SECOND TIME AROUND, COUNTY EARNS HIGHER DEPOSITORY BID

JACKSON - A decision by the Cape Girardeau County Commission to seek new bids for a depository of county funds has apparently paid off.

Although the interest rate for large certificates of deposit won't be anywhere near the 9.53 percent Cape County has earned the last two years and 9.14 percent the two years before that, the re-bidding process did generate a higher rate than one received last month.

The county commission is awarding its depository for the next two years to Capital Bank, which has had the county's account for several years.

Capital submitted a bid of 6.51 percent when it re-bid for large C.D.'s with a minimum deposit of $100,000. Earlier, Capital had offered a top rate of 6.15 percent.

County Clerk Rodney Miller, who served with Treasurer Bill Reynolds and Auditor H. Weldon Macke on the depository committee, and Presiding Commissioner Gene Huckstep, said the re-bidding process paid off for the county.

"We really don't know how much it will amount to, but it will be a pretty good increase over the original bid," said Huckstep. "I can say the re-bidding will amount to an additional $50,000 to $75,000 a year in interest earnings."

Miller added, "we were definitely hoping to get a higher rate with the new bid and this was higher than what we had before, and we accomplished that."

The clerk explained that although the county's interest earnings will drop significantly with this new bid, when invested funds run about $6 million a year, any increase over the initial bid will definitely make a difference.

Boatmen's Bank was the only other bidder and offered a top rate of 6.21 percent on large C.D.'s. That was up from the 6.01 percent the bank had bid previously.

One change in the bid specifications the second time was that financial institutions were required to give the county the right to shop rates and move funds to other institutions. In the first set of specifications, institutions were asked only if they would allow the county to shop rates. Boatmen's indicated it would; Capital said it would not.

Huckstep said adding the provision to shop rates was important since interest rates are probably on the verge of bottoming out and should start increasing over the next few months.

"One definite consideration in the bid process," noted Miller, "was being able to invest elsewhere in the future if interest rates change."

Capital also increased its second bid on the county checking account, which must have a minimum balance of $10,000. The interest rate was increased from 5.25 percent to 5.31.

Boatmen's submitted the same bid figure for the funds at 5.14 percent.