HomeMy Public PortalAbout14294ORDINANCE NO. 14294
AN ORDINANCE repealing Ordinance No. 13806, adopted February 13, 2014,
and enacting a new Ordinance in lieu thereof, to update The District’s Investment Policy, to
revise the list of Securities Dealers to invest with, and to revise the list of acceptable Commercial
Paper to invest in; and
WHEREAS, the revised Securities Dealer list and revised list of acceptable
Commercial Paper are within the parameters set by the District’s Investment Policy.
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF TRUSTEES OF
THE METROPOLITAN ST. LOUIS SEWER DISTRICT:
Section One. Investment Policy
The Secretary-Treasurer shall prepare, maintain and adhere to a written
investment policy which shall include an asset allocation plan which limits the total amount of
District funds which may be invested in any particular investment authorized by law. The
Secretary-Treasurer shall present a copy of such policy to the Board of Directors annually or at
any time the written investment policy is amended, attached hereto as Exhibit "A"
Section Two. Time and Demand Deposits – Approved Depositary Banks/Contracts
A. The Secretary-Treasurer shall maintain a list of banks or trust companies,
situated in the District, approved for deposit of District funds ("Approved Depositary Banks").
The list of Approved Depositary Banks, attached hereto as Exhibit "B", is hereby approved;
provided that such list may be modified from time to time by resolution of the Board of Trustees
of the District.
B. The Secretary-Treasurer shall determine, by the exercise of his best
judgment, the amount of District funds that are not immediately needed for the purpose to which
such funds are applicable, and shall keep on demand deposit in Approved Depositary Banks the
amount of District funds which he has so determined are needed for current operating expenses
of the District and disburse the same as authorized by state law and the District's Plan.
C. Within the parameters of the Secretary-Treasurer's written investment
policy, the Secretary-Treasurer shall place the District funds which he has determined are not
immediately needed for the purpose to which said funds are applicable, on time deposit drawing
interest in Approved Depositary Banks, or place them outright or by repurchase agreement in
Authorized Investments described in Section 3 of this Ordinance, as he in the exercise of his best
judgment determines to be in the best overall interest of the District, giving due consideration to:
(1) The preservation of such moneys;
(2) The liquidity needs of the District;
(3) The comparative yield to be derived therefrom;
(4) The effect upon the economy and welfare of the people of
Missouri of the removal or withholding from banking institutions
in the District of all or some such District funds and investing same
in obligations authorized in section 15, article IV of the Missouri
Constitution; and
(5) All other factors which to him/her as a prudent Secretary-Treasurer
seem to be relevant to the welfare of the District in the light of the
circumstances at the time prevailing.
In making such deposits or investments, the Secretary-Treasurer shall follow the applicable
investment strategy submitted to the Board of Trustees of the District as a part of his monthly
report as required by Section 4 of this Ordinance; provided that the Secretary-Treasurer may
make investments or deposits, which are not consistent with such investment strategy, when such
action is, in the judgment of the Secretary-Treasurer, in the best interest of the District, taking
into consideration the factors set forth in this Section, provided the Secretary-Treasurer will note
such action in his next monthly report to the Board of Trustees of the District.
D. In placing moneys on demand or time deposit, the Secretary-Treasurer
shall use his best efforts to obtain three quotes from Approved Depositary Banks and shall place
such funds with the Approved Depositary Bank selected by him/her, taking into consideration
the quote of such Approved Depositary Bank and the factors set forth in Section C above. The
Secretary-Treasurer shall maintain a record of all quotes received. The Secretary-Treasurer may
place such funds with an Approved Depositary Bank, without obtaining quotes, when such
action is, in the judgment of the Secretary-Treasurer, in the best interest of the District taking
into consideration the factors set forth in Section C above, provided that the Secretary-Treasurer
shall note such action in his next monthly report to the Board of Trustees of the District.
