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2077 W. LARPENTEUR AVENUE FALCON HEIGHTS, MN 55113-5594 PHONE (651) 644-5050 FAX (651) 644-8675 January 10, 2003 MEMORANDUM To: Mayor Gehrz, Councilmembers Kuettel, Lamb, Lindstrom and Talbot From: Heather Worthington, City Administrator ~t~ Re: Waiver of tort liability limit At the Wednesday night council meeting, Councilmember Lamb asked for further information on the staff's request to not waive the tort liability limit. I have enclosed a memo from the LMC regarding this issue, and it has quite a bit of detailed information in it. On Page 4, paragraph 4, the question of the effect on cities that waive the limit is addressed. • In addition, Roland spoke with Rochelle, our insurance representative at the LMCIT. She provided the following information: • If the city chooses the waiver option, there is increased exposure in the opinion of the LMCIT, and the premium increases 3% on the general liability premium. In addition, the excess liability premium increases 25%. The city carries a $1,000,000 general liability policy. We also carry a $1,000,000 excess liability policy. We carry an excess liability policy mainly to cover attorney fees on any lawsuit (which are not covered in the general liability policy). There are several additional reasons to carry excess liability on page 2 of the LMC memo- such as inverse condemnation, indemnification of a second or third party in contracts, or claims under the federal civil rights laws. For 2002, we paid $14,602 for general liability, and a 3% increase would have added $439 in premium cost. For excess liability, we paid $3,035, and a 25% increase would have added $759 in premium cost. • 2003 rates are projected to be in-line with 2002 increases/rates. I hope this clarifies things. Please call me at 917-1288, or e-mail if you have questions. HOME OF THE MINNESOTA STATE FAIR AND THE U OF M ST. PAUL CAMPUS ® ~~ PRINTED ON RECYCLED PAPER TREE CITY USA