Explanation
This legislation seeks to amend Columbus City Code Section 321.081, to change the optional pledging requirements for City depositories in order to comply with a change in depositories in order to comply with a change in depository collateral requirements promulgated by Sub H.B. 473 to Ohio Revised Code Chapter 135.
There will be no fiscal impact as a result of this legislation.
Title
To amend Section 321.081 of the Columbus City Codes, 1959, in order to change optional pledging requirements for City depositories in order to comply with changes in optional pledging requirements as promulgated by Sub H.B. 473 to Ohio Revised Code Chapter 135.
Body
WHEREAS, the Columbus City Council passed Ordinance No. 321-96 on March 4, 1996; and
WHEREAS, Section 321.081 of the Columbus City Codes, 1959, requires amendment due to changes made by Sub H.B. 473 to the Ohio Revised Code in optional pledging requirements for City depositories. Now therefore
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS
SECTION 1. That Columbus City Code Section 321.081 be amended and corrected as follows:
321.081 Optional pledging requirements-- Trustee for safekeeping of securities--Sale upon default.
(A) As used in this section:
(1) "Public depository" means that term as defined in Ohio R.C. 135.01, but also means an institution which receives or holds any public deposits as defined in Ohio R.C. 135.31.
(2) "Public deposits," "public moneys," and "treasurer" mean those terms as defined in Ohio R.C. 135.01, but also have the same meanings as are set forth in Ohio R.C. 135.31.
(3) "Subdivision" means that term as defined in Ohio R.C. 135.01, but also includes a county and the city of Columbus.
(B) In lieu of the pledging requirements prescribed in Section 321.08 of the Columbus City Codes, an institution designated as a public depository at its option may pledge a single pool of eligible securities to secure the repayment of all public moneys deposited in the institution 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 (C) of this section, is at least equal to one hundred ten (110) one hundred five percent 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 institution 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.
(C) The following securities, at the specified valuations, shall be eligible as collateral for the purposes of division (B) 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 this state, or any county or other legally constituted authority of this state, or any instrumentality of this state, or such county or other authority: at face value;
(6) Obligations of any other state: at ninety (90) percent 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 (80) percent 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 Aid Commission pursuant to Ohio R.C. 3351.05 to 3351.14: at face value;
(9) Any other obligations the treasurer of state approves: at the percentage of face value he prescribes;
(10) Shares of no-load money market mutual funds consisting exclusively of obligations described in division (C)(1), (2), or (3) of this section and repurchase agreements secured by such obligations: at face value.
(D) The state and each subdivision shall have an undivided security interest in the pool of securities pledged by a public depository pursuant to division (B) of this section in the proportion that the total amount of the state's or subdivision's public moneys secured by the pool bears to the total amount of public deposits so secured.
(E) An institution designated as a public depository shall designate a qualified trustee and deposit with the trustee for safekeeping the eligible securities pledged pursuant to division (B) of this section. The institution shall give written notice of the qualified trustee to any treasurer or treasurers depositing public moneys for which such securities are pledged. The treasurer 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.
(F) Any federal reserve bank or branch thereof located in this state, without compliance with Ohio R.C. 1109.03, 1109.04, 1109.17, and 1109.18 and without becoming subject to Ohio R.C. 1109.15 or any other law of this state 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 Ohio R.C. 135.03(A) or 135.32(A) which holds a certificate of qualification issued by the Superintendent of Financial Institutions or any institution complying with Ohio R.C. 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 Ohio R.C. 1101 .01(A). Upon application to him in writing by any such institution, the Superintendent shall investigate the applicant and ascertain whether or not it has been authorized to execute and accept trusts in this state and has safe and adequate vaults and efficient supervision thereof for the storage and safekeeping of such securities. If the Superintendent finds that the applicant has been so authorized and does have such vaults and supervision thereof, he shall 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 named therein is qualified to act as trustee for the purposes of this section with respect to securities other than those belonging to itself or to an affiliate.
(G) The public 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 (C) of this section, to an amount that is less than one hundred ten (110) one hundred five (105) percent of the total amount of public deposits as determined pursuant to division (B) of this section.
(H) Notwithstanding the fact that a public 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 public depository. This applies in all situations including, but not limited to, a substitution or exchange of securities, but excluding those situations effectuated by division (I) of this section in which the trustee is required to determine face and market value.
(I) If the public depository fails to pay over any part of the public deposits made therein as provided by law and secured pursuant to division (B) of this section, the treasurer 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 treasurer for public sale such of the pooled securities as may be necessary to produce an amount equal to the deposits made by the treasurer and not paid over, less the portion of such deposits covered by any federal deposit insurance, plus any accrued interest due on such deposits; however, such amount shall not exceed the state's or subdivision'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 treasurer shall sell at public sale any of the bonds or other securities so transferred. Thirty (30) days' notice of such sale shall be given in a newspaper of general circulation at Columbus, in the case of the treasurer of state, and at the county seat of the county in which the office of the treasurer is located, in the case of any other treasurer. When a sale of bonds or other securities has been so made an upon payment to the treasurer of the purchase money, the treasurer 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 state or subdivision and expenses of sale shall be paid to the public depository.
(J) Any charges or compensation of a designated trustee for acting as such under this section shall be paid by the public depository and in no event shall be chargeable to the state or subdivision or to the treasurer or to any officer of the state or subdivision. 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 state or subdivision or of the treasurer. The treasurer and his bondsmen or surety shall be relieved from any liability to the state or subdivision or to the public depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.
(K) In lieu of placing its unqualified endorsement on each security, a public depository pledging securities pursuant to division (B) 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.
(L) Upon request of a treasurer no more often than four (4) times per year, a public depository shall report the amount of public moneys deposited by the treasurer and secured pursuant to division (B) of this section, and the total value, based on the valuations prescribed in division (C) of this section, of the pool of securities pledged to secure public moneys held by the depository, including those deposited by the treasurer. Upon request of a treasurer no more often than four (4) times per year, 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 treasurer specifies.
The city treasurer shall request the public depository and the qualified trustee to provide the information detailed in Section 321.081(L) not less than four (4) times per year and on a quarterly basis. The public depository and the qualified trustee are required to comply and provide the information detailed in Section 321.081(L). (Ord. 321-96.)
SECTION 2. That this ordinance shall take effect and be in full force from and after the earliest period allowed by law.