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November 29, 2012 (Special Meeting) Page 1302 determined that there were a number of technical defects with the bond and as a result of making that determination on November 21 I wrote a letter to Mr. Small and advised him that we reviewed his bond and found these particular items to be the technical deficiencies. I'll go ahead and briefly recount what those were. The first is that the bond wasn't signed by Mr. Small as principal and the statute and the bond require that his witness - or his signature - be witnessed, excuse me. According to the statute, the bond is to be payable to the State of North Carolina, this particular bond was not and that is one of the requirements under 161-4(a), which you have in front of you. Now the standard practice that's been done in previous bonds is to have the bond made payable to the state and to the county (ATIMA), which simply means "as their interest may appear ". That's been the standard practice, but the statute specifically says just the state, but for reasons that I'm going to get into in just a moment it makes sense to have it made payable jointly. But the statute says what the statute says. The third item was that the bond technically stopped short of the last day of the four year term for this office. It said that it ran through December 3 rd and we determined the last day of the four year term would be December 5 Again, another technical matter, but the statute's clear it has to run for the entire term of the office. And then finally, they're gonna copy some - (Multiple people talking) Koch: The original bond would need to be submitted, we had a copy, presumably that would be done. So, that was sent to Mr. Small and it's my understanding that he is prepared to address those issues this afternoon. Now the reason that is all important is because it's required of this board that you approve the bond and that is contained in North Carolina General Statute 58- 72 -50. And even more importantly, and more to the point, is that if there is a defect in the bond - of any sort - that those board members who vote to approve the bond are personally liable for any loss that is occasioned that that bond won't cover. And I'm not talking about above the statutory limit, I'm talking about a situation in which the bonding company would say "No, we're not gonna pay on that bond because there was a defect in it, your board approved it, your members need to deal with it - we're not." And let me just reiterate, that is personal liability, that's not county liability. That is individual, personal liability on the part of each commissioner. Under those circumstances, then it is incumbent upon each of you and your specific obligation to be careful that the bond has been issued in proper form and that there is no defect or reason, of any sort, that the bonding company would come back later and not honor the bond. That specifically appears to be able to include knowledge you may have of some matter that has not been disclosed to the bonding company. If you have reason to believe that the bonding company has not been made aware of something that would be relevant in the underwriting process - if that's the case, the bonding company could conceivably come back and say "You knew of something that we didn't know about and therefore we are not going to honor this bond if there is a situation in which the bond is called upon to pay for some matter, and basically we're not going to pay on it. You're on your own." And the liability would run to the party who was harmed by some conduct that occurred in the office of the register of deeds, whether it be something relating to handling of money or some other matter related to the discharge of officious duties, whether it be misindexing or some other matter that could come up in that type of - in that office. So that's the - that's the reason that you need to be satisfied that this bond is one that has no issues with it at the time that you approve it. Now, the statutes are pretty short and succinct, and I may just for the purpose of the record go ahead and read them into - read them aloud to you. And let me just do that right now. I had mentioned 58- 72 -50, that is the statute that requires your approval, I think that really the - just the first sentence is the one that is appropriate here - or the first two sentences. "The approval of all official bonds taken or renewed by the Board of Commissioners shall be recorded by the clerk to the board. Every such bond shall be acknowledged by the parties thereto or proved by a subscribing witness, before the chairman of the Board of Commissioners, or before the clerk of court, registered in the registers office in a separate vote for the registration of official bonds showing the approval of the commissioners' endorsement thereon and certified by their chairman." It goes on to talk about the specific requirements for a surety bond, that if there is a properly authorized power of attorney attached to that bond, that that would be one of the requirements that would make it sufficient. Meaning that you don't have to bring Western Surety Company into - into this room and question them about their ability to be able to perform on the bond. If they're registered and in good standing with the Department of Insurance and they have a duly authorized power of attorney attached to it that shows that the bond was properly issued, then that's sufficient for that purpose. And in this particular case, there is a duly executed, authorized power of attorney attached and as I indicated earlier, the Western Surety Company is an insurance company that is in good standing with the Department of Insurance in the State of North Carolina. And then if I can just read 58- 72-60 "Every commissioner who approves an official bond, which he knows to