Jacksonville’s treasurer doesn’t expect the city to be affected in the same manner as Springfield when it comes to a banking system change.
Because of a recent Securities and Exchange Commission rule change, Springfield has to move 18 accounts from Illinois Funds, a program administered by the state treasurer’s office, according to reports from the State Journal-Register.
Illinois Funds is a service that allows municipalities to pool excess money.
Jacksonville Treasurer Ron Smiljanich says at one time, the interest returns were good, but since then have been minimal. He explains the city currently has two Illinois Funds accounts, so there will be virtually no cost to the city.
“I kept a substantial amount of money in there when interest was good, but now my excess money or money that I don’t use frequently, I keep in certificates of deposit. There’s almost no activity in our two accounts, they’re just accounts where money is set aside. The new changes are going to require that if we want to utilize those in a general checking account, we’d have to convert them to general checking account, and we’ll probably do that,” says Smiljanich.
“There are fees associated with general checking accounts; generally, the city gets fees waived, U.S. Bank has been very good with us as far as doing that. If we have any fees, it will be minimal at this point or not at all.”
According to the Springfield newspaper, the city will lose about $60-thousand in interest income per year. Some of the affected accounts in Springfield reportedly have balances of more than $1-million on average.
“I think they probably use them as traditional checking accounts. We don’t, we park the money there and we move money out of one of them once in a while into our general operating account for expenses for payroll or for paying bills and so on and so forth,” he says. “That’s done maybe once a month, so, our activity in those accounts is just absolutely minimal.”
Smiljanich says he’ll discuss whether Jacksonville should stay with Illinois Funds with the mayor and City Council.