This page provides an overview of banking requirements for local governments in Washington State, along with sample RFPs/agreements and links to best practices and list of authorized depositaries.
New legislation: Effective July 25, 2021, SB 5106 repeals RCW 39.58.240 and the limitation that a credit union may only accept deposits greater than the maximum insured amount from a public funds depositor that either is a county with a population of 300,000 persons or less or is a public funds depositor located within a county with a population of 300,000 persons or less.
Overview
Cities and counties are required to bank with a qualified public depositary (RCW 39.58.080). In code cities, the bank is designated by the council (RCW 35A.40.030). In other classes of cities and counties, the statutes allow the treasurer to select the bank (RCW 35.38.010 and 36.29.020). Note that credit unions are public depositaries solely for the purpose of receiving deposits of no more than $250,000, the maximum deposit insured by the national credit union share insurance fund.
Cities and counties may pay for their banking services by direct charges for each service, by compensating balances (funds the bank holds on which it pays no interest), or a combination of the two.
Relevant Statutes
- RCW 39.58.080 - Deposit of public funds in public depositary required -- Deposits in institutions located outside the state
- RCW 35A.40.030 - Fiscal -- Depositaries
- RCW 35.38.010 - Designation of depositaries
- RCW 36.29.020 - Custodian of moneys -- Investment of funds not required for immediate expenditures -- Service fee
- RCW 39.58.010 (8) and (15) - Definitions
Examples of RFPs
To make certain that they are getting the services at a good price, local agencies should periodically do a request for proposals (RFP). Below are a few selected examples.
Cities
Counties
Special Purpose Districts
Joint RFPs
Examples of Banking Agreements
Below are a couple examples of banking contracts. Some of the RFPs above also include sample banking contracts.
Recommended Resources
- WA State Treasurer: PDPC Banks – List of financial institutions currently authorized to accept public deposits
- Government Finance Officers Association (GFOA)
- Banking Services: A Guide for Governments (2004) – Very detailed and informative publication discusses cash flows, core/ancillary banking services, and the procurement process. Older publication, but still timely and relevant.
- Best Practices: