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HomeMy WebLinkAboutJune 18, 2007 Work SessionCITY OF COLUMBIA HEIGHTS 590 40°' Avenue N)i, Columbia Heights, MN _55421-3878 (763)706-3600 TDD (763) 706-3692 I~isit our wefisite at: wrovw.ci.coltearbia-hei~hts.mrr.us ADMINISTRATION NOTICE OF CITY COUNCIL MEETING to be held in the CITY OF COLUMBIA HEIGHTS czs follows: Meeting of: COLUMBIA HEIGHTS CITY COUNCIL Date of Meeting: JUNE 18, 2007 Time of Meeting: 5:30 TO 7:00 P.M. Location of Meeting: CONFERENCE ROOM 1 Purpose of Meeting: WORK SESSION AGENDA Repair University service road 2. 2007 park improvements Crest View request 4. Renewal of LMC insurance Liquor Store update MaVUr Gary l l'e2~i~van ("uuncilmembers Knhnr~ A. Wrlharns Bruce Nmernckr l ~nnnreru l rorc~lnn Brucr ReJ_nrihcr~; City Manager 14~idtcrr K. Fnrhsi The City of Calumbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individuals with disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call. the City Council Secretary at 706-3611, to make arrangements. (TDD/706-3692 for deaf or hearing impaired only) CITY OF COLUMBIA HEIGHTS Public Works Department TO: WALT FEHST CITY MANAGER FROM: KEVIN HANSEN PUBLIC WORKS DIRECTOR/CITY ENGIN SUBJECT: UNIVERSITY SERVICE ROAD REHABILITATION DATE: June 5, 2007 As a follow up to information conversations this week with Mr. Medlo on University Avenue, the following is a summary of estimated costs for three strategies of bituminous road repairs of the University Service Road from 45th to 53rd Avenues. I am not recommending performing a seal coat on the roadway due to its poor condition and most if not all of the defects would not be corrected or come back in a short period of time. The cost estimate is for information only. It should be recognized that one half of the segment from 45th to 53rd Avenue is the municipal boundary. 1. Seal coating: NOT RECOMMENDED 45°' Ave to 53"~ Ave: (fot~~rl width) - 13675 S.Y. x $2.75 = $37,600 (total) - Assessable Amount = $18,800 2. Mill and Overlay: 2007 CONTRACTOR BID 45°i Ave to 53rd Ave: (centerline length) 5232 L.F. x $28 = $146,500 (total} Assessable Amount = $47,400 City Cost = $99,100 3. Edge Mill and Main Ol~erlcty: PUBLIC WORKS RECOMMENDED 45`h Ave to 53rd Ave: (centerline length) - 5232 L.F. x $7.05 = $36,785 (total) - Assessable Amount = $0 - City Cost = $36,785 Memo to Walt Fehst -University Service Road Rehabilitation Page 2 Again, I do not recommend seal coating as this, simply stated, is throwing money away. Strategy 2 would be performing a 3 inch mill and overlay using our 2007 Contractor pricing. This would require public hearings under the 429 process. Strategy 3 is proposed as a maintenance repair and would be short-tern fix (2-4 years) using Public Works staff. I am not proposing a financial contribution from Fridley in the cost equation at this time. This is because strategy 3 is a short-tern fix and it may eliminate payment (from Fridley) for the long-tern permanent option of reconstructing the roadway through the MNDOT Cooperative Agreement Program, which we would be eligible for again in the 2009 funding cycle. This also allows us to work on other related issues such as a one-time Fridley contribution ($$) and the area drainage problems and issues. I spoke with the Director of Public Works from Fridley and we did agree to sharing personnel and equipment under strategy 3, which will expedite the length of the work, currently estimated at 12 working days. I am recommending strategy 3 of a thin overlay using Public Works staff to perform an edge mill (18-24 inches in width), and then overlay the entire street with a thin bituminous layer of approximately one inch. Looking at the condition of the street, this would provide a reasonable driving surface for the next 2-4 years until the street is reconstructed, and it is only a short tern fix. I am proposing that the City would pay for the estimated cost of materials out of the 2007 Streets budget, which will have to be amended for the increased cost. The Street Foreman estimates a crew of 8 with a total working time of 12 days from start to finish. We would be able to perform the work after our preparation for the seal coat program, possibly in late July or early August of this year. If you have any questions or need further information, please contact me. (\/\ ~ "~.~ CITY COUNCIL LETTER Meeting of: 6/25/07 AGENDA SECTION: CONSENT AGENDA ORIGINATING DEPARTMENT: CITY MANAGER NO: PUBLIC WORK ITEM: 2007 PART{ IMPROVEMENTS BY: K. 1lansen BY: DATE: 6/14/ DATE: Background: T'he 2007 Parks Capital Improvement Budget has established fimding for two Parks: 1. $30,000 is established for the shelter replacement at Silver Lake Beach. 