(a) In lieu of the pledging requirements prescribed in Section 179.04, an institution, with the consent of the Director of Finance, may pledge a single pool of eligible securities to secure the repayment of public moneys deposited in the institution and not otherwise secured pursuant to law, provided that at all times the total value of the securities so pledged, based on the valuations prescribed in subsection (b) hereof, is at least equal to 110 percent (110%) of the total amount of all public deposits to be secured by the pooled securities, including the portion of such deposits covered by any federal deposit insurance. Each such institution shall carry in its accounting records at all times a general ledger or other appropriate account of the total amount of all public deposits to be secured by the pool, as determined at the opening of business each day, and the total value of securities pledged to secure such deposits.
(b) The following securities, at the specified valuations, shall be eligible as collateral for the purposes of subsection (a) hereof, provided no such securities pledged as collateral are at any time in default as to either principal or interest:
(1) Obligations of or fully insured or fully guaranteed by the United States or any federal government agency: at face value;
(2) Obligations partially insured or partially guaranteed by any federal government agency: at face value;
(3) Obligations of or fully guaranteed by the federal national mortgage association or the federal home loan mortgage corporation: at face value;
(4) Obligations of any state, county, municipal corporation or other legally constituted authority of any state or any instrumentality of any state, county, municipal corporation or other authority, which are secured as to the payment of principal and interest by the holding in escrow of obligations of the United States for which the full faith and credit of the United States is pledged: at face value;
(5) Obligations of the State of Ohio or any county or other legally constituted authority of the State of Ohio or any instrumentality of the State of Ohio or such county or other authority: at face value;
(6) Obligations of any other state: at ninety percent (90%) of face value;
(7) Obligations of any county, municipal corporation or other legally constituted authority of any other state or any instrumentality of such county, municipal corporation or other authority: at eighty percent (80%) of face value;
(8) Notes representing loans made to persons attending or planning to attend eligible institutions of education and to their parents, and insured or guaranteed by the United States or any agency, department or other instrumentality thereof, or guaranteed by the Ohio student loan commission pursuant to Ohio R.C. 3351.05 to 3351.14: at face value;
(9) Any other obligations the Director of Finance approves: at the percentage of face value he prescribes.
(c) The City shall have an undivided security interest in the pool of securities pledged by an institution pursuant to subsection (a) hereof in the proportion that the total amount of the City's public moneys secured by the pool bears to the total amount of public deposits so secured.
(d) An institution pledging pooled securities shall designate a qualified trustee and deposit with the trustee for safekeeping the eligible securities pledged pursuant to subsection (a) hereof. The institution shall give written notice of the qualified trustee to the Director of Finance. The Director shall accept the written receipt of the trustee describing the pool of securities so deposited by the institution, a copy of which also shall be delivered to the institution.
(e) Any federal reserve bank or branch thereof located in the State of Ohio, without compliance with Ohio R.C. 1109.03, 1109.04, 1109.17 and 1109.18 and without becoming subject to Ohio R.C. 1109.15 or any other law of the State 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. Any institution mentioned in Ohio R.C. 135.03(A) or 135.32(A) 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 under this section, other than those belonging to itself or to an affiliate as defined in Ohio R.C. 1101.01(A). Upon application to him in writing by any such institution, the superintendent shall investigate the applicant and ascertain whether or not it has been authorized to execute and accept trusts in the State of Ohio and has safe and adequate vaults and efficient supervision thereof for the storage and safekeeping of such securities. If the superintendent finds that the applicant has been so authorized and does have vaults and supervision thereof, he shall 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 named therein is qualified to act as trustee for the purposes of this section with respect to securities other than those belonging to itself or to an affiliate.
(f) The institution at any time may substitute, exchange or release eligible securities deposited with a qualified trustee pursuant to this section, provided that such substitution, exchange or release does not reduce the total value of the securities, based on the valuations prescribed in subsection (b) hereof, to an amount that is less than 110 percent (110%) of the total amount of public deposits as determined pursuant to subsection (a) hereof.
(g) Notwithstanding the fact that an institution 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 an institution. This applies in all situations including, but not limited to, a substitution or exchange of securities, but excluding those situations effectuated by subsection (h) hereof, in which the trustee is required to determine face and market value.
(h) If the institution fails to pay over any part of the public moneys made therein as provided by law and secured pursuant to subsection (a) hereof, the Director of Finance shall give written notice of this failure to the qualified trustee holding the pool of securities pledged against public moneys deposited in the institution, and at the same time shall send a copy of this notice to the institution. Upon receipt of such notice, the trustee shall transfer to the Director of Finance for public sale such of the pooled securities as may be necessary to produce an amount equal to the deposits made by the Director and not paid over, less the portion of such deposits covered by any federal deposit insurance, plus any accrued interest due on such deposits; however, such amount shall not exceed the City's proportional security interest in the market value of the pool as of the date of the institution's failure to pay over the deposits, as such interest and value are determined by the trustee. The Director of Finance shall sell at public sale any of the bonds or other securities so transferred. Thirty (30) days' notice of such sale shall be given in a newspaper of general circulation in the City. 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. Any surplus after deducting the amount due the City and expenses of sale shall be paid to the institution.
(i) Any charges or compensation of a designated trustee for acting as such under this section shall be paid by the institution and in no event shall be chargeable to the City or Director of Finance. 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 Director of Finance. The Director and his bondsmen or security shall be relieved from any liability to the City or to the institution for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.
(j) In lieu of placing its unqualified endorsement on each security, an institution pledging securities pursuant to subsection (a) hereof that are not negotiable without its endorsement or assignment may furnish to the qualified trustee holding the securities as appropriate resolution and irrevocable power of attorney authorizing the trustee to assign the securities. The resolution and power of attorney shall conform to such terms and conditions as the trustee prescribes.
(k) Upon request of the Director of Finance, an institution shall report the amount of public moneys deposited by the Director and secured pursuant to subsection (a) hereof, and the total value, based on the valuations prescribed in subsection (b) hereof, of the pool of securities pledged to secure public deposits held by the institution, including those deposited by the Director of Finance. Upon request of the Director, a qualified trustee shall report such total value of the pool of securities deposited with it by the institution and shall provide an itemized list of the securities in the pool. These reports shall be made as of the date the Director of Finance specifies.
(Ord. 63-1983. Passed 5-2-83.)