Oregon State Treasury

Ted Wheeler OREGON STATE TREASURER

Public Funds Requirements

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Oregon Revised Statute (ORS) Chapter 295 outlines requirements surrounding the deposit and collateralization of public funds. Public funds are defined as funds that a public official has custody of or controls by virtue of office.  Per Oregon Revised Statute 295.002, an Oregon public official may deposit public funds up to the amount insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund of the National Credit Union Administration (NCUA) in any insured financial institution with a head office or branch in Oregon. Public funds deposits that exceed these insurance limits, currently set at $250,000, may only be held in a depository qualified by the Oregon Public Funds Collateralization Program (PFCP). The current list of qualified depositories covers a wide range of financial institutions. Additional information on reporting requirements and several Frequently Asked Questions are outlined below.  Quarterly Audit Reports, which local government officials may need for various informational purposes, can be found here.

Information Requirements 

Frequently Asked Questions

It is important to note that compliance with the requirements of the Oregon Public Funds Collateralization Program, which complies with ORS 295.001 to 295.108, relieves a public official of personal liability for the loss of public funds in the official’s custody or control. In order to relieve personal liability, ORS 295 requires public officials to: 
  • Provide the Oregon State Treasury Public Funds Collateralization Program (PFCP) with the names of all qualified depositories in which they currently deposit public funds. If a public official makes any changes to the qualified depository they use, they must notify the Program within three business day. This can be done by e-mail (public.funds@ost.state.or.us) or phone (503-378-3400). 
  • Provide contact information for the local government, including entity name, contact name, address, phone number and email address annually.  The Program will request validation of this information in January of each year.
  • Ensure that public funds deposits that exceed insurance limits, currently set at $250,000, are only held in a depository qualified by the Oregon Public Funds Collateralization Program (PFCP). The current list of qualified depositories covers a wide range of financial institutions. 
  • Respond promptly, and in accordance with the requirements of ORS 295, whenever a request or notification is sent by Oregon State Treasury PFCP. Failure to respond in accordance with statutory requirements could put public funds at risk of loss and result in personal liability.

If you have any questions regarding these responsibilities, please contact Public Funds Collateralization Program staff at (503) 378-3400 or public.funds@ost.state.or.us.

 
 

Frequently Asked Questions

Do I need to notify the Oregon State Treasury when I start depositing with a qualified depository? What about when I stop doing business with a qualified depository? 
Yes!  Oregon Revised Statute (ORS) 295.006 states, “A public official shall keep on file with the State Treasurer the name and address of each depository in which the public official deposits public funds, together with any other information the State Treasurer may require by rule. If a public official changes a depository in which the public official deposits public funds, the public official shall report the information regarding the change that is required to the State Treasurer within three business days after the effective date of the change.” So, as soon as the change is effective send an e-mail to public.funds@ost.state.or.us  that includes current contact information for your local government, the name of the qualified depository and the action taken (established new relationship/closed all public funds accounts).
 
What information do you need us to report regarding the qualified depositories we do business with?
You must report the names of all qualified depositories you do business with.  This information must be updated within 3 days of a change in any depository. Do not send account numbers, balances or other sensitive financial information.
 
What information do you need about my local government?
We need a contact name, mailing address, phone number and email address from each local government.  You may submit more than one contact.  This contact information will be used in the event we need to notify you that a qualified depository you do business with has failed to meet the requirements of the Oregon Public Funds Collateralization Program, has ceased to be a qualified depository or has experienced a loss that would impact public funds accounts.
 
The information request refers to “public officials”, what does this mean? 
Per ORS 295.001(17), the term “Public official” means an officer or employee of this state or any agency, political subdivision or public or municipal corporation of this state, or a housing authority, that by law is the custodian of or has control of public funds.
 
What are public funds?
ORS 295.001(16) defines public funds as that a public official has custody of or controls by virtue of office.  If you are unsure if your entity’s funds are considered public funds, based on the definition, we recommend you discuss your questions with your legal counsel.
 
My organization receives funding from a federal government program. Are these funds “public funds” that need to be collateralized?
Yes. Oregon Revised Statute 295.001(16) defines public funds as “funds that a public official has custody of or controls by virtue of office” so federal funds would be included in this definition.
 
