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Council staff credits consultant relationship, account changes for extra yield and lower fees
Summary
Finance staff said a new relationship with a firm called "3 plus 1" and restructuring of bank account compensating balances reduced the required minimum balance by 46%, freeing funds to invest and identifying up to about $92,000 in potential annual additional earnings.
The Presenter told the board the city began working with a consulting firm called "3 plus 1" in April to review bank accounts and seek higher returns while preserving liquidity: "They provide an independent rate review to help ensure the city receives fair interest rates on our bank accounts" and to monitor fees.
According to the Presenter, changes negotiated with banks cut the required compensated balance from roughly $15,900,000 to about $8,500,000 — a 46% reduction — which freed excess funds that the board decided to invest. "So with that balance requirement being reduced, that freed up excess funds that we're able to invest out a little bit and actually earn some return for our taxpayers," the Presenter said. He added staff identified potential to earn "up to $92,000 more annually" from the account-structure change and investing excess liquidity.
The board agreed to invite 3 plus 1 to give a short presentation at the next Treasury Investment Board meeting so members could see the firm's dashboard and methods. No policy vote was taken; the changes were presented as operational adjustments completed or underway.
