(a) The board of directors shall designate one or more banks within any county in which any part of the district shall lie to serve as depositories for the funds of the district, and all funds of the district shall be deposited in such depository bank or banks.

(b) Before designating a depository bank or banks, the board of directors shall issue a notice stating the time and place the board will meet for such purpose and inviting the banks in the counties in which any part of the district shall lie to submit applications to be designated depositories. The term of service for depositories shall be prescribed by the board. Such notice shall be published one time in a newspaper or newspapers having general circulation in the district and specified by the board.

(c) At the time mentioned in the notice, the board shall consider the applications and the management and condition of the banks filing them, and shall designate as depositories the bank or banks which offer the most favorable terms and conditions for the handling of the funds of the district and which the board finds have proper management and are in condition to warrant handling of district funds. Membership on the board of directors of an officer or director of a bank shall not disqualify such bank from being designated as a depository.

(d) If no applications acceptable to the board are received by the time stated in the notice, the board shall designate some bank or banks within or without the district upon such terms and conditions as it may find advantageous to the district.