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May 19, 1953
Hon. W. P. Herms, Jr. Opinion No. S-hi3
County Auditor
Wailer County Re: Several questions,relating
Hempstead, Texas to the amount of securities
which mustybe pledged by
Dear Sir: the county depository.
You have requssted an opinion on the follow-
ing questions:'
"1. The county depository should pledge
obligations (presuming such is their choice
to secure county funds) in what amount?
"2. May this amount of depository secu-
rity vary from month to month or from q.uarter
to quarter to conform to the revised daily
balances?
“3. If yo’ur anser is E to No. 2 above,
then under the facts, what is the minimum
amount of funds for which security should be
required?
"4. In view of the fact that for short
periods during the year, funds from maturing
Treasury Bills will actually be on deposit
in the depository, does the investment of a
sizable portion of County Funds in such bills
in any way affect this matter?"
Article 2547, Vernon's Civil Statutes, provides
three methods for qualifying as a county depository, and
states in part as follows:
"Within fifteen (15) days after the
selection of such 'depository,it shall be
the duty of the banking corporation, as-
sociation or individual banker so selected,
to qualify as county depository in one or
Hon. W. P. Herms, Jr., page 2 (S-43)
more of the following ways, at the option
of the Commissioners' Court:
":(a)By executing and filing with the
Commissioners' Court, a bond or bonds . . .
said bond to be signed by not less than five
(5) solvent sureties. . . said bond or bonds
to be in an amount equal to~the estimated
highest daily balance of such county, as
determined by the Commissioners' Court, such
estimated daily balance to be in no event
less than seventy-five (75%) per cent of
the highest daily~balance of said county for
the next preceding year, less,the amount of
bond funds received and expended; provided,
however, in the event that county funds
derived from the s,aleof county securities~
during the term of such bond are deposited,
such Commissioners' Court shall require
additional bond and/or bonds, and/or pledge
of securities equal to the amount of such
additional county funds. . .
"(b) By having issued and executed by
some solvent surety company or companies
authorized to do business in the State of
Texas, such bond or bonds, ,asprovided by
law, to be in the amount and ,payableas pro-
vided in subdivision (a) hereinab,ove,which
said surety bond shall be approved by both
the Commissioners' Court and the Comptroller,
and filed in the office of the County Clerk
of said county. . e
"(c) In lieu of such personal bonds or
surety bonds as above specified, said banking
corporation, association or individual banker
so selected as county depository, may pledge,
and said depository bank is authorized to
pledge with the Commissioners' Court for the
purpose of securing such county funds, se-
curities of the following kind, in an amount
equal to the amount of such county funds on
deposit in said depository bank. s .'
..
Hon. W. P. Herms, Jr., page 3 (S-43)
If the method under subsection (a) or (b) as
above stated is followed the securities, as a minimum,
must be “75% of the highest daily balance of said co,unty
for the next preceding year less the amount of bond
funds received and expended." However, an amount equal
to the estimated highest daily balance of such county
must be maintained at all times.
If subsection (c) above stated is followed,
securities pledged are to be in an amount equal to the
amount of county funds on depos,it.
In regard to your last three question, the
second paragraph of subsection (c), Article 2547,
Vernon's Civil Statutes, states in part:
"When the securities pledged by a de-
pository bank to secure county funds shall
be in excess of the amount required 'under
the provisions of this Article, the Commis-
sioners' Court shall permit the release of
such excess; and when the county funds de-
posited with said depository bank shall for
any reason, increase beyond the amount of
securities pledged, said depository bank
shall immediately pledge additional securities
with the Commis,sioners'Court so that the
securities pledged shall at no time be less
than the total amount of county funds on de-
posit in said depository bank. . .'
As provided in this section depository securi-
ties may vary from time to time to conform to revised
daily balances. Security is required for all funds de-
posited regardless of the amount of the fund.
If the county funds in the depository are in-
creased, beyond amount of sec,uritiespledged, from funds
from maturing Treas,urybills or any other source, the
depository bank shall immediately pledge additional se-
curities with Commissioners' Court as provided above.
If the county funds are decreased in size from invest-
ment in Treasury bills or any other investment, the
Commissioners' Court shall permit the release of securi-
ties in excess of the amount required under Article 2547,
Vernon's Civil Statutes.
Hon. W. P. Herms, Jr., page 4 (S-43)
County depository must pledge securi-
ties or obligations in an amount equal to
the amount of such county funds on deposit.
The amount of depository securities may
vary during the year.. Securities are re-
quired for all funds deposited. If county
funds,in depository increase beyond security
the depository shall immediately pledge addi-
tional security. If the amount of money in
the county depository is decreased, the Com-
missionerss Court shall permit the release
of securities in excess of the amount re-
quired under Article 2547, Vernon's Civil
Statutes.
Yours very truly,
APPROVED: JOHN BEN SHKPPERD
Attorney General
J. C. Davis, Jr.
County Affairs Division
C. K. Richards By ab- e.Q*
Reviewer Sam C. Ratliff
Assistant
Robert S. Trotti
First Assistant
John Ben Shepperd
Attorney General
SCR:am