2005 Minnesota Statutes

CHAPTER 427. Depositories, city and statutory city funds

     427.01 Deposit of public funds.  

    The council of any statutory city or of any city of the 
 fourth class shall designate as a depository of city funds such 
 national, state, or private banks as it may deem proper.  Except 
 as to deposits insured by the federal deposit insurance 
 corporation or protected by collateral or a corporate surety 
 bond furnished under section 118A.03, each shall give bond to 
 the municipality in at least double the amount authorized to be 
 deposited therein, to be approved by the council, conditioned to 
 repay all sums deposited therein upon proper demand therefor or 
 at such time, not exceeding one year, as fixed by the terms of 
 the deposit, and for the performance of such other duties as the 
 council may require.  The council shall require the city 
 treasurer to deposit all or any part of the public funds in hand 
 in such banks and to withdraw the same when so directed.  All 
 the terms and conditions of deposit shall be set forth in the 
 resolution designating the several depositories, which 
 resolution shall be filed with the clerk or recorder.  The 
 treasurer shall not be liable on the treasurer's bond for any 
 money so deposited by direction of the council and lost through 
 the failure, bankruptcy, or other default of the bank.  All 
 interest accruing upon these deposits shall belong to the city.  

    HIST: RL s 774; 1957 c 367 s 5; 1957 c 518 s 1; 1973 c 123 art 
 5 s 7; 1986 c 444; 1996 c 399 art 2 s 12 

     427.02 Depositories. 

    The council of any city in this state, but not including 
 cities when governed under a charter adopted under and pursuant 
 to the Constitution of the state of Minnesota, article IV, 
 section 36, article XI, section 4, or article XII, section 5, 
 and sections 410.03 to 410.24, and all acts supplemental 
 thereto, in which charter the matter of designating depositories 
 for city funds and the protection thereof is provided for, or in 
 which charter it shall hereafter be provided for, shall have the 
 power and authority to designate or redesignate at the beginning 
 of each calendar year, or from time to time, the banks or other 
 legal depositories of any city in which the treasurer of the 
 city shall deposit and keep the moneys of the city, designating 
 in each instance the maximum amount which may at any time be 
 kept in any one of these depositories, which maximum amount 
 shall in no case exceed 25 percent of the paid-up capital and 
 surplus of the depository, unless the depository shall deposit 
 with the treasurer of the city United States government bonds to 
 secure the deposit of the funds of the city; and, in that event, 
 the amount so deposited shall not exceed the amount of the 
 United States government bonds so deposited.  No depository 
 shall deposit United States government bonds which mature within 
 one year from the date such bonds were first considered as a 
 part of the bank's reserve and which reserves are required by 
 section 48.221.  The council of each city shall, at all times, 
 designate depositories in the city, or elsewhere in the United 
 States, sufficient for the depository of all funds which are 
 likely to be in the hands of the treasurer of the city at any 
 one time and shall, so far as consistent with the best interest 
 of the city, designate these depositories in the city and 
 require from these depositories good and sufficient bonds 
 payable to the city in a penal sum not to exceed the amount 
 designated as the limit of deposit therein, and conditioned for 
 the safekeeping and payment of funds so deposited, or, in lieu 
 thereof, good and sufficient collateral as provided for by 
 section 118A.03.  

    HIST: (1327) 1907 c 17 s 1; 1933 c 179; 1935 c 124 s 1; 1969 c 
 78 s 2; 1971 c 24 s 50; 1987 c 384 art 2 s 1; 1996 c 399 art 2 s 
 12; 1997 c 7 art 1 s 139; art 4 s 2 

     427.03 Duty of treasurer; exemption from liability.  

    The treasurer of each city where depositories have been 
 designated in accordance with sections 427.02 to 427.07 shall 
 keep the funds of the city as far as possible in the 
 depositories so designated and when so deposited the treasurer 
 and the sureties on the official bond of such treasurer shall be 
 exempt from all liability for the loss of any such funds so 
 deposited as provided in sections 427.02 to 427.07, if such loss 
 is caused by the failure, bankruptcy, or any other act of 
 default of such depository.  