E. The Executive Director and Secretary-Treasurer of the District are
authorized and directed to execute a contract with each Approved Depositary Bank holding
funds of the District. The contract shall be in substantially the form of Exhibit "C" attached
hereto with such changes therein as shall be approved by the Executive Director, Secretary-
Treasurer and General Counsel of the District, provided that such officers' signatures on such
contract shall constitute conclusive evidence of the approval thereof.
Section Three. Authorized Investments – Approved Securities Dealers - Contracts
A. The Secretary-Treasurer may subscribe for or purchase outright or by
repurchase agreement securities which are lawful for investment of the District's funds under
state law and the District's Investment Policy ("Authorized Investments") which he, in the
exercise of his best judgment, believes to be the best for investment of District funds at the time
and in payment therefor may withdraw moneys from any bank account, demand or time,
maintained by him/her. The Secretary-Treasurer may bid on subscriptions for such Authorized
Investments in accordance with his best judgment. Such Authorized Investments must be
purchased in accordance with applicable law and the District’s Investment Policy. The Secretary-
Treasurer shall maintain a list of Approved Securities Dealers. The list of such Approved
Securities Dealers, attached hereto as Exhibit "D", is hereby approved; provided that such list is
in accordance with the District’s Investment Policy and may be modified from time to time by
resolution of the Board of Trustees of the District. The Secretary-Treasurer shall maintain a list
of Approved Commercial Paper. The list of such Approved Commercial Paper, attached hereto
as Exhibit "F", is hereby approved; provided that such list is in accordance with the District’s
Investment Policy and may be modified from time to time by resolution of the Board of Trustees
of the District.
B. The Executive Director and Secretary-Treasurer of the District are
authorized and directed to execute a contract with each Approved Depositary Bank or each
Approved Securities Dealer with whom the District enters into a repurchase agreement. The
contract shall be in substantially the form of Exhibit "C" attached hereto with such changes
therein as shall be approved by the Executive Director, Secretary-Treasurer, and General
Counsel of the District, provided that such officers' signatures on such contract shall constitute
conclusive evidence of the approval thereof.
Section Four. Secretary-Treasurer's Report
The Secretary-Treasurer shall prepare a monthly report to the Board of Trustees
of the District relating to the deposit and investment of District funds pursuant to this Ordinance.
The Secretary-Treasurer's monthly report shall include a prospective overview of the Secretary-
Treasurer's investment strategy for the deposit and investment of District funds for the next
succeeding monthly period and a report regarding the deposit and investment of District funds
for the preceding monthly period including the performance of such funds for the reporting
period. The District reports all holdings of Securities by portfolio on the web page daily for
review as well as monthly (CFR) comprehensive financial reporting of asset allocation and
compliance with Investment Policy.
Section Five. Security for Safekeeping of District Funds
For the security of the funds deposited by the Secretary-Treasurer under the
provisions of this Ordinance, the Secretary-Treasurer shall, from time to time, submit a list of
acceptable securities to be approved by resolution of the Board of Trustees of the District and the
Secretary-Treasurer shall require of the Approved Depositary Banks as security for the
safekeeping and payment of deposits, securities from the list provided for in this section, which
list may include only securities of the kind and character permitted by state law and the District's
Plan ("Approved Collateral"). The list of Approved Collateral, attached hereto as Exhibit "E" is
hereby approved; provided that such list may be modified from time to time by resolution of the
Board of Trustees of the District. Such securities shall be delivered to the Secretary-Treasurer or
to a disinterested banking institution or safe depositary, as escrow agent or trustee, as directed by
the Secretary-Treasurer. All securities will be held by third-party custodian designated by the
Secretary-Treasurer and evidenced by safekeeping receipts. All trades where applicable will be
executed by delivery vs. payment (DVP) to ensure that securities are deposited in an approved
financial institution prior to the release of funds.
Section Six. Authorized District Representatives
All requests for transfers of funds from District accounts to other accounts of the
District maintained at the same Approved Depositary Bank, other than transfers by check, may
be authorized by telephonic, telegraphic, oral or written request received from an Authorized
Representative of the District. A transfer of funds from District accounts in favor of third parties
shall be authorized only at the request of any two Authorized Representatives of the District. All
checks drawn on any accounts of the District shall be signed, either manually or by means of a
check-signing machine, by any Authorized Representative of the District; provided that checks
of $50,000 or more may not be signed by means of a check signing machine or other facsimile
and must be signed by the manual signatures of two Authorized Representatives of the District.
