(A)
In lieu of the pledging requirements prescribed in Section 39.04, a depository, with the consent of the Finance Officer/Tax Commissioner, may pledge a single pool of eligible securities to secure the repayment of public moneys deposited in the depository 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 division (B) of this section, is at least equal to one hundred ten 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 depository 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 division (A) of this section, 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 R.C. Sections 3351.05 to 3351.14: at face value;
(9) Any other obligations the Finance Officer/Tax Commissioner 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 a depository pursuant to division (A) of this section 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) A depository pledging pooled securities shall designate a qualified trustee and deposit with the trustee for safekeeping the eligible securities pledged pursuant to division (A) of this section. The depository shall give written notice of the qualified trustee to the Finance Officer/Tax Commissioner. The Finance Officer/Tax Commissioner shall accept the written receipt of the trustee describing the pool of securities so deposited by the depository, a copy of which also shall be delivered to the depository.
(E) Any federal reserve bank or branch thereof located in the State of Ohio, 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 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 division (A) of R.C. Section 135.03 or division (A) of R.C. Section 135.32 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 under this section, other than those belonging to itself or to an affiliate as defined in division (A) of R.C. Section 1101.01. Pursuant to R.C. Section 135.181, 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 135.181, approve the application and issue a certificate to that effect, the original of 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.
(F) The depository 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 division (B) of this section, to an amount that is less than one hundred ten percent (110%) of the total amount of public deposits as determined pursuant to division (A) of this section.
(G) 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, but not limited to, a substitution or exchange of securities, but excluding those situations effectuated by division (H) of this section in which the trustee is required to determine face and market value.
(H) If the depository fails to pay over any part of the public moneys made therein as provided by law and secured pursuant to division (A) of this section, the Finance Officer/Tax Commissioner shall give written notice of this failure to the qualified trustee holding the pool of securities pledged against public moneys deposited in the depository, and at the same time shall send a copy of this notice to the depository. Upon receipt of such notice the trustee shall transfer to the Finance Officer/Tax Commissioner for public sale such of the pooled securities as may be necessary to produce an amount equal to the deposits made by the Finance Officer/Tax Commissioner, less the portion of such deposits covered by any federal deposit insurance, plus any accrued interest due on such deposits. The Finance Officer/Tax Commissioner shall sell at public sale any of the bonds or other securities 80 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 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. Any surplus after deducting the amount due the City and expenses of sale shall be paid to the depository.
(I) 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 Finance Officer/Tax Commissioner. 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 Finance Officer/Tax Commissioner. The Finance Officer/Tax Commissioner and his bondsmen or surety shall be relieved 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.
(J) In lieu of placing its unqualified endorsement on each security, a depository pledging securities pursuant to division (A) of this section that are not negotiable without its endorsement or assignment may furnish to the qualified trustee holding the securities an 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 Finance Officer/Tax Commissioner, a depository shall report the amount of public moneys deposited by the Finance Officer/Tax Commissioner and secured pursuant to division (A) of this section, and the total value, based on the valuations prescribed in division (B) of this section, of the pool of securities pledged to secure public deposits held by the depository, including those deposited by the Finance Officer/Tax Commissioner. Upon request of the Finance Officer/Tax Commissioner, a qualified trustee shall report such total value of the pool of securities deposited with it by the depository and shall provide an itemized list of the securities in the pool. These reports shall be made as of the date the Finance Officer/Tax Commissioner specifies.
(Ord. 73-1988, passed 12-7-88; Am. Ord. 03-2024, passed 2-7-24)