Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Public Finance topic
No spam. Unsubscribe anytime.
Proposed bankers bill could cost Sedgwick County up to $3 million a year, county staff say
Summary
County finance staff warned that a bill to create a state collateral pool and to favor local banks for public deposits could reduce county investment returns and cost up to an estimated $3,000,000 annually; staff noted potential conflict with IRS rules for invested bond proceeds.
Brent, a county finance staff member, outlined a bankers bill with two components: a state-managed collateral pool to secure public deposits, and a provision that could require the county to place deposits with local banks even if their rates are up to two basis points below market. Brent said the measure's intent is to increase public money flowing into local banks, but that the local-deposit requirement could reduce county returns.
Brent said modeling shows the county could "incur up to $3,000,000 a year" depending on portfolio size, and added that investing bond or debt-proceeds under IRS rules requires market-rate returns, creating a potential conflict with the bill's terms. County staff said the Kansas Association of Counties and other municipal groups were asked to negotiate a compromise with the bankers and that Sedgwick County had been asked to take a lead role in those talks.
Staff recommended watching the bill and participating in the KAC-led negotiations; no formal county decision was recorded.
