5.3. SR 09-17-2007 - Laserfiche WebLink

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3) Last year. we talked about the impact of the builders' associations claim. Although the Municipal Liability premium for 2007 is considerably less than last year, this single claim accounts for about $22.000-23,000 for 2007. It will also impact next year's renewal. This matter is considered a "land use" coverage claim. and is counted twice in the experience rating formula. This particular suit was settled successfully. but defense costs were significant and are also included in the fomlUla. The main reason for the reduction in the liability premium this year is the combination of a 3% rate reduction and a 7% improvement in the City's experience rating factor. This 7% improvement is primarily due to two previous land use claims that have fallen out of the 3-year experience period. 4) The property schedule has again grown significantly. We have added almost S 11 million in scheduled value to the list. The new Library, River's Edge Commons, a new substation and well for ERMU, and improvements to the Wastewater Treatment facility from 2006 have all been added. along with an inflationary factor of about 4.5% to maintain replacement values. 5) The City's Workers Compensation coverage will automatically renew on October 1st. and will again include an excellent Experience Modification factor of .74. This is up a bit from last year's .68 modifier, but is still one of the lowest factors we are likely to see! This is evidence that the City's efforts in the area of risk management and safety-conscious supervision and safe practices is working. This moditier means the City receives a discount from LMCIT base rates of 26%. The League's overall base rates for 2007 have remained fairly steady, although there have been changes in select classes. In the classes with major changes. the League has imposed a 20% constraint on the amount of increase to help modify the impact. Workers Compensation rates, to the extent possible, are set for each class based on LMCIT's own actual loss experience by class for the preceding five-year period. Rising medical costs continue to be a major concern, and are projected to continue rising at an annual rate of 9%. The Workers Compensation line will not return a dividend for this year. 6) An optional quote for Excess Liability coverage has again been secured. At $ 1.000.000 limits. the additional cost would be $66.114. At a 52.000,000 limit. the annual additional cost would be $ 99,171. These quotes are higher than in most previous years, and are also influenced by the land use claim noted in item 3. above. Although the City has declined the purchase of additional limits in the past, we have secured the quotes for the Council to consider. The City has elected the League's waiver option, and generally has a total of S 1,000,000 available for anyone "occurrence". There are some special exceptions, and in some cases, separate limits for special types of losses, however, the general limit is currently S1.000,000.