HomeMy WebLinkAboutCity Council Minutes 03-30-1987 Special0
M I N U T E S
SPECIAL COUNCIL MEETING
MARCH 309 1987
1 special meetlrtq of the
order by '4ayor Schneider
furenee room of the; City
March 30, 1987.
Plymouth City Council was called to
at 7:27 p.m. in the City Council con-
Carrter at 3400 Plymouth Boulevard on
PRESENT: Mayor Schneider, Councilmembers Crain, Sisk, ZLtur,
dad Vaslliou, Nanager Willis, Assistant Manager
Boyles, Public Works Director Moore, Planning Director
Tremere, Park Dlreo:tyr Blank, Finance Director Hahn,
City Attorney Thomson
ABSENT: None
Manager Willis stated that the specl.il meettnq had beers ':alled
to discuss award of bid for 1987-88 property and liability in-
surance.
Finance Director Hahn described the differences between the two
proposals submitted; the first by the league of Minnesota Cities
Insurance Trust, and the second by CNA Insurance Companies, the
City's current Insurer. Tne pr'nary difference Is the Leaguer
policy is on a cLalms-made basL:. rather than occurrence basis.
I)Lscusston ensued about the advantages arid disadvantages of such
a system, arid the possibility of purc.ttising a "tall".
Don Kuplic reviewed the City's premiums versus claims payment
for the last year. Although 1966 had unusually low losses, the
average amount of lo• %es which the Clty has sustained each year
Is In the area of $50,000. He stated that, at this average, the
City could expect to save about $25,000 per year through the
Leayoe program., which requires a greater risk retention by the
City.
Councllmember Sisk asked Mr. KuptLc whether he recommends the
purchase of the tall, rather than escrowLnq the money. Mr.
KuptLc staled that this is a policy decLsLort, but that the pre-
mium savings could be used to cover exposure also covered by the
tall. He also suggested that the City Look at its $2.5 million
insurance: reserve as umbrella coverage since It does riot pre-
sently purchaser such coverage from a company because of the
cost.
Mayor Schneider' asked Mr. KuptLc
to take to totally self -insure.
asmiLty would need: 1) a strung
Claims procedure established; 3)
est i':ll shment of a trust fund f•
What steps the City wc,:,:d have
Don Kuplic stated that the com-
loss prevention program; 2) a
a grogram administrator; arid 4)
yment of r. I a Lms.
AWARD Of BIO FOR
PROPERTY 8 LIABILITY
tNSURANCF
March 30, 1987
Page 93
Manager Willis stated that tonight's recommendation was another
step in the self-insurance process, wherein the City assumes
greater exposure than has heretofore been the case. to twelve
months, or so, the staff will likely return with a recommenda-
tion to expand tole areas of self-insurance If current market
conditions hold and claims experience is positive.
Don Kupltc Indicated that he had contacted two firms to deter.
mine what level of self -Insurance the City could reasonably
handle. One firm stated that between $1 million and $1.5 mIl-
Lion could be retdtned by the City; the other estimated that the
City could retaLn $600,000 exposure using self-insurance. Pre -
Insurance would be required beyond these amounts. Mr. Kupltc
explained that the proposal being made to the Council this even-
ing, would be to provide for a $1009000 aggregate annual deduct-
lblc on !lability coverage and $309000 aggregate deductible on
property. The premium savings over the CNA proposal is approxi-
mdtely $100,000 which would be available for claims payment if
necessdry.
MOTION was made by Councllmember Mur, seconded by Councllmem-
ber Crain, to adopt RESOLUTION N0, 87-214 A RESOLUTION AWARDING
CONTRACT FOR INSURANCE FOR THE 1987/1988 INSURANCE PROGRAM TO
THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST AND KRAUS
ANDERSON INSURAINCE.
Discussion ensued with respect to the advantages and disadvant-
ages of self-llisuring.
Manager Willis stated that the City Is moving more and more
toward self-insurance, but is taking these steps In a cautLou
Fashion.
Councllmember Sisk stated that he favors the motion as a first
step, the end of which should be full self -Insurance.
Mdyor Schneider asked the staff to collect alL costs for total
self-ii:suring ds he believes this is the appropriate direction
for the City to be moving.
Don Kuplic stated that the only reason that Plymouth can get
bids for insurance of any sort and entartaln a self-insu;•ance
program, is Lis excellent loss experience and lass prevention
program to date.
Notion passed on d roll call vote. Five dyes.
Mayor Schneider adjourned t.hc meeting at 8:31 p.m.
ss Stant Crty aFP aq1
RESOLUTION N0. 87-214
1987/1988 INSURANCE
PROGRAM