2. $175,000 for Ramsdell Park for athletic field reconstruction, bituminous trail, lighting, playground equipment, landscaping and other ancillary improvements. Analysis/Conclusions: The City Council authorized staff to seek bids for the Silver Lake Beach picnic structure in at the May 29`}' regular meeting. The 2006 Parks Capital Improvement Budget had $215,000 established for Sullivan Lake Park for various improvements. Work was never initiated in 2006 at Sullivan Lake Park. Because of the high use of the Sullivan Lake Park facilities (picnic shelter, walking trail, tennis courts), the Park & Recreation Commission and staff are recommending delaying any work in Ramsdell Park Lentil 2008, and making improvements in Sullivan Lake Park in 2007. The regular May Park and Recreation Commission meeting was held at Sullivan Lake Park with over 50 people attending. The following potential improvements were identified and discussed: ^ Playground equipment replacement. ^ Picnic shelter roof and expansion (to the north). ^ Removal of existing pergolas or arbors. ^ Create a viewshed of the Lake. ^ Trail improvements. (ADA, width, & sheet piling). ^ Park and trail fighting. ^ Additional Parking. ^ Tennis Courts reconstruction. ^ Landscaping ^ Improved Park Signage. The Park & Recreation Commission made a recommendation to the City Council to authorize improvements as identified above. Recommended Motion: Move to authorize staff to delay improvements at Ramsdell Park until 2008, reauthorize the 2006 Park Improvements to Sullivan Lake Park in 2007 and reappropriate $215,000 from the Park Capital Improvement Fund. KH:jb COUNCIL ACTION: i r::, . ', -_ ~~ - F -. _ C~ ' June 1, 2001 WWW.CRESTVIEWCARES.ORG ~~f m Mr. Walter Fehst, City Manager City of Columbia Heights - 590 40th Avenue NE - Calum~ia Heights, T 55421 , City of Columbia Heights,llfiinnesota Multifamily and Health Care Facilities Revenue Refunding Bonds (Crest View Corporation Projects} Series 2007A and Taxable Series-2007B Dear Mr. Fehst: tan behalf of Crest View Corporation, I'd like to express thanks to the City of Columbia Heights and its staff for your approval of the issuance of conduit revenue bonds for the benefit of Crest View. The proceeds of the Bonds will be used to make various needed improvements to our facilities, and also to refiznd our outstanding debt at a lower interest cost. Through the efforts of the City, we are able to continue to provide excellent and affordable housing and care facilities to older adults in Columbia Heights. As you know, we have an additional-request for the City. We respectfully ask for a waiver of that provision of City's administrative fee policy with respect to the issuance of conduit revenue bonds, which. requires payment of an initial fee on the date of issuance of the Bonds (in the amount equal to one-half of one percent (0.5%} of the outstanding principal arr~ount of Bonds as of the date of issuance of the Bonds}; and an additional fee payable on or before the first anniversary of the date cif issuance of the Bonds (in the amount equal to one-half of one percent (0.5°/m} of the outstanding principal amount of the bonds as of the first anniversary of the date of issuance of the Bonds}, to the extent that the Bonds are refunding Bands with respect to which such amounts were paid at initial issuance. We would, of course, remain obligated to pay the ongoing fee with respect to the Bonds on each anniversary of issuance (in the amount equal to the product of one- tenth of one percent (0.1%} and the outstanding principal amount of the Bonds as of each such anniversary}. We would also pay the component ofthe initial fee and first anniversary fee that is applicable to the "new money" portion ofthe Bonds (roughly 20'/0 of the total bond amount of approximately X21,000,000}. - a . 4444 RESERVOIR BLVD NE COLUMBIA FIEIGHTS, tJ 55421 763.72.1611 FAx 782.0857 CREST VIEW IS AN EQUAL OPPORTUNITY EMPLOYER thle believe that this waiver is justified and appropriate on several counts. The City will incur no direct. expenses that are not being paid or reimbursed by Crest View (i.e. legal expenses, publication costs, etc.), and the City is fully indemnified for future expenses and liabilities. ~n the spirit of thankfulness and cooperation, we gladly pay the City's fee for new band issuances, ` . but we do not believe that it is appropriate public policy for the City to be enriched at the expense of its citizens a second time when the bonds in question are refirtnding bands. ~ Although we still expect to achieve some debt service savings in today's interest rate environment, even , with payment of the City's additional 1 %, such savings will of course be reduced if we are required to pay the City's full fee. As we are in the process of stnzcturing the bond issue at this time, we appreciate your prompt consideration and resolution of this issue. Thank you again for the issuance of revenue bands on our behalf, and for your consideration of our waiver request: incer~y, ~'` S rley E.H. ne °~ `" --°°' Chief Executive Officer Crest View Corporation cc: Mayor Gary Peterson i We understand. that the Minnesota Supreme Court has not slued away frown fanding that anunicipal corporations are subject to tlge same "~narai obligatian" anti principles of"good canscience" as ail persons, natural or artit~cial, which prevent tale taking or holding of tlae money of anather person to which such person is not entitled, including fees that awe not reasonable in relation to the services provided. ~J CITY OF COLUMBIA HEIGHTS DATE: JUNE 14, 2007 TO: WALT FEHST CITY MANAGER ,~ .J ~' FROM: WILLIAM ELRITE `-' FINANCE DIRECTOR RE: INSURANCE RENEWAL COUNCIL LETTER Attached are a council letter and several documents that we received from our new agent regarding our insurance renewal. It should be noted that our new insurance agent has much mare experience in municipal insurance and working with the League of Minnesota Cities Insurance Trust. With that, he has brought up several items related to our insurance renewal. To reduce costs his first suggestion is to eliminate the no-fault sewer backup coverage. This would reduce our premium by approximately $6,574. The second item is to not waive the statutory tort limits. This would save $7,500. His third suggestion to reduce costs is to increase our deductible from $1,000 to $5,000. This would reduce our premium by approximately $21,400. However, this option is a gamble, as four claims in excess of $5,000 would utilize all of our potential savings due to the additional deductible expense. The option of increasing our deductible may be more viable if we chose to eliminate our no-fault sewer backup coverage. Our agent's other area of concern is that we currently carry $1,000,000 in liability coverage. He is recommending that we increase this to at least $2,000,000. The premium cost for an additional $1,000,000 in coverage is approximately $27,331. Staff will be available at the work session. on June 18 to discuss these items further with the City Council. WEams 0706141 CM CITY COUNCIL LETTER Work Session of: June 18, 2007 AGENDA SECTION: CONSENT ORIGINATING DEPT: CITY MANAGER NO: FINANCE APPROVAL ITEM: STATUTORY TORT LIABILITY BY: WILLIAM ELRITE BY: LIMITS AND EXCESS LIABILITY COVERAGE NO: DATE: June 13, 2007 The City's commercial il~surance policy with the League of Minnesota Cities Insurance Trust was up for renewal on June l , 2007. It has become mandatory with each renewal for the City Council to decide whether or not to waive the stattttoiy tort liability limits to the extent of the coverage purchased. If the City does not waive the statutory tort limits, the general liability premium is reduced by 3-1/2%. Based on last year's premium this is a reduction of approximately $7,500. This year it is our insurance agent's recommendation to not waive the statutory tort liability limits. Please note that the City currently does not carry excess liability coverage. The decision to waive or not to waive the statutory limits has the following effects: If tlae cih~ does not waive the statutorw tort limits, an individual claimant would be able to recover no more than $300,000 on any claim to which the statutory tort limits apply. The total that all claimants would be able to recover for a single occurrence to which the statutory tort linuts apply would be limited to $1,000,000. These statutory tort limits would apply regardless of whether or not the city purchases the optional excess liability coverage. If tl~e city waives the statz~~to~w taut li»~zits a~2~d daes Trot p7~~~~cha,ce exc°ess liability cover-uge, a single claimant could potentially recover up to $1,000,000 on a single occurrence. The total that all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to $1,000,000, regardless of the number of claimants. If the city waives the statutor~~ tort lin~rits and pur•ch~ases excess liability coverage, a single claimant could potentially recover an amount up to the limit of the coverage purchased. The total which all