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<br />DATE: October 15, 2024 <br />REGULAR <br /> <br />TO: Mayor and City Council <br />FROM: Clarissa Hadler, Finance Director <br />AGENDA ITEM: 2025 LMCIT – Statutory Tort Limits <br /> <br />BACKGROUND: <br />The decision to waive, or not waive the statutory municipal tort limits for LMCIT members is typically <br />required to be made by the members governing body. In the last few years, Council provided <br />authorization to elect not to waive the statutory municipal tort limits. <br /> <br />If the member does not waive the statutory tort limits, an individual claimant would be able to recover no <br />more than $500,000 on any claim to which the statutory tort limits apply. The total all claimants would be <br />able to recover for a single occurrence to which the statutory tort limits apply would be limited to <br />$1,500,000. These statutory tort limits apply regardless of whether the city purchases the optional excess <br />liability coverage. <br /> <br />If the member waives the statutory tort limits and does not purchase excess liability coverage, a single <br />claimant could potentially recover up to $2,000,000 for a single occurrence. (Under this option, the tort <br />cap liability limits are waived to the extent of the member's liability coverage limits, and the LMCIT per <br />occurrence limit is $2 million.) The total all claimants would be able to recover for a single occurrence to <br />which the statutory tort limits apply would also be limited to $2,000,000, regardless of the number of <br />claimants. <br /> <br />If the member waives the statutory tort limits and purchases excess liability coverage, a single claimant <br />could potentially recover an amount up to the limit of the coverage purchased. The total all claimants <br />would be able to recover for a single occurrence to which the statutory tort limits apply would also be <br />limited to the amount of coverage purchased, regardless of the number of claimants. <br /> <br /> <br />ISSUE BEFORE COUNCIL: <br />Should the Council provide authorization for the City to not waive the municipal tort limits for liability <br />coverage from LCMIT and maintain the $1,000 deductible for Property and Liability coverage? <br /> <br />PROPOSAL DETAILS/ANALYSIS: <br />Staff recommends that Council elect not to waive the statutory municipal tort limits, and approve the <br />Liability Coverage Waiver Form as such. Staff also recommends maintaining the $1,000 deductible for the <br />LCMIT property and liability coverage as it was last increased in 2017 for 2018 Property and Liability <br />coverage. <br /> <br />FISCAL IMPACT: <br />As referenced above, if the City maintains the same deductible, the liability and land use claims will carry <br />a deductible of $1,000. <br /> <br />If the Council does not waive the statutory tort limits, an individual claimant would be able to recover no <br />more than $500,000 on any claim to which the statutory tort limits apply. The total all claimants would be