AGO IAL081307.

• Case Date: August 13, 2007
• Court: New Mexico

New Mexico Attorney General Opinions 2007. AGO IAL081307. August 13, 2007IAL081307The Honorable Leonard Lee RawsonNew Mexico State SenatorP.O. Box 996 Las Cruces, NM 88004 Re: Opinion Request - Collateralization of County FundsDear Senator Rawson: You have requested an Attorney General's opinion concerning the necessary levels of collateralization for Dona Ana County funds held by financial institutions acting as depositories. Based on our examination of the relevant New Mexico constitutional, statutory and case law authorities, and on the information available to us at this time, we conclude that the Board of County Commissioners of Dona Ana County may direct the County Treasurer to allow financial institutions who otherwise qualify to act as depositories of county funds to collateralize the account(s) holding those funds at 50 percent of the aggregate value of those funds or at a higher percentage as the Board may determine in the exercise of its discretion. Article VIII, section 4 of the New Mexico Constitution requires, in pertinent part, that:

All public money not invested in interest-bearing securities shall be deposited in national banks in this state, in banks or trust companies incorporated under the laws of the state, in federal savings and loan associations in this state, in saving and loan associations incorporated under the laws of this state whose deposits are insured by an agency of the United States and in credit unions incorporated under the laws of this state to the extent that such deposits of public money in credit unions are insured by an agency of the United States. . . The conditions of such deposits shall be provided by law.

As directed by that constitutional provision, there are a number of relevant statutory provisions. The first is NMSA 1978, Section 6-10-8 (1987), which provides that the board of county commissioners of each county shall constitute the county board of finance and as such is charged with supervision over the determination of the qualifications and selection of financial institutions to receive county funds for deposit. Upon certification or designation of a particular financial institution, the county treasurer may then deposit county funds with that institution upon it qualifying by posting collateral security or giving bond. See NMSA 1978, §§ 6-10-10(A) and (B) (2006)...