(a) The City Treasurer, before making the initial deposit in an eligible depository designated pursuant to Section 178.03 or before making an investment in a certificate of deposit pursuant to division (b)(8) of Section 178.12, shall require the eligible depository to pledge to and deposit with the City Treasurer, as security for the repayment of all public monies to be deposited in the eligible depository, eligible securities in the aggregate market value equal to one hundred and ten percent (110%) of the amount of public monies to be at the time so deposited. 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, shall be equal to one hundred and ten percent (110%) of the amount of public monies on deposit in such public depository plus one hundred and ten percent (110%) of the amount to be so deposited. The City Treasurer 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. This paragraph shall not apply to a pooled security arrangement authorized under division (c) of this section.
(b) The following securities shall be eligible securities for the purposes of this section:
(1) Bonds, notes or other obligations of or 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 specifically appearing therein and not merely by interpretation or otherwise;
(2) Bonds, notes, debentures, or other obligations or securities issued by any U.S. government agency, or the export-import bank of Washington;
(3) Bonds and other obligations of the State of Ohio guaranteed as to principal and interest by the State of Ohio or those for which the full faith and credit of the State of Ohio is pledged for the payment of principal and interest thereon by language specifically appearing therein and not merely by interpretation or otherwise;
(4) Bonds and other obligations of any county, township, school district, municipal corporation, including the City, or other legally constituted taxing subdivision of the State of Ohio, 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 subdivision is pledged;
(5) Obligations guaranteed as to principal and interest by the Ohio student loan commission;
(6) A no-load money market mutual fund that is registered as an investment company under the "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a-1 to 80a-64, and that has the highest letter or numerical rating provided by at least one (1) nationally recognized standard rating service, consisting exclusively of obligations described in division (b)(1) or (b)(2) of this section and repurchase agreements secured by such obligations.
(c) The City shall not accept as eligible securities for purposes of this section any securities which are part of a pool of securities authorized in RC 135.182, unless authorized in advance and in writing by the Director of Finance and the City Treasurer.
(d) If the eligible depository fails to pay over any part of the deposit made therein as provided by law, the City Treasurer shall sell at public sale any of the eligible securities deposited with the City Treasurer pursuant to this section. Thirty (30) days notice of such sale shall be given in a newspaper of general circulation within the City of Cleveland. Pursuant to division (C) of RC 135.18, when a sale of eligible securities has been so made and upon payment to the City Treasurer of the purchase money, the City Treasurer shall transfer such eligible securities, whereupon the absolute ownership of such eligible securities shall pass to the purchasers, and any surplus remaining after deducting the amount due the City of Cleveland and the expenses of sale shall be paid to the eligible depository.
(e) An eligible depository may, by written notice to the City Treasurer, designate a qualified trustee and deposit the eligible securities required by this section with the trustee for safekeeping for the account of the City Treasurer and the eligible depository, as their respective rights to and interest in such securities under this section may appear and be asserted by written notice to or demand upon the trustee pursuant to division (D) of RC 135.18. In such case, the City Treasurer shall accept the written receipt of the trustee describing the securities which have been deposited with the trustee by the eligible depository, a copy of which shall also be delivered to the eligible depository. Thereupon all such securities so deposited with the trustee are, pursuant to division (D) of RC 135.18 deemed to be pledged with the City Treasurer and to be deposited with him or her, for all the purposes of this section. The qualified trustee designated to perform the duties pursuant to this division (e) must be approved by the Director of Finance prior to designation by the eligible depository.
(f) The City Treasurer may make provisions for the exchange and release of securities and the substitution of other eligible securities therefor.
(g) Pursuant to division (I) of RC 135.18, any federal reserve bank or branch thereof located in the State of Ohio, without compliance with RC 1109.03, 1109.04, 1109.17 and 1109.18 or any provision of this chapter and without becoming subject to RC 1109.15 or any other law of Ohio relative to the exercise by corporations of trust powers generally, is qualified to act as trustee for the safekeeping of securities under this section.
(h) Notwithstanding the fact that an eligible depository is required to pledge eligible securities in certain amounts to secure deposits of public monies, 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 an eligible depository. This applies in all situations including, without limitation, a substitution or exchange of securities.
(i) Any charges or compensation of a designated trustee for acting as such under this section shall be paid by the eligible depository and in no event shall be chargeable to the City or to the City Treasurer or to any officer of the City. Pursuant to RC 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 City Treasurer. Pursuant to RC 135.18, the City Treasurer and the City Treasurer's bondsmen or surety shall be relieved from any liability to the City or to the eligible depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.
(Ord. No. 6-18. Passed 1-22-18, eff. 1-25-18)