Bonding Requirements

Date Posted: Wednesday, September 11, 2024
Posted In: Legal Notes

State law requires some municipal officials to be “bonded.” In this context, a “bond” is an insurance policy or security that protects the municipality and municipal taxpayers in the event the official fails or refuses to faithfully perform required duties or to properly account for monies received. If the municipality incurs losses as a result, the surety agrees to cover those losses up to the limits stated in the bond instrument.

The surety may be a bonding company, insurance company, or other corporate or individual surety. The bond can be a blanket fidelity bond covering all municipal officials, or individualized bonds covering specific municipal officials, or a combination of the two. Some sureties bond the position itself, while others bond the specific individual holding the position.

It is important to confirm that required bond coverage meeting minimum statutory criteria is in place. For example, if a blanket fidelity bond is used, confirm that it covers the officials desired, as some blanket bonds exclude certain officials or special coverages. Also, for individualized bonds or bonds specific to an officeholder, the surety should be promptly notified whenever a new person takes office so that official can be properly covered.

Listed below are municipal officials that commonly must (or may) be bonded under Maine law.

Municipal clerks may be required to be bonded if the municipal officers (selectboard or council) desire. See 30-A M.R.S. § 2651. The bond amount is within the board’s discretion; it may be either a corporate surety bond, or an individual surety bond provided it is accompanied by a detailed sworn statement of the surety’s personal financial ability. The municipality must pay for the bond. 30-A M.R.S. § 5601. The clerk and the surety are liable for all acts and omissions of deputy and assistant clerks. See 30-A M.R.S. §§ 2603, 2654.

Constables must be bonded in the amount of $500, with two sureties approved by the municipal officers, before serving process (i.e., court papers). See 14 M.R.S. § 703.

General assistance (GA) administrators must be bonded. The bond amount and type of surety are within the municipal overseers’ discretion. See 22 M.R.S. § ٤٣٠٢.

Road commissioners must be bonded. The bond amount and type of surety are within the municipal officers’ discretion. See 23 M.R.S. § 2701.

Tax collectors must be bonded. The bond amount is within the municipal officers’ discretion; it may be either a corporate surety bond, or an individual surety bond provided it is accompanied by a detailed sworn statement of the surety’s personal financial ability. See 36 M.R.S. § 755. The tax collector and the surety are liable for all acts and omissions of deputy collectors. 30-A M.R.S. § 2603.

Treasurers must be bonded. The amount of the bond is within the municipal officers’ discretion but need not exceed twice the amount of taxes to be collected during the municipal year; the bond may be a corporate surety bond, or an individual surety bond provided it is accompanied by a detailed sworn statement of the surety’s personal financial ability. The municipality must pay for the bond. See 30-A M.R.S. § 5601. The treasurer and the surety on the bond are liable for all acts and omissions of deputy treasurers. See 30-A M.R.S. § 2603.

In plantations, tax collectors, treasurers and constables must be bonded in the same manner as their counterparts in towns. See 30-A M.R.S. § 7007.

School District Treasurers. Although not municipal officials, treasurers of RSU and SAD boards of directors and CSD school committees must be bonded; the amount of the bond and the type of surety are within the school board’s discretion. See 20-A M.R.S. §§ 1251, 1471, 1652. (Note: in municipal school units, the municipal treasurer serves as the school’s treasurer.)
(By S.F.P.)