A brewing City Charter Crisis?
COLUMBIA, Mo 9/3/17 (Beat Byte) -- Columbia city government's $300 million Swiss bank account took center stage at the 2017-18 City Council budget retreat, when city manager Mike Matthes and his finance director, Michele Nix, tried to explain why City Hall has so much cash on deposit.
Matthes is seeking the fourth round of rate, fee, fine, and tax hikes since he took office in 2012.
The discussion begins at 1:13 in the video here:
Held at Swiss banking giant UBS, the city's account balance reached $306 million in June 2016. As of the most recent audited city financial report the following Sept., the balance had fallen to just under $300 million.
Council members wanted to understand why city government had banked so much cash over the years.
UBS -- Union Bank of Switzerland/Swiss Bank Corp. -- has held the monies, known as "pooled cash accounts," since 1994, city spokesperson Steve Sapp told the Heart Beat. UBS Investment Consulting manages another $118 million in police and firefighter pension investments, he added.
"There are no fees changed to the city for this account," Sapp explained. "UBS also provides reports to the city at no charge."
Day-to-day banking -- money for bill payments, paychecks, and so forth -- stays closer to home at US Bank, Sapp added.
"Inventory is considered a cash equivalent because you can sell it and turn it into cash,” he said.
But that was wrong, Nix countered, interrupting several times to correct her boss. Inventory and supplies are NOT cash equivalents, she insisted. Instead, cash equivalents are short-term investments -- CDs, money markets, savings accounts -- "that you can liquidate in three months or less."
To deflect concerns about City Hall holding a large Swiss bank account, Nix asserted that because UBS has offices in New Jersey, it wasn't *really* a Swiss bank. Formed in a merger between the Union Bank of Switzerland and the Swiss Bank Corporation in 1998, UBS is, in fact, the world's largest Swiss bank, with dual headquarters in Zurich and Basel, Switzerland.