The Authorized Representatives of the District, which include the Secretary-Treasurer, Assistant
Secretary-Treasurer, General Counsel, Attorney III, and Director of Information Services, and of
the District are hereby approved; provided that the Board of Trustees may, from time to time, by
resolution change such Authorized Representatives of the District.
Section Seven. Official Bonds
The Secretary-Treasurer of the District shall, before entering upon the discharge
of his duties hereunder, give bond in the sum of not less than $1,000,000 to the District and any
other Authorized Representative of the District shall give bond in the sum of not less than
$500,000; provided that the District may purchase such bond in additional amounts which the
Executive Director deems in the best interest of the District, taking into consideration the
security of District funds as well as the cost of such bond. The bond shall be furnished with a
surety company authorized to do business in the State of Missouri and shall be in such form as
may be prescribed by the General Counsel of the District. The bond shall be filed in accordance
with Section 7.070 of the District Plan.
Section Eight. Prior Ordinances
The provisions contained in this ordinance shall take the place of and supersede
the provisions of all prior ordinances or resolutions relating to the same subject matter which are
herewith inconsistent, including but not limited to Ordinance Nos. 7879, adopted August 9, 1989
and 10908, adopted February 8, 2001, and such ordinances are hereby repealed.
Section Nine. FDIC Limits
Deposits at FDIC-insured institutions are now insured up to at least $250,000 per
depositor through December 31, 2013. On January 1, 2014, the standard insurance amount will
return to $100,000 per depositor for all account categories except for IRAs and other certain
retirement accounts which will remain at $250,000 per depositor.
Section Ten. Check 21 Act
The District follows the law related to the Check 21 Act. The Check 21 was
enacted on October 28, 2004. The law allows the recipient of the original paper check to create a
digital version of the original check, into an electronic format thereby eliminating the need for
further handling of the physical document.
Section Eleven. Electronic Payments
The District issues payments using the EFT Electronic Funds Transfer process
and adheres to the same approvals and guide lines as the issuance of checks. This is the
District’s preferred method of payment.
EXHIBIT B
LIST OF APPROVED DEPOSITARY BANKS
Bancorp South
Bank of America, N.A.
BMO Harris Bank
Boulevard Bank
Bremen Bank & Trust Company
Carrollton Bank
Cass Commercial Bank
Citizens National Bank
Commerce Bank of St. Louis
Commerce Trust
Commercial Bank of Westport
Eagle Bank and Trust Company of Missouri
Enterprise Bank & Trust
EverBank
FCB South County Bank
Fifth Third Bank
First Financial Bank
First National Bank of St. Louis (Central Bancompany)
Founders Bank
Heartland Savings Bank
Lindell Bank & Trust Company
Main Street Bank & Trust (Lock-Box /Firstech Pay Station Pass Through)
Montgomery 1st National Bank
Northern Trust Bank
PNC Bank
Pulaski Bank
Regions Bank, N.A.
Reliance Bank
Rockwood Bank
Royal Banks
Saint John’s Bank & Trust Company
St. Louis Bank
Southern Commercial Bank
The Bank of New York*
The Business Bank of St. Louis
The Private Bank
UMB Trust
US Bank
*Paying Agent Institutions Only
EXHIBIT C
DEPOSITARY CONTRACT FOR DEPOSITS
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
THIS CONTRACT, made the _____ day of_________________, 20___, between
the Secretary-Treasurer of The Metropolitan St. Louis Sewer District (hereinafter the "District")
and ___________ ______________ (hereinafter the "Depositary");
WITNESSETH:
Pursuant to the provisions of Section 7.080 of the District's Plan and Ordinance
No.__________ of the District, Depositary has been selected as a depositary of moneys of the
District; and it is hereby agreed as follows:
1. Demand Accounts. The Secretary-Treasurer of the District will from
time to time deposit moneys with Depositary on demand deposit. The District agrees to establish
and maintain with Depositary the following demand deposit accounts:___________
_______________________________________________. Depositary agrees to safely keep the
demand deposits made hereunder, to promptly collect all checks, drafts and other instruments of
exchange deposited with it under this contract, and to pay out such sums as the District may draw
by check or other transfer as hereinafter provided.
