8.4. SR 12-17-2012 CO of
REQUEST FOR ACTION
River
To Item Number
Mayor and City Council 8.4
Agenda Section Meeting Date Prepared by
General Business December 17,2012 Tim Simon, Finance Director
Item Description Reviewed by
Annual Renewal of City's Insurance Policies with the League of Cal Portner, City Administrator
Minnesota Cities Insurance Trust Reviewed by
Action Requested
The City Council is asked to accept and approve the renewal of the city's insurance policies with the
League of Minnesota Cities Insurance Trust (LMCIT).
Background/Discussion
For over 20 years, the City of Elk River and Elk River Municipal Utilities (ERMU) have participated in
the LMCIT. Coverage has been in binder since the official July 1 renewal date even though the renewal
documents and rates were just received. The workers' compensation insurance renewal is included as
well;that policy renewed on October 1, 2012. The policies have remained unchanged for the most part.
Here are a few highlights with this year's insurance renewal:
• The city received two dividends last year for participating in the LMCIT program;$63,624 (19%
increase over prior year) on the insurance package and$36,751 on the workers compensation.
The city should expect to receive the 2012 dividend in December. These dividends have
historically offset premium increases and allowed for deductible increases.
• The property schedule has remained relatively the same as last renewal with property rates
increasing about 3%.
• The package coverage including property, autos,municipal liability, etc. came with an increase of
about$40,850,largely due the land use claim which has an impact in the formula.The next
renewal will be the last surcharge for the prior land use claim.
• The workers compensation costs have increased as our experience modification factor has
increased from .95 to 1.02 for this renewal. The league has indicated that a 1.02 is "right around-
average." The league gave us a breakout of workers compensation formula based on the city and
ERMU as stand-alone renewals. The city would be .98 and ERMU would be 1.14.
The city and ERMU continue to be proactive in promoting safety and safety standards through the
continued dedication of all city employees and the Safety Committee.
In last year's renewal,we recommended the change to a$20,000 deductible option and keeping the same
$40,000 aggregate.This worked very well for the 2011-2012 renewal as we only had a few minor claims
against the deductible. Outside the land use claim there were no other significant claims.
Financial Impact
PQMEREB UY
[NATURE
All insurance policy renewals are budgeted in the 2013 budget.
Attachments
• City of Elk River Premium Summary&Comparison-2012
• Balance sheet (Insurance Reserve Fund)
Action Motion by Second by Vote
Follow Up
rrt aEn B1
NATURE
City of Elk River
Insurance Renewal 2012-2013
COVERAGE LINE 2012-2013 2011-2012 2010-2011
Revised
PROPERTY $87,784 $87,505 $93,384
$129,349,117 $130,190,564
Schedule Schedule $120,487,468 Schedule
$20,000 Occ/ $20,000 Occ/
$40,000 Agg/ $1,000 $40,000 Agg/ $10,000 Occ/$40,000
Deductible Maint $1,000 Maint Agg/ $1,000 Maint
MOBILE PROPERTY $10,642 $10,608 $10,665
$2,589,583 $2,684,352
Schedule Schedule
MUNICIPAL LIABILITY$1.5 M Limit $168,616 $132,824 $125,019
AUTO LIABILITY Including Um/Uim&PIP $19,178 $17,361 $14,724
PHYSICAL DAMAGE $22,237 $22,193 $24,564
152 Units 157 Units 145 Units
CRIME INCLUDED INCLUDED INCLUDED
BOND $500,000 Limit $1,545 $1,653 $1,893
EQUIP BREAKDOWN(Inc! ERMU Gen Equip) $56,842 $53,850 $55,517
PETRO FUND REIMB INCLUDED INCLUDED INCLUDED
OPEN MEETING LAW INCLUDED INCLUDED INCLUDED
LIQUOR LIABILITY $9,985
SUB-TOTAL $366,844 $325,994 $335,751
(6.2% Inc) (0.5% Decr)
WORKERS COMP w/$10,000 Ded $259,324 $231,482 $216,594
1.02 Exp Mod .95 Exp Mod .93 Exp Mod
GRAND TOTAL $626,168 $557,476 $552,345
II
12-12-2012 01:19 PM CITY OF ELK RIVER PAGE: 1
BALANCE SHEET
AS OF: NOVEMBER 30TH, 2012
291-INSURANCE RESERVE
ACCOUNT # ACCOUNT DESCRIPTION BALANCE
ASSETS
291-1010 Cash - Insurance Reserve 234,718.63
291-1310 Due From Other Funds 86,768.50
321,487.13
TOTAL ASSETS 321,487.13
LIABILITIES
EQUITY
291-2400 Fund Balance 340,957.99
TOTAL BEGINNING EQUITY 340,957.99
TOTAL REVENUE 35,621.80
TOTAL EXPENSES 55,092.66
TOTAL REVENUE OVER/(UNDER) EXPENSES ( 19,470.86)
TOTAL EQUITY & REV. OVER/(UNDER) EXP. 321,487.13
TOTAL LIABILITIES, EQUITY & REV.OVER/(UNDER) EXP. 321,487.13