Amends TCA Title 6.

This bill revises provisions regarding depositories of municipal funds, applicable to all municipalities, whether under a general law charter or a private act charter.<br /> <br /> Under present law:<br /> <br /> (1) For municipalities under general law mayor-aldermanic and city manager-commission charters, depositories of the municipal funds must be designated by ordinance, and the local governing body must require any financial institution that becomes a depository of municipal funds to secure such funds by collateral in the same manner and under the same conditions as state deposits as provided in a collateral pool;<br /> (2) For municipalities under general law modified city manager-city council charters, the local governing body must designate a commercial bank or banks as depository or depositories for city funds and must provide for the regular deposit of all city moneys. The local governing body must require that any city funds deposited with a financial institution be secured by collateral in the same manner and under the same conditions as state deposits, or as provided in a collateral pool; and<br /> (3) For municipalities not chartered under the general law, notwithstanding any other public or private act to the contrary, any municipal funds deposited with a financial institution must be secured by collateral in the same manner and under the same conditions as state deposits or as provided in the collateral pool.<br /> <br /> This bill rewrites the above provisions and makes the following applicable to all:<br /> <br /> (1) The local governing body, at a regular meeting, must adopt a resolution to contract with a bank or banks making the highest and best bid or bids to pay interest on daily balances of municipal funds;<br /> (2) The local governing body must require any financial institution that becomes a depository of municipal funds to secure the funds by collateral in the same manner and under the same conditions as state deposits or as provided in a collateral pool; and<br /> (3) At least once every four years and at least once during a mayor's term of office, the local governing body must evaluate whether the contract entered into should be rebid. This evaluation must be based on the local governing body's evaluation on proposals obtained from at least two banks or other financial institutions. The treasurer must prepare a written evaluation of the proposals and preserve the evaluation for at least three years.<br /> <br /> ON FEBRUARY 25, 2019, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 72, AS AMENDED.<br /> <br /> AMENDMENT #1 removes the requirement that periodic evaluation of whether a banking contract should be rebid occur at least once during a mayor's term of office. Under this amendment, the evaluation must occur at least once every four years.<br /> <br /> This amendment makes the requirement that the treasurer review and analyze the bids prior to a contract being entered applicable to all of the municipalities to which this bill applies.<br /> <br /> This amendment specifies that this bill's requirements apply to any municipality that does not have banking evaluation provisions in its charter that are at least as detailed as provided in this bill.<br /> <br /> ON APRIL 17, 2019, THE HOUSE SUBSTITUTED SENATE BILL 72 FOR HOUSE BILL 204, ADOPTED AMENDMENTS #1 AND #2, AND PASSED SENATE BILL 72, AS AMENDED.<br /> <br /> AMENDMENT #1 revises various provisions of this bill, including the following:<br /> <br /> (1) This amendment revises the provisions described above in the second item (1) of the bill summary to require a local governing body to adopt a resolution to contract with a bank or banks making the "best proposal to become the depository of municipal funds" instead of the bank or banks making the "highest and best bid or bids to pay interest on daily balances of municipal funds";<br /> <br /> (2) This bill requires a treasurer, city manager, or contracting authority to analyze the bids from the banks and to include in the analysis a recommendation of the bank or banks making the "highest and best bid or bids to pay interest on daily balances of the municipality's funds." This amendment revises this to instead require that the analysis consider factors such as the "banks proposing the highest interest rate" and "any other relevant factors";<br /> <br /> (3) For municipalities under general law city manager-commission charters, this amendment requires the board, instead of the treasurer, to reevaluate executed contracts for depositories of municipal funds; and<br /> <br /> (4) For municipalities not chartered under the general law, this amendment requires the "contracting authority for the municipality," instead of the "municipal governing body" to perform the functions relating to choosing a depository of municipal funds.<br /> <br /> AMENDMENT #2 replaces references to "financial institutions" with references to "banks".<br /> <br />