Marion City Council: Why did treasurer move $504,000 without authorization?

Marion City Council wants to know the reasons why Treasurer Tommy Reese transferred $504,941.56 from an existing bank account into a newly-created account at a different bank without first receiving authorization from the city's Treasury Investment Board.

Any questions council members have about the situation remained unanswered because Reese did not attend the regular city council meeting on Monday evening.

This marked the second consecutive week that city council has had an issue with Reese. During the finance committee meeting held March 20, Reese declined to answer questions asked of him by Councilman Jeff Gerritsen, 1st Ward.

Late last summer, city council members sparred with Reese about system software training and bank reconciliation issues. There were also concerns about a lack of communication between Reese and Auditor Miranda Meginness.

Auditor Miranda Meginness told city council that on Oct. 21, 2022, Reese transferred $504,941.56 from an account the city has at FC Bank to a newly-opened money market account at The Union Bank Co. She said the funds "sat there for four days" until Oct. 25, 2022, when $260,000 was then transferred to a "separate savings account" at The Union Bank Co. where it remains.

Meginness said Reese mentioned the transfer to her "in passing" during a "brief discussion" last October. She said he noted at the time that "a better rate" was being offered at The Union Bank Co. and that he'd experienced issues in communicating with FC Bank representatives.

Meginness said FC Bank was offering an interest rate of 0.15% at the time the funds were moved from there. The Union Bank Co. was offering a rate of 1.39% for its money market account. However, the rate for the savings account that the $260,000 was moved to was 0.35%. She said she was concerned about that because the city "lost at least 1% on $260,000 for the last five months."

"I did not know about the transfer (in October) until after it was completed and I did not know about the $260,000 transfer until last week when I started digging into it," Meginness said.

Per city code, the treasurer is required to get authorization from the city's Treasury Investment Board on all financial investment conducted on behalf of the city. According to Marion City Code Title 5, Section 123.01, the city auditor is tasked with maintaining what's known as the Treasury Investment Account, "in which there shall be entered all transactions related to the investment of treasury funds," per Ohio Revised Code Sections 731.56 and 731.57.

The city's Treasury Investment Board - comprised of the mayor, auditor, law director, and chairman of the finance committee - supervises the investment of funds from the Treasury Investment Account. The finance committee chairman - in this case, Councilman Jason Schaber, 3rd Ward - is an ex-officio members of the board with no voting privileges.

Councilman Ayers Ratliff, 2nd Ward, challenged city council to take decisive action in this situation, citing the issues the city is facing in the wake of missteps by former Auditor Robert Landon, who resigned in October 2021 amid controversy.

"My question to this city council is, what are we going to do?" Councilman Ayers Ratliff, 2nd Ward, asked of his fellow council members. "I don't know about you guys, but sitting through where we are now, seeing where we've come from and the reasons why, we cannot let it happen again. And we sat up here for two years with the previous auditor and talked about it and talked about it and the majority of council was never willing to take action to do anything.

"A half a million dollars is a lot of money. When you are making bad choices to start with by losing us interest rates, and there's no oversight when you're moving figures like a half a million dollars, nowhere up here can we have confidence that our money is where it should be to start with," he added. "We should be able to have confidence in that and the people of Marion should be able to have confidence in that, that the treasurer knows and is following the law, and that we are holding them to that."

Law Director Mark Russell advised members of the Treasury Investment Board to "select a date for us to meet, request the treasurer to come forward, and to advise us of his designation or understanding as to the type of funds on deposit at every one of the institutions the city has monies in."

"Once we have the opportunity to hear from the treasurer, we can provide a report back (to city council) and determine what course is necessary going forward," Russell added.

Councilman Aaron Rollins, At-large, asked Russell if city council had ever passed a resolution of "non confidence" regarding a fellow elected official. Russell said city council does have the authority to pass a resolution censuring an elected official; however, the ramifications of such an action are not clear.

Marion City Council committees will meet beginning at 6:30 p.m. on Monday, April 3 at City Hall.

The next regular city council meeting is scheduled for Monday, April 10. It will begin at 6:30 p.m. at City Hall.

For information about Marion City Council or to view meeting agendas and minutes, go to the City of Marion website www.marionohio.us.

Email: ecarter@gannett.com | Twitter: @AndrewACCarter

This article originally appeared on Marion Star: Marion Council: Why did treasurer move $504K without authorization?