City Council approves change in banking services
By Ginger Livingston
The Daily Reflector
Friday, November 9, 2018
Savings of $130,000 annually prompted the Greenville City Council to select a new bank.
The City Council on Monday unanimously voted to award its banking contract to First Bank, which is based in Southern Pines, effective Feb. 1, pending the completion of final negotiations.
Staff recommended moving services to First Bank from current provider Wells Fargo because the smaller institution offered interest rates that will generate revenue that should pay for most bank fees, resulting in the savings.
The city received proposals from five banks, said Byron Hayes, financial services director. First Bank and Wells Fargo were the finalists.
“We do consider both submissions to be strong,” Hayes said. Both are stable financial institutions.
“The biggest difference was in the earning credit rate,” Hayes said.
The earning credit rate is the daily calculation of interest that a bank pays on customer deposits.
First Bank had an earning credit rate interest of 1.75 percent while Wells Fargo’s rate was 0.9 percent.
First Bank offered 1.9 percent interest on balances and while Wells Fargo offered none, Hayes said. The combined interest earnings would generated $100,000 in annual revenue which would offset the banking costs and generate savings.
The committee that reviewed the proposals noted that First Bank does not have the same experience working with governmental customers as Wells Fargo does. It also noted that First Bank has undergone two mergers this year, Hayes said. Officials assured the committee that no additional mergers are expected.
First Bank also does not offer procurement card services, which are used to keep track of charges staff make in connection to work. However, Hayes said the city could join the state’s procurement card service and the cost should not reduce the savings expected under First Bank.
While Wells Fargo has three locations in Greenville versus First Bank’s one location, Hayes said the First Bank business support team would be locally based, while Wells Fargo’s team is at another location.
“That’s awesome. It shows the importance that we need to go back and always reviewing contract,” Mayor P.J. Connelly said.
The council in April directed staff to seek bids for providing banking services. The move came less than a month after its current bank provider, Wells Fargo, announced it was closing its Greenville-based automotive financial services center which employed 600 people. Staff said the the banking services contract needed to be evaluated because the last review was done in 2011.
Also on Monday, the council unanimously approved an ordinance allowing disabled veterans to ride the GREAT bus system for free by presenting a valid Veterans Administration ID card.
Public Works Director Kevin Mulligan said the local Veterans Affairs office asked the city for helping with transporting disabled veterans. A pilot project launched in August.
“We can’t do enough for our veterans, especially those with disabilities,” Mulligan said.
More than 1,200 disabled veteran riders used systems during the initial stages of the pilot program, according to a memorandum to council members. The estimated annual cost of this program is about $5,000.
“Transportation is a large barrier to health care. Improving access to transportation approves access to health care,” said John Forte, administrator with Greenville VA Health Care Clinic.
Mulligan said the free rides will begin on Sunday, which is Veterans Day.
Contact Ginger Livingston at email@example.com or 252-329-9570.