2. Certification of Deposit. The Secretary-Treasurer of the District will
from time to time purchase certificates of deposit from the Depositary. The rates of interest,
basis of calculation of interest, time of payment of interest and maturity of each such certificate
of deposit shall be as agreed to by the District and the Depositary at the time of purchase.
3. Collateral for Deposits. The Secretary-Treasurer shall from time to
time provide the Depositary a list of approved securities ("Securities"), which may be provided
as collateral for District deposits. The current list of Securities is attached hereto as Addendum
A. To secure the safekeeping of the moneys deposited under this contract, Depositary will
deliver Securities, in an amount at least equal in market value to the amount of deposits of
District and its sub districts in the Depositary hereunder, as directed by the Secretary-Treasurer.
Such Securities shall be delivered to the Secretary-Treasurer or to a disinterested banking
institution or safe depositary, as escrow agent or trustee (the "Custodian") as directed by the
Secretary-Treasurer in writing. The current written direction of the Secretary-Treasurer as to the
Custodian for such Securities is attached hereto as Addendum B. Depositary does hereby grant,
bargain, convey and pledge a security interest in any and all Securities deposited with the
Secretary-Treasurer of the District or the Custodian in accordance with the terms of this contract.
Upon an increase in the deposits of the District in the Depositary, the Depositary will
make additional deposits of Securities with the Secretary-Treasurer or Custodian, equal in
market value to the amount by which such deposits have increased. Upon a decrease in the
deposits of the District in the Depositary, the Secretary-Treasurer of the District shall consent to
a withdrawal of deposits of Securities in such amounts as will insure that all deposits are fully
collateralized in the amount required hereunder.
4. Accounting and Safekeeping of Securities. The Secretary-Treasurer of
the District may from time to time inspect or request an accounting of the securities to determine
that they are kept and maintained as required in paragraph 3. Any expenses charged by the
Custodian for the deposit, safekeeping and inspection of said securities shall be paid by
Depositary. If in any case, or at any time, the Secretary-Treasurer of the District determines that
the Securities given by Depositary do not satisfactorily secure the deposits made or to be made
hereunder, the District may require additional or substitute security to be given and Depositary
shall furnish additional or substitute security as is satisfactory to the Secretary-Treasurer of the
District.
5. Substitution of Securities. The Depositary may, at any time with the
consent of the Secretary-Treasurer, withdraw any of the Securities deposited to secure the
safekeeping of the moneys deposited hereunder upon depositing in lieu thereof other Securities
of like kind and character and at least equal in market value to the Securities withdrawn.
Securities so deposited will be pledged to secure payment by the Depositary of District funds as
directed by the District pursuant to the provisions hereof, and such Securities shall be released
and delivered to the District on its sole demand made to the Custodian, in the event that the
Depositary should fail to pay such secured funds, or any part thereof, as directed by the District
pursuant to the provisions hereof, and that securities so released and delivered to the District
shall be converted into money and the District shall use the same in lieu of such secured funds.
6. Statement of Accounts. Depositary shall, at times specified in
writing by the Secretary-Treasurer of the District, render a statement showing the daily balance,
or amount of money, held by it under this contract and shall include with such statement all
cancelled checks drawn on any accounts of the District covered by such statement.
7. Conversion of Securities. In the event that Depositary defaults in any
manner in performing any of the terms and conditions of this contract between the parties or fails
to keep safely the moneys deposited with it, or to pay any demand ordered by the Secretary-
Treasurer of the District, the Secretary-Treasurer of the District shall be authorized forthwith
without notice, advertisement or demand and at public or private sale to convert into money the
Securities deposited by Depositary or as many of them as may be necessary to pay the whole
amount of the moneys deposited; and District may purchase at the then market value any or all of
the Securities sold at any such sale.
