Ordinance No. 2,97700925 -6
IQ 12iul "AR1 3 9WIM
AN ORDINANCE SELECTING A CITY DEPOSITORY; AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE AND ATTEST TO A
CONTRACT WITH THE SELECTED DEPOSITORY; AND PROVIDING
FOR THE EFFECTIVE DATE HEREOF.
WHEREAS, pursuant to the provisions of TEX.REV.CIV.STAT.
art. 2559, the City of Baytown is authorized to receive
applications for the custody of City funds from any banking
corporation, association, or individual banker doing business
within the City that may desire to be selected as depository
of the City; and
WHEREAS, notice that such applications would be received
on the 10th day of September 1980, was published pursuant to
TEX.REV.CIV.STAT. art. 2559, on the 3rd day of September,
1980, which is not less than one week nor more than four
weeks before such date and notice was personally given to
each banking corporation in the City of Baytown; and
WHEREAS, pursuant to TEX.REV.CIV.STAT. art. 2560, the
governing body is to select as depository the banking cor-
poration, association, or individual banker offering the
most favorable terms and conditions for the handling of the
City's funds; and
WHEREAS, the City of Baytown did receive applications
from banking corporations, associations, and /or individual
bankers doing business within the City to serve as the
depository of the City funds; and
WHEREAS, the City Council deems that Citizens Bank &
Trust Company of Baytown has offered
the most favorable terms and conditions for the handling of
such funds; NOW THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
BAYTOWN, TEXAS:
Section 1: That the City Council hereby finds that
Citizens Bank & Trust Company of Baytown
has offered the most favorable terms and conditions for the
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handling of the City's funds.
Section 2: That Citizens Bank & Trust Company of Baytown
is selected as the Depository of the City of Baytown, Texas,
consistent with the terms and provisions of its application.
Section 3: That the Mayor and City Clerk are hereby
authorized to execute and attest to a contract with Citizens
Bank & Trust Company of Baytown _ said
contract setting forth terms and conditions consistent with
the application that was submitted. The contract is attached
as Exhibit "A," and made a part hereof.
Section 4: This ordinance shall take effect from and
after its passage.
INTRODUCED, READ, and PASSED by the affirmative vote of
the City Council of the City of Baytown this 25th day of
FW-A-1 UT TWO • • •
ATTEST:
EILEEN P. HALL, City Clerk
APPROVED:
ANDALL B. STRON`6, City torney
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E X H I B I T "A"
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DEPOSITORY CONTRACT
CITY OF BAYTOWN
THE STATE OF TEXAS
COUNTY OF HARRIS
This Contract and Agreement is made and entered into by
and between the City of Baytown, a municipal corporation,
hereinafter sometimes referred to as the "City ", located in
the County of Harris, State of Texas, and Citizens Bank &
Trust Company of
Baytown hereinafter called "Bank" or "Depository
Bank ".
WITNESSETH:
Whereas, bids were received in response to an Invitation
to Bid on Depository Contract for the City of Baytown; and
Whereas, Citizens Banat & Trust Company of Baytown _ was
duly selected, qualified, and designated as Depository Bank
for the deposits of the City, to serve in such capacity for
the term commencing on the 1st day of October, 1980 and
ending on the 30th day of September, 1982.
NOW THEREFORE, it is agreed by the parties hereto, as
follows:
1. That pursuant to the action taken by the City on
the 25th day of September, 1980 , Citizens Bank
Q, Trust Company of Baytown _is
selected and designated as Depository Bank of the
City, for the period from the 1st day.of October,
1980 to the 30th day of September, 1982, and
thereafter until the successor depository shall
have been duly selected and qualified according to
law.
2. That in consideration of said selection as Depos-
itory Bank, the said Depository Bank convenants
and agrees to faithfully perform all of the duties
thereof, as provided by the laws of the State of
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Texas, and will safely keep and faithfully disperse
all funds coming into it as depository, and faith -
fully.pay over to the successor, all funds remaining
in the depository, and does guarantee and indemnify
the City against all loss, cost or expense, includ-
ing a reasonable attorney's fee, arising out of or
related to the failure to perform duties imposed
by law or this`Contract.
The term "funds" shall be considered to mean all
cash, securities and investments, sinking funds,
trust funds, and other funds or assets that may
come into the possession of said Bank.
3. Bank states that it is a banking institution char-
tered under the laws of the United States or of
the State of Texas.
4. The Depository Bank agrees to pay to the City of
Baytown interest on time deposits of $100,000.00
or more at a rate-equal to the interest rate for
U. S. Treasury Bills of like maturity, minus 0.4
percentage points. The interest rate for U. S.
Treasury Bills to be used in determining the total
interest rate shall be the rate for treasury bills
at the close of business on the previous day as
published in the "ask" or "offer" column under
Treasury Issues in the WALL STREET JOURNAL. The
total interest rate to be paid on each time deposit
will be determined on the deposit date and will
remain unchanged for the term of that deposit.
