Lehighton hears two banking proposals

The two entities in line to provide banking services to Lehighton Area School District presented before its finance committee Monday night.

Mauch Chunk Trust Company and the Pennsylvania Local Government Investment Trust were the only respondents to an RFP issued by the board following controversy over a motion in November 2018.

Todd Smolinsky, MCT business banker, said the local institution would look forward to continuing the working relationship it has had with the Lehighton district since 2011. He touted the bank’s “no fee” policy, saying it “hasn’t charged the district a cent” for any of its services.

“We want to give back to the community, and one of the ways we do that is to offer municipalities and school districts the highest quality products a bank can offer at no cost to them,” Smolinsky said. “Any time we have made improvements over the past seven years, we have let the district know right away what was available. We’d like to think we have provided the district with top notch service for the past seven years.”

Paul Robinson, part of the Pennsylvania trust marketing team, said Monday the best option for the district may be a partnered approach between the trust and a local bank such as Mauch Chunk.

“We don’t have a brick and mortar building down the street like a bank will,” Robinson said. “However, we do believe the trust can be and would be beneficial. It is important a district of your size recognize the importance of diversification.”

Robinson said the trust only works with local governmental entities and can use programs geared for analysis of cash flows to maximize interest earnings while providing proper liquidity.

“You put together a terrific request for proposals that really gave us an idea of what the district wants to accomplish,” Robinson said.

Lehighton sent out a request for banking services as a follow up to a motion in November 2018, when the board unanimously approved opening accounts with TD Bank. That came after former district business administrator Brian Feick told finance committee members the district would generate between $120,000 and $150,000 per year more in interest than what it was bringing in by using Mauch Chunk Trust Company.

The bank accounts, however, were never opened, and current business administrator Patricia Denicola said she could not find any written proposal from TD Bank indicating how the promised savings would be reached.

TD Bank did not respond to the most recent RFP, noting, “the numbers do not allow them to be as aggressive as they were last year.”

Last month, the board voted to rescind the motion to open the TD Bank accounts.