5.13. SR 12-19-1994
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ITEM 5.13.
MEMORANDUM
TO:
Mayor & City Council \
Lori Johnson, Finance Director ~~
FROM:
DATE:
December 19, 1994
SUBJECT: Insurance Issues
In September when the insurance contract renewal was discussed, there were
several items on which the Council did not act and requested further
information. Dan Greene presented information on both the Open Meeting
Law and Excess Liability Insurance coverage. In response to the Council's
request for further information, attached is a memo from City Attorney Peter
Beck regarding these two items.
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Staff is recommending approval of the Open Meeting Law insurance at a
premium cost of $1,756 per year. This policy would cover all Boards and
Commissions of the City.
The other item yet to be addressed is the need for Excess Liability Insurance.
The attached memo gives further explanation of what the Excess Liability
Insurance would cover. As Peter indicates, the League of Minnesota Cities
has stated that they have very seldom had claims which would be covered
under the Excess Liability Insurance. The premiums for this coverage are
somewhat high. The annual premium without a waiver of immunity is
$29,636. The annual premium with a waiver of immunity is $40,147.
Action Reauested
The City Council is asked to indicate whether it wishes to purchase Open
Meeting law coverage at an annual premium of $1,756 for all City Officials.
Second, the City Council is asked to indicate whether it wishes to carry
Excess Liability coverage at an annual premium of $29,636 without a waiver
of immunity or $40,147 with a waiver of immunity.
council:insissue
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13065 Orono Parkway. P.O. Box 490. Elk River, MN 55330. (612) 441-7420. Fax: (612) 441-7425
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MEMORANDUM
LARKIN, HOFFMAN, DALY & LINDGREN, LTD.
Attorneys at Law
1500 Norwest Financial Center
7900 Xerxes Avenue South
Bloomington, Minnesota 55431
Telephone: (612) 835-3800
FAX: (612) 896-3333
TO:
Mayor Henry A. Duitsman and
Members of the City Council
Peter Beck, City Attorney
December 14, 1994
Conflict of Interest Ordinance
Open Meetin~ Law
Excess Liab1lity Insurance
FROM:
DATE:
RE:
Conflict of Interest Ordinance
Earlier this year I prepared, at Council direction, two
alternative amendments to the City'S Conflict of Interest
Ordinance. The Council had directed me to prepare an Qrdinance
which would bring the City'S policy generally into closer
conformance with state conflict of interest laws applicable to
municipalities. Council indicated a preference for the more
comprehensive of the two alternatives I had prepared. It is my
understanding that the other City Commissions which have reviewed
the proposed ordinance have concurred. Therefore, the attached
ordinance is ready for Council adoption at its meeting of
December 19, 1994, if the Council so desires.
I also prepared, earlier this year, a draft memorandum to members
of the City Council, members of City Commissions and City
department heads outlining the City'S conflict of interest
policy. If the Conflict of Interest Ordinance is adopted by the
Council on December 19, 1994, I will update and circulate this
memorandum to all Commissioners and department heads.
Open Meeting Law
I recommend that the memorandum on the City'S Conflict of
Interest policy be expanded to include a few paragraphs on the
state's open meeting law. I have met with most of the City
Commissions over the past year to discuss the requirements of the
open meeting law, and have found a certain amount of
misunderstanding regarding these requirements. I think it would
be helpful for people to have a written document to refer to in
the future.
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I am also recommending that the City purchase so-called "open
meeting law insurance" from the League of Minnesota Cities
Insurance Trust. The Minnesota Supreme Court has recently
confirmed that a suit against city officials alleging a violation
of the open meeting law is not a claim covered under the Trust's
general policy. The Trust offers open meeting law coverage at a
fairly nominal amount. This coverage protects City officials
against the possibility of incurring attorneys' fees defending an
open meeting law suit. If the Council elects to purchase this
coverage, I will mention that fact in my memorandum.
Excess Liability Insurance
Lori has asked me to discuss with the Council whether the City
should purchase "excess liability insurance" from the Trust.
Minnesota law puts a limit on the tort liability of
municipalities (currently $200,000 per claim and $600,000 for all
claims arising out of the same occurrence). Excess liability
insurance provides coverage in excess of these tort liability
limits.
The League offers two types of excess liability insurance. The
first type does not waive the statutory tort liability limits for
claims which are covered by the statutory limits, but provides
excess liability coverage for claims which may not be covered by
the tort liability limits. For instance, dram shop claims, civil
rights claims, and certain federal employment law claims may not
be covered by the state tort liability limits.
The second type of excess liability insurance offered by the
League waives the tort liability limits of Minnesota law. The
purpose of this policy is to provide the opportunity for
plaintiffs to obtain more than the statutory maximum in damages.
It is my understanding Lori has some information for the Council
on the cost of this excess liability insurance. I will leave to
the Council the decision of whether the benefit received is
sufficient to off-set the cost. However, in my discussions with
people at the League of Cities, they indicate that they have very
seldom had claims that have gone into excess liability coverage.
I will be at the Council meeting on December 19, 1994, and will
be happy to answer questions from the Council on any Of the three
topics discussed in this memo.
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