Loudon County changing banking system
Hugh G. Willett knoxnews.com
LOUDON — Loudon County is making changes to its banking strategy to increase return on investment, reduce fees and streamline the process by which bills are being paid, Trustee Chip Miller told county commissioners Monday.
The commission unanimously approved an amendment to create new checking accounts for disbursing county funds to vendors.
The new accounts with First National Bank will enable the county to move from the old warrant system to what is known as “true trustee checking,” which allows the county to eliminate the need for multiple transfers of funds between accounts, Miller said.
“It’s more streamlined and reduces the possibility of errors. We hope to have the system working by Dec. 15,” he said.
Miller said he has been upgrading many outdated systems and procedures in the trustee’s office, including moving from the DOS operating system to Windows earlier this year. He said he is working closely with the accounting office to implement the changes.
Miller also announced a new investment relationship with FSG Bank. In recent years municipalities such as Loudon County have had trouble finding banks that want to do business, he said.
“They require that we keep $18 million on deposit not making any interest, and they’re killing us with the fees,” Miller said.
The new relationship with FSG Bank will increase rate of return by as much as five times and eliminate a lot of fees, he said.
Many larger banks are not necessarily looking for relationships with small communities, said Peter Lindeman, senior vice president and director of treasury management at FSG Bank.
“The challenge is to get both security and a higher rate of return,” he said.
Because FSG Bank is focused on community banking and interested in attracting customers such as Loudon County, it is prepared to offer better terms than many larger banks, Lindeman said.