Pataskala finance committee recommends adding employee-dishonesty insurance alongside surety bonds

Pataskala City finance staff proposed adding employee-dishonesty/faithful-performance insurance alongside existing surety (performance) bonds to reduce the risk that a fiscal officer could be held personally liable for missed payments, and the finance committee voted to recommend the change to city council.

Jennifer, finance staff, told the committee that state auditors can list fiscal officers on what she called 'findings for recovery' when invoices are late or unpaid, which can create personal repayment responsibility. She said the proposal would add an insurance policy that generally would make the insurance primary and reduce the chance an individual employee would be pursued for repayment. 'Per ORC 3.061,' Jennifer said, 'employee dishonesty coverage must be primary if the loss occurs.'

Why it matters: Jennifer described the difference between surety/performance bonds and employee-dishonesty insurance. She said surety bonds (the current protection) allow the surety to pay a loss and then pursue an employee to recover funds, while employee-dishonesty/faithful-performance insurance can provide broader coverage without necessarily pursuing the individual. To comply with state guidance, staff plan to present a resolution that shows the city is using both forms of protection.

Coverage and cost details presented: Jennifer said the city’s current surety bonds are $100,000 per position. She described proposed employee-dishonesty coverage at $100,000 per employee with a $2,500 deductible and quoted premium figures: the current bond premium was given as $164 per bond, the employee-dishonesty coverage as $259 per bond, plus an additional $118 per bond for a $35,000 surety component. In the meeting she stated, 'So the total is $6.36 that we would pay per person then for the all the extra coverage.' (figure reported as stated in the meeting; transcript audio/wording on that total appeared unclear.)

Process and next steps: Committee members asked whether this change applies only to finance staff; Jennifer confirmed the higher bond/coverage was targeted at the finance positions that must be bonded. The committee voted to recommend that the city council adopt the resolution; staff said they will place the prepared resolution on the next council agenda for formal consideration.

The committee’s recommendation does not itself adopt the policy; a council resolution is required. The finance committee recorded its recommendation by roll call and directed staff to bring the resolution forward. The council will make the final decision at a future meeting.

Quotes from the meeting are presented as stated by speakers in the recorded transcript.