CCA(LOCAL) - FISCAL MANAGEMENT: DEPOSITORY BANK

Selection

The depository selected shall be a bank located in the state of Texas. The depository may be a state bank authorized and regulated under Texas law; a national bank, a savings and loan association, or savings bank authorized and regulated by federal law; or a savings and loan association or savings bank organized under Texas law, but shall not be any bank the deposits of which are not insured by the Federal Deposit Insurance Corporation (FDIC).

Term of Contract

The depository shall serve for a term of two years and until its successor has been duly selected and qualified. The ESC and its depository bank may agree to extend the contract for three additional two-year terms. The contract may be modified for each two-year extension if both parties mutually agree to the terms. The initial contract term and any extension must coincide with the ESC's fiscal year.

Bid Notices

At least 30 days prior to the termination of the current depository contract, the Board shall mail to selected banks in the ESC region and, if desired, to other banks, a notice stating the time and place in which bid applications will be received for selecting a depository or depositories. Attached to the notice shall be a uniform bid blank similar to that found in State Board rules.

Factors to Consider

All bids received in accordance with these provisions shall be considered by the Board at a regular or special meeting. In determining the best bid, the Board shall consider the interest rate bid on time deposits; the charge for keeping ESC accounts, records, and reports and furnishing checks; the ability of the bidder to render the necessary depository service and any other matter that the Board considers to be in the best interests of the ESC.

Tie Bids

If tie bids are received, and each tie bidder has bid to pay the ESC the maximum interest rates allowed by the Federal Reserve System and the FDIC and, in the Board's judgment, the bids are otherwise equal and two or more of the tie bidders have the facilities and ability to provide the needed services, the Board may award the contract:

  1. To either tie bidder;
  2. To each tie bidder or to as many as the Board may select; or
  3. By determining by lot which bidder shall receive the contract.

Rejection of Bids

The Board has the right to reject any and all bids.

Duties

Contract

The depository shall:

  1. Make and enter into a depository contract(s), bond(s), or other necessary instruments setting forth the duties, responsibilities, and agreements pertaining to the depository. The bid of the depository shall be attached to the contract and incorporated by reference in the contract.
  2. Faithfully perform all legal duties and obligations and make payments from ESC funds upon order, duly entered, of the Board.
  3. Faithfully keep and account for, according to law, all ESC funds upon deposit and pay over to the successor depository all balances remaining in ESC accounts.

Authorized Collateral

Eligible securities for collateralization of deposits are those defined as "eligible securities" by the Public Funds Collateral Act.

Monitoring Collateral Adequacy

The ESC shall require monthly reports with market values of pledged securities from all financial institutions with which the ESC has collateralized deposits. The investment officers shall monitor adequacy of collateralization levels to verify market values and total collateral positions.

Release of Pledged Securities

The investment officer or designee shall approve in writing the release or substitution of any securities pledged to the ESC that are being held by any organization.

Education Service Center Region 11

CCA(LOCAL)-ESCA

UPDATE 23

DATE ISSUED: 6/20/2018