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183 L nh-ersity Ave.East <br /> St.Pau1,111N 55101-2526 <br /> League of Minnesota Cities 0612)227.5600(FAX:221-0986) <br /> November 8, 1989 <br /> TO: City Managers and Clerks <br /> FROM: Millie MacLeod, LMC President <br /> RE: LMC/LMCIT Fees <br /> There has been some discussion of the fees ch=__=ed by the League for <br /> various services to the League of Minnesota C_--:es Insurance Trust <br /> (LMCIT) . Because some of the information be_-= circulated to cities is <br /> not completely accurate, I believe that, as L===ue president, I should <br /> communicate the facts to every League member. <br /> First, what is the present situation with Lea fees for services to <br /> LMCIT? The League has an agreement with insu=_-:ce trust which <br /> specifies that LMCIT pays LMC for all direct =_=ts attributable to the <br /> operation of LMCIT. As the agreement on Leas-_= costs was developed, <br /> the League board realized the value of certain Services provided to <br /> LMCIT were difficult to assign a direct cost -_'_lure. After <br /> considerable discussion by the League board an= the LMCIT trustees, the <br /> board concluded that a fee of 1 . 5 percent of =`__ premium volume for the <br /> property casualty and the workers' compensate=n program would be <br /> appropriate. This fee went into effect on Jan-_:ry 1, 1989. <br /> The League board did not arrive at this deci__=n suddenly or without <br /> considerable discussion. The question of a =s of this type was <br /> considered by the 1986 Dues and Services Cop.-._==ee. That Committee <br /> recommended that the League collect an additi=n=l fee from LMCIT. The <br /> issue was further considered by the League bu;=at committees in -1987 <br /> and 1988 . These committees recommended a fee :' this type. The League <br /> board considered the matter on more than three :ccasions and the issue <br /> was before the LMCIT trustees at least three =--_=es as well. Finally, <br /> the board asked a special "blue ribbon" commi__ae to review the matter <br /> before final action was taken. Each of these ==oadly representative <br /> committees supported the additional fee. <br /> The board has received several resolutions ad =ed by city councils <br /> suggesting this fee be reviewed. The board Y:_= directed the League <br /> meet with the first city which adopted such a ==solution to discuss the <br /> issue. That meeting has been set for later t-_s month. <br /> This issue also arose at the August meeting o` =he Coalition of Greater <br /> Minnesota Cities. A resolution on this subject was offered during that <br /> meeting for consideration but it was withdrawn after I suggested that <br />