McMinnville staff recommends keeping positive-pay at First National, proposes adding Coffee County Bank for utility payments

McMinnville finance staff reported to the finance committee that First National Bank remains the only local bank offering positive-pay — a fraud-prevention service — and recommended continuing the city’s primary banking relationship with First National while exploring a new utility payment account at Coffee County Bank.

The recommendation was presented during an agenda item reviewing the city’s periodic four-year banking verification. “Positive pay is something very valuable, and it’s something we need to keep on those city checking accounts we’re writing all of those payments out of,” a finance staff member told the committee, describing how the bank matches uploaded check files to items presented for payment and stops items that do not match. The staff member said the city’s check-fraud incident last year would have been prevented had positive-pay been in place.

Why it matters: Positive-pay gives the city an extra layer of protection against check fraud by flagging mismatches in check number, payee, date or amount. Staff also framed the Coffee County Bank suggestion as a customer-service measure: opening a utility payment account there would let residents pay water bills at that bank branch, similar to existing arrangements with Homeland, Citizens, Security Federal and Tri-County banks.

Staff noted there is no additional fee for positive-pay; banks the city uses have waived stop-check and other service fees for municipal accounts. The staff member said utility-account banking arrangements typically create a local deposit account that the city transfers into its operating account for daily processing.

Committee members asked procedural questions about whether the finance committee can proceed without a full meeting. Because Dietra and Sally were absent, the committee lacked a quorum and no formal committee vote was taken on adding Coffee County Bank. “We don’t have a quorum. So you couldn’t have a vote other than directory,” one member said. A board member suggested the item be brought back at a later date with signature cards prepared if the board desires.

What remains unresolved: Staff said they will gather any additional information requested by committee members and return with details for final approval. No formal motion or formal approval to add Coffee County Bank was recorded at the meeting.