Midway through last year (2019), staff at the Town of Port McNeill discovered and reported to council that for the previous five years, the town’s primary chequing/operating account – used for day to day operations – at CIBC was not accumulating interest on funds held on deposit with the bank.
This CIBC account can, at times, have several million dollars on deposit and had the account originally been set up to provide for interest payments, the yield to Port McNeill would have been significant.
While other funds not needed for day-to-day use are held in interest bearing accounts and/or invested through the province’s Municipal Finance Authority (MFA), this regular operational bank account was not.
After further research by the town, and in early October, council requested staff prepare a summary report detailing CIBC account balances (that would qualify for bank interest payments) for a period covering the last five years. The intent of the report was to determine the amount that would have been paid if the town had been provided with an interest bearing account.
The investigation determined that since 2015 there had been a total of $106,000 in unrealized interest and staff were directed to meet with the bank to, “negotiate back payment on interest missed on the town’s bank account.”
On Nov. 13, the town’s Chief Administrative Officer and Accountant met with CIBC’s Manager of Commercial Banking and began the process of negotiating payment of the amount felt owed to Port McNeill. Following that meeting, and on Nov. 14, a formal letter was issued to the bank, “requesting [payment of] $106,000 in lost interest since 2015.”
Since that time, Pete Nelson-Smith, CAO for Port McNeill, said that “Negotiations with the bank have been ongoing.”
Mayor Gaby Wickstrom confirmed that she and council have been kept up to date on all matters, stating: “Our CAO has kept us apprised of our banking situation.” She went on to explain, “While it is frustrating to have learned this information, we are confident moving forward, the Town’s money will be managed in a responsible manner.”
This reporter reached out to the CIBC for comment but did not hear back from the bank prior to going to press.
– Bill McQuarrie article