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M MEMORANDUM DATE: June 20, 2011 TO: Mike Morrison, City Manager FROM: Roger Larson, Finance Director ITEM: LEAGUE OF MN CITIES INSURANCE RENEWAL The attached information includes price quotations for property, auto, general liability, and workers' compensation. The cost for maintaining our present coverage of $10,000 deductible and $50,000 aggregate through the League of Minnesota Cities totals $214,291. The cost for renewal of St. Anthony's insurance coverage reflects a (3.1%) increase in total premiums. The increase in premiums was for Property, General Liability, No -Fault Sewer Back-up and Workers Compensation, while other policies remained similar to last year showing a slight increase or decreased in premiums based on the experience of claims. Highlights of the policies with increases are as follows: Property: The premiums show an increase of $ 922, mainly because of property values set by the League and value of building contents, showed a slight increase. General/Municipal Liability: The premium increase of $2,583 is directly related to the amount of projected expenditures. As in previous years, the amount of expenditures spent on road improvement projects impacts the cost of this coverage. The cost of the 2011 Street Improvement Project totals $1,940,000 which impacted the cost of coverage. No -Fault Sewer Back-up: This year the League of Minnesota Cities increased the limit of this coverage from $10,000 to $25,000. Because of this change, all Cities are required to pass a resolution to establish the amount of their coverage. Based on our history of having a few of these claims and given the fact a claim could exceed $10,000, it is recommended by our Agent to opted for the increase in coverage to $25,000. This improved coverage increased the premiums by $1,309. Workers Compensation: St. Anthony experience rating is at the bottom of the modification scale (.76). This reflects St. Anthony's commitment to educate and train employees on the importance of remaining safety conscious when performing their duties. The increase in premiums is caused by the public safety activity of the Police Department. Grants such as "Safe & Sober", "Operation Heat" and "Citizens Academy" where police officers are paid overtime for those activities contributes to the cost of workers compensation. The increase in premiums of $3,171 is mainly offset by Grant Revenues. Other Hiphliphts of the renewal are as follows: Liquor Liability: These premiums are based on annual sales and the League's rating of losses combined with the League's overall experience rating of liquor liability claims, the rate the League charges the premiums dropped slightly resulting in a decrease of ($403).