DEPOSITORY.

(a) The board shall designate one or more banks inside or outside the district to serve as depository for district money.

(b) All district money shall be deposited in a designated depository, except that:

(1) bond proceeds and money pledged to pay bonds, to the extent provided in the indenture, may be deposited with the trustee bank named in the trust indenture; and

(2) money shall be remitted to the bank of payment for the payment of principal of and interest on the bonds.

(c) To the extent that money in a depository bank or the trustee bank is not insured by the Federal Deposit Insurance Corporation, the money must be secured in the manner provided by law for the security of county funds.

(d) The board shall prescribe the terms of service for depositories.

(e) Before designating a depository bank, the board shall:

(1) publish notice one time in a newspaper of general circulation in the district that is specified by the board; or

(2) mail a copy of the notice to each bank in the district.

(f) The notice must:

(1) state the time and place at which the board will meet to designate a depository bank or banks; and

(2) invite each bank in the district to submit an application to be designated as a depository.

(g) At the time stated in the notice, the board shall:

(1) consider the applications and the management and condition of each bank; and

(2) designate as a depository the bank or banks:

(A) that offer the most favorable terms for the handling of the money; and

(B) that the board finds have proper management and are in condition to handle the money.

(h) Membership on the board of an officer or director of a bank does not disqualify the bank from being designated as a depository.

(i) If the board does not receive any applications before the time stated in the notice, the board shall designate one or more banks inside or outside the district on terms that the board finds advantageous to the district.