Kewanee Park Board keeps investment firm, despite worries they've overpaid
The Kewanee Park District will stay with First Midstate even as commissoners question years of paying high fees to the investment firm.
Kewanee Parks Director Andrew Dwyer, charged with finding the best deal for the district, said two companies had been vying for the park district’s business based on last year’s bond amount of $517,000.
“I asked for the issuance and closing costs that would be associated with that,” said Dwyer. “Last year it was approximately $25,000. (This year) both of the companies have come in at a very good rate.”
Dwyer said the two companies -- Stifel, the newcomer, which does bonding for the Kewanee School District, and First Midstate, a firm that has worked with the park district for almost three decades -- both came in at a “very good rate.” Stifel proposed a cost of $9,500, while First Midstate quoted $9,000.
“All in all, we’re going to save $15,000 on issuance and closing fees. The only unknown is our interest rates on the bonds,” said Dwyer, adding that he didn’t have a recommendation for the board on which company it should choose.
“We’ve been paying a lot more with Midstate than we could have been with someone else. Correct?” Commissioner Andrew Verstreate asked.
Dwyer said the park district had been paying more with Midstate but that the company had lowered its fees significantly. Over the years, the park district has paid the firm somewhere in the mid-20,000 range and even as high as mid-thirties some years.
“Our issuance was at 7% last year,” Dwyer said, adding that the new rate would be at around 3%. “The discussion is, moving forward, on who to do business with in the future to ensure we get the very best rate possible for our taxpayers.”
Commissioner Jim Heberer said he preferred the company with the cheapest rate, Midwest, as long as the district would get the same service as in previous years.
But Board President Steve Brackett questioned why it took shopping around for Midstate to lower the costs.
“It does bother me a little bit that they could have done this for all these past years,” said Brackett.
Commissioner Jim Heberer responded that the board also didn’t know what Stifel would have been charging them, but noted that companies will often jack up rates until they are called out.
“I guess shame on us and let’s address it now,” said Commissioner Paula Kapacinskas.
In the end, the board voted unanimously to go with First Midstate, although Dwyer said it was his intention to review the matter and perhaps shop around for the best rates in a year.
The public bond hearing is set for Oct. 20.
This article originally appeared on Star Courier: Has Kewanee's Park Board paid too much in investment fees? Some members think so
