City officials’ bonds flew under charter radar

Photo by Norman Schimmel

In 2010, when Pam Nadalini was approved as the Sarasota city auditor and clerk, a problem arose. Human Resources Director Kurt Hoverter told City Attorney Bob Fournier that Nadalini could not obtain the bond required to serve in the office.

“Kurt appraised me of Pam’s inability to obtain a bond,” Fournier told The Sarasota News Leader.

Hoverter then obtained an insurance policy covering all city employees who were involved with money and finance, including Nadalini.

Fournier said bonding agencies require applicants to fill out long questionnaires. “It’s a detailed application process specific to bond underwriters, including credit scores and income and personal background,” he said. “I don’t know what caused [the agencies] to decline.”

Hoverter said no one knows why Nadalini failed to receive a bond. “The only person who knows is the individual who asked for the bond,” he said. “Only they can call up and find out.”

Later in 2010, a citizens committee was empanelled to study and propose changes to the city’s charter. Some of the issues were contentious, but the “housekeeping amendments” were not. One of them would eliminate the need for a bond for senior city staffers.

At no time – either before the Charter Review Committee or during additional discussion before the Sarasota City Commission – was it revealed that Nadalini was not bond-worthy. The proposal for the charter change won City Commission approval and will appear on the ballot for citizen approval in November.

“That information [about Nadalini] was never brought to the board,” said Charter Board Member Elmer Berkel. “Because of the supposed difficulty in getting a bond, we needed a different approach. Staff indicated [insurance] was the way to go.”

But for right now, the city is working under the guidelines of the current charter, which says:  “The city manager, the city auditor and clerk … and the finance director shall each give bond with authorized corporate sureties, conditioned upon their faithful performance of duty.”

And the charter requires the City Commission to set the amount of that bond by resolution every year. On Nov. 7, 2011, the commission passed the latest resolution and back-dated it to Oct. 1, the start of the fiscal year. Finance Director Chris Lyons and then-City Manager Bob Bartolotta both received bonds, but Nadalini, for the second year in a row, did not.

Fournier said bonds and insurance “are functionally equivalent.” He said one advantage of insurance over bonds is that “insurance is more explicit. Bonds are more ambiguous. And of course surety [bonds] do require an investigation, while insurance does not.”

There are other differences between bonds and insurance. Insurance mostly covers negligence. Bonds cover a wider range of conduct, including malfeasance and misfeasance. “Bond language requires faithful performance of duties,” said Fournier. “With insurance, you can adjust coverage for your needs. And it’s easier to secure coverage of new employees.”

Kerry Kirschner is executive director of The Argus Foundation, a pro-business group. Nadalini’s failure to obtain a bond as the charter requires worries him. “This is very troubling,” he said. “If we have rules, we expect them to be followed.”

“If you had somebody handling your money, and they couldn’t be bonded, wouldn’t you look for someone else?” he asked. “The bond is a simple protection for the taxpayers,” said Kirschner, a former city commissioner and mayor.

Interim City Manager Terry Lewis does not have a bond, either, as the charter requires. He checked with Fournier and Hoverter, who told him the insurance policy and the bonds were “functionally equivalent,” and he did not need the bond. “It’s just another policy that covers the same thing,” he said.

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