HomeMy WebLinkAbout5.F.7. 2008/2009 Property/Liability Insurance Renewals
5~ F. ?-
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CITY OF SHAKOPEE CONSENT
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
RE: 2008/09 Property/Liability Insurance Renewals
DATE: July 30, 2008
Introduction
Council is requested to approve of the renewal of property and liability
insurance coverage from the League of Minnesota Cities.
Background
Renewal
Attached is a list of property/liability insurance premiums for the renewal
of the present coverage with the League of Minnesota Cities insurance Trust
(LMCIT) . The policy period is August 1, 2008 to July 31, 2009.
Basic policy
The policies proposed are basically the same as current coverage. The
premium rates are slightly smaller than last year but more items and value
are covered. The total deposit premium has increased from $417,194 to
$523,439 covering the City, SPUC and EDA.
The main reason for the increase in premium is an increase in property
values from 72 million to 88 million and the resultant premium increase from
$108,843 to $152,834. SPUC has increased the amount of coverage for
inventory stored in their yard and the city has increased and scheduled each
park's property in the open for playground equipment, fencing, etc. .
If Council does not want to cover park property such as playground
equipment, fencing, etc. and determines that the city can use General Fund -
fund balance and Park Asset Fund monies to pay for damages, it would reduce
the premium by about $12,000. Street lights are not covered.
All of the coverages are from the League of Minnesota Cities Insurance
Trust.
There is more detail available on the policy for any Council member that
desires it.
Optional Coverage
Quotations were not requested for the following coverages:
Flood
Earthquake
PIP (auto coverage)
Asbestos removal liability (in excess of basic coverage of $200,000)
Open meeting law defense
Joint Powers contracts
Fire works
Utility poles and lines - SPUC
Independent Administrative Boards
Premise medical - no fault coverage
Extraordinary expense (loan for disasters)
The city budget contains $354,840 (General Fund $281,190) for insurance
(not counting employee group or work compo insurance) and deductibles
across all funds, excluding sPUC. SPUC share in the cost of the
insurance is about $143,218 and the city is $380,221.
One of the items for the renewal of the property/liability insurance is to
not waive the monetary limits on municipal tort liability. Council
previously did not waive the monetary limits on tort liability established
by Minnesota Statutes 466.04 and the renewal was processed accordingly. The
current liability limit is $1,200,000.
In a move that is contrary to private insurance companies, LMCIT has
included terrorism property coverage up to $1, 000,000 as a result of 9/11.
There is also included up to $1.5 million coverage for mold liability.
Umbrella liability coverage
Council added excess liability coverage last year. Some types of claims
are not covered by the immunity limit and extension of coverage to
additional insured parties under the city policy may not be within the
immunity limits.
The premium for excess liability coverage is $63,748 for one million
dollars of coverage.
Driver motor vehicle records
Commercial insurers for business require annual checks of driving records
of employees. The previous carrier for the city did check records. The
League does not but leaves that up to the city. Shakopee only checks the
records upon hire.
Although the Employee Handbook requires employees to notify supervisors
when an incident occurs there is no verification by the city. The recent
case of a city employee with a poor driving record illustrates the point.
With emergency vehicles, large vehicles and equipment and group
transport, the City is at risk and not being diligent in protecting
itself and the public by not annually checking driving records. There is
a statistical correlation between a private driving record and the
driving behavior on the job. The city should be checking motor vehicle
record annually for those who drive on city business and adopt a policy
on what action to take based on certain driving infractions up to and
including termination when operating vehicles/equipment is a required
part of a position.
Action Recommended
1. Move to accept the property/liability insurance renewals from the League of
Minnesota Cities Insurance Trust for a deposit premium of $523,439, and not
waive the monetary limits on tort liability established by Minnesota
Statutes 466.04.
2. Move to promptly and annually check motor vehicle records of persons who
operate motor vehicle/equipment on city business and direct staff to
develop a policy delineating what action the city will take based various
infractions and suggest Shakopee Pub li c Utilities Commission to do
likewise.
Gr~Xland
Finance Director
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