Calculation of interest shall be made on a 360 -day
simple interest basis and.shall be paid on each
time deposit upon maturity.
5. No time deposit that carries a maturity date
beyond the date prescribed for termination of the
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contract will be placed with the Bank; however, in
the event time deposits shall mature subsequent to
the date of the termination of the contract, all
deposits previously invested may, at the election
of the City, remain on deposit until. maturity.
6. The Bank shall furnish monthly statements or
statements at other special intervals as requested
by the City or its designated accountant and /or
auditor, showing the debits and credits and
balance in each account on deposit. The postings
to each account shall be an individual posting of
each debit and credit and other matters of banking
routine shall be handled in a manner satisfactory
to the City. The Bank also agrees to provide the
following services free of charge:
(a) Night depository service, including keys and
bags;
(b) Safety deposit box service,
(c) Coin wrappers and money straps;
(d) Certified and /or cashier's checks;
(e) Checks of type, quality and quantity specified
by the City; and
(f) Coded form deposit slips.
7. The Bank shall pledge, to the City with a bank of
safekeeping (Trustee Bank), acceptable to the
City, "approved securities" in an amount (based on
current market value, not par value) sufficient to
adequately protect the funds of the City deposited
with said Bank. Securities shall be accepted at
their current market value and total securities
pledged shall have market value of not less than
One Hundred Percent (100 %) of the funds secured at
all times. Should the value of the securities
pledged ever be less than One Hundred Percent
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(100%) of the funds secured, the Bank, within five
(5) days of notice of said default, shall cause
additional securities to be deposited in such
5
amounts as to restore the total securities pledged
to One Hundred Percent (100go) of the funds secured.
The Bank shall have the right and privilege of
substituting approved securities upon obtaining
the written approval of the City, which shall not
be unreasonably withheld. The term "approved
securities" as used herein shall mean and include
direct obligations of the United States of America,
bonds of any agency of the United States which are
unconditionally guaranteed as to principal and
interest by the United States, bonds of the State
of Texas or of any county, school district, city
or town of the State of Texas that have been rated
"A" or better by Moody's Investors Service and
that mature in less than ten (10) years from the
date pledged, or other securities provided by
Texas Revised Civil Statute art. 2560(d). The City
must approve all securities prior to their being
pledged. The City may use as many as five (5)
days for the approval of said substitution. The
Bank will execute a safekeeping agreement, in a
form as attached hereto and marked Exhibit "A ".
Securities may only be released from the banking
institution holding said securities in safekeeping
(Trustee Bank), by a release in a form which shall
be provided by the City.
8. In the event the City shall desire to convert a
part or all of the public funds invested under
this Contract, to demand deposits or to cash, the
Bank agrees to make such funds available without
delay, subject to regulations imposed by appro-
priate bank regulatory authorities; and the City
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agrees that upon payment of the funds to the City,
it shall provide a release of the bonds or securities
in an amount proportionate to the funds withdrawn,
subsequent to said withdrawal, after said funds
have been credited or cashier's checks issued
thereon have been duly paid.
9. In the event the City shall deposit public funds
with the Bank which would exceed the reasonable
market value of the securities pledged by the
Bank, then the undersigned Bank agrees, within
forty-eight (48) hours thereafter, to deliver to
the Finance Director of the City, in the form
provided by the City, a list of additional secu-
rities that are to be deposited with the Trustee
Bank. In the event the sum on deposit with the
Bank is reduced to less than the bonds on deposit
with the Trustee Bank, the City does agree to
release such excess bonds on deposit with the
Trustee Bank, by the Finance Director of the City
notifying the Trustee Bank, in writing, of the
agreement to release such bonds, and in the
appropriate amount.
10. The Bank covenants and agrees that the Finance
Director of the City shall not be required nor
requested to execute a release of bonds held on
deposit pursuant to the Safekeeping Agreement
unless a bona fide exchange of collateral bonds
has been approved by the Finance Director of the
City or until such time as all monies, including
principal and interest secured by the deposit of
bonds in the Trustee Bank, have been paid to the
City and a copy of the cashier's check dated not
more than thirty (30) days prior to the date of
such release, duly endorsed by the Finance Director
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of the City and canceled, has been attached and
made a part of the release of the City. In addition,
the Finance Director of the City shall release any
excess collateral upon request by the Bank.
11. The Bank covenants and agrees that in the event
any of the terms, covenants, or conditions of the
bid document, this Contract document, or the Safe-
keeping Agreement, are in any way breached or
violated or for any reason the Bank has failed to
perform under the terms and conditions of said
documents and /or agreements, the City reserves the
right to terminate this Contract or any agreement
entered into subsequent to or by.reason of the bid
previously submitted by the Bank and shall have
the option of withdrawing time deposits from the
Bank, including principal and accrued interest, or
in the alternative, to allow said funds to remain
on deposit until maturity. Failure by the City at
any time or instance to exercise any of its
rights under the terms, covenants, or conditions
of the bid document, this Contract document, or
the Safekeeping Agreement shall not constitute or
be construed to constitute a waiver of any of the
City's rights as stated herein.
