Priya PatelTLDR:
- The city of Painesville in Ohio expects to save $571,000 a year by switching its public depository from Chase Bank to Dollar Bank.
- The savings will come from higher interest earnings and lower fees offered by Dollar Bank.
Painesville’s finance director, Bill Parkinson, announced that the city will be changing its public depository to Dollar Bank starting from March 1. Parkinson estimates that the switch will result in a net monthly saving of $47,000 for the city, which adds up to $571,000 a year. Parkinson cited high fees, low interest earnings, and unsatisfactory customer service as reasons for the switch. He reached out to five different banks and determined that Dollar Bank offered the most favorable terms.
The transition process will take a few months and Parkinson described it as a “very complicated operation” that will require careful consideration and testing. While the process will use city employee time, it is not expected to incur significant costs, and the savings will be prorated as Painesville transfers its savings. The city council approved the switch in a 6-0 vote on February 5.
Parkinson’s decision to switch banks was driven by the potential for substantial cost savings. He expects the higher interest earnings and lower fees offered by Dollar Bank to save the city a substantial amount of money over the five-year depository agreement. The savings will help free up funds for other city projects and initiatives.
