17-607 Treasurer; depositories; qualification; bond; exemption of treasurer from liability; conflict of interest. - Nebraska Statutes

17-607. Treasurer; depositories; qualification;bond; exemption of treasurer from liability; conflict of interest.(1) The treasurer of a city of the second class or village shall deposit,and at all times keep on deposit, for safekeeping, in banks, capital stockfinancial institutions, or qualifying mutual financial institutions of approvedand responsible standing, all money collected, received, or held by him orher as city or village treasurer. Such deposits shall be subject to all regulationsimposed by law or adopted by the city council or board of trustees for thereceiving and holding thereof. The fact that a stockholder, director, or otherofficer of such bank, capital stock financial institution, or qualifying mutualfinancial institution is also serving as mayor, as a member of the city council,as a member of the board of trustees, as a member of a board of public works,or as any other officer of such municipality shall not disqualify such bank,capital stock financial institution, or qualifying mutual financial institutionfrom acting as a depository for such municipal funds. Section 77-2366 shallapply to deposits in capital stock financial institutions. Section 77-2365.01shall apply to deposits in qualifying mutual financial institutions.(2) The council or board of trustees shall require from all banks, capitalstock financial institutions, or qualifying mutual financial institutions(a) a bond in such penal sum as may be the maximum amount on deposit at anytime less the amount insured orguaranteed by the Federal Deposit Insurance Corporation or, inlieu thereof, (b) security given as provided in the Public Funds Deposit SecurityAct, to secure the payment of all such deposits and accretions. The councilor board shall approve such bond or giving of security. The city treasureror village treasurer shall not be liable for any loss of any money sustainedby reason of the failure of any such depository so designated and approved. SourceLaws 1879, § 65, p. 209; R.S.1913, § 5149; Laws 1921, c. 304, § 1, p. 961; C.S.1922, § 4324; Laws 1927, c. 38, § 1, p. 168; Laws 1929, c. 45, § 1, p. 193; C.S.1929, § 17-515; Laws 1931, c. 33, § 1, p. 124; Laws 1935, c. 140, § 2, p. 515; Laws 1937, c. 31, § 1, p. 155; C.S.Supp.,1941, § 17-515; Laws 1943, c. 27, § 2(1), p. 121; R.S.1943, § 17-607; Laws 1957, c. 54, § 3, p. 264; Laws 1989, LB 33, § 22; Laws 1992, LB 757, § 19; Laws 1996, LB 1274, § 22; Laws 2001, LB 362, § 24; Laws 2003, LB 175, § 1; Laws 2009, LB259, § 10. Cross ReferencesPublic Funds Deposit Security Act, see section 77-2386. AnnotationsA municipal treasurer is required to deposit its funds in a bank selected by the village board. Village of Hampton v. Gausman, 136 Neb. 550, 286 N.W. 757 (1939).Where village treasurer deposits funds in bank duly designated by board as its depository and, after insolvency of such bank, sureties confess their liability and to recoup part of their loss sold bonds pledged with them by bank, such sureties are not entitled to a preferred claim against assets of such bank for balance of their loss. Shumway v. Department of Banking, 131 Neb. 246, 267 N.W. 469 (1936).A village treasurer is not authorized to deposit village funds in a bank not designated by board of trustees as a depository. Village of Overton v. Nagel, 128 Neb. 264, 258 N.W. 461 (1935); State ex rel. Sorensen v. Bank of Otoe, 125 Neb. 414, 250 N.W. 547 (1933); State ex rel. Sorensen v. Bank of Otoe, 125 Neb. 383, 250 N.W. 254 (1933).Deposit of funds in duly designated depository by city treasurer, where he received them for the specific purpose of investing them in securities designated by ordinance, does not make such funds trust funds. State ex rel. Sorensen v. Fidelity State Bank, 127 Neb. 529, 255 N.W. 781 (1934).Where a bank, not designated as a depository by village board, accepts village funds from its treasurer, with knowledge of their character, such bank holds such funds as trustee, and on bank's insolvency, the village is entitled to a preferred claim therefor. State ex rel. Sorensen v. Plateau State Bank, 126 Neb. 407, 253 N.W. 433 (1934).Designation of bank as a depository does not relieve treasurer and his bondsmen from liability for funds of municipality lost in bank failure, where treasurer was officer, director, and stockholder of the bank and knew bank was unsafe. City of Cozad v. Thompson, 126 Neb. 79, 252 N.W. 606 (1934).Treasurer is liable on his official bond for loss of funds deposited by him in a bank not duly designated as a depository. City of South Sioux City v. Mullins, 125 Neb. 410, 250 N.W. 549 (1933).City treasurer is bound to deposit city money in bank which has made application and been accepted as city depository by the city council. Luikart v. City of Aurora, 125 Neb. 263, 249 N.W. 590 (1933).