claill~ants wouldbe able to recover for a single occurrence to which the statutory tort limits apply would also be limited to the amount of coverage purchased, regardless of the number of claimants. Excess liability coverage can be puurchased in amounts of $1,000,000 to $5,000,000. The approximate cost for the City of Columbia Heights to purchase $1,000,000 in excessive liability insurance is $27,331. This would increase our liability coverage from $1,000,000 to $2,000,000. RECOMMENDED MOTION: Move to decline the optional excess liability insurance coverage and retain the current liability limit of $1,000,000 with a deductible unlit of $1,000 per occurrence. RECOMMENDED MOTION: Move to waive the reading of Resolution 2007-84 there being ample copies available to the public. RECOMMENDED MOTION: Move to adopt Resolution 2007-84 being a resolution. to not waive the statutory tort liability limits. WEams 0705141('(7UNC1L Lia bi I ityCoverageOpti Attachments: Resolution 2007-8~+ E-Maii.pdf ons.pdf COUNCIL ACTION: RESOLUTION N0.2007-84 BEING A RESOLUTION TO NOT WAIVE THE STATUTORY TORT LIABILITY LIMITS WHEREAS, the City of Columbia Heights is a Minnesota political subdivision desiring to self- insure its property and. liability risks through participation in a joint powers arrangement known as the League of Mimlesota Cities Insurance Tnzst (LMCTT); and WHEREAS, Minnesota Statute Section 471.981 permits a city to extend the coverage of its self insiu-ance to afford protection in excess of any limitations on liability established by law, and WHEREAS, Minnesota Statute Section 471981 provides that tulles expressly provided in the ordinance or resolution extending the coverage, the statutory limitations on liability shall not be deemed to have been waived. NOW, THEREFORE, BE IT RESOLVED that the Columbia Heights City Council does hereby reverse it previous decision to waive the statutory limitations on liability as set forth in Resolution 2007-36 and accepts the monetary limits of tort liability established by Minnesota Statute Section 466.04. Passed this day of , 2007. Offered by: Seconded by: Roll Call: Mayor Gary L. Peterson Patricia Muscovitz, Deputy City Clerk Page 1 of 1 Bill Eirite From: "Brian LLindquist" <blundl@frontienlet.net> To: "Sue Schmidtbauer" <Sue.Schmid~tbauer~~ci.columbia-heights.mn.us> Date: 6/1/2007 2:08 PM The attached Risk Management Information should answer all of your questions about "liability" issues currently under consideration. As I mentioned, until yesterday when 1 met with the LMCIT underwriter Jan Kodet, I believed you had $1 million excess liability coverage in place. The application that I left with her included the application for excess liability and the indication to bind coverage effective 6/1/07. My recommendation is to include the excess coverage for the reasons outlined in the attached article. It would make more risk management sense to opt for a higher deductible, not waive your tort liability, and allocate the premiums to the excess liability coverage. I have not seen your claim history for the time you have been with the LMCIT. My guess would be that the higher deductible option would have saved money for the City over that time. I will request loss runs and prepare the analysis of claims to see if it would have been to your advantage to do so. According to the proposal for 2006-2007 the premium savings would have been $21,400. to have a $5,000. deductible. Please call me following your review of the attached so we can discuss the alternatives available at this time. Thank You! °~ ~, `< ~~°ian J: Lunc~g7,cis~ ~'l~' file://C:ADocuments and Settings`~CCI-~-User.C1015.0OO~Local Settings\Te1np~GW; 00001.... 6/13/2007 League of Minnesota Cities insurance Trust 145 University Avenue West, St Paul, MN 55103-2044 (651} 281.1200 • (800) 925-1122 Fax: (651} 281-1298 • TDD: (651) 281-1290 www.lmnc.org RISK MANAGEMENT INFORMATION LMCIT LIABILITY COVERA.