On June 7, 1972, the BoCC approved a resolution “Establishing Policy Covering the Disposition of the Interest Earned on Those Deposits Required of Parties Utilizing the Lee County Water System.” This resolution, as well as clarifying resolutions 81-9-25 and 88-7-24, determined that customers with security deposits held by Lee County Utilities should receive credit for interest earned on their money while on deposit with the County. The resolution also approved the refund of all or a portion of interest earned on security deposits to customers’ accounts in the form of a credit. The Board voted on August 4, 2009 to align the interest rate with the average SBA rate for the first six months of each fiscal year. Board approval is required to modify the security deposit interest rate annually.
Customer security deposits are maintained on accounts until they have twenty-three (23) months of clean account credit history. The accounts accrue interest monthly, and the security deposit interest is refunded to all customers in the form of a credit on their bills each September. In the event an account closes, or the twenty-three month clean account credit threshold is achieved, customers will receive the deposit and any accrued interest up to that date.
Lee County is earning an average variable SBA rate of 2.5601% on security deposit monies invested. This rate represents the average Florida SBA’s prime monthly rate for the first six (6) months of Fiscal Year 18/19. The existing rate adopted by the BoCC (Agenda Item Report #C53, June 5, 2018) for customer security deposits is 1.5556%. That adopted interest rate became effective June 15, 2018, and is less than the current rate of earnings. If approved, the new rate of 2.5601% will be effective June 1, 2019. The current balance in the security deposit account is approximately $2,600,000.
Attachment:
Lee County Clerk of Courts Recommendation Memo, dated April 11, 2019