AGO 86-14.

• Case Date: October 06, 1986
• Court: Colorado

Colorado Attorney General Opinions 1986. AGO 86-14. October 6, 1986Department of Law Attorney General Opinion FORMAL OPINION of DUANE WOODARD Attorney General Opinion No. 86-14 AG Alpha No. TR TR AGAPH B. J. Thornberry Deputy Treasurer Department of the Treasury 140 State Capitol Denver, Colorado 80203 RE: Federal deposit insurance coverage of deposits of state college and university funds in banks and savings and loan associationsDear Ms. Thornberry: You have asked whether the state treasurer is the "official custodian" of state college and university funds and, if so, whether each college or university is a separate "public unit" for purposes of deposit insurance coverage by the Federal Deposit Insurance Corporation ("FDIC") and the Federal Savings and Loan Insurance Corporation ("FSLIC"). QUESTIONS PRESENTED AND CONCLUSIONS Whether the state treasurer is the official custodian of any or all of the funds of the state colleges and universities. With the possible exception of certain "special funds," the state treasurer is the official custodian of the funds of all state college and university governing boards. If so, whether the funds of each state college or university governing board deposited by the treasurer in a federally insured bank or savings and loan association will be separately insured up to a maximum of $100,000? No. ANALYSIS This office has on several occasions analyzed the scope of federal insurance coverage for deposits of state moneys in Colorado banks and savings and loan associations. In earlier opinions, we have examined several different state agency accounts (April 10, 1978; April 20, 1981; February 18, 1983; May 8, 1985; and, November 19, 1985). However, none of these opinions have dealt with state institutions of higher education. Therefore, before turning to your substantive questions, a preliminary issue must be addressed. You have asked about federal insurance coverage of deposits made by state "colleges and universities." The Legislature has established several corporate governing boards to which general control and supervision of individual state institutions of higher education has been committed. The colleges and universities under these boards' governance have no independent legal existence. See generally Rivas v. State Board for Community Colleges and Occupational Education, 517 F. Supp. 467 (D. Colo. 1981). My analysis of deposit insurance coverage of institutional funds thus focuses on the governing boards and not on the subordinate colleges and universities the boards manage. This opinion will consider the "public unit" status of the following governing boards (hereafter referred to as the "governing boards" or "boards"): (1) the Board of Regents of the University of Colorado, sections 23-20-101 to 135, C.R.S. (1973 & 1986 Supp.); (2) the State Board of Agriculture (Colorado State University, Fort Lewis College, University of Southern Colorado), sections 23-30-101 to 116, C.R.S. (1973 & 1986 Supp.); (3) the Board of Trustees of the University of Northern Colorado, sections 23-40-101 to 105, C.R.S. (1973 & 1986 Supp.); (4) the Board of Trustees of the Colorado School of Mines, sections 23-41-101 to 122, C.R.S. (1973 & 1986 Supp.); (5) the Trustees of the Consortium of State Colleges in Colorado (Metropolitan State College, Mesa College, Western State College of Colorado, Adams State College of Colorado), sections 23-50-101 to 112, C.R.S. (1973 & 1986 Supp.); (6) The State Board for Community Colleges and Occupational Education (Arapahoe Community College, Community College of Aurora, the Community College of Denver, Front Range Community College, Lamar Community College, Morgan Community College, Otero Junior College, Pikes Peak Community College, Pueblo Community College, Red Rocks Community College, and Trinidad State Junior College), sections 23-60-101 to 210, C.R.S. (1973 & 1986 Supp.) and (7) The Board of Directors of the Auraria Higher Education Center, sections 23-70-101 to 112, C.R.S. (1986 Supp.).(fn1) Under federal law, each "official custodian" of the funds of a "public unit" depositing the public unit's moneys in a federally insured bank or savings and loan association ("S & L") is separately insured by the FDIC or FSLIC up to $100,000 for such deposits. See 12 U.S.C. secs. 1813(m)(1) and 1728(d)(1)(ii)(1980). In other words, if a single public unit has more than one official custodian, each custodian depositing the public unit's funds in a particular bank or S & L is a separately insured depositor. Conversely, when the same person acts as the official custodian of the funds of two or more public entities, the deposits of each entity at a federally insured institution will be separately insured up to the $100,000 maximum, if, but only if, each entity is a separate "public unit." See 12 C.F.R. secs. 330.8(a)(6) and 564.8(a)(2)(1986). Therefore, for the purpose of determining whether deposits of governing board funds in a federally insured bank or S & L will be separately insured to the maximum...