143.05 SECURITY FOR REPAYMENT OF DEPOSITS.

   (a)    The Director, before making the initial deposit in an eligible depository designated pursuant to Section 143.03 or before making an investment in a certificate of deposit pursuant to division (b)(5) of Section 143.07, shall require the eligible depository to pledge to and deposit with the Director, 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 the excess of the amount of public monies to be at the time so deposited, over and above the portion or amount of such monies as is at that time insured by the Federal Deposit Insurance Corporation or by any other agency or instrumentality of the federal government. 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 the amount of public monies on deposit in such public depository plus of the amount to be so deposited minus the portion or amount of that total amount that is at the time insured as provided in this section. The Director 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 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; 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;

      (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.A., 80a-1 to 80a-64, or any amendment or successor statute, and that has the highest letter or numerical rating provided by at least one nationally recognized standard rating service, consisting exclusively of obligations described in division (b)(1) or (2) of this section and repurchase agreements secured by such obligations.

   (c)   The City may agree with an eligible depository to use the provisions and procedures in Ohio R.C. Chapter 135 as the means of securing deposits of the City and may accept as eligible securities for purposes of this section any securities which are part of a pool of securities authorized in Ohio R.C. Chapter 135.

   (d)   If a depository of the City's funds fails to pay over any part of the deposit made by the City, the Director shall sell at public sale any of the pledged securities deposited with the Director pursuant to this section. Thirty (30) days notice of such sale shall be given in a newspaper of general circulation within Cuyahoga County. Pursuant to Ohio R.C. Chapter 135, when a sale of eligible securities has been so made and upon payment to the Director of the purchase money, the Director 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 and the expenses of sale shall be paid to the depository of the City's funds.

   (e)   An eligible depository may, by written notice to the Director, designate a qualified trustee and deposit the eligible securities required by this section with the trustee for safekeeping for the account of the City 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 Ohio R.C. Chapter 135. 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 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 Ohio R.C. Chapter 135 deemed to be pledged with the Director and to be deposited with him, 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 prior to designation by the eligible depository.

   (f)   The Director may make provisions for the exchange and release of securities and the substitution of other eligible securities.

   (g)   Pursuant to Ohio R.C. Chapter 135, 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, or as such sections may be amended or renumbered, or any provision of this chapter and without becoming subject to Ohio R.C. 1109.15, as such section may be amended or renumbered, 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 Director or to any 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. Chapter 135, the Director and the Director'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. 13-27. Enacted 3-27-13.)