Findlay Council on Tuesday hurried legislation that will allow City Auditor Jim Staschiak to begin signing new bank depository agreements, in advance of a rule change in Ohio that Staschiak said may prove to be a bad deal for local governments.
Council voted 9-0 to suspend its three-reading rule and pass the legislation, which authorizes Staschiak to approve the new agreements. Councilman Tim Watson, R-7, was absent from Tuesday’s meeting.
Staschiak said a change made by state Treasurer Josh Mandel is “forcing” cities like Findlay to change their depository agreements.
“Unfortunately for the City of Findlay, this change is not for the better and will ultimately end with fewer options for protecting our funds and significantly increase banking fees,” he said. “In the past, every dollar of the city’s money was guaranteed at a minimum of $1.02. Under the new state treasurer program, this will be reduced to as little as 50 cents.”
In the past, banks were required to keep a treasury with enough money to guarantee of the return of public funds should the bank collapse. Under the new rules, all pooled collateral will be pledged to the state treasurer, rather than to individual public entities, Staschiak said.
The new rules would allow banks to invest more of the public money that was once held to back the funds, Staschiak said.
Staschiak said his goal in the negotiations will be to maintain an excess of the 100 percent guarantee. He said it is unlikely banks will change their current agreements with the city.