    HIST: (1328) 1907 c 17 s 2 

     427.04 Failure to designate.  

    The failure of the council of any city to designate 
 depositories, as provided in sections 427.02 to 427.07, shall 
 not exempt or relieve the treasurer of the city or the sureties 
 on the treasurer's official bond from any liability.  

    HIST: (1329) 1907 c 17 s 3; 1986 c 444 

     427.05 Duty of council; interest.  

    The council of any city authorized under sections 427.02 to 
 427.07 to designate depositories shall exercise all possible 
 care to secure safe depositories for the funds of the city and 
 to obtain the highest rate of interest possible consistent with 
 safety for such moneys.  All interest received in any way for 
 the use or keeping of moneys or on account of the same shall be 
 the property of the city and credited to the current expense 
 fund of the city.  

    HIST: (1330) 1907 c 17 s 4 

     427.06 Money, how deposited; checks, how drawn.  

    All money of any city kept in accordance with sections 
 427.02 to 427.07 in any depository designated by the council of 
 the city shall be kept and deposited in the name of the city and 
 the depository shall have no authority to pay out this money 
 except upon checks drawn upon the depository signed by the city 
 treasurer and countersigned by the city comptroller or recording 
 officer of the city.  

    HIST: (1331) 1907 c 17 s 5 

     427.07 Withdrawal of funds.  

    The treasurer of any city, who has city funds deposited in 
 accordance with sections 427.02 to 427.07, shall, when notified 
 so to do by the sureties on the treasurer's official bond or by 
 the council of the city, withdraw all funds from any designated 
 depository and it shall be the duty of the city comptroller or 
 other recording officer of such city to countersign all checks 
 for such withdrawal.  The city treasurer shall thereupon, upon 
 such withdrawal, notify the council of the city thereof and 
 thenceforth the city treasurer shall deposit no more funds in 
 the depository until authorized so to do by the council of the 
 city.  Upon this withdrawal, it shall be the duty of the council 
 of the city to proceed forthwith to redesignate, in accordance 
 with the provisions of sections 427.02 to 427.07.  

    HIST: (1332) 1907 c 17 s 6; 1986 c 444 

  427.08 Repealed, 1957 c 367 s 7 

     427.09 Failure to designate depository. 

    If the council of any home rule charter city of the fourth 
 class or any statutory city shall refuse or fail to act, as 
 provided in section 427.01, within 30 days after the beginning 
 of the fiscal year the treasurer shall select one or more 
 depositories, not exceeding four in number, for the safekeeping 
 of city funds and deposit such funds therein, in the name of the 
 city, to the extent authorized by chapter 118A in each 
 depository so selected without requiring security therefor. 

    HIST: (1049-2) 1931 c 216 s 2; 1933 c 62 s 2; 1957 c 367 s 6; 
 1959 c 289 s 3; 1973 c 123 art 5 s 7; 1976 c 44 s 35; 1Sp1981 c 
 4 art 1 s 175; 2001 c 7 s 90 

     427.10 Treasurer, liability. 

    The city treasurer, in the absence of negligence, shall not 
 be liable for the loss of money while so deposited within the 
 limits above specified occasioned by the closing or insolvency 
 of a designated depository. 

    HIST: (1049-3) 1931 c 216 s 3; 1933 c 62 s 3; 1973 c 123 art 5 
 s 7; 1976 c 44 s 36 

     427.11 Interest on funds. 

    All interest received on funds deposited under the 
 provisions of sections 427.09 and 427.10 shall be credited to 
 the respective city funds. 

    HIST: (1049-4) 1931 c 216 s 4; 1933 c 62 s 4; 1971 c 24 s 51; 
 1973 c 123 art 5 s 7; 1976 c 44 s 37

     427.12 Warrant as check on city depository. 

    When a disbursement is made by order or warrant in any home 
 rule charter city of the second, third, or fourth class, the 
 order or warrant for the disbursement shall be so drawn that 
 when signed in an appropriate place by the treasurer or other 
 officer to whom it is directed, it becomes a check on the city 
 depository. 

    HIST: 1953 c 319 s 6; 1976 c 44 s 38