8. Charges for Services. The District will be responsible for all charges for
services provided by Depositary, as mutually agreed in the attached Pricing Schedule,
Addendum C. The Depositary agrees to give the District 60 days advance written notice prior to
the effective date of any changes in Pricing Schedule, Addendum C. The Depositary will bill the
District monthly for charges for services and will not automatically debit any account of the
District maintained with the Depositary for such charges. The Depositary retains its right to set
off against any such account for charges which remain unpaid 30 days from date of billing,
provided that if the District disputes any charge within such 30 day period the Depositary's right
to set off with respect to such disputed charge may only be exercised for such charges which
remain unpaid 30 days following notice by the District to the Depositary that such charge is in
dispute.
9. Transfer of Funds. The Depositary is authorized to honor, execute and
charge to the District's account at the Depositary all telephonic, telegraphic, oral or written
requests received from an Authorized Representative of the District for transfers of funds from
District accounts to other accounts of the District maintained with Depositary, provided that a
transfer of funds from District Accounts in favor of third parties, other than a transfer by check,
shall be made by the Depositary at the request of any two Authorized Representatives of the
District. The names, offices, manual signatures and facsimile signatures of individuals presently
serving as Authorized Representatives of the District are set forth on Addendum D. The
Executive Director and Secretary-Treasurer of the District shall notify the Depositary in writing
of any changes in such Authorized Representatives of the District.
10. Checks of the District. The Depositary is authorized to honor,
execute and charge to the District's accounts at the Depositary all checks drawn on any such
accounts, signed either manually or by means of a check signing machine, by any Authorized
Representative of the District as set forth in Addendum D; provided that checks of $50,000 or
more may not be signed by means of a check signing machine or other facsimile but only by
manual signature and checks of $50,000 or more must be signed by the manual signatures of two
Authorized Representatives of the District. Check 21 Act. The District follows the law related to
the Check 21 Act. The Check 21 was enacted on October 28, 2004. The law allows the recipient
of the original paper check to create a digital version of the original check, into an electronic
format thereby eliminating the need for further handling of the physical document.
Section 11. Electronic Payments. The District issues payments using the EFT
Electronic Funds Transfer process and adheres to the same approvals and guide lines as the
issuance of checks. This is the District’s preferred method of payment.
11. Assignment. Depositary shall not transfer by assignment, subcontract or
otherwise any interest in this contract without the prior written consent of the Secretary-
Treasurer of the District.
12. Access. Depositary shall permit reasonable access by the Secretary-
Treasurer of the District for purposes of performing audit procedures relating to any aspect of
services provided by Depositary to District in connection with this contract.
13. Records. Depositary shall maintain complete records relating to
deposits made hereunder in accordance with state and federal laws, rules and regulations. No
listing, report or other material generated from date covered by this contract may be disclosed or
transferred by Depositary to any other person, except as required by state and federal laws, rules
and regulations, and then only after notice to the Secretary-Treasurer of the District.
14. Term. This contract shall continue in force and effect until
________________, provided that such contract shall automatically renew on each June 30 for
an additional one-year period unless Depositary is notified by the Secretary-Treasurer of the
District that this contract will terminate on such June 30; provided, however, that each party
reserves the right to terminate this contract at any time on giving sixty (60) days written notice to
the other party of its intention to do so, and this contract shall continue in effect until so
terminated.
15. Depositary Resolution. There is attached hereto a certified copy of
the resolution adopted by the Board of Directors of Depositary authorizing the execution and
delivery of this contract by the officers of Depositary, whose names are affixed on behalf of
Depositary.
16. Modification. This Agreement and Addendum may be modified or
amended only in writing and agreed to by both parties.
17. Applicable Law. This Agreement and all sections thereof shall be
governed by the laws of the State of Missouri.
