A Vancouver Island community is looking for compensation after a banking issue may have cost it more than $100,000.
Midway through 2019 staff at the Town of Port McNeill discovered for the previous five years, the town’s primary operating account — used for day to day operations — at its bank was not accumulating interest on funds held on deposit.
This 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. But 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, this regular operational bank account was not.
A staff investigation determined that since 2015 there had been a total of $106,000 in unrealized interest. Council directed staff to meet with the CIBC 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 “negotiations with the bank have been ongoing.”
Mayor Gaby Wickstrom confirmed that she and council have been kept up to date on all matters.
“Our CAO has kept us apprised of our banking situation,” she said. “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.”
CIBC had not responded to a request for comment by the time of this posting.
– Bill McQuarrie article