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City of <br /> Elk Request for Action <br /> River <br /> To Item Number <br /> Mayor and City Council 8.4 <br /> Agenda Section Meeting Date Prepared by <br /> General Business July 21, 2014 Tim Simon, Finance Director <br /> Item Description Reviewed by <br /> Annual Renewal of Property and Casualty Cal Portner, City Administrator <br /> Insurance Reviewed by <br /> Action Requested <br /> Approve,by motion,the annual renewal for Property and Casualty Insurance with the League of <br /> Minnesota Insurance Trust (LMCIT). <br /> Background/Discussion <br /> The city has participated in LMCIT for over 20 years. The policies are effective 7/1/14 through <br /> 6/30/15 with a deductible of$25,000 per occurrence/$75,000 annual aggregate deductible and $1,000 <br /> maintenance. Our coverage has been in binder since the official July 1 renewal date even though the <br /> renewal documents and rates were just received. <br /> Here are a few highlights with this year's insurance renewal: <br /> • Received a dividend last year of$32,386 on the liability package. The city can expect the 2014 <br /> dividend in December. The dividends have historically offset premium increases, allowed for <br /> deductible increases and funded the safety budget. <br /> • Property premium increases with the addition of the new public works building and contents <br /> coverage, ISO Fire Protection Class change,and LMCIT inflation cost factor adjustment of 2%. <br /> • Municipal/Auto Liability Experience Factor decreased from 1.319 to 1.029. <br /> • City insurance agent,Northern Capital Insurance Group,has analyzed our recent deductibles and <br /> recommends increasing them based on size and experience. The current deductible is $20,000 per <br /> occurrence/$40,000 annual. Equipment Breakdown has a separate $20,000 per accident <br /> deductible. <br /> Over the last 6 years,the only major loss was a hail damage claim in 2008 for $103,472. With a deductible <br /> of$25,000/$75,000/$1,000 over the same period the city would have had a positive gain every year with a <br /> total gain over premium savings of$394,662 versus $297,792 at the current deductible. <br /> The 2014/15 premium would decrease $23,374 at the new level. In addition,the fund balance in the <br /> Insurance Revenue fund as of June 30, 2014,is $263,610 which will provide funding if we breach our <br /> trend. <br /> City staff and the Safety Committee proactively promote safety and a safe work place. <br /> P a w E A E U s r <br /> Template Updated 4/14 INIM UREI <br />