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State requires switch from individual bonds to crime insurance; Cedar City staff warn of unknown costs
Summary
Staff told the council that the Utah legislature directed municipalities to replace certain official bonding requirements with a crime‑insurance policy effective May 7; staff expect broader coverage but do not yet have final cost figures and warned the council the city must comply or risk state enforcement.
City staff told the council that a state legislative change will require Cedar City to replace traditional individual bonds for certain officials with a crime‑insurance policy.
The city attorney reported the change is effective by statute on May 7 and that the new crime‑insurance language appears broader than the bonding it replaces — potentially covering more employees under a single policy. "This is our great wonderful state legislature... who decided that bonding was not what they wanted. They wanted crime insurance," the staff representative said, adding the city must comply and staff are seeking cost estimates from insurers.
Staff cautioned that, while current rates may be similar to existing bonding costs, the city does not yet have a definitive premium amount. If the cost proves large, councilmembers said they would revisit the ordinance. Staff flagged that failing to adopt the required change could leave the city in violation of state law and could carry a default penalty under state statute.
Council agreed the ordinance must come back on action once staff provide the insurance cost and coverage details.
