(a) Generally. The director of finance shall deposit all moneys, checks, drafts and other receipts in such qualified banks or banking institutions in the United States of America to be designated as hereinafter provided.
(b) Designation of depositories, etc. The director of finance shall designate from time to time such banks and banking institutions as are qualified to be county depositories and the extent to which each is qualified to receive county funds. He shall immediately remove from such designation any bank or banking institution which fails to maintain the security provision hereinafter provided and shall immediately withdraw county funds from such bank or banking institution to the extent necessary to conform to this section; provided, however, that the council shall by resolution establish a policy for determining the proportionate distribution of county funds maintained in qualified depositories, which policy shall be followed by the director of finance within the limitation of the security provision herein contained.
(c) Security to be maintained; amount, form, etc. A bank or banking institution to qualify as a county depository shall furnish in advance of deposit of county funds, security in an amount not less than the amount of county funds to be deposited; and shall at all times maintain such security in an amount not less than the total amount of all county funds on deposit in such depository; provided, that any bank or banking institution which is prohibited by law from pledging any of its assets to secure deposits of public money of a state or subdivision thereof may be designated by the council upon recommendation of the director of finance, as a depository to hold county funds on deposit in an amount not to exceed two hundred fifty thousand dollars ($250,000.00) at any one time. The form of such security shall be in one or a combination of the following:
(1) Surety Bond. A surety bond in a form approved by the county attorney executed by a surety or guarantee company qualified to transact business in the state; the bond to run to the county and to guarantee payment on demand of all sums on deposit, in the event such bank or banking institution fails to make such payment for any reason or cause whatsoever.
(2) Federal Deposit Insurance. Federal deposit insurance as to such amount as is not in excess of the coverage limited to any one (1) depositor.
(3) Bonds. Bonds at face value or market value, whichever is less, of the United States Government or bonds or certificates of the state or bonds, notes or certificates of indebtedness of any county or municipality or other subdivision of the state; such bonds to be pledged to the county for the security of county money and to be placed for safekeeping in a safe deposit box in the banking institution, which box shall have a dual key lock and may be opened only by an official of the bank jointly with the director of finance or his duly designated representative; or in the alternative like securities may be placed in some other bank, banking institution or trust company under escrow agreement whereby such securities shall be held for the protection of county money and shall be released only by the joint authority of the depository and the director of finance of the county or his duly designated representative. The substitution of bonds, notes or other securities of a kind other than those designated in this section shall be permitted only upon the approval by unanimous vote of the council members in office.
(d) Procedure where county money exceed amount of security. If at any time the director of finance shall receive money belonging to the county exceeding the amount of the security furnished by county depositories, and no bank or banking institution shall furnish security or additional security to cover the amount for deposit, the director of finance may deposit such moneys in any bank or banking institution in the United States of America having a combined capital and surplus of not less than one million dollars ($1,000,000.00) without the security required by the preceding paragraph (c); but the director of finance shall within three (3) days after making such deposit without security notify the county executive or his designee. It shall be the duty of the county executive or his designee to cooperate with the director of finance in locating as promptly as possible a depositor willing and able to provide the security required in the preceding subsections hereof.
(e) Funds in trust. Banks or banking institutions receiving county funds in trust for payment of principal and interest on bonds or other obligations of the county shall not be required to furnish security therefor; nor shall security be required of banks or banking institutions to secure county funds which are deposited for transmittal forthwith to corresponding banks, qualified as county depositories.
(f) Agreements as to interest, etc.; disposition of amount accrued. If any bank or banking institution which is a county depository shall agree to pay interest upon the monthly balance of county deposits or upon a reserve deposit of a fixed amount for a stated period of time, the director of finance is authorized to enter into agreements with such depositories for the payment of interest to the county and such interest, when and if received, shall be treated as general revenue of the county. At such time as the county shall have on deposit funds not needed for immediate expenditure, the director of finance is authorized to invest such funds until the time they will be needed in such securities as are now or may hereafter be authorized by applicable public general and local laws, or in such other securities as may be authorized by resolution of the county council. Such authority shall extend to the investment of proceeds of the county bonds or other obligations, to trust funds and to other special as well as general funds of the county. All such securities shall be placed in safekeeping with one of the designated depositories of the county or shall be kept in a safe deposit box in any bank or banking institution of the county, leased for the exclusive use of the county, and to be opened by the director of finance jointly with some other county official to be designated by the county executive.
(g) Segregation of funds. The director of finance shall not be required to segregate money for various appropriations or various funds in separate bank accounts, but shall keep account of such segregation in the regular financial records of the county. (Mont. Co. Code 1965, § 2-102; 1906, ch. 171, § 62F; 1912, ch. 790, § 134; 1920, ch. 706, § 134; 1931, ch. 385; 1933, ch. 541, § 204; 1939, ch. 662; 1969 L.M.C., ch. 40, § 1.)
Editor’s note—See County Attorney Opinion dated discussing public purpose funds and non-public purpose fund.