18. Additional Services. The Depositary and the District mutually agree that
the Depositary shall perform certain additional banking services as described in Addendum E
under the terms and conditions as described in Addendum E, which is incorporated herein by
reference; provided that in the event of conflicts between this contract and Addendum E, as to
the services described in Addendum E the provisions of such Addendum shall control.]
IN TESTIMONY WHEREOF, the parties have executed this contract in duplicate
and hereunto subscribed their names and affixed their seals as of the date first above written.
THE METROPOLITAN ST. LOUIS SEWER
DISTRICT
By ______________________________
Executive Director of The
Metropolitan St. Louis Sewer District
ATTEST:
_____________________________
Secretary-Treasurer
ATTEST:
_____________________________
Secretary or Assistant Secretary
Approved as to form:
_____________________________
General Counsel
EXHIBIT D
LIST OF APPROVED SECURITIES DEALERS
Primary Government Securities Dealers*
Bank of Nova Scotia, New York Agency
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies LLC
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities USA Inc.
Morgan Stanley & Co. LLC
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
SG Americas Securities, LLC
TD Securities (USA) LLC
UBS Securities LLC.
* Such Primary Government Securities Dealers shall be those certified as such, from time to
time, by the New York Federal Reserve Bank. Current list dated February 11, 2014
District Approved Securities Dealers
Blaylock Robert Van, LLC
Comerica Securities, Inc.
Edward D. Jones
First Bankers
Bane Securities, Inc.
FTN Financial Capital Markets
Great Pacific Securities
Piper Jaffray & Co
Raymond James/Morgan Keegan
Siebert Branford Shanks & Co., LLC
Stifel Nicolaus & Co., Inc.
Sterling Investments
Stem Brothers & Co.
Wells Fargo Institutional Brokerage
Multi-Bank Securities, Inc.
District Authorized Depositary Banks
EXHIBIT E
LIST OF APPROVED COLLATERAL
The securities described below are hereby designated as acceptable collateral for state funds on
deposit, as required by Section 30.270 RSMo (as amended). The State Treasurer reserves the
right to refuse to accept as collateral any security or securities on this list, or to request the
submission of an alternate acceptable security or securities, if, in the sole discretion of the State
Treasurer, the State Treasurer determines that such action will provide greater security for the
deposit of state funds.
The securities described below are designated as acceptable collateral for the deposit of state
funds. The listing is not intended to serve as, and should not be considered as a listing of legally
authorized investment instruments.
1. Marketable Treasury securities of the United States.
2. Bonds or certificates of participation (COP’s) issued by the State of Missouri with an
investment grade long-term rating from one of the Nationally Recognized Statistical
Ratings Organizations (NRSRO’s) or are secured by a federal agency guarantee (directly or
through guaranteed loans), to include the following:
a. General obligation debt securities issued by the State of Missouri.
b. Revenue bonds issued by the Missouri Board of Public Buildings or Department of
Natural Resources.
c. Revenue bonds of the Missouri Housing Development Commission, Missouri Health
and Education Facilities Authority, Missouri Higher Education Loan Authority,
Missouri Environmental Improvement and Energy Resources Authority, Missouri
Agricultural and Small Business Development Authority, Missouri Industrial
Development Board, or State-owned educational institutions.
d. Certificates of Participation issued by the Missouri Board of Public Buildings or Public
Fund Commissioners.
3. Bonds or certificates of participation with an investment grade long-term rating from one of
the NRSRO’s issued by of any of the following agencies:
a. Any city in this state having a population of not less than two thousand
b. Any county of this state
c. Any school district situated in this state
d. Any special road district in this state
e. Bonds of any political subdivision established under the provision of Article VI,
Section 30 of the Constitution of Missouri (City and County of St. Louis)
f. Any of the fifty states within the United States of America
4. Debt securities guaranteed by the United States or its agencies or instrumentalities, as
follows:
a. Debt securities of the Federal Farm Credit System
b. Debt securities of the Federal Home Loan Banks
c. Debt securities of the Federal National Mortgage Association (“Fannie Mae”)
d. Debt securities of the Student Loan Marketing Association
e. Debt securities of the Tennessee Valley Authority (TVA)
f. Debt securities of the Federal Agricultural Mortgage Corporation (“Farmer Mac”)
g. Debt securities of the Government National Mortgage Association (“Ginnie Mae”).
