You know where your money is. If it’s in a bank, you know the name of the bank and you understand the security of your funds. But did you ever wonder where a city keeps it’s money? Like you, it deposits it’s money in a financial institution and for a designated time, that money is kept in that institution.
On Monday night, Portsmouth City Council will consider an ordinance authorizing City Auditor Trent Williams to solicit for applications for depositories for city funds coming into the Finance Department of the city of Portsmouth and to designate eligible public depositories for a period of five years, with applications providing for the security to be given those depositories.
The reason council will be considering what financial institution to deal with is that, according to the ordinance, the current period on the current contract is about to expire, so it is necessary to solicit for applications from institutions wishing to receive and hold city funds.
In addition, the ordinance calls for the agreement to fix and designate the kind of security to be given the city’s depositories guaranteeing the city against loss by reason of the deposits, and that security given by those deposits should be collateral as provided for by law for depositories holding public funds.
The ordinance calls for the amount of the collateral to be at all times 10 percent in excess of the amount of the deposit or the minimum as required by the Ohio Revised Code.
According to the wording of the ordinance – “In case of default on payment by such depository of any funds so deposited when requested by said city, the collateral so deposited as security shall become the property of said city and can be used by it in meeting any deficit created by default of such depository.”
Reach Frank Lewis at 740-353-3101, ext. 1928, or on Twitter @franklewis.