EDC Board moves funds into CDs
(Posted: 10:15 p.m. Oct. 5,2009)
After a somewhat lengthy discussion Monday regarding the investment of Liberty Hill economic development funds, directors voted unanimously to place most of the tax-generated dollars into certificates of deposit (CD) at Union State Bank.
Directors of the Liberty Hill Economic Development Corp. voted to move $200,000 of the $272,000 in its checking account, which was earning no interest, into a 12-month certificate of Deposit. They also voted to renew a $109,972 CD for six months.
Director Dave Parker raised the question of whether the Board should consider moving all or a portion of the EDC's $382,000 from Union State Bank to another financial institution where the funds could possibly earn more interest. He said some out-of-town banks are advertising higher rates of return and thought the EDC should not be bound by city limit boundaries when it comes to investing and earning interest on taxpayer money.
City Council members serving on the EDC Board said the City has an agreement with Union State Bank for the current year and can not take its business to another bank. At Union State Bank, the new CD will earn 1.34 percent interest over one year and the six-month CD will earn interest at the rate of 1.04 percent.
"This is not a competitive rate," Parker said. "It seems silly to have an agreement with a bank in town that's not going to give us a competitive rate."
Council Member Liz Rundzieher explained that the City chooses a bank every year based on the best bid or (RFP) submitted. In this case, Union State Bank was the only bank to respond to the City's Request for Proposals. There are three banks within the city limits of Liberty Hill.
Also Monday, the Board received letters from five Liberty Hill Junior High School students as part of a class project to write to public officials.
Seventh graders Meagan Gatlin and Riana Baker asked the Board to see what it could do "about getting a skating rink" in Liberty Hill.
"I think it would be good entertainment for the younger residents of Liberty Hill," wrote Miss Gatlin.
"I would like it if the city built one with an arcade, a room to hang out in, and nice clean bathrooms," wrote Miss Baker. "If anyone wants to have some fun family or friend time then we have to drive all the way into Austin and it would be nice to have a skating rink just a few minutes away."
Bradley Noel wrote that he was interested in an Italian restaurant for Liberty Hill, and Ashton Mackenzie Hood wrote that a "Brahms would be a delicious and sensible addition to our city."
The seven-member EDC Board, which has regular meetings quarterly, will have a special meeting Nov. 2 at which time they will elect
officers for the new fiscal year.
Two members, Jimmy Oliver and Debby Norman, are being replaced by George Nassour and John Austin. The new Board members, who were approved by the City Council last week, were present Monday to observe. Oliver and President Ken Cousins were not present. Also last week, the Council renewed the terms of Parker and Charles Canady, who also serves as Mayor Pro Tem.