~E OPTI®NS Liability Limits, Coverage Limits, and Waivers LMC1T gives cities several options for structuring their liability coverage. The city can choose either to waive or not to waive the monetary limits that the statutes provide; and the city can select from among several liability coverage limits. This memo discusses these options and identifies same issues to consider in deciding which of the options best meets the city's needs. What are the statutory limits on municipal tort liability? The statutes limit a city's tort liability to a maximum of $300,000 per claimant and $1,000,000 per occurrence. These limits apply whether the claim is against the city, against the individual officer or employee, or against both. What are the caverage limits for LMCIT's basic primary liability coverage? LMC1T's liability coverage provides a limit of $1,000,000 per occurrence, matching the per- occurrence part of the statutory municipal tort liability limit. Under the basic coverage form the $300,000 per claimant part of the statutory liability limit is not waived, so if the statutory limit applies to the particular claim, LMCiT and the city would be able to use that limit as a defense. Beside the overall coverage limit of $1,000,000 per occurrence, there are also annual aggregate limits (that is, limits on the total amount of coverage for the year regardless of the number of claims}, for certain specific risks. Aggregate limits apply to the following: Products /com feted o erations $1,000,000 annuall Failure to su 1 utilities $1,000,000 annuall EMF $1,500,000 annuall Limited oliution* $1,000,000 annuall Lead and asbestos* $200,000 annuall Mold $1,500,000 annuall Land use liti anon** $1,000,000 annuall Em r~la~ers liability (work com _$_1,000,000 annuall * The limit applies to both damages and defense costs. ** Coverage is on a sliding scale percentage basis, and applies to both damages and litigation. costs. If the statute limits our liability to $1,000,000 per occurrence, `vhy would the city purchase higher coverage limits than that? There are several different reasons why cities should strongly consider carrying higher limits of liability coverage. 1. The statutory tort limits either do not or may not apply to several types of claims. Some examples include: • Clairus under federal civil rights laws. These include Section 1983, the Americans with Disabilities Act, etc. • Clairus far tort liability that the city has assumed by contract. This occurs when a city agrees in a contract to defend and indemnify a private party. • Claims for actions in another state. This might occursn border cities that have mutual aid agreements with adjoining states, ar when a city official attends a national conference or goes to Washington to lobby, etc. • Clairus based on liquor sales. This mostly affects cities with municipal liquor stores, but it could also arise in connection with beer sales at a fire relief association fund-raiser, for example. • Claims Uased on a "taking" theory. Suits challenging land use regulations frequently include an "inverse condemnation" claim,alleg ing that the regulation amounts to a "taking" of the property. 2. LMCIT's primary liability coverage has annual limits on coverage for a few specific risks. The table on page 1 lists the liability risks to which aggregate coverage limits apply. If the city has a loss or claim in one of these areas, there might not be enough limits remaining to cover the city's full exposure if there is a second loss of the same sort during the year. 1/xcess liability coverage gives the city additional protection against this risk as well. However there are a couple of important restrictions an how the excess coverage applies to risks that are subject to aggregate limits: • The excess coverage does not apply to four risks: lend and asbestos; failure to supply utilities; mold; and "limited pollution" claims if either the pollutant release or the damage is below ground or in a body of water; and • The excess coverage does not crutorrzatically apply to liquor liability unless the city specifically requests it. 3. The city may be required by contract to carry higher coverage limits. Occasionally, a contract might incl~ide a requirement that the city carry mare than $1,Q00,400 of coverage limits. Carrying excess coverage is a way to meet these requirements. (There's also another option for cities in this situation. LMCIT can issue an endorsement to increase the city's coverage Iimit only far claims relating to that particular contract. There's a small charge for these "laser" endorsements.} There may be more than one political subdivision covered under the city's coverage. An HIZA, EDA, or port authority is itself a separate political subdivision. Ifthe city EDA, for example, is named as a covered party on the city's coverage and a claim were made that involved both the city and the EDA, theoretically the claimant might be able to recover up to $1,000,000 from the city and another $1,000,000 from the EDA, since there are two political subdivisions involved. Excess coverage is one way to provide enough coverage limits to address this situation. Another solution is far the HRA, EDA, or port authority to carry separate liability coverage in its own name. This issue of multiple covered parties can also arise is if the city has agreed by contract to name another entity as a covered party, or to defend and indemnify another entity. 