(A) (1) Before the Director of Finance shall deposit any of the funds of the city in Citizens Bank of Kentucky, City National Bank, Community Trust Bank, Fifth Third Bank, Kentucky Farmers Bank, Peoples Bank, PNC Bank, and Town Square Bank, all of this city, as well as FSA Bancorp, U.S. Bank and any other institutions that may be required as related to bond issues, any such bank shall execute collateral in the amount of deposits with good and sufficient surety, payable to the city, to indemnify the city from loss by reason of the public funds being deposited therein. The bank, in its discretion, in lieu of such an indemnifying bond, may pledge collateral bonds, as defined in § 37.020, as collateral security for such deposit or deposits of public funds deposited with the bank, which collateral bonds shall have a market value at all times of not less than deposits, and which shall be supplemented by additional collateral bonds from time to time, as may be required to maintain the cash market value of all of the same at all times in an amount equal to, or in excess of, amount of deposits.
(2) The city requires deposits to be 100% secured by collateral valued at market or par, whichever is lower, less the amount of the Federal Deposit Insurance Corporation insurance (FDIC). The total of the bank balances shall be insured or collateralized with securities held by the city’s agents in the city’s name, or by letters of credit.
(B) Should the bank elect to deposit collateral bonds as herein provided, then, and in that event, the collateral bonds so deposited as collateral surety shall be, and shall remain in the absolute control of the city, subject only to the limitations and provisions set forth in §§ 37.021, 37.022 and 37.023.
(C) The collateral provided for in this subchapter shall be held by the city to indemnify it from any loss it may sustain by reason of the deposit of any of its public funds in the bank. The proceeds of sale of the collateral shall be applied by the city and the bank as a credit on the city’s deposit in addition to any liquidating dividends the city would otherwise have been entitled to receive, if the deposit should have been unsecured.
(‘83 Code, § 36.12) (Ord. 26-1967, passed 9-26-67; Am. Ord. 92-1987, passed 9-1-87; Am. Ord. 17-2018, passed 1-25-18)