238.01 Definitions relating to entire chapter.
238.015 Definitions relating to Sections 238.05 and 238.055 only.
238.02 Findings by Council; inapplicability of and incorporation of State laws.
238.03 Depositories.
238.04 Security for repayment of deposits.
238.05 Investment policy.
238.055 Eligible investments.
238.06 Liability of City officers for losses; insurance.
238.07 Interest on Treasury investments.
CROSS REFERENCES
Finance generally - see CHTR. Art. VIII
Uniform Depository Act - see Ohio R.C. Ch. 135
Custody of municipal securities - see Ohio R.C. 731.59
Department of Finance - see ADM. Ch. 234
Treasurer - see ADM. Ch. 240
As used in this chapter, unless another definition is provided or the context otherwise requires:
(a) "Active deposit" means a deposit of the City's public moneys payable or withdrawable, in whole or in part, on demand, or a deposit in a negotiable order of withdrawal account as authorized in the Consumer Checking Account Equity Act of 1980, 94 Stat. 146, 12 U.S.C.A. 1832(a).
(b) "Eligible depository" means any national bank located in Ohio, any bank, as defined by Ohio R.C. 1101.01, which is subject to inspections by the Ohio Superintendent of Banks and any domestic building and loan association, as defined in Ohio R.C. 1151.01, that is authorized to accept deposits.
(c) "Public moneys" means all moneys in the Treasury of the City, or moneys coming lawfully into the possession of the Director of Finance.
(d) "Uniform Depository Act" means Ohio R.C. Chapter 135, as amended. Wherever any provision of the Uniform Depository Act is made applicable under this chapter, such provision is applicable only to the extent that it is not in conflict with or inconsistent with the City Charter and City ordinances or resolutions.
(Ord. 86-81. Passed 11-9-81.)
(1) "Derivative security" shall mean a financial instrument, shall contract or obligation whose value or return is based upon or linked to another asset or index, or both, separate from the financial instrument, contract or obligation itself, but shall not include a written repurchase agreement that satisfies the provisions of Section 238.055(a)(2).
(2) "Eligible depository" shall mean any institution described in Ohio R.C. 135.03.
(3) "Eligible investment" shall mean any investment described in Section 238.055(a).
(4) "Investment pool" shall mean a fund established by another subdivision (including a county), the Director of Finance, the governing board or the investing authority (as each of those terms is defined in Ohio R.C. 135.01), if that fund was established for the purpose of investing the public moneys of other subdivisions, but shall not include STAR Ohio.
(5) “Investment Advisor” shall mean any person qualified to act as an investment advisor under Ohio R.C. 1707.141.
(6) “Public moneys” shall mean all moneys in the Treasury of the City or moneys coming lawfully into the possession of the Director of Finance.
(7) “Qualified securities dealer” shall mean the Treasurer of the State of Ohio for the purposes of investments in STAR Ohio.
(8) “Qualified Trustee” shall mean a qualified trustee as described in Ohio R.C. 135.18.
(9) “Reverse repurchase agreement” shall mean a repurchase agreement under the terms of which the Director of Finance or such Director of Finance's designee agrees to sell securities owned by the City to a purchaser and agrees with that purchaser to unconditionally repurchase such securities.
(10) “STAR Ohio” shall mean the Ohio Subdivision's Fund created pursuant to Ohio R.C. 135.45 and currently designated as “Star Treasury Asset Reserve of Ohio”.
(11) “Uniform Depository Act” shall mean Ohio R.C. Chapter 135 and all amendments thereto.
(b) Nothing in this section shall be construed as permitting the investment of the public moneys of the City in any of the obligations defined in subsection (a) hereof if investment in such obligations is otherwise prohibited by the City's investment policy.
(Ord. 51-97. Passed 3-24-97; Ord. 66-16. Passed 5-23-16.)
(a) Council hereby makes the following findings with respect to the authorization and establishment of policies and procedures for the deposit and investment of public moneys in the City's Treasury:
(1) The authorization and establishment of such policies and procedures are powers of local self-government that may be exercised by the City through its ordinances under Sections 3 and 7 of Article XVIII of the Ohio Constitution and Article II of the City Charter.
