City of Asheville considers spending $100K to find new bank with no ties to fossil fuels
Yep. You read that right. This is NOT fake news.
In March of this year the City's Finance Committee considered a proposal to move the City's banking services from Wells Fargo because of that bank's investment in the Dakota Access Pipe Line. At the June 27th Finance Committee meeting, a presentation was made to further that process. Council members Julie Mayfield, Gwen Wisler and Cecil Bothwell are the council members who make up the Finance Committee. The presentation was made by the City's financial advisor, Doug Carter of DEC Associates, a Charlotte based company that provides consulting to many other NC municipalities. Mr. Carter, a former city finance director himself (with Charlotte) came prepared.
What transpired reveals the impractical, sometimes bizarre, demands of some of our council members. In short...
The Finance Committee is considering spending over $100,000 and devoting a minimum of 6 months of staff time and resources to changing the City's banking services. Why? Not because the current fees are too high or the current banking services are inadequate. No, they want a bank that doesn't invest in fossil fuels. The narrow mindedness of this Council is apparent. The consultant, Mr. Carter, and even Barbara Whitehorn, the city's chief financial officer, tried to delicately dance around the issue while Julie Mayfield and Cecil Bothwell clearly had a one track mind. Gwen Wisler looked like a ping-pong ball between the two of them, trying to stay in the middle of an unreasonable argument.
The issues that came up, but were totally ignored were:
1) Even if a bank today doesn't invest in fossil fuels, how can it promise to NEVER invest in them? How would they know and what what would they do? As the consultant stated, banks are run by boards and those members do what is best for their shareholders which means investing in profitable industries. Also, boards change so even if the policy today was to not invest in fossil fuels, this could change down the road.
2) Cecil was bothered by Wells Fargo's recent fraudulent activity in setting up false accounts. Wells Fargo was fined $185 million and continues to operate today. But again, just because a bank today has a stellar record, what would the City do if that were to change?
3) What if the bank the City chooses is bought by another bank that does invest in fossil fuels or has an unsavory reputation? This happens frequently especially with smaller regional banks.
4) The City Council itself is bound to change. (Too bad we don't have council term limits.) What about future Councils and their city policies and priorities?
5) Ms. Mayfield mentioned that several community members are supportive of this change but really, how many? IS the City about to embark on a costly, time consuming change for a few people? The Council needs to be reminded that they represent ALL of Asheville, even those they do not agree with.
6) The Consultant informed the Committee that there is no national bank that could meet their fossil fuel investment restriction requirements. The Council would have to find a local or regional bank to fulfill that requirement but does one exist?
7) Will the City's banking services suffer? The Consultant reminded the Council that the City has a complex system of banking services it uses - it's not just about deposits. The City utilizes coin counting (parking meters); debt services and payment collection services (such as water bills, licenses and permits, etc.). Any change would be potentially disruptive and any mistakes would cost the City.
Part of the process of changing banks would require a RFP (Request for Proposal) to invite other qualified banks to submit applications. Traditionally, this is done based on fees and ability to provide all banking services needed. In this case, the Finance Committee would like to make fossil fuel investments the priority for selection.
When Ms. Mayfield asked what impact this kind of restriction would have on banks responding to an RFP, the consultant... in the kindest way stated "it would damper the process" and added he had not ever seen an RFP done this way. Instead of comparing bank services and costs and fees, our City Council is placing more importance on the bank's investment policy which of course, is subject to change.
Despite these warnings, Ms. Mayfield was persistent in her demands for asking staff to research and review banks that fit the criteria based on fossil fuel investments. Banking services and fees are a secondary criterion. It appears Ms. Mayfield has pushed her own organization's agenda to the top of all other taxpayer needs. Ms. Mayfield is the co-director of Mountain True whose mission is "...champions resilient forests, clean waters and healthy communities in Western North Carolina."
These actions could be viewed as a potential conflict of interest for Ms. Mayfield. Is she pushing the use of taxpayer funds for her own organization's political agenda? At the least, it's a frivolous waste of taxpayer dollars when you consider all the other budget concerns.