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November 29, 2012 (Special Meeting) Page 1314
<br />days or whatever period of time - cause that seems to me to be a fairly easy
<br />technical correction, I don't think anybody would have any problem with that.
<br />Koch: Well, that's the way I perceived it when I wrote the letter, was that
<br />it's a technical issue because it basically ran from December 3 rd to December
<br />- of 2012 - to December 3 rd of 2016. And that by writer or endorsement to
<br />this bond that that could have been corrected.
<br />Carruth: You've got four years to do that. That's what I'm saying, I guess.
<br />White: If you have four years to correct it, but if it doesn't get
<br />corrected, what's our recourse?
<br />Koch: I wanted to look back at the statute to find the right one. The
<br />county manager is referring to an issue concerning a requirement under 58 -72-
<br />20 to examine the bond each year to determine if there are any issues with
<br />it. And the commissioners reserve the right to request that it be changed or
<br />strengthened in conformance with that statute, that is limited to the maximum
<br />amount otherwise set out by statute. In other words, since this bond is for
<br />50,000 you could not increase it because the statutory maximum is 50,000. If
<br />you became concerned about the surety, for some reason at that point, then in
<br />accordance with the other statutes that we've talked about certainly you
<br />could impose some requirement, additional requirement at that time on an
<br />annual basis.
<br />White: Well, what my statement is, is if we approve the bond and it does not
<br />get corrected, what is our recourse?
<br />Koch: I was looking back for the statute that says that the bond - the
<br />statute - the statute requires that the bond be for the entire length of the
<br />term of office.
<br />White: And it's not.
<br />Koch: And it's not.
<br />White: Is that correct, it is not for the term, for the entire length of the
<br />of the office?
<br />Koch: It's technically two days short.
<br />White: I understand. Can that be fixed and even if it can be fixed, if it
<br />is not fixed what is our responsibility? What can we do? What is our
<br />recourse?
<br />Koch: Let me answer the question this way: the purpose of my letter to Mr.
<br />Small was not to impose any undue, additional requirements on him. The
<br />purpose of that letter was to make sure that any bond that was in place, that
<br />was approved by this board, would not be subsequently revoked - would not be
<br />subsequently revoked by Western or would not use - or they would not use some
<br />technical defect in the bond as a basis for avoiding their obligation. I
<br />don't want to put Commissioner Carruth on the spot or Mr. Harris, but I
<br />certainly it's not uncommon for an insurance company when presented with a
<br />claim to rely on technical defects or language in their insuring instrument
<br />to avoid paying a claim. So, part of the purpose or a large part of the
<br />purpose was that every bond you approved would be something that would not
<br />allow them to skate out of it, basically. Whether they would or not on that
<br />particular item, you know, with the date being two days short - I can't
<br />answer that. That would be a decision that they would make, situationally,
<br />based on the circumstances. But certainly it just seemed, particularly since
<br />it was something that could be fairly easily corrected, so that there is
<br />absolutely no issue about it that it would - it might not - it would be a
<br />good idea to attempt to do so at this time so that it would not be a problem.
<br />I think that's about as well as I can answer it, Commissioner.
<br />White: It's as clear as mud.
<br />Small: Madam Chairman, could I please respond, briefly? I have spoken to
<br />Western about those particular concerns and Western did not change the date
<br />on the bond. So I guess to address Mr. Koch's concern, that Western in the
<br />event of a claim might want to use this type of technicality as a defense, I
<br />don't think that's going to be possible considering they have the notice of
<br />the term and kept the bond the same.
<br />Measmer: What was their reasoning for keeping - keeping it the same?
<br />Small: I'm not a bond writer; I don't have that, Mr. Measmer.
<br />Measmer: I just thought, you know, if you had asked, it seemed like they
<br />would say the reason why - or give some sort of response.
<br />Carruth: I think one of the big issues we've got I know that 12 years I've
<br />been on the board where we have bonded or approved Ms. McAbee's bond three
<br />times, Sheriff Riley's bond three times, and think we've probably have done
<br />the Finance Director at least three times. We've never had an issue, that's
<br />the reason why we discuss - cause this issue never has come up. Is there any
<br />reason, and let's ask Tony, is there any reason why after, if this satisfied
<br />(inaudible) that couldn't he reapply through Penn? Or is the bond just
<br />turned down, is that it? Is there any reapplication to them? If it occurred
<br />and I was thinking maybe if each one came back - to really make it solid -
<br />just come back and reapply here in several months, three to six months,
<br />something like that and by that point (inaudible) that way he'll be bonded
<br />just like the others. (inaudible)
<br />Harris: Commissioner Carruth, you can always reapply. Normally, it's best
<br />to wait a certain amount of time, maybe one years or two years, I would have
<br />to ask the agent that question.
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