(2) The authorization and establishment of such policies and procedures are in the best interests of the City and its residents:
A. To provide a more efficient management of the City's moneys and investments; and
B. To enable the City to earn a greater yield on its investments and provide safeguards of the City's moneys.
(b) It is hereby determined that the Uniform Depository Act shall not apply to the City, except as it may be adopted by reference under this chapter, provided that Ohio R.C. 135.11, pertaining to exemption from conflict of interest laws, shall apply to the City.
(c) Ohio R.C. 731.56 to 731.59, inclusive, shall not apply to the City, except as Ohio R.C. 731.59 is incorporated in part in Section 238.05(h).
(d) Unless incorporated by reference or otherwise made applicable in this chapter, no other provision of the Ohio Revised Code which is inconsistent or in conflict with this chapter shall apply to the City.
(Ord. 86-81. Passed 11-9-81.)
(a) The Mayor shall determine the amount of public moneys which shall be available in active deposits to provide the needed cash flow to pay warrants and checks issued and outstanding, to provide for a reasonable surplus in addition to the amount needed to pay such warrants and checks and to maximize the interest received on public moneys of the City. Interest on active deposits shall be paid or credited by the City's designated eligible depositories at least quarterly and when funds are withdrawn, computing the time of payment from the date of deposit. No service charge shall be made by a designated eligible depository against an active deposit or collected from or paid by the Director of Finance, unless such service charge is the same as is customarily imposed by institutions receiving money on deposit subject to check, in the City, in which event the Director of Finance may pay such charge. All public moneys of the City not deposited in active deposits shall be invested pursuant to Section 238.05.
(b) The Mayor shall, by a writing filed with the Clerk of Council, designate one or more eligible depositories as the depository or depositories of the City's active deposits. In making such designation the Mayor shall consider the following:
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(1) The convenience of the location of the depositor's offices;
(2) The rate or rates of interest, if any, which the depository will pay on the active deposits;
(3) The service charges, if any, that will be made for the services of the depository; and
(4) Any other terms or conditions with respect to the depository's acceptance of the City's active deposit.
(c) The initial designation of depositories for the City's active deposits shall be for a period not to exceed six months and may be made without giving the notice provided for in this subsection. Subsequent designations of depositories for the City's active deposits shall be for a period specified in the Mayor's written designation of depositories pursuant to subsection (b) hereof, which period shall be not less than six months nor longer than five years, and shall be made after the Director of Finance has provided written notice by first class mail to the eligible depositories having an office in the City, and such other eligible depositories as determined by the Director, at least sixty days prior to the date of the action of the Mayor designating depositories for the City's active deposits. Such notice shall:
(1) Provide an estimate of the maximum amount of such active deposits at any time during the period of designation, and the proposed period of designation or alternative proposed periods of designation;
(2) Request such depositories to apply, in writing, for all or part of the City's active deposits on or before a date and time specified in the notice;
(3) Request each such depository to state in its application the amount of such active deposits that will be accepted by it, the rate or rates of interest, if any, that will be paid on such active deposits, the service charges, if any, that will be made for its services, other terms or conditions with respect to the depository's acceptance of all or part of the City's active deposits and the location of its offices in the City, or if none are located in the City, the location of its nearest offices; and
(4) Include or request any other information to or from such depositories which the Director of Finance deems relevant.
The request for written applications or their receipt does not constitute a bidding procedure. Rather, such request and application are intended to provide relevant information to the Mayor for his or her designation pursuant to subsection (b) hereof and to provide notice to eligible depositories that the City will receive applications and proposals for its active deposits.
(d) The Mayor shall enter into a contract, approved as to form and content by the Director of Law, with such depositories for the appropriate period determined pursuant to subsection (c) hereof. Such contract shall establish the rate or rates of interest, if any, to be paid by the depository on the City's active deposits, the service charges, if any, the depository may make for its services, and other terms or conditions of the depository's acceptance of the City's active deposits.
(e) The limitations on the aggregate amounts of public moneys that may be on deposit with eligible depositories, as set forth in the Uniform Depository Act, shall apply under this chapter.
(Ord. 86-81. Passed 11-9-81; Ord. 16-10. Passed 2-22-10.)
