The city of Painesville's finance director expects the upcoming bank change will save the city more than $500,000 annually.
The City Council recently selected Dollar Bank as the public savings account for the City of Painesville for a five-year period beginning March 1. Officials will work over the next few months to transition financial operations away from the city's current savings account, Chase Bank.
Finance director Bill Parkinson added that the increased interest income and reduced fees will result in net monthly savings. He said interest rates were “fixed in.”
“It's about $47,000 a month net, which is a significant amount per year, and if you sign a five-year escrow agreement, it's a significant amount,” he told Congress on February 5.
Paynesville has had an account with Chase for “a significant number of years,” according to Parkinson's report in the city's Feb. 5 city manager report.
“During my short tenure with the city, I found high fees, low interest income, and poor customer service,” he added in his report.
Mr. Parkinson said he contacted five banks and “Dollar Bank was the best offer.” He also spoke with other companies that use Dollar Bank and are satisfied with it.
“We felt the savings were too large to ignore,” he said. “Again, Dollar Bank is a very good bank and has a very good reputation.”
The account switching process will take several months. Mr Parkinson called it a “very complex surgery” and said there were “a lot of things to consider, a lot of things to consider, things to test, verify and make sure everything is good.” “There is,” he said.
“It's not just a matter of taking money out of Chase Bank, having Chase write a check, and putting it in Dollar Bank,” he added. “There are a lot of things that need to be done to make sure the funds are working as expected.”
He said the transition process will take up city staff time but will not incur “material” costs. This process does not require any budget adjustments.
Parkinson added that the savings will be pro-rated when the City of Painesville transfers them.
The council approved the new storage facility by a 6-0 vote on Feb. 5, and Councilman Mario Rodriguez was excused from the meeting.
