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7 <br /> coverage. The letter of credit would only be accessed if the County failed to pay a part or all of <br /> the deductible. This practice is consistent with industry standards for loss programs. <br /> The County's current bank, Truist, will provide a letter of credit not to exceed $500,000 for a rate <br /> of 0.5% if it needs to be accessed by Travelers. Even though the FY2022-23 Budget contains <br /> sufficient funding to pay deductibles, Truist is requiring Board approval of the letter of credit since <br /> the bank considers it a debt instrument. <br /> FINANCIAL IMPACT: There is no immediate financial impact. However, if the County failed to <br /> pay a deductible, Travelers would have the ability to make a claim against the County's letter of <br /> credit, and the County would be responsible to pay Truist Bank that amount with interest <br /> accumulating at a rate of 0.5%. <br /> SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated <br /> with this item. <br /> ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal <br /> impact associated with this item. <br /> RECOMMENDATION(S): The Manager recommends the Board: <br /> 1) Ratify the County Manager's execution of an agreement with Travelers Indemnity Company <br /> for insurance coverage; <br /> 2) Authorize the County Manager or her designee, the Chief Financial Officer, to execute the <br /> required $300,000 Letter of Credit for Travelers Indemnity Company; <br /> 3) Authorize the County Manager or her designee, the Chief Financial Officer, to execute any <br /> renewals, amendments, or extensions, and other associated legal documents as necessary <br /> to meet Travelers Indemnity Company's Letter of Credit and Guaranty Agreement <br /> requirements; <br /> 4) Authorize the County Manager or her designee, the Chief Financial Officer, to make <br /> changes to any of the legal documents prior to execution, consistent with this approval; and <br /> 5) Authorize the County Manager or her designee, the Chief Financial Officer, to sign and <br /> submit an application to Truist Bank for a Letter of Credit cap not to exceed $500,000. <br />