1. Except as provided in subsection 2 of this section, upon the opening of the sealed proposals submitted, the city council shall select as the depositary of the funds of the city the banking institution offering to pay to the city the largest amount for the privilege; except that the council may reject any or all bids. Within five days after the selection of the depositary, the banking institution selected shall deposit the securities as required by sections 110.010 and 110.020. The rights and duties of the parties to the depositary contract are as provided in section 110.010.

2. Notwithstanding any provision of section 95.280 or this section to the contrary, the contract term for any city of the third classification with more than ten thousand five hundred but less than ten thousand six hundred inhabitants shall begin on the first day of August following the receipt of the bid proposals.