2007 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.
History: 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.
History: (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.
History: (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.
History: (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.
History: (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.
History: (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.
History: (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.
History: (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.
History: (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.
History: (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.
History: 1953 c 319 s 6; 1976 c 44 s 38