor the accounts and to pursue renegotiation if needed.
