06-26-1995 CC - Laserfiche WebLink

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° REQUEST FOR COUNCIL CONSIDERATION Agenda Section: 11. A 11708 Report Number: 95-1392C STAFF REPORT CITY COUNCIL MEETING DATE June 26, 1995 Report Date: 6-22-95 Council Action: ❑ Special Order of Business ❑ Public Hearings ❑ Consent Agenda ® Council Business Item Description: Consideration of Proposal by League of Minnesota Cities Insurance Trust for Renewal of Insurance overages for 1995-96 Administrator's Review/Recommendation: - No comments to supplement this report - Comments attached. Explanation/Summary (attach supplement heets ::'necessary.) ,SUMMARY; The City's quotation on the July 1, 1995 renewal of insurance coverages has been received from the League of Minnesota Cities Insurance Trust (LMCIT). Charles Clysdale, of the Maguire Agency, Inc., will be at the June 26, 1995 Council meeting to present and review the quotation with you. Attached please find a copy of highlights of the quotation. I will briefly outline the quotation and present several options for your consideration. The 1995 renewal quotation of $155,447 is presented on the sheet entitled "Premium Summary". The quotation is $28,293 under the amounts budgeted in 1995 for various insurance coverages. A sheet entitled "Premium Comparison" shows the renewal quotation, less the Liquor Liability premium of $1,975 for The Bridges, and the premiums for the past two years. The City's total 1995 premium is $2,548 more than the 1994 premium, an increase of 1.7%. The first few pages of the attachment present information about workers compensation insurance. Note that many of the rates have been reduced for 1995. In addition, the City's experience modification has been reduced to .72 from .75, giving the City a further discount of 3% from standard rates. All of those factors result in a 1995 proposed workers compensation premium of $43,100, which is $10,960 less than the 1994 premium of $54,060. An option, which our agent is recommending, will reduce our workers compensation premium by $5,652. That option is having a deductible of $5,000 on medical costs only. The City would be responsible for the first $5,000 of medical expenses for each workers compensation claim. The agent feels that this is a reasonable option because total medical expenses incurred for the last five years were $4,026, or an average of $805 per year. Another option to be considered is increasing the City's deductible on liability and property coverages from $5,000 to $10,000. This option would produce a savings of $10,100, which is approximately 10% of the premium for those coverages. The City changed from a $1,000 to a $5,000 deductible in 1988. Since that time the City has realized a savings of approximately $115,000 in premium costs. There have been only two occasions when the City has had to pay the full $5,000 deductible. While there is no guarantee that the City will continue to have a good claims experience in the future, it may be considered reasonable to assume additional risk for a premium discount of 10%. RECOMMENDATION; An additional option, which our agent recommends Council consider, is Open Meeting Law coverage for an additional premium of $1,432. Such coverage would reimburse Councilmember's legal costs for