5. Cities sometimes choose to carry higher coverage limits because of a concern that the courts might overturn the statutory liability limits. However, those limits have now been tested and upheld several times in Minnesota. While it's always possible that a future court might decide to throw out the statutory limits, this is now less of a concern. What excess liability coverage limits are available? Excess coverage is available in $1 million increments, up to a maximum of $5 million. We're just a small city. Isn't excess liability coverage really just something that big cities might need? Absolutely not. If anything, excess [lability coverage is even more important to a small city. If a city ends up with more liability than it has coverage, the city will have to either draw on existing funds or go to its taxpayers to pay that judgment. A large city faced with, say, a million dollars of liability over and above what its LMCIT coverage pays might be able to spread that $1 million cost over several thousand taxpayers. The small city by contrast might be dividing that same $1 million cost among only a couple hundred taxpayers. $1 million divided among 5000 taxpayers is $200 apiece - am~oying but probably at least manageable for most taxpayers. $1 million divided among 200 taxpayers is $5000 apiece -enough to be a real problem for many. How does excess coverage apply to uninsured/underinsured motorist coverage? If the city carries cxcess liability coverage, the city has the option to have the excess coverage also apply to uninsured or underinsured motorist (UM/UIM) claims. To do so, the city must first increase its primary UM/UIM limit from the basic $50,000 to $1,000,000. There are additional premium charges both to increase the primary UM/UIM limit and to apply the excess coverage to the UM/UIM exposure. The city needs to consider whether the benefit from having higher UM/UIM limits is worth. that cost. The UM/UIM coverages are intended to assure that an injured driver will 6e compensated ifs/he is injured in an accident caused by an uninsured or underinsured driver. The UN1/UIM caverage steps into the place of the liability insurance that the driver should have had. Keep in mind that in the case of city vehicles, an injury to the driver while operating a city vehicle would in most cases be covered by workers' compensation. The amounts the individual would be able to recover from UM/UIM would be in addition to the medical, indemnity, and other benefits paid under work comp. In many cases, it would amount to a double recovery for the individual's injuries. A city might decide to carry a higher limit for a couple reasons: if they believe the workers' compensation benefits are insufficient to compensate their injured employees; or if they want to make sure that non-employees riding in city vehicles are fully compensated in the event of an accident with an uninsured or underinsured vehicle. (Note that inmost cases the passenger's own UM/UIM would alsa respond.} LMCIT now gives the cities who participate in the primary liabi ity coverage the option to waive the $300,000 per claimant statntory liability limit. What's the effect if we do this? if the city chooses the '`waiver" option, the city and L~%1T no longer can use the statutory limn of $300,000 per claimant as a defense. Because the waiver increases the exposure, the premium is roughly 3% higher for caverage under the waiver option. if the city waives the statutory limit, an individual claimant could therefor recover up to $ I,OOO,U00 in damages on a claim. Of course, the individual wauld still have to prove to the court or jury that s/he really does have that amount of damages. Alsa, the statutory limit of $1,000,000 per occurrence would stilt apply; that would limit the individual's recovery to a lesser amount if there were multiple claimants. Why would the city choose to pay more in order to get the waiver-option caverage`? hoes it give the city better protection? No. Buying coverage under the "waiver" option doesn't protect the city any better. The benefit is to the injured party. The statutory liability limit only camas info play in a case where 1. the city is in fact liable; and 2. the injured party's actual graven damages are greater than the statutory limit. Very literally, applying the statutory liability limit means that an injured party want