Report to Mayor and City Council
Tuesday, March 15, 2022
Consent
SUBJECT:
Title
CONSIDER THE CITY MANAGER'S REQUIRED BOND AMOUNT AND RESOLUTION NO. 22-032, A RESOLUTION OF THE CITY OF CARSON, CALIFORNIA, AUTHORIZING THE RISK MANAGER TO PURCHASE INSURANCE OR A MASTER BOND IN LIEU OF PURCHASING INDIVIDUAL OFFICIAL BONDS FOR CITY CLERK AND CITY TREASURER
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I. SUMMARY
California Government Code and the City’s Municipal Code require that the City Clerk and the City Treasurer each furnish a Public Officer Bond in favor of the City in the amount of $50,000. Additionally, the City Charter and the City’s Municipal Code require that the City Manager furnish a surety bond in favor of the City in an amount determined by City Council. Staff is recommending that Council set the City Manager Bond amount at $50,000, the same as the City Clerk and City Treasurer bonds.
California Government Code allows the City to use its blanket crime insurance policy to be used as an alternative to the bond. Approving Resolution 22-032 will have no adverse impact on the City’s insurance and will provide more coverage and save approximately $1,500 in annual bond premiums for the City Clerk and City Treasurer. The City Charter does not allow substitution for the City Manager’s bond.
II. RECOMMENDATION
Recommendation
1. APPROVE staff recommendation to set City Manager’s required bond amount at $50,000; AND
2. WAIVE further reading and ADOPT Resolution No. 22-032, " A RESOLUTION OF THE CITY OF CARSON, CALIFORNIA, AUTHORIZING THE RISK MANAGER TO PURCHASE INSURANCE OR A MASTER BOND IN LIEU OF PURCHASING INDIVIDUAL OFFICIAL BONDS FOR CITY CLERK AND CITY TREASURER."
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III. ALTERNATIVES
TAKE any action deemed necessary.
IV. BACKGROUND
California Government Code section 36518 requires the City Clerk and City Treasurer to execute a bond to the City. Government Code section 36519 allows the City Council to require bonds for any other officer or employee of the City. The City’s Charter and Carson Municipal Code (“CMC”) require the City Manager to furnish a corporate surety bond conditioned upon the faithful performance of their duties in such amount and form as may be determined by the City Council. (City Charter, § 402, subs. C; CMC § 2102.) The City’s Municipal Code requires the City Clerk to upon entry to his or her duties to execute a bond to the City in conformity with bonds of Public Officers, and in conformity with the provisions of the California Government Code relating thereto, in an amount of $50,000. (CMC, § 2202.) The municipal code also requires the City Treasurer to upon entry to his or her duties execute a bond to the City in conformity with bonds of Public Officers, and in conformity with the provisions of the California Government Code relating thereto, in an amount of $50,000. (CMC, § 2203.)
California Government Code section 1481 provides “when deemed expedient by the legislative body of a local public agency, a master official bond or other form of master bond may be used which shall provide coverage on more than one officer, employee, or agent of the local public agency, whether elected or appointed, who is required by statute, regulation, the appointing power, the governing board of a local public agency, or the board of supervisors of a chartered or general law county to give bond.” And California Government Code section 1463 provides as an alternative to the official bond required by a city, the City can procure a government crime insurance policy or employee dishonesty insurance policy to be used as a master bond, as though it were an official bond.
The City purchased an Insurance Policy that covers all City employees for theft, fraud or crime up to One Million Dollars, ($1,000,000). The policy covers all City employees, including those required to be bonded, and provides broader coverage and higher limit.
California Government Code and the City’s Municipal Code require that the City Clerk and the City Treasurer each furnish a Public Officer Bond in favor of the City in the amount of $50,000. Additionally, the City Charter and the City’s Municipal Code require that the City Manager furnish a surety bond in favor of the City in an amount determined by City Council. Staff recommends that City Council set the required City Manager bond amount at $50,000, same amount as the other two required bonds.
California Government Code allows the City to use its blanket crime insurance policy to be used as an alternative to the City Clerk and City Treasurer bonds. The City’s crime insurance covers the City for the risks of employee fraud, theft, and dishonesty, with a limit of $1,000,000. The proposed resolution 22-032, if approved, would provide more coverage at no additional cost to the City. The City Charter does not give the option to substitute crime insurance or a master bond for the City Manager’s bond.
V. FISCAL IMPACT
Adopting resolution 22-032 would save the City approximately $1,500 in annual bond premiums.
VI. EXHIBITS
1. Resolution 22-032 (pages 4-6)
Prepared by: Roobik Galoosian, Risk Manager