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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