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I am writing this letter, not only as a lifetime North Polk School District resident and parent, but also as a concerned taxpayer. My position at a bank within the district has brought to my attention an issue I feel I need to address. The North Polk School District implemented a Request for Proposal from several financial institutions to consider changing their current financial institution.
It is disappointing to learn that the North Polk School Board has recently voted to remove its banking from the North Polk School District. Because our school board has a fiduciary responsibility to the school district and its taxpayers, I find it difficult to understand the reasoning behind the board's decision. The funds that are generated from within the district could be reinvested within our district several times over. This reinvestment only boosts the economy and tax base for future bonding capacity for North Polk schools.
The bank chosen by our board has offered the school a rate no lower than 2.5 percent for the first 18 months and no lower than 2.00 percent thereafter. A proposal within our district offered a deposit rate of 3.10 percent APR on all accounts.
With the tasks we have ahead of us to maintain the quality of North Polk Schools, I would have expected that if there were any questions as to the soundness of a financial institution, or the rates they would be willing and able to supply the district, that those specific questions would be asked, answers obtained and contemplation would ensue on those facts. Nowhere in the RFP (Request for Proposal) was it asked what rates would be paid, only how those rates would be determined. As stated in the RFP, the District reserves the right to negotiate regarding this matter. It is hard for me to believe that another financial institution in another community and district could be favored without further discussion. If the RFP had requested rate details, those rates would have been quoted. If the board would like to have a floor set on these rates, then it should have been asked in the RFP. Bottom line, if there were additional factors that were not asked in the RFP, but utilized in determining which lending institution would be selected, all of the lending institutions should have been asked and the findings discussed.
In the RFP, it discusses the criteria of the evaluations. This is important, as it not only allows the board to look at least cost, but whether or not one financial institution may be in a better financial standing than another. This is a prudent and important part of this type of evaluation for the school district and the tax dollars it controls. If anyone wants to evaluate a financial institution, all they must do is look at the FDIC Web site. This site has been placed on the Web for the general public to research and evaluate a potential financial institution, and it contains quarterly financial reports on all FDIC insured institutions. I cannot assume the board did such due-diligence prior to the decision, once again upholding their fiduciary responsibility to the taxpayers. Looking at the FDIC Web site, the bank chosen has fifteen times more non-performing loans and 60 times as many write-offs this year than an institution within the district that submitted an RFP. Regarding equity position, that information was given as part of the RFP and should have been compared with other RFPs.
To summarize, our board has chosen to place the district's funds in a financial institution that is not in the North Polk School District, not in the same county, in a poorer financial condition and is paying less on deposits than we could have received from a bank within our own district. If any financial institution within our district was chosen, no matter where the location, I would not be writing this letter. If there was an overwhelming issue of higher depository rates, stronger financial condition of the bank, lower fees or some other compelling reason to support the decision the board made, then please let us know. However, I have to ask, has the school district's board upheld its fiduciary responsibility to the district and the taxpayers within the district? If they have, we, as taxpayers, need to know what factors were involved in making their decision.
Jon Johnson
Resident of
North Polk School Distric
