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Auditor warns Gregory’s depository setup could leave funds under‑protected
Summary
The auditor told council members their current depository practices may leave municipal funds inadequately collateralized and recommended exploring Texas CLASS or different depository arrangements and daily monitoring of cash positions.
During the audit presentation, Noble Snedeker explained that FDIC coverage provides standard limits and that the city’s current bank collateral practices and daily reporting expectations may expose funds. "FDIC is… you get $250,000 for your bank account," Snedeker said, then contrasted bank deposits with pooled investments such as Texas CLASS as an alternative approach to reduce risk.
Snedeker recommended the city discuss depository collateral practices with its bank and consider alternatives that pledge sufficient collateral; he also said staff should monitor daily cash positions and prepare procedures so large unplanned deposits do not create coverage gaps. Council members asked follow‑up questions about how to structure transfers and whether switching depositories would solve the problem; Snedeker said changing account types and securing collateral from a depository that offers higher pledged coverage would help protect the city’s funds.
