The City of Arkansas City has had a long-standing relationship with RCB bank, but one commissioner wants the city to seek proposals from other local banks.
During a city work session Wednesday, Kanyon Gingher said that many communities seek bids for banking services every three years. She said that process allows the city to make sure they are getting the best possible service, with the least cost to the taxpayers. She said the city might be receiving the best deal possible from RCB, but better options could exist.
“We don’t know because we haven’t done it in decades,” she said. “It’s a move to say that we’re interested in what your services are.”
Gingher said that sending out bid requests every three to five years was just good governmental practice.
Her suggestion met some opposition.
“I’m kind of in the middle with all of this,” Mayor Scott Rogers said. “We don’t get charged for anything right now, so the taxpayers aren’t out any money with it.”
Rogers said that according to finance director Jennifer Waggoner, RCB provides all of the services that the city needs and at no cost. The city keeps its money in RCB Bank accounts. It also uses Union State Bank for merchant services with credit or debit card payments.
Rogers said that the city-owned certificates of deposit are sent out annually to other banks for bids on interest rates.
“There’s no cost to citizens now, our CD’s are getting looked at annually, I guess I don’t know what our overall goal is in doing this,” he said. “That’s the question I have right now.”
City attorney Larry Schwartz noted that the goal would be community outreach and fairness, creating the appearance of an equal playing field.
“It doesn’t hurt to send it out,” he said. “I doubt there will be a change.”
Asked for her opinion, Waggoner said that she did not see a need to explore other options. RCB provides every service the city needs, including one service that no other local institution currently offers.
“RCB is the only one that offers PausePay,” she said. “That’s where they check the checks that are being cashed against our records to make sure they match up.”
Waggoner added that a financial institution must be able to pledge collateral to cover the city’s accounts.
“We have $15 to $16 million at any given time,” she said. “There are only two banks in town that will probably be able to do this.”
Changing financial instructions would also require a massive amount of work for the city, she added.
Gingher, however, kept making her case. “Then we just need to tell the local banks that we’re not interested in whatever they can offer,” she said. “I’m not willing to do that, I’m not interested in saying that I’m not interested in seeing what their bid is.”
Commissioner Duane Oestmann said that the only possible thing to be gained might be a higher interest rate on the checking accounts. But he doubted any increase would pay for the time Waggoner would spent making changes.
“The banks don’t make that much of a difference in your interest-bearing checking account,” he said. "I think that’s what you need to look at. Is it worth the time she has to put in, would it make that much difference for the city?”
Commissioner Jay Warren he wants Waggoner to be involved in the process if the city does decide to seek bids.