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<br /> <br />and exposures, it may be time to conduct a workshop to either re-affirm, or <br />change, the City's decision on the purchase of liability limits. This is a policy <br />decision and LMCIT requires city council to make these choices.. <br />Lori and I will be happy to complete any research you may wish to see, and <br />can discuss pros and cons with the Council. <br />7) For the Council's information, there will likely be some changes made to the <br />current property coverage limits for the Utilities' older generation equipment. <br />The League is in the process of evaluating the Utilities' current equipment and <br />will likely soon arrange a meeting with Utilities' management to discuss <br />options available for replacement of older equipment with newer technology. <br />The "replacement cost" coverage LMCIT provides for electric utility <br />equipment differs from the coverage provided for other municipal property. It <br />allows for the use of used parts and materials to repair or replace damaged <br />utility property. This is a cost containment measure to some degree, and in <br />some cases, new parts may no longer be available. <br />An "Agreed Amount" approach may be appropriate. This method of <br />valuation could allow for insuring the cost of constructing the needed <br />generating capacity, rather than at true "replacement cost". This method of <br />insuring assets requires a very careful, and very technical calculation of the <br />amount of coverage to purchase. This is where the League's expertise <br />provides assistance. <br />This discussion is not yet complete, but we will keep the Council informed, if <br />and when, changes are made to the coverage, as it will also have an impact on <br />the cost. If the Council would like to have additional information at this time, <br />we can prepare a packet of support information, or provide additional <br />information in a workshop setting. There is no specific concern at this time, <br />but we consider these potential changes and the discussion surrounding them <br />to be necessary and important to the LMCIT coverage for the City and <br />ERMU, and will be happy to provide whatever information the Council <br />wishes. <br />8) The City changed to a $2,500 deductible last year, and made several other <br />changes to its LMCIT coverage. We have again secured some additional <br />deductible options for your review, and will be prepared to discuss them at <br />your Council meeting. We have enclosed an "OPTIONS" document outlining <br />these additional deductible choices. Since the change to $2,500 deductible <br />was just made last year, and since the cost increase over last year is relatively <br />modest, we do not recommend a change at this time. <br />If the apparent reduction in frequency of claims continues, the Council may <br />wish to consider a larger deductible with no aggregate (maximum), or an even <br />larger per occurrence deductible with a large aggregate, such as option # 3, <br />or # 5 at some future anniversary. <br />The LMCIT No-Fault Sewer Back-Up coverage was declined last year. We <br />did not seek a quote for this year's renewal, but coverage and pricing have not <br />changed. The approximate cost to purchase the coverage would be $11,615. <br />Although there has been one additional incident, it is still open and, if paid, <br />will be under the current deductible. Last year's determination that this <br />