Section 55806-A - Depositories of township fundsThe following shall apply:
(1) The board of commissioners shall designate by resolution a depository or depositories for township funds. Funds deposited with a banking institution of this Commonwealth shall be insured with the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund or their successor agencies, to the extent that accounts are so insured. The designation is valid for a period of one year or until another depository or other depositories are designated by similar action of the board of commissioners.(2) The depository or depositories shall be banks, banking institutions or trust companies located in this Commonwealth.(3) The depository or depositories shall not be required to furnish bond or collateral security to cover the amount of any deposit to the extent that the same is insured as provided in paragraph (1).(4) The township treasurer or deputy treasurer shall, upon the designation of the depository or depositories by the board of commissioners, immediately transfer to the depository or depositories the township funds and after that make deposits solely in the depository or depositories in the name of the township.(5) The township treasurer or deputy treasurer, acting in accordance with law, shall not be liable for the loss of township funds caused solely by the insolvency or negligence of the depository or depositories.(6) The following apply:(i) The designated depositories shall, upon receipt of notice of their selection as a depository of township funds, collateralize deposits of public funds in accordance with the act of August 6, 1971 (P.L. 281, No. 72), entitled, "An act standardizing the procedures for pledges of assets to secure deposits of public funds with banking institutions pursuant to other laws; establishing a standard rule for the types, amounts and valuations of assets eligible to be used as collateral for deposits of public funds; permitting assets to be pledged against deposits on a pooled basis; and authorizing the appointment of custodians to act as pledgees of assets," which authorizes financial institutions to pledge collateral in an account in the name of the township or utilize a letter of credit from the Federal Home Loan Bank, to secure public deposits in excess of Federal Deposit Insurance Corporation insurance limits. The depository shall provide a monthly report within 15 days after the end of each month to the board of commissioners in accordance with the reporting requirements in the act of August 6, 1971 (P.L. 281, No. 72), including the composition of the collateral and related market value.(ii) Townships may elect to require that depositories must pledge collateral in an account in the name of the township to collateralize deposits above the Federal Deposit Insurance Corporation limit. These accounts may be custodied with the depository's trust department or at a third-party financial institution. The arrangement with the depository may be governed by a written agreement, approved by the board of directors or loan committee of the depository, with approval reflected in the minutes of the board or committee, which are kept continuously as an official record of the depository, and include the following if collateral is pledged instead of a Federal Home Loan Bank Letter of Credit: (A) Collateral shall be marked to market no less frequently than weekly. (B) Collateral shall be in investments as prescribed in the investment program provided by the board of investment or board of commissioners. (C) If the financial institution serves as the custodian, the pledged collateral shall be held in a separate account established under the act of August 6, 1971 (P.L. 281, No. 72), in the depository's trust department. (D) The market value of the pledged collateral shall be at least 102% of the township's deposits in excess of federally insured limits. (E) A monthly report shall be provided as specified in subparagraph (i).1931, June 24, P.L. 1206, art. VIII-A, § 806-A, added 2012, Oct. 24, P.L. 1478, No. 188, § 10, effective Jan. 6, 2014. Amended 2020, Oct. 29, P.L. 782, No. 96, § 35, effective in 60 days [Dec. 28, 2020].