§ 5.08.030. Collateral security—Loss and default recovery.

A.

Each of the bank and trust company depositories mentioned in Section 5.08.020 shall deposit in an escrow account in a second bank or trust company for the benefit of the metropolitan government, as collateral security for such metropolitan government funds, bonds of the United States or any of its agencies, or obligations guaranteed by the United States or any of its agencies, the payment of which are insured by it and which are fully guaranteed both as to principal and interest by the United States; bonds of this state, bonds of other states with at least an "A" rating, including any revenue bonds issued by any agency of the State of Tennessee, specifically including institutions under the control of the state board of education, the board of trustees of the University of Tennessee, and bonds issued in the name of the state school bond authority; bonds of any county or municipal corporation of this state, including bonds payable from revenues (expressly excluding bonds of any road, levee or drainage district) upon which said municipal or county bonds there has been no default in the payment of interest more than thirty days upon any one installment of interest for the five years preceding the deposit of such county or municipal bonds; and loans to students guaranteed one hundred percent by the Tennessee educational loan corporation, during the dormant period of such loan or any bond issued under the provisions of Chapters 7-37 (T.C.A. § 7-37-101 et seq.) and 7-53 (T.C.A. § 7-53-101 et seq.) of Tennessee Code Annotated, that are rated "A" or higher by any nationally recognized rating service or any other collateral security as may be described in Tennessee Code Annotated, Section 5-8-201, as amended from time to time.

B.

Any loss incurred by the metropolitan government by reason of failure by any bank or trust company to safely keep and account for metropolitan government funds and interest thereon shall be recovered by the metropolitan government from the bank or trust company and a sale of the securities pledged under this section.

C.

In the case of default by any bank or trust company having a metropolitan government account of any type, the securities pledged under this section shall be sold by the person holding such securities; and payment of the proceeds of such sale shall be made to the metropolitan government to the extent of its interest, but such sale shall be without recourse as to the metropolitan government.

D.

The face value of the collateral herein described shall be a sum ten percent in excess of the deposits to be secured thereby, less so much of any such amount as is protected by the Federal Deposit Insurance Corporation.

(Ord. 90-1339 § 1 (15-1), 1990; prior code § 15-1-28 (part))