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CANNELTON - Cannelton Clerk-Treasurer Arvina Bozarth went to Fifth Third Bank to secure a $19,000 loan to buy a dump truck, but was told she couldn't get one. So she checked with First State and Old National banks, and both said they could provide the money if the city moved its accounts to their vaults.
After she told Fifth Third's Kelly Malone the other banks were willing to front the city the money, she said, he told her the loan would be possible after all.
Common-council members voted to accept the offer but to shop around to see which bank might be more responsive to the city's needs.
Councilman Adam Goffinet said the city has approximately $400,000 banked at Fifth Third, and said for the bank to deny the relatively small loan until "after we went elsewhere" was "kind of crappy."
Councilwoman Lynn Fulkerson noted the city leaders have been working for three months toward buying the truck, which will serve several departments and purposes, and was reluctant to drag it out any further.
The city has banked with Fifth Third for more than 30 years, Councilman John Young III noted in agreeing with Goffinet.
"We ought to let them come in, sit here and compete for our business," he said.
As The News reported April 23, Street Commissioner Charlie Davis had been asked to research costs for the purchase of a dump truck to serve street, trash and cemetery functions. After available funds from each of the three budgets are contributed, he said, $19,137 would have to be financed over three or five years at 5-percent interest. The council voted to spread payments over five years, but noted they might be able to pay it off earlier.
Davis told the council Monday he didn't check with other banks because of the city's relationship with Fifth Third, which had offered the 5-percent rate. Old National Bank offered 5.5 percent and First State's rate would be between 4.25 and 4.75 percent.
City attorney Chris Goffinet said the city is required to take the lowest responsive bid, but wasn't sure whether the requirement to shift accounts to a different bank qualified as responsive.
Mayor Smokey Graves speculated that Malone may have felt the loan would be approved, but "was taken by surprise from the corporate level."
Bozarth said that in past dealings, "Fifth Third has been very helpful and went above and beyond when I needed something." She expressed reluctance at "losing them over such a little issue."
"I've been watching the support they've provided to the clerk-treasurer," Graves said, "but if it's a dump truck today, will it be a fire truck tomorrow, or another piece of emergency equipment?"
He said he agreed with finalizing the current purchase, however.
"All of the local banks have to go to the corporate level," Fulkerson said. "There are no local banks."
The council approved two motions, one to reaffirm their original vote to secure the loan through Fifth Third, and another to advertise for banking services.
A News call to Malone was returned by Lloyd Winnecke, a vice president and marketing director in Fifth Third's Evansville offices.
"We appreciate and value Cannelton's business and appreciate that they've agreed to do the loan with us," he said Tuesday. He declined to discuss the city's loan specifically, just as he would any customer's information, but said, "banks in this (economic) environment are taking a closer look at all of the loans they make."
In contrast, he noted the bank's fiscal strength is sound, having made loans totaling $5.5 billion in February, the latest month for which figures are available, he said, noting that was a $400 million increase over January lending.