2019 Oregon Revised Statutes
Volume : 07 - Public Facilities and Finance
Chapter 295 - Depositories of Public Funds and Securities
Section 295.098 - Public body agreements with third parties; alternative methods.
(1) A public official who enters into an agreement with a third party, under which the third party facilitates the receipt, collection, transfer, disbursement or payment of public funds and temporarily holds or deposits public funds, may use alternative methods to those set forth in this chapter to secure public funds that are held or deposited by the third party if the methods meet the following requirements:
(a) The alternative methods must be approved by an official action of the governing body or appropriate public official of the public body. The official action must include findings by the governing body or public official describing any financial institution used by the third party and how the alternative methods will protect public funds from loss by the third party; and
(b) The alternative methods must be designed so that the public funds are fully secured while held or deposited by the third party and until the funds are remitted to the public body. A public official shall calculate the minimum amount of collateral required of a third party as follows:
(A) For the initial calendar quarter of the agreement, the public official shall calculate the minimum amount of collateral to equal a reasonable estimate of the highest amount of public funds that the third party is expected to hold or deposit unremitted at any time within the initial calendar quarter.
(B) Within the first month of each calendar quarter subsequent to the initial calendar quarter of the agreement, the public official shall recalculate the minimum amount of collateral to equal a reasonable estimate of the highest amount of public funds that the third party is expected to hold or deposit unremitted at any time within the current calendar quarter based on factors that must include but are not limited to:
(i) The highest amount of public funds that the third party held or deposited unremitted at any time on any day within the preceding calendar quarter; and
(ii) Any reasonably expected increase or decrease in the amount of public funds the third party is expected to hold or deposit within the current calendar quarter.
(2) If the State Treasurer prepares a model policy related to acceptable alternative methods as described in subsection (1) of this section, a governing body may adopt all or part of the model policy.
(3) This section does not apply to a public body that is a state agency.
(4) As used in this section, "collateral" means cash or a letter of credit or similar instrument intended to ensure payment, approved by a governing body or appropriate public official of a public body, to be used as security to ensure the obligations of a third party. [2019 c.587 §30]
