City officials lack performance bonds

A former mayoral candidate pointed out the bond policy failure.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- For more than four years, most city officials in Youngstown required to have individual faithful performance bonds to financially protect city residents have served without them.
The bonds are needed to recoup money in cases where city officials do anything illegal with city funds.
Those officials required to have performance bonds but serving without them are the mayor, law director, city council president and council's seven members.
Finance Director David Bozanich is the only Youngstown official who has a bond. The rest won't have them for about two more weeks, said city Law Director Iris Torres Guglucello.
Policy established
City council passed legislation Dec. 19, 2001, to require the previously mentioned officials to be covered by individual faithful performance bonds. Even before the city ordinance, state law requires most of those officials to have performance bonds.
Councilman Michael Rapovy, D-5th and the body's president pro-tempore, served on council when the law was passed. But Rapovy had no recollection of the legislation that is more than four years old.
Council President Charles Sammarone, who served in that capacity when council approved the legislation, said he recalled the policy but doesn't know why it was never enforced.
Bozanich has a $100,000 performance bond. Because Bozanich is the chief fiduciary officer for the city, he said he made sure he had a performance bond. As far as obtaining bonds for other city officials, he said that responsibility lies with the law director's office.
Guglucello said she had asked the previous city administration, run by ex-Mayor George M. McKelvey, about the lack of the performance bonds, but was never instructed to obtain the coverage. McKelvey couldn't be reached Monday to comment.
It wasn't until Maggy Lorenzi, a community activist and 2005 mayoral candidate, recently requested to get copies of the insurance bonds that city officials took another look at the city ordinance.
Following the law
"This law makes sure taxpayers are covered," Lorenzi said. "This is garbage. They should be bonded. No one gets a contract to do work for the city without a bond yet the city doesn't honor that law for its employees."
Certain people with fiduciary responsibilities, under state law, must be bonded in order to protect citizens if city officials are dishonest with city funds, said Warren Law Director Greg Hicks.
Warren city officials with fiduciary responsibilities must sign papers to have the city pay premiums for the performance bonds shortly after they take office, Hicks said.
"It's good accounting," he said. "It's a good business practice. It's amazing [Youngstown city officials aren't bonded]. It would have been real amazing if something went wrong."
A Youngstown ordinance calls for the city to pay the premiums on the officials in question for individual bonds. The bonds are to be prepared by the law director with the amount determined by council, city law states.
No set amount
Guglucello said council never set an amount for the bonds.
Because Bozanich's bond amount is $100,000, Guglucello said she would use that same amount for the other city officials.
Guglucello is "shopping around" for the best price and doesn't have time to ask members of council if $100,000 is enough for each bond. If council wants to increase the bond amount at a later date, Guglucello said that wouldn't be a problem.
With the amount of money handled by the city, Lorenzi suggest each person should be bonded at $1 million.
"I just want them to do their job and not have me do it for them," she said.
Failure to comply
Guglucello said she, Bozanich and McKelvey were covered through the city's insurance policy that was canceled about a year ago. She acknowledges the three didn't have individual bonds.
"We were on an insurance policy that gave faithful performance coverage," said Guglucello, who added that the policy was as good as a performance bond.
The law director said council members have never had performance bonds to the best of her knowledge.
The city law also said council "may" declare an office vacant 10 days after a person takes one of the bond-required positions and doesn't obtain the bond.
Guglucello said the word may allows discretion on the city's behalf in this case.
Mayor Jay Williams wasn't aware of the required bond, but said he was confident his administration would comply with city and state laws on the matter.
skolnick@vindy.com