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CHA~TE~ 8 <br /> <br />Minn. StaL§ 412.1 [ t. <br /> <br />S¢~ League research memo <br />Official Bonds and Oaths of <br />City Officers and Employees <br />(65.2). <br /> <br />tMinn. Stat. § 412.151, sub& 2. <br /> <br />Minn. Stat. § 412.1 [I. <br /> <br />,Minn. Stat. § 412.151, subd. 2. <br /> <br />See LMCIT r/sk management <br />information memo LMC1T Bond <br />Coverage. <br /> <br />A. Official bonds <br /> <br />State law requires the treasurer and clerk to furnish bonds. In addition, the <br />state law authorizes the council to require a bond from any other officer or <br />employee. <br /> <br />The city should always require a bond for employees that handle <br />substantial amounts of money or property that is readily convertible into <br />money. In some cases, the city may find it desirable to bond major <br />administrative officers as well, even though they do not directly handle <br />money. Many cities bond the city manager, finance director, deputy clerk, <br />department heads, and other similar administrative officials. <br /> <br />In addition, if the council designates all or part of the clerk's bookkeeping <br />duties to another officer or employee, that officer or employee must furnish <br />a fidelity bond. <br /> <br />1, Premium payments <br /> <br />State law allows the council to pay the premium on the bond from city <br />funds, although the council could require officers or employees to obtain <br />the bonds and pay their own premiums. <br /> <br />2. Amount of bond <br />The law does not set a Schedule of bond coverage for any particular class of <br />officials or employees. The amount of bond coverage is up to the city <br />council. A city may set the amount of bond coverage in several different <br />ways. One way is to set the bond amount as approximately equal to the <br />largest amount of money on hand at any one time. <br /> <br />The Government Finance Officers Association recommends using a <br />formula to determine the officer's "exposure index." This formula takes I 0 <br />percent of the sum of the city's total annual revenue, adds it to the market <br />value of negotiable securities under the official's control, and matches the <br />resulting figure to a recommended bond amount. Further information on <br />this formula is available from the League of Minnesota Cities. <br /> <br />8-14 <br /> <br />Tiffs chapter last revised 12/14/2004 <br /> <br />HANDBOOK FOR MINNESOTA CITIES <br /> <br />-74- <br /> <br /> <br />