2.7. ERMUSR 07-12-2016 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Theresa Slominski, Finance and Office Manager
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
July 12, 2016 2.7
SUBJECT:
Renewal Premium for LMCIT Property/Casualty Insurance
BACKGROUND: Our annual renewal for Property and Casualty Insurance is effective 7/1/2016
through 7/1/2017.
DISCUSSION: We have received our renewal premium from the LMCIT for the 2016/2017
year. The 2016/2017 premium is $117,432 with a$20,000 per occurrence/$40,000 annual
aggregate deductible, except the Equipment Breakdown has a separate $20,000 per accident
deductible. This is a reduction from the prior year of$23,074 or 16%.
We have a reduction in premium this year due to a few different factors.
• The property premium decreased about 2% due to rate decreases. Also, our
experience modification factor decreased about 2% from .880 to .863 (however
our aggregate factor is still slightly above 1 at 1.01).
• The municipal liability premium decreased about 54%. There are a few factors
that contributed to this large decrease: 1) the decrease in the experience
modification factor, 2) decreases in rates, and 3)the most significant factor is the
elimination of the transition factor that has been applied the past few years to
assist us in transitioning into the new liability rating method. We are now fully
transitioned into this new rating system.
• The auto liability premium decreased about 5% due to the decrease in the
experience modification factor and a change in exposure.
I have attached the Renewal Premium Summary for your review, which lists the various
coverages and related premiums of the prior and current year.
Our agents are not recommending any changes to our current occurrence and aggregate
deductibles. If the Commission desires to make any such changes, we would need to let the
LMCIT know as soon as possible.
INATURE
EN Page 1 of 2
Reliable Public'
Power Provider POWERED T O S ERV E
56
ACTION REQUESTED:
Staff recommends that the Elk River Municipal Utilities Commission approve the submitted
insurance policy with the renewal premiums of$117,432.1iability.
ATTACHMENTS:
• Renewal Premium Summary
I4ATLJRE
® Page2of2
Reliable Public
Power Provider P 0WE 0.E D T O S ERV E
57
0
LEAGUE OF CONNECTING & INNOVATING
MINNESOTA SINCE 1913
CITIES
June 27,2016
NCI-BIB LLC
Northern Capital Insurance Group Covered Party: Elk River Municipal Utilities
8200 Highwood Drive
P.O.Box 9396 Effective Date: 7/1/2016
Minneapolis,MN 55440-9396
RENEWAL PREMIUM SUMMARY
Common Coverages
Coverage Deductible Premium
• Property $ 20,000/40,000/ 1,000. $23,670.
• Mobile Property 20,000/40,000/ 1,000. 4,133.
• Municipal Liability 20,000/40,000/ 1,000. 19,340.
• Automobile Liability 20,000/40,000/ 1,000. 2,616.
• UM/UIM$200,000 all owned autos 20,000/40,000/ 1,000. Included.
• Basic Economic Loss Benefits(PIP)all owned autos 20,000/40,000/ 1,000. Included.
• Automobile Physical Damage 20,000/40,000/ 1,000. 3,912.
• Crime 20,000/40,000/ 1,000. Included.
• Petrofund NA. Included.
• Defense Cost Reimbursement NA. Included.
Experience Factor Modifier: 0.863 Aggregate Factor Modifier: 1.010
Expiring Experience Factor Modifier: 0.880
(Applied to Municipal Liability,Auto Liability,and UM/UIM) The modifier is calculated with a formula which compares the city's actual loss history with the amount of losses that
would be expected for a city of that size if the city were a perfectly average LMCIT member. If the city's losses and expenses are better than average the city receives a premium credit.
If the city's losses and expenses are worse than average,the city receives a premium debit.
Optional Coverages
Coverage Deductible Premium
• Bond $ 500,000. 20,000/40,000/ 1,000. 658.
• Equipment Breakdown 20,000/40,000/ 1,000. 63,103.
• Excess Liability Limit: $ NA. Not Covered.
• Liquor Liability Limit: $ NA. Not Covered.
• Fireworks
Not Covered.
• No Fault Sewer Back Up Limit: $ Not Covered.
• Airport Liability
Not Covered.
TOTAL: $117,432.
DO NOT PAY UNTIL YOU RECEIVE INVOICES
TORT LIMIT: $500,000/$1,500,000
LEAGUE OF MINNESOTA CITIES 145 UNIVERSITY AVE.WEST PHONE:(651)281-1200 FAx(651)281-1298
INSURANCE TRUST ST.PAUL,MN 55103-2044 TOLL FREE:(800)925-1122 WEB:WWW.LMC.ORG
PREMSUMXM(11/11) 58
Comments: If the expiring covenant includes additional interests(mortgagee, loss payee,additional insured)you will find a
schedule of those interests included with the Premium Breakdown. Please review,update and return to your LMCIT Underwriter.
Optional Coverage Quotes
Coverage Deductible Approximate Premium
Data Security Breach:Limit$500,000 $1,000.
Excess Liability: Limit: $1,000,000 $6,972.
Optional coverage(s)are not bound unless the covered party has requested that coverage be bound and LMCIT has sent a
written confirmation.Optional coverage quotes are valid for 30 days after the date of this letter.
Sincerely,
\I\ VYR 61/0
Underwriter
PREMSUMXM(11/11) 59
LMCIT PREMIUM BREAKDOWN
DATE: 06/27/2016 Coverage Period: 07/01/2016 -
07/01/2017
TO:
CITY OF: ELK RIVER MUNICIPAL UTILITIES
COVERAGE AVERAGE RATE AMOUNT OF COVERAGE PREMIUM
PROPERTY (Per $100 Coverage) * $ 55, 762,105 $ 23,670
EQUIPMENT BREAKDOWN COVERAGE $ 55, 762, 105 $ 63, 103
MOBILE PROPERTY(Per $100 Coverage) :
SCHED.OVER 25,000 .23998 $ 998,005 $ 2, 395
UNSCHED. 25 ,000 & LESS $ 538,492 $ 1 , 738
MUNICIPAL LIABILITY SEE ATTACHED $ 19, 340
AUTO LIABILITY & PHYSICAL DAMAGE *SEE ATTACHED $ 6,528
CRIME-INSIDE/OUT/FORGERY $ 250,000 $
BONDS $ 500,000 $ 658
*These AVERAGE RATES are to be used TOTAL PREMIUM: $ 117,432
for ESTIMATES of PREMIUM ALLOCATION ONLY
06/20 PREPARED BY:
60
MUNICIPAL LIABILITY - ELK RIVER MUNICIPAL UTILITIES
COVENANT Number: CMC 39276
COVENANT Period: 07/01/2016 TO 07/01/2017
PREMIUM ADVANCED
--HAZARD-- BASIS PREMIUM
EXPENDITURES $ 31,431 , 180.00 $ 15,024
EMPLOYMENT 42.00 $ 4,316
TOTAL LIABILITY $ 19, 340
61