Clinton hopes to recoup $80,000 it lost to bank closure

CLINTON — City officials in Clinton are hoping to recoup about $80,000 that may be lost following the March 7 closure of Centennial Bank.

The FDIC closed the Ogden-based bank, which operated a branch in Clinton, in northern Davis County, closing accounts and paying account holders up to $250,000 for insured deposits.

The city cemetery's Perpetual Care Fund was held in a Centennial Bank certificate of deposit with a healthy 3.5 percent interest rate. The balance: $330,000.

Clinton city manager Dennis Cluff said most of the city's money is held by the Utah Public Treasurers Investment Fund, also known as the state pool.

But not the cemetery's care fund, which gets its revenue when people buy cemetery plots.

"When the CD was completed, we were going to transfer the money out and change it," Cluff said.

But when banks began failing, city officials made a plan in January to begin looking at other options, though none was likely to be as lucrative as the Centennial Bank CD, Cluff said.

On Tuesday, the Clinton City Council, through an ordinance revision, authorized Cluff to make the change.

"Unfortunately, they closed it down," Cluff said. "We were a week too late."

The cemetery money doesn't come from the city's general fund, sales taxes or property taxes, and the loss doesn't exactly hurt the city's operations. The city still has the principal it invested in the CD and some of the interest it earned.

But that's little consolation to Cluff, who takes pride in saving the city money wherever possible. The city rarely borrows money through bonding, preferring to save up for projects instead.

"For me, it's kind of embarrassing," Cluff said. "It's very, very frustrating."

There's some hope the FDIC will recover some of the lost $80,000 through liquidation of the bank's assets, but the city isn't waiting to find out.

Cluff already has deposited the recovered $250,000 into the state pool, which is managed by state treasurer Richard Ellis.

Ellis acknowledged Thursday that the 0.55 percent the state pool offers public entities is a paltry amount, especially compared with the 17.9 percent the pool offered shortly after it opened in 1981.

But for a conservative investment vehicle for municipalities, the pool is a good deal, Ellis said.

About 600 entities, including cities, counties, school districts and sewer districts, have accounts with the state pool, which provides them with liquidity, or easy access to their funds.

But what the state needs, Cluff said, are statewide protections for public money held in banks. He said he and Clinton Mayor Mitch Adams plan to meet with legislators to discuss future protections.

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