Ordinance No. 4,54160911 -1
ORDINANCE NO. 4541
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 5th day of September 1986, was published pursuant to TEX.
REV. CIV. STAT. , art. 2559, on the 23rd day of August, 1986,
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
corporation, 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 corporation, 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 Baytown State Bank 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 Baytown
State Bank of Baytown has offered the most favorable terms and
conditions for the handling of the City's funds.
Section 2. That Baytown State rank of Baytown is selected
as the Depository of the City of Baytown, Texas, consistent with
the terms and provisions of its application.
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Section 3: That the Mayer and City Clerk are hereby
authorized to execute and attest to a contract with Baytown State
Bank 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 afters
its passage.
INTRODUCED, READ
City Council of the
September, 1986.
and PASSED by the affirmative vote of the
City of Baytown, this the 11th day of
4MMETT O. TO, MAYOR
ATTEST:
E T LEEN P. HALL, City Clerk
i
.._..._.__..._.._........ _ ...._..._......_..._ ........... ....._.__ ......... .........._....._
fRAND07 B . STRONG, City At t - -ney
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DEPOSITORY CONTRACT
CITY OF BAYTC Wi'V
THE STATE OF TEXAS
COtNTY OF HARR I S
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 BAYTC!,IIE STATE BANK of
Baytown hereinafter called "Bank" or "Depository Bank ".
W I T N E S S E T H:
WHEREAS, bids were received in response to an Invitation to
Bid on Depository Contract for the City of Baytown; and
WHEREAS, BAYT0WN STATE BANK 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 nctober 1986, and ending on the 30th
day of September, 1988.
NOW THEREFORE, it is agreed by the parties hereto, as
follows:
1. That pursuant to the action taken by the City
on the 11TH day of SEPTEMBER 1986
BAYTOUN STATE BANK
is selected and designated as Depository Bank of
the City, far the period from the 1st day of
October, 1986, to the 38th day of September, 1988,
and thereafter until the successor depository shall
have been duly selected and qualified according to
law.
2. That in consideration of said selection as
Depository Bank, the said Depository Bank covenants
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
faithfully nay over to the successor, all funds
remaining in the depository, and does guarantee and
indemnify the City against all loss, cost or
expense, including 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 he 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
chartered 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, + .18
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 "yield" column under Treasury
Issues in the WALL STREET JOURNAL; and such rate
shall remain in effect until 5:00 p.m. of the day
it is published. 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.
Maturity dates for investments will be set by the
City to met expected cash needs of the City.
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60911 -1d
5. No time deposit that carries a maturity date
beyond the date prescribed for termination of the
contract will be placed with the Rank; 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 desionated 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;
(f) Coded form deposit slips; and
(g) Wire transfers.
(h) Delivery of deposit slips to the City for all
funds deposited directly to City Accounts no later
than the following business day after the deposit:
(i} Will consider all City accounts as one account for the
purpose of determining if an overdraft condition
exists:
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(j) A monthly account analysis which must show at a minimum
the account number, period covered, average ledger
balance, average collection balance, and services
rendered (must include type and quantity of service);
and
(k) Have the Trustee Bank provide directly to the City a
report certifying the current market value of all
pledqed secureities. Such report to be provided each
ninety (90) days. The First Report will be for market
value as of October 31, 1986, and all other reports
will be for the ninetieth day from the previous report.
If the ninetieth day falls on a non - business day. The
report will he for the first business day after the
ninetieth day.
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 (100X) of the funds
secured at all times. Should the value of the securities pledged
ever be less than One Hundred Percent (100 %) of the finds
secured, the Bank, within five ( 5 ) days of notice of said
default, shall cause additional securities to be deposited in
such amounts as to restore the total securities pledged to One
Hundred Percent (100X) of the funds secured. The Bank shall have
the riqht 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,
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60911 -1f
school district, city or town of the State of Texas that have
been rated "A" or a better by Wody'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 aoreement, 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 appropriate bank
regulatory authorities; and the City 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 reasonahIe 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 securities that are to be deposited with the
Trustee Rank. In the event the sum on deposit with the Bank is
reduced to Iess 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 writinq, of the agreement to release such
bonds, and in the appropriate amount.
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60911 -1g
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 of the City and cancelled, 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 Safekeepinq 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 documents, 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. The Bank certifies that it is not disqualified from biddinq
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
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Council of the City of Baytown, and further that no officer,
director or stockholder voted or participated in the proceedings
whereby the Bank was selected as depository.
13. The Parties covenant and agree that the Bank shall be the
sole and single depository of the City for the term of the
Contract, and the City shall not maintain time or demand accounts
(other than bond interest and sinking fund accounts) in any other
financial institution. The City may, however, invest funds in
direct debt securities of the United States, and debt securities
considered to be "Yield Restricted" by the United States Internal
Revenue Service.
IN WITNESS WhIEREOF, witness the signature of the President
of SA YTOLh; STATE BAP1L (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 11th day
of SEPTEMBER , 1986.
ATTEST:
Secretary
ATTEST:
EILEEN P. HALL, City Clerk
BAYTONiN STATE BANK
Bank
By:
President
CITY OF BAYTOV"
By:
yo
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60911 -1h
TO
TRUSTEE BANK
60911 -1i
SAFEKEEPING AGREEWNT
The undersigned, being a duly qualified and actino officer
of the undersigned Bank, acting for and on behalf of said Bank,
does hereby deposit with the above named Trustee bank ino
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 9AYTOM.
It is agreed and understood that you are to release these
bonds only upon the written authorization of the undersigned Bank
and the CITY OF BAYTOM 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 OF
BAYTOWN are due, you are instructed and authorized to deliver to
the Finance Director of the CITY OF BAYTOWN , all bonds and/or
securities deposited hereunder without further authorization,
release or direction by the undersigned Bank, so long as you
shall be furnished a certified copy of a resolution duly enacted
by the City Council of the CITY OF BAYTOO N, 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 prior to the enact-
ment of such order.
EXHIBIT "A"
Page 1 of 4
60911 -1j
3. That the undersigned Bank has refused and /or failed to
pay to the CITY OF BAYTCMdJ 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 undersigned
Bank does agree to be bound by the provisions herein, and does
hereby release and forever discharge the above named Trustee Rank
from any liability for the release of the said bonds to the
Finance Director of the CITY OF BAYTr-MN, as herein specified.
SIGWD and EXECUTED this the day of , 1986.
ATTEST:
SECRETARY
ACCEPTED AND AGREED TO:
TRUSTEE BANG
OFF I CER
ATTEST:
SECRE TARY
BASK
OFFICE
F',H I B I T "A"
Page 2 of 4
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EXHIBIT 'R'
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60911 --1L
PARTIAL RELEASE OF THE
CITY OF BAYTOMAN
The undersigned FINANCE DIRECTOR of the CITY OF BAYTOMAN
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) here 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 , 1986.
FINANCE DIRECTOR OF THE
CITY OF BAYTOMN
Exhibit "A"
Page 4 of 4