(A) It is the policy of the city, and in accordance with the GFOA’s recommended practices on the collateralization of public deposits (Attachments #2 and #3 to Ordinance 2017-07), that the city requires that funds on deposit in excess of FDIC limits be secured by some form of collateral, including surety bonds or letters of credit.
(B) The city will accept any of the following assets as collateral:
(1) Government securities;
(2) Obligations of federal agencies;
(3) Obligations of federal instrumentalities;
(4) Fixed rate general obligation municipal bonds rated AA or better;
(5) Obligations of the State of Illinois;
(C) The city reserves the right to accept or reject any form of the above-named securities.
(D) The city also requires that all depositories that hold city deposits in excess of the FDIC limit must agree to utilize the GFOA’s recommended practices of collateralization of public deposits as outlined in Attachments #2 and #3 to Ordinance 2017-07.
(E) The amount of collateral provided will not be less than 110% of the fair market value of the net amount of public funds secured. The ratio of fair market value of collateral to the amount of funds secured will be reviewed monthly by the city, and additional collateral will be required when the ratio declines below the level required, and collateral will be released if the fair market value exceeds the required level. Pledged collateral will be held in safekeeping or the Federal Reserve Bank of Chicago, designated by the city and evidenced by a safekeeping agreement. The city shall approve, in writing, the process for the release of substitution of pledged assets. The city realizes that there is a cost factor involved with collateralization, and the city will pay any reasonable and customary fees related to collateralization.
(1994 Code, § 40.10) (Ord. 99-03, passed 3-22-1999; Ord. 2017-07, passed 12-26-2017)