(a) The Director of Finance, before making the initial deposit in a public depository pursuant to an award made under Section 238.03, or pursuant to an investment in a certificate of deposit under Section 238.05(b)(7), shall require the institution designated as the depository to pledge to and deposit with him or her, as security for the repayment of all public moneys to be deposited in the depository during the period of designation pursuant to the award, eligible securities of aggregate market value equal to the excess of the amount of public moneys to be at the time so deposited, over and above such portion or amount of such moneys as is, at such time, insured by the Federal Deposit Insurance Corporation or by any other agency or instrumentality of the Federal Government or of the State as may be approved by the Mayor and the Director of Law, or the Director of Finance may require such institution to deposit with him or her surety company bonds or other insurance policies approved by the Mayor and the Director of Law which, when executed, shall be for an amount equal to such excess amount. In the case of any deposit, other than the initial deposit made during the period of designation, the amount of the aggregate market value of securities required to be pledged and deposited, or of the surety company bonds required to be deposited, or the insurance coverage required, shall be equal to the difference between the amount of public moneys on deposit in such public depository, plus the amount to be so deposited, minus such portion or amount of the aggregate as is, at the time, insured as provided in this section. The Director of Finance may require additional eligible securities to be deposited to provide for any depreciation which may occur in the market value of any of the securities so deposited.
(b) The following securities shall be eligible for the purposes of this section:
(1) Bonds, notes or other obligations of the United States, or bonds, notes or other obligations guaranteed as to principal and interest by the United States or those for which the faith of the United States is pledged for the payment of principal and interest thereon, by language appearing in the instrument specifically providing such guarantee or pledge and not merely by interpretation or otherwise;
(2) Bonds, notes, debentures or other obligations or securities issued by any Federal Government agency, or the export-import bank of Washington, or bonds, notes or other obligations guaranteed as to principal and interest by the United States or those for which the faith of the United States is pledged for the payment of principal and interest thereon, by interpretation or otherwise and not by language appearing in the instrument specifically providing such guarantee or pledge;
(3) Bonds and other obligations of the State; Bonds and other obligations of any county, township, school district, municipal corporation, including the City, or other legally constituted taxing subdivision of the State, which is not, at the time of such deposit, in default in the payment of principal or interest on any of its bonds or other obligations, for which the full faith and credit of the issuing subdivisions are pledged; Bonds of other states of the United States which have not, during the ten years immediately preceding the time of such deposit, defaulted in payment of either interest or principal on any of their bonds; and Obligations guaranteed as to principal and interest by the Ohio Student Loan Commission.
(c) If the depository fails to pay over any part of the deposit made therein as provided by law, the Director of Finance shall sell at public sale any of the bonds or other securities deposited with him or her pursuant to this section or Ohio R.C. 131.09. Thirty days notice of such sale shall be given in a newspaper of general circulation in the county seat of Lorain County. Pursuant to Ohio R.C. 135.18(C), when a sale of bonds or other securities has been so made, and upon payment to the Director of Finance of the purchase money, the Director shall transfer such bonds or securities, whereupon the absolute ownership of such bonds or securities shall pass to the purchasers, and any surplus remaining, after deducting the amount due the State or subdivision and the expenses of the sale, shall be paid to the depository.
(d) An institution designated as a depository may, by written notice to the Director of Finance, designate a qualified trustee and deposit the eligible securities required by this section with the trustee for safekeeping for the account of the Director and the institution as a depository, as their respective rights to and interests in such securities under this section may appear and be asserted by written notice to or demand upon the trustee pursuant to Ohio R.C. 135.18(D). In such case, the Director shall accept the written receipt of the trustee describing the securities which have been deposited with the trustee by the depository, a copy of which shall also be delivered to the depository. Thereupon all such securities so deposited with the trustee are, pursuant to Ohio R.C. 135.18(D), deemed to be pledged with the Director and to be deposited with him or her, for all the purposes of this section.
(e) Council may make provision for the exchange and release of securities and the substitution of other eligible securities therefor, except where the depository has deposited eligible securities with a trustee for safekeeping as provided in this section.
