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Munising approves placement agreement to protect roughly $7.5 million in uninsured cash
Summary
Commission authorized an IC placement agreement to sweep uninsured cash into a multi-bank network to keep balances under FDIC limits and authorized the City Manager, City Treasurer and City Clerk to execute the agreement.
The Munising City Commission approved a placement agreement to move a portion of city cash into an insured-cash (IC) sweep product that spreads funds across multiple banks to keep balances under FDIC insurance limits.
City staff told the commission the city had roughly $7.5 million in unprotected bank balances at the end of the last fiscal year and recommended using the IC product (similar to the existing Cedar product) to increase protection while keeping funds liquid. Staff described the mechanics: city funds placed into a participating account are daily swept and reinvested across multiple banks at or below FDIC limits; cash can be returned with one business day’s notice.
Commissioners discussed whether Range Bank should be used because it is already a participant in the network and because of deposit-size considerations. Staff said other banks and networks exist but the recommended approach was to use the inter-network arrangements the city already employs. The commission approved the placement agreement and expressly authorized the City Manager, City Treasurer and City Clerk to execute the documents.
Finance staff said returns on the product will appear on the interest line of investment reports and that the city’s investment policy — to be revised — will continue to govern activity.
Next steps: execute the placement agreement and reflect returns in the city’s regular interest reporting; staff will present an investment-policy revision at a future meeting.