be fully compensated far his/her actual, proven damages that were caused by city negligence. Same cities as a matter of public policy may want to have more assets available to compensate their 4 citizens for injuries caused by the city's negligence. Waiving the statutory liability limits is a way to do that. tither cities may feel that the appropriate policy is to minimize the expenditure of the taxpayers' funds by taking full advantage of every protection the legislature has decided to provide. There's no right or wrong answer on this paint. It's a discretionary question of city policy that each city council needs to decide for itself. How would the waiver affect our city's coverage or risk on those claims that the statutory tort liability limits don't apply to? It doesn't. V~aiving the statutory tort limits has no effect on claims that the statutory limits don't apply to. What's the effect of waiving the statutory limits if we have excess coverage? Ifthe city has $1 million of excess coverage and chooses to waive the statutory tort limits, the claimants (whether it's one claimant or several) could then potentially recover up to $2 million in damages in a single occurrence. If the city carries higher excess coverage limits, the potential maximum recovery per occurrence is correspondingly higher. Carrying excess coverage under the waiver option is a way to address an issue that some cities find troubling: the case where many people are injured in a single occurrence caused by city negligence. Suppose, for example, that a city vehicle negligently runs into a school bus full of kids, causing multiple serious injuries. $1,000,000 divided 50 ways may not go far toward compensating for those injuries. Excess coverage under the waiver option makes more funds available to compensate the victims in that kind of situation. The cost of the excess liability coverage is about 25% greater if the city waives the statutory tort limits. The cost difference is proportionally greater than the cost difference at the primary level because for a city that carries excess coverage, waiving the statutory tart [units increases both the per-claimant exposure and the per-occurrence exposure. If we waive the statutory tort liability limits, does it increase the risk that the city will end up with liability that L,IVIaCIT doesn't cover?' No. The waiver form specifically says that the city is waiving the statutory tort liability limits only to the extent of the city's coverage. Ofcaurse, that's not to say that there is na risk that the city's liability could exceed its coverage limits. We listed earlier a number of ways that could happe~a to any city. But the waiver doesn't increase that risk. Can we waive the statutory tort limits for the primary coverage but not for the excess coverage? No. If the city decides to waive the statutory tort limits, that waiver applies to the full extent of the coverage limits the city has. The city cannot partially waive the statutory limits. I'm confused. Is there a simple way to summarize tl-e options? It's not necessarily simple, but the table on the following page is a shorthand summary of what the effect would be of the various coverage structure options in different circumstances. Pm stilt confused. Who can I talk to? Give us a call at the League office. Pete Tritz, Tom Grundhoefer, Bill >/verett, Doug Gronli, or any of LMCIT's propertyicasualty underwriters will be glad to talk witl5 you. 6 LCIT Liability Coverage options ®n a liability Claim to which On a Liability Claim to which the statutory limits apply the statutory limits do not apply (overage structure This is the maximum This is the rnaximum This is the maximum amount of damages which If the City: amount a single claimant total amount that all LMCIT would pay on the city's behalf for a could recover on an claimants could recover single occurrence, regardless of the number of occurrence. on a single occurrence. claimants. Does not have excess coverage & Does nat waive the statutory limits $300,000 $1,000,000 $1,000,000 Does not have excess coverage 8~ Waives the statutory limits $1,000,000 $1,000,000 $1,000,000 Has X1,000,000 of excess coverage & Does not waive the statutory limits $300,000 $1,000,000 $2,000,000 Has $1,000,000 of excess coverage & Waives the statutory limits $2,000,000 $2,000,000 $2,000,000 psT i~~oa 466.04, Minnesota. Statutes 2006 lni~~~~tC Page 1 of 2 ~egisE~tur~ Hcrrrt~ ~ finks to the ward ~ Helps (~dvaxsced ~~aFci1 ~~ .._ _ ( ~:~a~> ( Joint G_~. ..~ ~~w.t~~..u~i~,ts i ~i . "=~r~l~ ar~d tatt~s ~ tata~t~s, taws, a~~sd Ru6~s M°~!