(f) When the depository has deposited eligible securities described in paragraph (b)(1) hereof with a trustee for safekeeping, the depository may, at any time, substitute or exchange eligible securities described in paragraph (b)(1) hereof having a current market value equal to or greater than the current market value of the securities then on deposit and for which they are to be substituted or exchanged, without specific authorization from Council or the Director of Finance of such substitution or exchange.
(g) When the depository has deposited eligible securities described in paragraphs (b)(2) to (6) hereof with a trustee for safekeeping, the depository may, at any time, substitute or exchange eligible securities having a current market value equal to or greater than the current market value of the securities then on deposit and for which they are to be substituted or exchanged, without specific authorization from Council or the Director of Finance of any such substitution or exchange, only if:
The Director of Finance has authorized the depository to make such substitution or exchange on a continuing basis during a specified period without prior approval of each substitution or exchange. Such authorization may be effected by the Director sending to the trustee a written notice stating that substitution may be effected on a continuing basis during a specified period which shall not extend beyond the end of the period of designation during which the notice is given. The trustee may rely upon such notice, upon the period of authorization stated therein and upon the period of designation stated therein.
No continuing authorization for substitution has been given by the Director of Finance, the depository notifies the Director and the trustee of an intended substitution or exchange, and the Director fails to object to the trustee as to the eligibility or market value of the securities being substituted within ten calendar days after the date appearing on the notiuce of proposed substitution. The notice to the Director and to the trustee shall be given in writing and delivered personally or be certified or registered mail with a return receipt requested. The trustee may assume, in any case, that the notice has been delivered to the Director. In order for objections of the Director to be effective, receipt of the objections must be acknowledged, in writing, by the trustee.
The Director of Finance gives written authorization for a substitution or exchange of specific securities.
(h) The depository shall notify the Director of Finance of any such substitution or exchange under paragraph (g)(1) or (2) hereof. Upon request from the Director, the trustee shall furnish a statement of the securities pledged against such public deposits.
(i) Pursuant to Ohio R.C. 135.18(I), any Federal Reserve Bank or branch thereof located in the State, without compliance with Ohio R.C. 1109.03, 1109.04, 1109.17 and 1109.18 or this chapter, and without becoming subject to Ohio R.C. 1109.15 or any other law of the State relative to the exercise by corporations of trust powers generally, is qualified to act as trustee for the safekeeping of securities under this section. Pursuant to Ohio R.C. 135.18(I), any institution mentioned in Ohio R.C. 135.03 which holds a certificate of qualification issued by the Superintendent of Banks or any institution complying with Ohio R.C. 1109.03, 1109.04, 1109.17 and 1109.18 is qualified to act as trustee for the safekeeping of securities, other than those belonging to itself, under this section and Ohio R.C. 135.18. Pursuant to Ohio R.C. 135.18, upon application to him or her in writing by any such institution, the Superintendent of Banks shall investigate the applicant and ascertain whether or not it has been authorized to execute and accept trusts in the State and whether or not it has safe and adequate vaults and efficient supervision thereof for the storage and safekeeping within the State of such securities. If the Superintendent finds that the applicant has been so authorized and does have such vaults and supervision thereof, he or she shall, pursuant to Ohio R.C. 135.18, approve the application and issue a certificate to that effect, the original or any certified copy of which shall be conclusive evidence that the institution therein named is qualified to act as trustee for the purposes of this section with respect to securities other than those belonging to itself. Notwithstanding the fact that a depository is required to pledge eligible securities in certain amounts to secure deposits of public moneys, a trustee shall have no duty or obligation to determine the eligibility, market value or face value of any securities deposited with the trustee by a depository. This applies in all situations, including, without limitation, a substitution or exchange of securities.
Pursuant to Ohio R.C. 135.18, any charges or compensation of a designated trustee for acting as such under this section shall be paid by the depository and in no event shall be chargeable to the City, to the Director of Finance or to any other officer of the City. Pursuant to Ohio R.C. 135.18, such charges or compensation shall not be a lien or charge upon the securities deposited for safekeeping prior or superior to the rights to and interests in such securities of the City or of the Director. Pursuant to Ohio R.C. 135.18, the Director and his or her bondsmen or surety shall be relieved from any liability to the City or to the depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.
(Ord. 86-81. Passed 11-9-81.)
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