ITEM 3.10 Monetary limits on Municpal Tort LiabilityOtkgoF
4011
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT REQUESTOR:
MEETING DATE:
Administration City Administrator/Finance Director Flaherty
October 14, 2019
PRESENTER(s) REVIEWED BY:
ITEM #:
Consent
3.10
STRATEGIC VISION
MEETS:
I THE CITY OF OTSEGO:
X
Is a strong organization that is committed to leading the community through innovative
communication.
1S A PUBLIC HEARING REQUIRED?
Has proactively expanded infrastructure to responsibly provide core services.
No
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
The City has received the quoted premium from the League of Minnesota Cities for the 2019-2020 liability
Is a social community with diverse housing, service options, and employment opportunities.
2018-2019 coverage period (2.1% increase).
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council elect to not waive the monetary limits on municipal tort
liability established by Minnesota Statute Section 466.04.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
1S A PUBLIC HEARING REQUIRED?
No
No
BACKGROUND/JUSTIFICATION:
The City has received the quoted premium from the League of Minnesota Cities for the 2019-2020 liability
insurance package. The total for the 2019-2020 coverage period is $137,297 compared to $134,456 for the
2018-2019 coverage period (2.1% increase).
Within the policy, there were minor increases in premiums for: equipment breakdown and mobile
equipment coverages; however, those increases were offset with minor decreases in premiums for:
general expenditure, land -use and automobile coverages.
The most direct cause for the increase within the insurance policy was for Property coverage, which
increased due to additional property added to the policy for Lefebvre Creek Park and Norin Landing Park.
Minnesota Statute Section 466.04 references tort liability for political subdivisions. The municipal tort
liability is limited to a maximum of $500,000 per claimant and $1.5 million per occurrence. These limits
apply whether the claim is against the City, against the individual officer or employee, or against both. The
LMCIT liability coverage provides a standard limit of $2 million per occurrence.
At the City's coverage renewal each year, it must decide whether to waive or not waive the statutory limits.
In the past, the City of Otsego has chosen not to waive these statutory limits on tort liability claims. The
LMCIT assures coverage to the limitations set by the Statute without additional cost to the City.
SUPPORTING DOCUMENTS ATTACHED:
• Liability Coverage Waiver Form
• Summary of LMCIT Liability Coverage Options
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES:
Motion that the City of Otsego elects not to waive the monetary limits on municipal tort liability
established by Minnesota Statute Section 466.04 for the September 25, 2019-2020 coverage period.
BUDGET INFORMATION
FUNDING;
BUDGETED:
Insurance coverage is allocated to each
fund/department of the City.
Yes
t
LEAGUE OF
MINNESOTA
CITIES
CONNECTING & INNOVATING
SINCE 1913
LIABILITY COVERAGE — WAIVER FORM
Members who obtain liability coverage through the League of Minnesota Cities Insurance Trust (LMCIT)
must complete and return this form to LMCIT before the member's effective date of coverage. Return
completed form to your underwriter or email to pstechAlmc.M.
The decision to waive or not waive the statutory tort limits must be made annually by the
member's governing body, in consultation with its attorney if necessary.
Members who obtain liability coverage from LMCIT must decide whether to waive the statutory tort liability limits
to the extent of the coverage purchased. The decision has the following effects:
• If the member does not waive the statutory tort limits, an individual claimant could recover no more than
$500,000 on any claim to which the statutory tort limits apply. The total all claimants could recover for a single
occurrence to which the statutory tort limits apply would be limited to $1,500,000. These statutory tort limits
would apply regardless of whether the member purchases the optional LMCIT excess liability coverage.
• If the member waives the statutory tort limits and does not purchase excess liability coverage, a single claimant
could recover up to $2,000,000 for a single occurrence (under the waive option, the tort cap liability limits are
only waived to the extent of the member's liability coverage limits, and the LMCIT per occurrence limit is
$2,000,000). The total all claimants could recover for a single occurrence to which the statutory tort limits apply
would also be limited to $2,000,000, regardless of the number of claimants.
• If the nrernber° waives the statutory tort limits and purchases excess liability coverage, a single claimant could
potentially recover an amount up to the limit of the coverage purchased. The total all claimants could 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.
Claims to which the statutory municipal tort limits do not apply are not affected by this decision.
LMCIT Member Name:
Check one.-
F-1
ne:❑ The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minn. Stat.
466.04.
The member WAIVES the monetary limits on municipal tort liability established by Minn. Stat. § 466.04, to
the extent of the limits of the liability coverage obtained from LMCIT.
Date of member's governing body meeting:
Signature: Position:
14S UNIVERSITY AVE. WEST PHONE: (651) 281-1200 FAx: (651) 281-1299
ST. PAUL, MN 55103-2044 TOLL FREE: (800) 925-1122 WEB: WWW.LMC.OKG
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