(A) All deposits of city funds in competitively bid interest bearing time certificates of deposits, Now accounts and active funds of the city, and repurchase agreements without the full faith and credit backing of the United States shall be secured by pledged collateral in an amount equal to at least 100% of the deposit less an amount insured by the Federal Deposit Insurance Corporation or by any other agency or instrumentality of the federal government. All securities shall be pledged at market value and all collateral must maintain a market value equal to at least 100% of the deposit less an amount insured by the Federal Deposit Insurance Corporation or by any other agency or instrumentality of the federal government.
(1) The following securities shall be eligible to be pledged as collateral for purposes of this section:
(a) 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 full faith and credit 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;
(b) Bonds, notes, debentures or other obligations or securities issued by a federal government agency; 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;
(c) Bonds and other obligations of Ohio;
(d) Bonds and other obligations of any county, township, school district, municipal corporation, or other legally constituted taxing subdivision 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;
(e) Bonds of other states of the United States which have not, during ten years immediately proceeding the time of such deposits, defaulted in payments of either interest or principal on any of their bonds.
(2) Any and all securities pledged as collateral by any institution where city investments have been made shall be delivered to the Finance Director as security for the repayment of public monies or to an independent third party financial institution or federal reserve bank or branch approved by the Finance Director serving as trustee (the trustee). Fees and expenses of the trustee shall be paid by the depository. When securities are held in trust by a third party, a safekeeping receipt (form of which must be approved by the city) naming the City of West Carrollton as holder, must be prepared and issued by the depository and presented to the city.
(3) If the depository fails to pay over any part of a deposit due the city, the Finance Director shall have the option to sell, in a manner determined by the Finance Director, any of the bonds or other securities deposited with the Finance Director pursuant to the provisions of this policy. If the bonds or other securities are on deposit with a trustee, the Finance Director may request the trustee to deliver to the Finance Director any of the bonds or other securities on deposit with the trustee; and the Finance Director shall have the option to sell such bonds or other securities in a manner determined by the Finance Director. When a sale of bonds or other securities has been made and upon payment to the Finance Director of the purchase money, the Finance Director shall transfer such bonds or securities whereupon the absolute ownership of such bonds or securities shall pass to the purchaser(s), and any surplus remaining after deducting the amount due the city and expenses of the sale shall be paid to the depository.
(B) (1) When the depository has deposited eligible securities as described in this policy 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 only:
(a) If the Finance Director with the approval of the City Manager has authorized the depository to make such substitution or exchange on a continuing basis during a specified period without prior approval of each substitution or exchange. Such authorization may be effected by the Finance Director 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;
(b) If no continuing authorization for substitution or exchange has been given by the Finance Director, but the depository notifies the Finance Director, the City Manager, and the trustee of an intended substitution or exchange, and the Finance Director, the City Manager, or his/her designee fails to object to the trustee within ten business days after the date appearing on the notice of proposed substitution. The notice to the Finance Director, the City Manager, 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 such case that the notice has been delivered;
(c) If the Finance Director with the approval of the City Manager gives written authorization for a substitution or exchange of specific securities.
(2) The depository shall notify the Finance Director of any substitution or exchange of securities authorized by this policy. Upon request from the Finance Director, the depository and/or the trustee shall furnish a detailed statement of securities pledged against the deposits of the city. The detailed statement will provide the value and the then current market value.
(C) (1) With the approval of the Finance Director and the City Manager, a depository may provide collateral for deposits of city funds in competitively bid interest bearing time certificates of deposit and for savings accounts or Now accounts and for active funds of the city through a single pool of securities pledged toward all deposits of public funds held by the depository and not otherwise secured pursuant to law.
(2) The "pooled collateral" option is subject to the following conditions:
(a) Securities committed to the pool must have a market value at least equal to 110% of all public monies on deposit with the depository excluding the amount covered by federal deposit insurance.
(b) The securities eligible for deposit in the pool shall be those described in division (A) of this section. In addition to those described in division (A) of this section, 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 of any other state shall be eligible under the "pooled collateral" option.
(c) The securities constituting the pool shall be delivered to a trustee as described in division (A) of this section. Fees and expenses of the trustee shall be paid by the depository.
(d) The city shall have an individual security interest in the pool of securities pledged by a public depository pursuant to this section in the proportion that the total amount of the city's public monies secured by the pool bears to the total amount of public deposits so secured.
(e) If the depository fails to pay over any part of the deposits due the city, the Finance Director may request the trustee to deliver to the Finance Director any of the securities on deposit with the trustee, not to exceed the amount necessary to produce an amount equal to the deposits made by the Finance Director and not paid over to the city, less the portions of the deposits covered by federal deposit insurance, plus any accrued interest due on the deposits; and in any event not to exceed the city's proportional security interest in the market value of the pool as of the date of the depository's failure to pay over the deposits as such interest and value are determined by the trustee. The Finance Director shall have the option to sell such securities in the manner determined by the Finance Director. Any surplus remaining after deducting the amount due the city and expenses of the sale shall be paid to the depository.
(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 market value of the securities to an amount that is less than 110% of the total amount of public funds on deposit with the depository.
(g) The institution shall provide to the Finance Director a detailed quarterly statement of the face and market values of all securities pledged to the pool within 30 days of the end of the quarter. The institution will also disclose the total amount of public funds on deposit in each quarterly statement.
(h) If at any time the market value of the pool is less than 110% of all public deposits held by the trustee, it is the responsibility of the depository to immediately add sufficient securities to the pool in an amount that will bring the market value of the pool to at least 110% of all public funds on deposit with the trustee.
(i) Failure of the institution to abide by any of the provisions of this section is cause for immediate suspension of the institution as a qualified depository for any city funds.
(Ord. 2973, passed 4-11-95)