12. Existing regulations prohibit the payment of
interest on demand deposits; however, if during
the period.covered by this Contract the rules and
regulations make it permissible to pay interest on
daily balances, the Bank agrees to pay the City
the interest rate equal to the maximum interest
rates paid on any other demand account by the
Bank.
so
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13. The Bank certifies that it is not disqualified
from bidding and becoming the depository for the
City by reason of one or more of its officers,
directors, and stockholders who own more than 10
percent of the bank's outstanding capital stock,
being on the City Council of the City of Baytown,
and further that no officer, director or stock-
holder voted or participated in the proceedings
whereby the bank was selected as depository.
14. The Bank covenants and agrees that the City may
maintain time deposit accounts in other banking
institutions and such accounts in other banks
shall not be deemed to be a breach of the terms or
obligations of this Contract. The City shall also
be entitled to negotiate repurchase agreements
with the Depository Bank or with other banking
institutions located within the city limits for
funds that will be invested for time periods of
less than thirty (30) days.
15. The City covenants and agrees that the Depository
Bank may limit its participation in time deposits
that exceed $14,000,000.00 at anyone time, and
shall not be required to accept time deposits in
excess of that amount.
IN WITNESS WHEREOF, witness the signature of the President
of Citizens ,Bank &: Trust Company of Baytown___
(Bank) as attested to by its Secretary, and the
Mayor of the City of Baytown as attested to by its City
Clerk, in duplicate, on this, the day of ,
r
Bank
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ATTEST:
Secretary
=ATT ST:
Cx�ty�•��le:
By:
President
CITY OF BAYTOWN
By:
Mayor
•
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TO:
Trustee Bank
SAFEKEEPING AGREEMENT
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The undersigned, being a duly qualified and acting
officer of the undersigned Bank, acting for and on behalf of
said Bank, does hereby deposit with the above named Trustee
banking institution, the bearer bonds set out on the Schedule
of Bonds attached hereto.
You are instructed that the bonds deposited with you
are deposited pursuant to an agreement to deposit public
funds with the undersigned Bank by the City of Baytown
(City).
It is agreed and understood that you are to release
these bonds only upon the written authorization of the
undersigned Bank and the City by an appropriate release, in
a form as attached hereto. However, in the event the
undersigned Bank shall fail and /or refuse to pay, upon
written demand and notice given at least twenty -four (24)
hours before the date any time deposits on deposit with the
undersigned Bank by the City are due, you are instructed and
authorized to deliver to the Finance Director of the City,
all bonds and /or securities deposited hereunder without
further authorization, release or direction by the under-
signed Bank, so long as you shall be furnished a certified
copy of a resolution duly enacted by the City Council of the
City of Baytown, which resolution shall provide:
1. That written notice and demand for payment had
been made twenty --four (24) hours prior to the date
time deposits on deposit with the undersigned
Bank, were due.
2. That a release of bonds on deposit with your bank
had been furnished to the undersigned Bank in a
form as attached hereto, at least twenty -four (24)
hours piror to the enactment of such order.
EXHIBIT "A"
Page 1 of 4
00925 -61
3. That the undersigned Bank has refused and /or
failed to pay to the City time deposits then due.
4. That a certified copy of said order has been
delivered to the undersigned Bank, at least one
(1) hour prior to its presentment to the Trustee
Bank for release of the bonds-or securities
deposited hereunder.
In executing this Safekeeping Agreement, the under-
signed Bank does agree to be bound by the provisions herein,
and does hereby release and forever discharge the above
named Trustee Bank from any liability for the release of the
said bonds to the Finance Director of the City of Baytown,
as herein specified.
SIGNED and EXECUTED this, the day of ,
1980.
ATTEST:
SECRETARY
ACCEPTED AND AGREED TO:
TRUSTEE BANK
OFFICER
ATTEST:
SECRETARY
OFFICER
EXHIBIT "A"
Page 2 of 4
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00925 -Gn
PARTIAL RELEASE OF THE
CITY OF BAYTOWN
The undersigned Finance Director of the City of Baytown
hereby authorizes the
Bank to release the securities
identified by the list attached hereto pursuant to the
Safekeeping Agreement with said
Bank
because (a) the
Bank has paid to the City monies in the
amount of
previously held on deposit; (b) there has been a substitution
of collateral and a list of the substituted collateral is
attached hereto; or (c) there is excess collateral pledged as
security.
Signed this the day of , 1980.
Finance Director
City of Baytown
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