Public funds deposits that are not insured through the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) must be protected against loss due to depository failure or other event (ORS 295.002). When a local government or state agency deposits public funds with a bank or credit union designated as a “qualified depository” under the Oregon State Treasury Public Funds Collateralization Program (PFCP) their uninsured public funds are protected under the terms of ORS 295.001 to 295.108. The Program works as follows: banks and credit unions deposit authorized securities with the Program’s Custodian Bank equal to a percentage of their uninsured public funds deposits. That percentage, per statute, is set by the Oregon State Treasury and falls within a range of 10-110 percent of their uninsured public funds deposits. These securities make up the pool of assets available to the Program to reimburse local governments and state agencies in the event their depository experiences a failure or loss event. This shared liability structure provides a strong level of protection for public funds, but does not guarantee 100 percent protection against loss in all situations.
 
Please Note: some federal programs have specific requirements regarding the protection of uninsured federal funds. These programs may require that federal funds be collateralized at 100 percent, to provide absolute protection against loss in all situations, or strictly limit the types of securities that may be pledged as collateral. The Oregon State Treasury PFCP has been designed to meet the requirements of ORS 295, which are less restrictive than the requirements noted above. If your federal program requires 100 percent collateralization of federal funds, or imposes other restrictions, you may be required to collateralize your uninsured federal funds under an alternative arrangement.
 
If this is the case, ORS 295 does not require you to also collateralize these funds through the Oregon State Treasury PFCP. Per ORS 295.101(d), “funds that are held by a public official and are required by federal law or contractual provisions to be collateralized at 100 percent, if the funds are deposited in an account that is separate from other accounts of the public official in a depository, and the public official and the depository have entered into a written agreement that provides a perfected security interest to the public official in collateral valued at an amount at least equal to the amount of funds in the account in a manner substantially similar to a pledge agreement described in ORS 295.001(15)” are not subject to the requirements of the Oregon State Treasury PFCP.
 
In summary, an arrangement that meets any 100 percent collateral requirement of your federal partner would also satisfy Oregon’s public funds requirement. Oregon’s program, however, may not be sufficient to meet your federal partner’s requirements.
 
What public funds are not covered by the Oregon Public Funds Collateralization Program based on ORS 295? 
 
ORS 295.001(24) Definition of Uninsured public funds. 
(a) “Uninsured public funds” or “uninsured public funds deposits” means public funds deposited in a depository that exceed the amounts insured or guaranteed as described in ORS 295.002 (1)(a) and (b). 
 
(b) “Uninsured public funds” or “uninsured public funds deposits” does not include public funds deposited in a certificate of deposit or time deposit under ORS 295.004 (1) or public funds that an Oregon depository arranges to deposit into an insured deposit account under ORS 295.004 (2).
 
295.002.
(1) A public official may retain un-deposited such reasonable cash working fund as is fixed by the governing body of the political subdivision or public corporation for which the public official acts. Except to the extent of the cash working fund, a public official shall deposit public funds in the public official’s custody or control in one or more depositories currently qualified pursuant to ORS 295.001 to 295.108. Unless a depository has entered into the agreement described in ORS 295.008 (2)(b) and has deposited securities pursuant to ORS 295.015 (1), the public official may not have on deposit in any one depository and branches of the depository a sum in excess of: 
 
(a) The amount insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund; or 
 
(b) For any amount over the amount insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, the amount insured or guaranteed by private deposit insurance or a deposit guaranty bond issued by an insurance company rated A- or better by a recognized insurance rating service.
 
(2) Compliance with ORS 295.001 to 295.108 relieves the public official of personal liability for the loss of the public funds in the public official’s custody or control.
 
295.004.
(1) A public official may deposit public funds in a depository in an amount in excess of the amount allowed in ORS 295.002 without requiring the depository to show that the depository entered into a pledge agreement or deposited securities pursuant to ORS 295.015 (1) if the public official deposits the funds into a depository in Oregon and the Oregon depository participates in a program through which: 
 
(a) The Oregon depository arranges to deposit the funds into one or more certificates of deposit or time deposits issued by other financial institutions in the United States;
 
(b) Each certificate of deposit or time deposit is fully insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund;
 
(c) The Oregon depository administers the funds on behalf of the public official; and
 
(d) Other financial institutions that participate in the program place funds into the Oregon depository in an amount at least equal to the amount the public official deposited into the Oregon depository for purposes of the program.
 
