$344,000 in Interest Lost on Cash?

In November 2023, the Park District had $9.3 million in cash or short-term investments. They had almost $5.8 million cash in money market funds at two different banks: Evergreen Bank and Hinsdale Bank. However, the interest rate paid on cash deposits at Evergreen Bank was 0.6% (very low) and at Hinsdale Bank 3.64% (closer to market rate). Why?

Now, that cash had been sitting in the money markets at the two banks, at very different interest rates, for some time. When you add up the differential, or potential lost interest payments over 6 years, it is about $344,000. All due to the interest rate differential between Evergreen Bank vs. Hinsdale Bank.

On average in 2023:

• Evergreen Bank interest rate on cash deposits: 2.57%

• Hinsdale Bank interest rate on cash deposits: 5.23%

What could cause such a big spread?

• Evergreen Bank donated to the Oak Brook Park District for naming rights of astro turf soccer field.

  • 'Donation’ of $347,950 + $107,000 future donations by 2028.

  • Evergreen pays property tax to Oak Brook Park District of $6,700 per year.

On the contrary,

• Hinsdale Bank did not donate any naming rights.

  • Hinsdale Bank donated $1,950 + $0 future donations.

  • Hinsdale Bank pays $0 in property tax to Oak Brook Park District.

So, was it a donation? I don’t know. You decide.