City Commission Rejects Banking Proposals

The Fernandina Beach City Commission decided on Tuesday not to move forward with any proposals for managed banking services. The decision comes as they struggled to select a financial institution to manage about $45 million in city funds, with the existing contract set to expire in May.

After a lengthy discussion, the commission unanimously voted to reject the latest request for proposals (RFP). They expressed concerns over the comparison of interest rates and how the evaluation criteria were weighted, instructing city staff to revise and resend the RFP.

This process has been a bit convoluted. Here’s a summary of key recent developments:

• In 2024, the commission, by a 3-2 vote, awarded First Bank a one-year contract instead of a proposed five-year term.
• By February 2025, they chose to extend First Federal’s contract for three years, although this decision was revisited at the following meeting.
• In March 2025, discussions about whether to pursue three-year or one-year agreements led to a vote favoring a one-year deadline to submit another RFP for consideration of other banks in 2026.

The current banking agreement with First Federal Bank is set to expire on May 14, 2026. While the city typically holds an average balance of around $45 million, officials noted that only about $8 million is necessary each month for daily operations, leaving the rest as surplus.

During the meeting, representatives from First Federal and other banks cautioned that restarting the bidding process could put those already involved at a disadvantage and further tighten the timeline for the city.

“Honestly, we won the RFP,” stated First Federal Market President Jim Wiebe. He spoke after the commission’s decision, voicing concerns that revisiting the process would not be beneficial for any party involved. “Each delay brings us closer to May,” he added.

An internal committee had reviewed three proposals from First Federal Bank, First Port City Bank, and Regions Bank, ranking First Federal as the top candidate based on the city’s scoring system. This recommendation was then forwarded for approval.

However, several commissioners pointed out that the RFP lacked clarity in comparing interest income accurately. “I’ve gone through all the documents, and I didn’t even know what the interest rate was. That’s a bit troubling,” remarked Commissioner Genece Minshew.

Comptroller Susan Carless informed commissioners that First Federal’s formula offers an interest rate around 2.73%, while First Port City Bank’s approach yields approximately 2.75%, which she deemed a minor difference.

“So, there’s virtually no difference in these interest rates?” Minshew inquired.

“They’re very close,” Carless confirmed.

Beyond interest rates, some members were concerned that the evaluation system seemed to favor the incumbent bank. Deputy Mayor Daron Ayskew pointed out that decisions were being made without clear financial comparisons. “I’m not going to predict what will happen in the next five years. I want to see it visually,” he expressed.

Ayskew also raised questions about the focus on the transformation plan, suggesting it offered an advantage to existing banks. Commissioner Joyce Tooten defended the approach taken, emphasizing that safety and stability were paramount, despite slight differences in interest income.

“This isn’t our money,” Tooten stated. “We are not private investors. The emphasis should be on financial strength.” She cautioned against expecting banks to use a rigid interest rate formula over five years, as it could be unrealistic.

Ultimately, the motion to award the contract to First Federal received insufficient support. A later attempt to adjudicate First Port City Bank also didn’t succeed.

With no proposal earning enough backing, Commissioner Minshew suggested an outright rejection of the RFP. “At the end of the day, we aren’t satisfied with the RFP,” she concluded. “We need to rethink it.”

Mayor James Antun echoed this sentiment, noting the procedural stalemate. “Without a majority, we’re somewhat boxed in,” he remarked.

The committee then unanimously opted to reject all proposals and instructed staff to create a revised RFP. City Manager Sarah Campbell mentioned that the new document would include standardized interest rate comparisons, tweaked evaluation criteria, and clearer requirements for potential banks.

In the meantime, First Bank will continue managing city funds under the existing agreement until it concludes in mid-May. This decision adds pressure on the city to find a banking partner before the current contract expires.