h. Debt securities of the Federal Home Loan Mortgage Corporation (“Freddie Mac”)
i. Guaranteed Loan Pool Certificates of the Small Business Administration (SBA)
j. Federal Home Administration insured notes (CBOs).
k. Public housing notes and bonds (“project notes and bonds”) issued by public
housing agencies, guaranteed as to the payment of principal and interest by the
government of the United States of any agency or instrumentality thereof.
l. Debt securities of the Resolution Funding Corporation (REFCORP).
Collateralization margins for pass-through mortgage-backed securities, SBA pool
certificates and collateralized mortgage obligations shall differ from debentures issued
by such agencies. The only type of Collateralized Mortgage Obligations (CMO) that the
Treasurer’s Office will accept is Planned Amortization Classes (PAC’s), Targeted
Amortization Classes (TAC’s) and sequential pay classes. Furthermore, Collateralized
Mortgage Obligations must have a weighted average life not to exceed five years and
pass the FFIEC High Risk Stress Test. No Strips, Z bonds, Mortgage Derivatives or
Zeros are acceptable.
5. Tax anticipation notes issued by any county of class one in Missouri with an investment
grade short-term rating from one of the Nationally Recognized Statistical Ratings
Organizations (NRSRO’s)
6. Surety bonds issued by an insurance company licensed under the laws of the State of
Missouri whose claims-paying ability is rated in the highest category by Duff & Phelps,
A.M. Best, Standard & Poor’s, or Moody’s. The face amount of such surety bond shall be at
least equal to the portion of the deposit to be secured by the surety bond.
7. Irrevocable standby Letter of Credit issued by a Federal Home Loan Band possessing the
highest rating issued by at least one NRSRO.
8. Bonds or certificates of participation issued by local government agencies within the fifty
states provided such instruments are rated in the highest category by at least one NRSRO.
The State Treasurer shall determine the collateralization margin (or “haircut”) for each
security type listed above, which may change from time to time subject to market
conditions and other factors, but in no event shall be greater than the maximum limits
allowed by law. The current collateralization requirements by security type are provided
on Attachment “A”.
The total market value of collateral must be equal to or greater than the collateralization
margin set by the State Treasurer of the total amount of state time deposits (including
accrued interest to maturity) plus demand deposits with the depository, less the amount,
if any, which is insured by the Federal Deposit Insurance Corporation, or the National
Credit Unions Share Insurance Fund. All securities pledged as collateral by the
depository will be held by the Missouri State Treasurer, in a segregated account. All
collateral pledged must be delivered in bearer for, book-entry form, or in the case of
fully registered certificates, placed into the nominee name of the custodian.
COLLATERALIZATION REQUIREMENTS
FOR DISTRICT DEPOSITS
No.
Security
Collateralization
Margin
(“Haircut”)
1. United States Treasuries 102%
2. State of Missouri Bonds/Debt 102%
3. Local/State Debt
a. Any city in this state having a population of not less
than two thousand
102%
b. Any county of this state 102%
c. Any school district situated in this state 102%
d. Any special road district in this state 102%
e. Bonds and COP’s of any political subdivision
established under the provision of Article VI, Section
30 of the Constitution of Missouri (City and County of
St. Louis)
102%
f. Any of the fifty state within the United States of
America
102%
4. U.S. Agency Securities
Agency Debentures 102%
SBA Loan Pools 105%
Agency Mortgage-Backed Securities 105%
Agency CMO’s (PACs, TACs, and SEq. Bonds only) 105%
5. Tax anticipation notes issued by any county of class one in
Missouri
102%
6. Surety bonds 100%
7. FHLB Letter of Credit 100%
8. Out-of-state Municipal Bonds/COP’s 102%
The foregoing ordinance was approved on December 10, 2015