~~>ota,Statutes Tabl~_clf__C`h^pt~rs_ Chap±p!° ~''`_T`able_caf Crtfi~ts 466.04, inn~ta hues 2006 Copyright ©2006 by the Office of Revisor of Statutes, State of Minnesota. 466.04 MAXIMUM LIABILITY. Subdivision 1. Limits; punitive damages. (a} Liability of any muunicipality on any claim within the scope of sections 466.01 to 466.15 shall not exceed: (1) $300,000 when the claim is one for death by wrongful act or omission and $300,000 to any claimant in any other case, for claims arising before January l , 2008; (2) $400,000 when the claim is one for death by wrongful act or omission and $400,000 to any claimant in any other case, for claims arising on or after January 1, 2008, and before July 1, 2009; (3) $500,000 when the claim is one for death by wa~anglul act or omission. and $500,000 to any claimant in any other case, far claims arising on or after July 1, 2009; (4) $750,000 for any number of claims arising out of a single occurrence, far claims arising on or after .Tanuary 1, 1998, and before January 1, 2000; (5) $1,000,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 2000, and before January 1, 2008; (6) $1,200,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 2008, and before July 1, 2009; (7) $1.,500,000 for any number of claims arising out of a single occurrence, for claims arising on or after July 1, 2009; or (8) twice the limits provided in clauses (1) to {7) when the claim arises out of the release or threatened release of a hazardous substance, whether the claim is brought under sections 1158.01 tai 1513.15 ar under any other la~v. (b) Na award for damages on any such claim shall include punitive damages. Subd. la. officers and employees. The liability of an officer or an employee of any municipality for a tort arising out of an alleged act or omission occurring in the performance of duty shall not exceed the limits set forth in subdivision I, unless the officer ar employee provides professional services and also is employed in the profession for compensation by a person or persons other than the municipality. Subd. lb. TotaC claim. The total liability of the municipality on a claim against it and against its officers or employees arising out of a single occurrence shall not exceed the limits set ford? in subdivisian 1. Subd. 2. Incl~~sions. The litnitatiali imposed by this section on individual claimants includes damages claimed 1~zr loss of services ar loss of support arising out ofthe same tort. Subd. 3. Disposition of multiple claims. Where the amotmt awarded to or settled upon multiple claimants exceeds the applicable limit under subdivision 1, paragraph (a), clauses (2) to (4), any parry may apply to any district court to apportion to each claimant a proper share of the total amount limited by subdivision 1. The share apportioned each claimant shall be in the proportion that the ratio of the award or settlement made to each hears to the aggregate awards and settlements far all claims arising out of the occurrence. I-Iisto~y: 1963 c 79H s 4; 1976 c '64 .s 1-3; 198_i c 1?1 s 28; 1483 c 331 s 2,3; 1986 c 444; http://ras.leT;ann/bin/getpub.php`?pubtype=STAT CHAT' SEC&year=current&section=4~6.04~image.x=... 6/13/2007 City of Columbia Heights Proposed Staffing Plan Prepared 06/18/2006 Annual Wage Current Number of Positions Proposed Number of Positions Current Max Pay Range First Year Start up Proposed Max Pay Range Liquor OpE:rations Manager 83,148 1 1 83,148 83,148 83,148 New Store Manager (new) 58,272 0 2 - 93,240 ** 116,544 Asst Liquor Manager 46,620 7 3 326,340 139,860 139,860 New PT Store 5~upervisor (new) 32,844 0 2 - 57,792 ~ 65,688 Total Cost 409,488 374,040 405,240 Annual Savi Wages 35,448 4,248 Benefits 15,480 15,480 Total Savings 50,928 19,728 Note: The Part Time Store Supervisor would be filled as needed with a projected total number of hours equivelent to two full time employees. Note: ** The movE; to fill the Store Manager position would not take place until a vacancy in the Assistant Manager position occurs. SubsequE;ntly we could be at the first year savings level for an extended period of time. City of Columbia Heights Proposed ;Staffing Plan Prepared 06/18/2006 Note: Actual wages for the new positions have not keen determined at this time. That would be done utilizing the City Council Adopted "Hay Wage Plan" entr 6 months 1 ear 2 ears 3 ears Li uor O E:rations Mana er 6,098 6,305 6,513 6,721 6,929 Store Manager (new) 4,274 4,419 4,565 4,710 4,856 Asst Liquor Operations Mana er 3,419 3,535 3,652 3,768 3,885 PT Store :>upervisor (new) Haurl 13.26 13.89 14.53 15.16 15.79