Charleroi transferring cash to get better interest rate

The borough will move a portion of the first payment it received from the sale of sewer lines in 2023.

Leaders in Charleroi have agreed to transfer $500,000 from their 2023 deal with the Authority of the Borough of Charleroi to a new account to increase interest payments.

Since a deal was reached in July 2023 for the authority to pay $3.7 million to purchase the borough-owned sewer lines, money paid to the borough has sat in an account with cfsbank.

Under to the contract, the borough is set to be paid annually until 2028.

The first payment of $1 million was received Oct. 1, 2023. The remaining $2.7 million will be paid in annual installments of $550,000 through 2028.

This year will mark the second $550,000 payment the borough has received.

Since reaching the agreement, council has discussed on multiple occasions the best way to invest that money.

Currently, it is being managed by cfsbank in a regular account and has provided the borough with a good rate, earning about $4,000 in interest each month.

Last year, council heard from other private investment firms but never pulled the trigger to use them. When the matter came up again in January, officials agreed to hold off on researching other options because of how well it was doing.

It was brought up again last week as council discussed financial matters.

A motion was made to transfer $500,000 of the ABC money into the Pennsylvania Local Government Investment Trust for a better short-term return, while keeping $700,000 in its cur- rent bank.

Their general fund will also continue to be managed by cfsbank.

Councilman Paul Pivovarnik, who sits on the finance committee, recommended the move, which would provide council with a better short-term interest rate.

Cfsbank’s rate for that account was 3.97%. The $500,000 transferred to PLGIT will earn roughly 4.3% for 90 days.

Pivovarnik said he also looked into Community Bank, but its rate wasn’t as high.

“So the thought process is if we do 90 days, which is the highest earning, we can reconfigure it in November because our situation will change as of October (when another payment is received) and we can look into it again,” President Kristin Hopkins said.

Councilman Robert Whiten Jr. wanted to make sure the transfer would not affect the borough’s standing with cfsbank. The borough could lose out on certain incentives if too much money is removed and would have to pay a monthly fee.

Pivovarnik said that won’t be a problem because of the money being left with cfsbank.

“We’re going to leave all of our general fund there, plus $700,000 from the sale of the sewer lines, so that money will all stay there,” he said. “So they will be keeping our general fund in one account, the remaining $700,000 in another.”

“Right, so that gives us a lot of cushion,” Hopkins said.

Borough Manager Joe Manning said he spoke with the bank ahead of last week’s council meeting before a decision was made.

“I emphasized our dedication to keeping things within the community, and within Charleroi, and they were grateful for us using them, as well as the fire department and other entities around here,” Manning said. “I told him we didn’t want to harm that relationship. Everybody these days wants to do things online and cheaper, out of state and everything, but we just had a festival they contributed to.

“Good luck going online or somewhere bigger and asking them to contribute to something to make the community stronger. I don’t ever want to see the day where municipalities get away from prioritizing hometown resources.”

“Right, the bank was named after Charleroi,” Hopkins said. “And you know they are involved in the community.”

Council agreed unanimously to transfer $500,000 of ABC money into a PLGIT account and leave $700,000 from the authority deal and its general fund, which sits around $1 million, with cfsbank.

Pivovarnik said budget talks have already started, but as things stand, the borough is in good financial shape so far this year.