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<br /> <br />premium costs. The most significant changes are in Municipal Liability rates, <br />which have decreased 7%, while Workers Compensation rates have increased <br />by 7%. I have enclosed a League memo explaining the changes for 2005. <br />This memo also provides some discussion on the League's dividend plan for <br />member cities. <br />2) The City of Elk River received a dividend in the amount of $ 44,207 in <br />December 2004. <br />3) Last year, the City's loss experience rating factor was impacted by several <br />land use claims. These claims served to reduce the favorable credit the City <br />had previously received. One of these claims has fallen out of the "experience <br />period" but has unfortunately been replaced by another. In spite of this, the <br />City's overall claims experience has been very solid. <br />The City's careful attention to loss control and risk management strategies <br />appears to be resulting in a reduced frequency of claims. Severity, or the cost, <br />of claims is critical too, but repeated incidents, or "frequency" is of greater <br />concern. It will be important to continue your emphasis on overall safety and <br />management of risk. It will payoff in terms of expense reduction, as well as <br />employee and public safety. <br />4) Westbound Liquor appears on the LMCIT renewal's property list as a <br />construction site. Since it has just opened this month, the coverage changes <br />and corresponding premium costs are not included in the Premium <br />Comparison enclosed. Fixtures and inventory are being added, and liquor <br />liability for the Westbound sales will also be added on a pro-rated basis. I <br />expect these charges to be between $2,800 and $3,000 additional for the <br />remainder of this policy period. <br />5) Workers Compensation coverage, although not shown on the comparison, has <br />just renewed at a total deposit premium of$ 142,708. The League's Workers <br />Compo Program provides an automatic renewal based on projected payrolls. <br />This year's Experience Modifier came in at .80, a slight reduction from .81 <br />last year. This modifier is another good indicator of attention to safety. A <br />factor under "1.0", means generally better than average loss experience; and <br />also results in a rating credit - 20% for this year, so that's excellent! <br />6) An optional quote for Excess Liability coverage has again been secured. At <br />$1,000,000 limits, the additional cost would be $52,505. At a $2,000,000 <br />limit, the annual additional cost would be $ 78,759. <br />The City has decided against the purchase of excess limits in the past, relying <br />on the statutory municipal tort liability limits. The City has elected the <br />League's waiver option, and generally has a total of$I,OOO,OOO available for <br />anyone "occurrence". There are some special exceptions, and in some cases, <br />separate limits for special types of losses, but in general, the figure to <br />remember is $1,000,000. <br />The League has very recently released a memo regarding liability under joint <br />powers agreements. A recent court case resulted in a new principle with <br />regard to "joint ventures". A copy of the League's memo is enclosed for your <br />review. In light of this recent Court of Appeals ruling, and the wisdom of a <br />periodic review of the City's policy with regard to municipal liability limits <br />