Submitted By
Steve Drazner, CFO
Reviewed By
A.M. Zayyad, Deputy Village Manager
Agenda Item Title
Title
A Resolution Designating Byline Bank as a Village of Oak Park Depository and Investment Bank and Authorizing Investments Pursuant to the Illinois Public Funds Investment Act and the Village’s Investment Policy
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Overview
Overview
The Village is seeking to expand banking relationships by selecting additional financial institutions to invest in surplus reserves. Finance Department staff prepared a Request for Proposals for Investment Services, included in this agenda item herein, and a total of nine (9) proposals were submitted to the Village. Staff thoroughly reviewed each proposal and recommended entering into an investment banking relationship with Byline Bank, which has a local branch in Oak Park.
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Recommendation
Recommendation
Adopt the Resolution.
Background
The Village utilizes the services of Huntington Bank, not only for checking and routine banking services but also for investing surplus funds. At present, the Village has approximately $78 million in its Huntington Insured Cash Sweep, earning a competitive interest rate of 5.00%.
In addition, the Village has approximately $10 million invested in a US Treasury note with PNC Bank, which will mature at the end of November 2023.
Staff recommends that $5 million be invested with Byline Bank’s wealth management services in order to obtain slightly better rates of return compared to the typical money market or certificate of deposit accounts. As specified in the Proposal, the cost of these wealth management services will equate to 30 basis points or .3%. Byline will only invest in securities authorized under the Village’s recently adopted investment policy as well as the Illinois Public Funds Investment Act.
This will allow the Village to develop and build another banking relationship, which may be beneficial in the future, depending on the Village’s needs. The $5 million for investment with Byline will come out of the Huntington ICS account, which will subsequently be replenished with the proceeds from the PNC Treasury note, when it matures on November 30, 2023.
Included as part of this agenda item for reference is the Proposal submitted by Byline Bank.
Fiscal Impact
There will be no impact on expenses (any investment fees will be netted against investment returns) and no significant change to interest income.
DEI Impact
N/A
Alternatives
The alternative is to not adopt the Resolution and therefore not enter into a banking relationship with Byline Bank.
Previous Board Action
N/A
Citizen Advisory Commission Action
N/A
Anticipated Future Actions/Commitments
N/A
Intergovernmental Cooperation Opportunities
N/A