Municipal Banking in Minnesota

We do, and it is a standing operational job here rather than something that happens when someone remembers. Coverage is monitored as your balance moves, the pledge is adjusted after a tax settlement or a bond sale rather than at the next review date, and the documentation your auditor asks for goes to you without you chasing it. Under section 118A.03 the collateral is assigned to your entity in writing, held at a custodian your entity approves, and cannot be returned to us without your authorization. Our job is to make sure the coverage is right on the days you are not thinking about it.

Yes. We can place the balance through an insured cash sweep program that spreads it across a network of banks in insured-size amounts, so the entire balance carries federal deposit insurance rather than depending on a pledge. You keep one account, one statement and one banker here. It is not our default structure, so raise it in the first conversation if your board wants it.

Ask for a Public Funds Money Market Account Rate Review. Send a recent statement or just your average balance and we send back a one page document written for your board: what the balance would earn here, the annual difference in dollars rather than basis points, the collateral schedule your entity would receive, and the depository designation language your clerk would need. It costs nothing and obligates you to nothing. Rates are subject to change and are not a commitment until set out for your entity in writing.

Put both on the same basis, because they are quoted differently. A fund's published seven-day yield is a simple annualization of a seven-day window, multiplied by 365 over 7, with no compounding. A bank annual percentage yield already includes compounding. Comparing one to the other at face value overstates or understates the gap depending on which way you do it. Convert both to an effective annual yield, and compare figures from the same date, because a yield from two months ago is not comparable to a rate quoted today.

Read the fund's information statement. Check the expense ratio, since fund fees come out of the yield you are quoted. Check whether the quoted yield reflects a voluntary fee waiver, because a waiver can be withdrawn and the yield falls with nothing happening in the market. Check the cut-off times, which govern how late you can move money and whether it settles today or tomorrow. Check whether your class carries a minimum investment period or an early withdrawal penalty, because the higher-yielding class often does. And check whether the fund can suspend withdrawals or postpone payment. Pooled fund documents commonly reserve that right for stressed or emergency conditions. None of it is hidden. It is in the document rather than on the rate page.

Not here. A bank deposit is payable on demand, and Minnesota law is explicit that if a depository closes, all deposits become immediately due and payable. There is no mechanism by which we can hold your money back. That is not true everywhere. Pooled investment fund documents commonly reserve the right to suspend withdrawals or postpone the date of payment under stressed or emergency conditions, and some reserve the right to limit the size of an account or the frequency of transactions. Those provisions exist for sound reasons and they are rarely used. They are also the kind of thing worth knowing before the week you need the money rather than during it.

Deposit rates for public entities are quoted to a specific entity rather than published, because balance, structure and how the funds behave through the year all bear on them. That does not mean the rate is arbitrary. We follow the same short-term rate markets the pooled funds do, we watch where the pool options are, and we set the account to be competitive with them. The rate moves when the market moves. Ask for a Rate Review and we will show you where you would stand today, in writing. Rates are subject to change and are not a commitment until set out for your entity in writing.

You call your banker and we move it. There is no daily cut-off deciding whether your own bank can help you today, and no minimum investment period or early withdrawal penalty on the Public Funds Money Market Account. That is the difference public officials notice most and expect least. It matters least when a transfer is planned and most when a payroll file is wrong, a closing moves up, or a contractor has to be paid before a holiday weekend.

All of them. Section 118A.01 defines a government entity as a county, city, town, school district, hospital district, public authority, public corporation, public commission, special district or any other political subdivision, and for the depository and collateral sections it also includes an American Indian tribal government entity within a federally recognized reservation. Our own municipal holdings span cities, towns and townships, a county, a school district, a watershed district, a joint sewage treatment commission, a lake improvement district and a housing and redevelopment authority.

Half of the issues on our books are under one million dollars and the smallest is two hundred thousand. We buy small issues by private placement without requiring a rating, because we do the credit work ourselves. If your project is a well, a lift station, a fire truck or three blocks of street, you are not an exception here. You are the median.

A resolution designating the institution as a depository, adopted by the governing body and recorded in the minutes. Most Minnesota entities handle designations annually, often at the organizational meeting. We supply what your clerk needs and work to your meeting calendar. Designating a depository does not obligate the entity to move any funds. It is permission to have the option.

No, and most entities do not. A common starting point is one account or one fund held through a full cycle, so your staff can watch how statements, collateral reporting and service actually work before anything else moves. Entities that expand do it because the first piece went well, which is the only good reason to.

Yes. We purchase general obligation bonds, revenue obligations, notes and lease purchase obligations directly from Minnesota issuers, including through private placement. For smaller issues that is often faster and less costly than a public offering, because it avoids the ratings process, the official statement and the syndicate. You continue to work with your municipal advisor and bond counsel. We hold what we buy rather than reselling it.

Often, yes. Bridge and interim financing is a regular part of our municipal lending, including for USDA Rural Development approved projects where permanent funding is committed but not yet funded. Tax and aid anticipation borrowing is available to smooth cash flow between settlements. All financing is subject to credit approval and to the borrowing authority your entity holds under Minnesota law.