City commissioners disagreed with how some of the city’s investment transactions – such as three bank transfers amounting to $29 million, $32 million, and $20 million each – were done without City Council review.
At the Wednesday, August 16, City Council meeting, City Finance Director Blanche Sherman presented an overview of the city’s investment transactions from 2021 to this year.
She reminded the City Council that the goal is to not concentrate all of the city’s investments in one bank, to allow for diversity and maximize the city’s investment earnings is another goal, and maintaining safety and liquidity.
She showed an overview of some of the deposits the city made since January 2021 with Synovus Bank, One Florida Bank, Florida Prime (which is the State Board of Administration), and Seacoast National Bank.
She highlighted some of the large transfers that were done from one bank to another.
In June 2021, there was a transfer of $29 million from Synovus Bank to One Florida Bank. Synovus’s interest rate was 0.30 percent, One Florida Bank’s was 0.32 percent, and the SBA interest rate was 0.10 percent.
In July 2022, there was a $20-million transfer from Synovus Bank to Florida Prime. Synovus Bank interest rate at that time was 0.351, Florida Bank at 0.5, and SBA interest rate was 1.8 percent.
In June 2023, a nearly $32-million transfer was done from One Florida Bank to Seacoast Bank. At that time, One Florida Bank’s interest rate was 4.7 percent, the Seacoast Bank interest rate was 5.2 percent, and the Synovus bank interest rate was also 5.2 percent.
Also, city staff asked for a legal opinion on the Synovus to One Florida Bank transfer that happened in June 2021.
“Upon a detailed review of the policy, supporting documentation provided by staff and additional information provided by staff, the wire transfer in question appears to comply with the City’s policy in that it met all the criterion and followed the procedures set forth in that policy,” a memo reads from city attorney Cliff Shepard to Blanche Sherman. “A more fulsome explanation of both the policy and the specifics of the transaction supported by exhibits will be forthcoming, but this summary memo accurately sets forth my conclusions that the investment was: properly authorized by the City; made to an authorized institution; resulted in a higher yield than the City was receiving on the funds prior to the transfer; was made through an appropriate selection method.”
Commissioner Nick Nesta reminded Sherman and Shepard that they “don’t exclusively work for the mayor,” since the presentation and legal counsel were requested by Mayor Bryan Nelson and not by anyone else on the Council. Nesta claimed that the numbers Sherman presented still showed inconsistency.
Nesta recommended a forensic audit on the numbers. Nelson asked what he himself had done wrong with the investment transactions.
“I’m not going to tell you because if you don’t know, and I’m sure you do, that’s the thing. And I don’t need you to edit any of the evidence that may be coming up,” Nesta replied. “And again, I hope that I’m completely wrong, waste of time. But I, you know, we sure aren’t wrong about the lie that you were censured for. So either way, I don’t have any additional questions. This was a waste of both of your guys’ time and now our more residents’ money because our attorney’s not a forensic auditor.”
According to Sherman, the three transactions per legal counsel review are in compliance with the procedures under the investment policy and do not require City Council authority even though some transactions were brought to the Council. She even said she spoke with City Administrator Edward Bass about the $29 million transfer before he died.
The city’s contracted investment advisor is reviewing the city’s investment policy and will bring it to City Council for input, Sherman added.
According to Commissioner Kyle Becker, the city’s investment policy has not been updated since 1995. As well, there has been inconsistency in the policy application. For example, the City Council once had to do as a formal agenda item a $2-million transfer from Iberia Bank to One Florida, yet the $29 million transferred was done without any City Council scrutiny.
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