(A)
The Finance Officer/Tax Commissioner, before making the initial deposit in a public depository pursuant to an award made under Section 39.03 or pursuant to an investment in a certificate of deposit under Section 39.05 (B)(7) shall require the institution designated as the depository to pledge to and deposit, 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 are 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 of Ohio as may be approved by Council. The Finance Officer/Tax Commissioner may require such institution to deposit with him surety company bonds or other insurance policies approved by Council 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 other 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 by the Federal Deposit Insurance Corporation or any other instrumentality of the Federal government or of the State of Ohio as may be approved by Council. Council 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; 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 this state;
(4) Bonds and other obligations of any county, township, school district, municipal corporation, including the City, or other legally constituted taxing subdivision of this state, which is not at the time of such deposit, in default in the payment of the principal or interest on any of its bonds or other obligations, for which the full faith and credit of the issuing subdivisions is pledged;
(5) Bonds of other states of the United States which have not during the ten years immediately preceding the time of such deposit defaulted in payments of either interest or principal on any of their bonds;
(6) 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 Finance Officer/Tax Commissioner shall sell at public sale any of the bonds or other securities deposited pursuant to this section or R.C. Section 131.09. Thirty (30) days' notice of such sale shall be given in a newspaper of general circulation, on the City’s website, or in any other manner designated by Council, at the county seat of the county in which the office of the municipality is located. Pursuant to division (C) of R.C. Section 135.18, when a sale of bonds or other securities has been so made and upon payment to the Finance Officer/Tax Commissioner of the purchase money, the Finance Officer/Tax Commissioner 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 expenses of sale shall be paid to the depository.
(D) An institution designated as a depository may, by written notice to the Finance Officer/Tax Commissioner, designate a qualified trustee and deposit the eligible securities required by this section with the trustee for safekeeping for the account of the Finance Officer/Tax Commissioner and the institution as a 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 R.C. Section 135.18. In such case, the Finance Officer/Tax Commissioner 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 division (D) of R.C. Section 135.18, deemed to be pledged with the Finance Officer/Tax Commissioner and to be deposited, for all the purposes of this section.
(E) The Finance Officer/Tax Commissioner may make provisions 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 division (B)(1) of this section with a trustee for safekeeping, the depository may at any time substitute or exchange eligible securities described in division (B)(1) of this section 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 the City's Council or Clerk of Finance Officer/Tax Commissioner of such substitution or exchange.
(G) When the depository has deposited eligible securities described in divisions (B)(2) to (6) of this section 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 of the Council or the Finance Officer/Tax Commissioner of any such substitution or exchange only if:
(1) The Finance Officer/Tax Commissioner has authorized the depository to make such substitution or exchange on a continuing basis during a specific period without prior approval of each substitution or exchange. Such authorization may be effected by the Finance Officer/Tax Commissioner 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 and upon the period of authorization stated therein and upon the period of designation stated therein; or
(2) No continuing authorization for substitution has been given by the Finance Officer/Tax Commissioner, the depository notifies the Finance Officer/Tax Commissioner and the trustee of an intended substitution or exchange, and the Finance Officer/Tax Commissioner fails to object to the trustee as to the eligibility or market value of the securities being substituted within ten (10) calendar days after the date appearing on the notice of proposed substitution. The notice to the Finance Officer/Tax Commissioner and to the trustee shall be given in writing and delivered personally or by certified or registered mail with a return receipt requested. The trustee may assume in any case that the notice has been delivered to the Finance Officer/Tax Commissioner. In order for objections of the Finance Officer/Tax Commissioner to be effective, receipt of the objections must be acknowledged in writing by the trustee; or
(3) The Finance Officer/Tax Commissioner gives written authorization for a substitution or exchange of specific securities.
(H) The depository shall notify the Finance Officer/Tax Commissioner of any such substitution or exchange under division (G)(1) or (2) of this section. Upon request from the Finance Officer/Tax Commissioner, the trustee shall furnish a statement of the securities pledged against such public deposits.
(I) Any federal reserve bank or branch thereof located in this state, without compliance with R.C. Sections 1109.03, 1109.04, 1109.17 and 1109.18, and without becoming subject to R.C. Section 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. Any institution mentioned in R.C. Section 135.03 which holds a certificate of qualification issued by the superintendent of banks or any institution complying with R.C. Sections 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. Pursuant to R.C. Section 135.18, upon application to him 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 Ohio and has safe and adequate vaults and efficient supervision thereof for the storage and safekeeping within Ohio of such securities. If the Superintendent finds that the applicant has been so authorized and does have such vaults and supervision thereof, he shall, pursuant to R.C. Section 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.
(J) 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.
(K) 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 or to the Finance Officer/Tax Commissioner or to any officer of the City. 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 Finance Officer/Tax Commissioner. The Finance Officer/Tax Commissioner and bondsmen or security shall be relived 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. 73-1988, passed 12-7-88; Am. Ord. 03-2024, passed 2-7-24)