(2) A public official may deposit public funds in a depository in an amount in excess of the amount allowed in ORS 295.002 without requiring the depository to show that it has entered into a pledge agreement or deposited securities pursuant to ORS 295.015 (1) if the funds are initially deposited into a depository in Oregon and the Oregon depository participates in a program that meets the following conditions: 
 
(a) On or after the date that the funds are received, the Oregon depository: 
 
(A) Arranges for the redeposit of the funds into one or more insured deposit accounts in other financial institutions in the United States; and
 
(B) Administers the funds on behalf of the public official;
 
(b) The full amount of the funds redeposited by the Oregon depository into deposit accounts in other financial institutions, together with any interest accrued on deposited funds, is insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund; and
 
(c) On the same date that the funds are redeposited under this subsection, the Oregon depository receives an amount of deposits from customers of other financial institutions that are at least equal to the amount of the funds redeposited by the Oregon depository.
 
(3) Until the Oregon depository places public funds into one or more certificates of deposit or time deposits as provided in subsection (1) of this section or places public funds into insured deposit accounts as provided in subsection (2) of this section, any uninsured public funds that the Oregon depository holds pending placement must be collateralized as provided in ORS 295.001 to 295.108 for other uninsured public funds deposits.
 
(4)(a) The provisions of ORS 295.006, 295.013, 295.015, 295.018, 295.037 and 295.038 do not apply to Oregon depositories that arrange to deposit public funds in accordance with the programs described in subsections (1) and (2) of this section.
 
(b) The provisions of ORS 294.035 and 295.001 that require public funds to be deposited into depositories that have offices or branches in Oregon do not apply to public funds that an Oregon depository arranges to deposit into certificates of deposit or time deposits under the provisions of the program described in subsection (1) of this section or to public funds that an Oregon depository arranges to deposit into insured deposit accounts under subsection (2) of this section.
 
295.022 Collateral not required for deferred compensation funds. 
Notwithstanding any other provision of this chapter, when a bank, mutual savings bank or savings and loan association receives moneys of the Deferred Compensation Fund established under ORS 243.411 from the state for deposit or investment, the institution shall not have to maintain the collateral required under this chapter for those deferred compensation moneys. 
 
295.101 Public funds not subject to ORS 295.001 to 295.108. 
(1) The following public funds are not subject to the provisions of ORS 295.001 to 295.108: 
 
(a) Funds that are deposited for the purpose of paying principal, interest or premium, if any, on bonds, as defined in ORS 286A.001 and 287A.001, and related costs or securing a borrowing related to an agreement for exchange of interest rates entered into under ORS 286A.110 or 287A.335.
 
(b) Funds that are invested in authorized investments under provisions of law other than ORS 295.001 to 295.108. Funds invested under ORS 293.701 to 293.820 are invested in authorized investments for purposes of this subsection from the time the funds are transferred by the State Treasurer to a third party under the terms of a contract for investment or administration of the funds that requires such a transfer until the time the funds are returned to the treasurer or paid to another party under the terms of the contract.

(c) Negotiable certificates of deposit purchased by the State Treasurer under ORS 293.736 or by an investment manager under ORS 293.741.

(d) Funds that are held by a public official and are required by federal law or contractual provisions to be collateralized at 100 percent, if the funds are deposited in an account that is separate from other accounts of the public official in a depository, and the public official and the depository have entered into a written agreement that provides a perfected security interest to the public official in collateral valued at an amount at least equal to the amount of funds in the account in a manner substantially similar to a pledge agreement described in ORS 295.001 (15).

(2) Notwithstanding subsection (1) of this section, funds deposited by a custodial officer under ORS 294.035 (3)(d) are subject to the provisions of ORS 295.001 to 295.108.
 
I understand that we are required to confirm, and update as necessary, qualified depository information with the Oregon State Treasury annually.  How and when will this occur?
The Oregon State Treasury will contact all public officials annually in January and request updates to the information on file by January 31.  If a public official makes any changes to the qualified depositories in which they deposit funds during any other time of the year, they are required to notify the Oregon State Treasury within 3 business days of the change
Does the Oregon Public Funds Collateralization Program guarantee my organization will never experience a loss of public funds?
Unlike depository insurance programs, the Oregon Public Funds Collateralization Program does not provide 100% protection for public funds balances. If a loss were to occur, the Program would take the steps detailed within ORS 295.037 (Bank Depositories) or ORS 295.038 (Credit Union Depositories) to recover public funds balances. In most cases, these steps should be sufficient to allow for the return of all public funds.
It is important to note that compliance with the requirements of the Oregon Public Funds Collateralization Program, which complies with ORS 295.001 to 295.108, relieves a public official of personal liability for the loss of public funds in the official’s custody or control. So, in the unlikely event of an unrecovered loss you would not be held personally liable.