Loading...
HomeMy WebLinkAbout06.17.2002• • COUNCIL WORK SESSION June 17, 2002 4:15 p.m. Council Chambers Members present: Mayor Rooff, Berry, Welper, Greenwood, Clark, Jordan, Hurley, Getty. Moved by Jordan, seconded by Hurley that the Agenda, as proposed, be approved. Ayes: Seven. Motion carried. Lou Cutwright, Building Official/Maintenance Administrator, reviewed the University/Falls Avenue Sidewalk Accessibility Project. Mr. Cutwright reported that a Memorandum of Understanding with INRCOG has been placed on tonight's council agenda. The Memorandum of Understanding with INRCOG is for writing of a grant for the University/Falls Avenue Sidewalk Accessibility Project. If the grant is funded, INRCOG will receive 1.5 percent of the proceeds, and if the grant is not funded INRCOG receives nothing. Mr. Cutwright reported that in August 2000, the ADA Commission received a letter from ARC of Black Hawk County addressing two issues: handicap seating at McElroy Auditorium and the dangerous pedestrian traffic condition that exists in the University/Falls Avenue corridor between Goodwill Industries and Adults, Inc. The handicap seating at McElroy Auditorium was addressed by the National Cattle Congress Board. The dangerous pedestrian traffic was addressed by Tim Mrozek, former Traffic Engineer. Since the University corridor is a state highway, contact was made with the Iowa Department of Transportation. After involving the Engineering Department and area residents and businesses, a plan was developed that provides a pedestrian corridor from Exceptional Persons (Ansborough and Falls Avenues) to the Greenhill Road Bike Trail. The Engineering Department estimated the cost for the project to be between $80,000 and $90,000. The A.D.A. Commission discussed at length how this project could be funded and decided to look into grants. INRCOG agreed to write the grant for submittal to the John Deere Foundation. Frank Dowie and Chris Fereday from PDCM reviewed the city's liability and property insurance. Mr. Dowie stated that PDCM was designated the city's insurance agent in 2000. PDCM has over a 30 year relationship with the city. PDCMs objective is to look at the market place and bring to the council the best premiums possible. Mr. Dowie listed other companies insured by PDCM and their insurance premiums. Mr. Dowie reported that the normal increase in premiums is 15 to 22 percent. Mr. Dowie reviewed the state of the marketplace. The insurance business is seeing a return of the hard market brought on by the following: effects of September 11 on the insurance industry, stockmarket's lackluster performance, Enron Scandal and related claims and mold remediation claims. The premiums are increasing as the result of the re -insurance carriers passing along claims paid to the marketplace. Mr. Dowie reviewed the city's current carrier, St. Paul Insurance Company. St. Paul is the largest insurer of public entity business in the country. They have expertise in the exposures of mid -size cities, provide loss control services and are a complete provider. St. Paul has had a seven year relationship with the city. Chris Fereday reviewed the city's current coverages. General Liability insurance is for any bodily or property injury based on the city's neglect. Public Officials Errors and Omissions coverage protects the council and mayor for decisions made on behalf of the community. This coverage is not only claims, but most of the time will cover defense expenses. The city has seen a rise in claims in the Errors and Omissions coverage. The Police Professional insurance covers claims for police action if it is deemed there is negligent in their job or duty. The umbrella liability is coverage in excess of the $1 million coverage on all the city's coverages. The Property insurance protects the city for damage to city property and has a $25,000 deductible. Mr. Fereday reviewed the Historical Loss Analysis since 1995. The city has an average of 61 claims paid per year, with an average of $107,000 paid out in claims. Mr. Dowie reviewed the marketing process. Mr. Dowie reported that market indications were that premiums would rise 27 to 28 percent. PDCM approached the marketplace and then met with the Insurance Committee to share the information with them. The Insurance Committee analyzed the information. The Insurance Committee explored alternatives in the existing Council Work Session June 17, 2002 Page 2 program to reduce the overall cost. Mr. Dowie stated if the city had $1 million reserves for insurance, the city could control its own destiny. Mr. Fereday reviewed the methodology of Risk Management. Mr. Fereday reported that the role of PDCM as the consultant is to lead the council through service, coverage and cost. The strategy developed with the Insurance Committee is to protect the city, insure for catastrophic losses, continuity of coverage and control. The city currently has a $5 million umbrella and the goal is $10 million umbrella coverage. The Insurance Committee evaluated future alternatives such as self -insured retention programs and a large deductible program. Mayor Rooff stated four years ago, it was suggested by another agent that the city go with a self - retention program and asked what if the city had done that. Mr. Dowie responded that in hindsight the city would have been in good shape because of the lower number of claims. Mr. Fereday stated that three years ago the market was soft with lower premiums and did not warrant the city going to a self -insured retention program. Mr. Fereday stated that the city budgets $250,000 for funds to pay the deductible, but at the end of the year unused funds are returned to the general fund. The city needs to look at building that fund so the city can go to a self -insured retention program. Mr. Fereday stated the city does not have a self -insured retention program because the claims have not warranted that program. Mr. Fereday reported that almost all public entities are looking at a self -insured retention program because of what the market is doing. As the market changes and premiums go up the city might want to look at a self -insured retention program. Councilperson Getty stated that the Insurance Committee would like to keep any leftover funds and build up the city's insurance reserves. Councilperson Hurley stated the city needs to set a $1 million target to be able to have a self -insured retention program in four or five years. Mr. Fereday responded if the city builds the fund to $250,000 to $300,00 we could start looking at a self -insured retention program. Mr. Dowie reported that PDCM presented three or four carriers to the Insurance Committee using a self -insured retention program and a deductible program with different deductibles to show how the premiums are affected by the options. The Insurance Committee reviewed the premiums and decided to stay with the conservative philosophy and build our reserve funds. Mr. Fereday reported that in a self -insured retention program the city would be responsible for attorney fees. Over the past three years, the self -insured retention program might have worked for the city, but three years prior it would not have worked. PDCM and the Insurance Committee looked at the market to see if it would be advantageous and decided to be conservative and not take the risk at this time. Mr. Fereday reviewed the three different options considered by the Insurance Committee. Option 1 was a premium quote from St. Paul with the existing program at $535,054 for a 22.6 percent increase, Option 2 included an alternate quote from Scottsdale Insurance for Police Professional coverage and a $25,000 deductible for Inland Marine coverage at a quote of $464,849 for a 6 percent increase, and Option 3 included a $50,000 deductible across all policy lines with no aggregate at a quote of $441,041. Mr. Dowie reported that the Insurance Committee's recommendation was to choose coverage Option 1 for the following reasons: continued relationship with St. Paul Insurance, continuity of coverage and first dollar defense on Law Enforcement coverage. The renewal of liability and property insurance coverage will be placed on the council agenda of June 24, 2002. The Insurance Committee will meet once more before June 24. With no further business before the council, it was moved by Berry, seconded by Getty that the meeting be adjourned at 5:25 p.m. Ayes: Seven. Motion carried. Nancy Eckert City Clerk