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ITEM 5.3 Montetary limitsP Otkzo` MINNESOTA CDO DEPARTMENT INFORMATION Request for City Council Action ORIGINATING DEPARTMENT: REQUESTOR: MEETING DATE: Administration Dan Jordet, ASD January 12, 2015 PRESENTER(s): REVIEWED BY: ITEM #: Dan Jordet, ASD Lori Johnson, CA 5.3 AGENDA ITEM DETAILS RECOMMENDATION: It is recommended that the City Council adopt a motion making the choice not to waive the monetary limits on municipal tort liability established by Minnesota Statutes 466.04. ARE YOU SEEKING APPROVAL OF A CONTRACT? No IS A PUBLIC HEARING REQUIRED? No BACKGROUND/JUSTIFICATION: Minnesota Statutes 466 deals with tort liability for political subdivisions. That statute delineates limits to claim amounts for actions within the scope of that Statute. To summarize, the limits for tort liability claims are $ 500,000 for a single claim from an incident arising on or after July 1, 2009 and $ 1,500,000 for any number of claims arising out of a single incident. Under the League of Minnesota Cities Insurance Trust (LMCIT) a city must choose whether to waive those limits or to be protected by them. If the limits are waived, it is recommended that additional coverage be obtained. Limitations on tort liability for damages are determined by the amount of additional coverage obtained. In the past, the City of Otsego has chosen not to waive these statutory limits on tort claims liability. The LMCIT assures coverage to the limitations set by the Statute without additional cost to the insured city. The City, however, carries an additional $ 1,000,000 of liability coverage at a cost of $ 10,285. This coverage would be used only in the case that the City is determined to be responsible for a claim to which the statutory limits do not apply. Such claims would involve such things as federal civil rights violations, assumption of liability in contracts with private enterprises, actions taken in other states or certain takings of property. Excess liability would also be used should the City exceed the annual coverage limitations for such things as claims for mold or chemical liability, failure to supply utilities or data breach damage claims. In all such cases, LMCIT would still cover the City to the extent of the policy provisions but anything beyond the policy limits would be the City's responsibility. Staff suggests that the Council consider discontinuing the excess liability coverage either this evening or at a work session in the near future as the City's risk exposure in the areas covered by excess liability is limited. SUPPORTING DOCUMENTS: X ATTACHED ❑ NONE O Copy of MS 466.04 o Copy of Liability Coverage Waiver Form PnSSIRI F MOTION Please word motion as you would like it to appear in the minutes. Move that the City of Otsego chooses not to waive monetary limits on municipal tort liability established by Minnesota Statutes 466.04 for the 2015 insurance policy period. RunGF_T INFORMATION FUNDING: BUDGETED: X YES ❑ NO ACTION TAKEN ❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes) COMMENTS: MINNESOTA STATUTES 2014 466.04 466.04 MAXIMUM LIABILITY. Subdivision 1. Limits; punitive damages. (a) Liability of any municipality 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 1, 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 wrongful act or omission and $500,000 to any claimant in any other case, for claims arising on or after July 1, 2009; (4) $750,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 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; (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 11513.01 to 115B.15 or under any other law; or (9) $1,000,000 for any number of claims arising out of a single occurrence, if the claim involves a nonprofit organization engaged in or administering outdoor recreational activities funded in whole or in part by a municipality or operating under the authorization of a permit issued by a municipality. (b) No award for damages on any such claim shall include punitive damages. Subd. 1 a. 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 1, unless the officer or employee provides professional services and also is employed in the profession for compensation by a person or persons other than the municipality. Subd. 1 b. Total 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 forth in subdivision 1. Subd. 2. Inclusions. The limitation imposed by this section on individual claimants includes damages claimed for loss of services or loss of support arising out of the same tort. Subd. 3. Disposition of multiple claims. Where the amount awarded to or settled upon multiple claimants exceeds the applicable limit under subdivision 1, paragraph (a), clauses (4) to (9), any party may apply to any district court to apportion to each claimant a proper share of the total amount limited by sub- division 1. The share apportioned each claimant shall be in the proportion that the ratio of the award or Copyright 0 2014 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 466.04 MINNESOTA STATUTES 2014 settlement made to each bears to the aggregate awards and settlements for all claims arising out of the oc- currence. History: 1963 c 798 s 4; 1976 c 264 s 1-3; 1983 c 121 s 28; 1983 c 331 s 2,3; 1986 c 444; 1989 c 325 s 50; 1997 c 210 s 3,4; 2006 c 232 s 2; 2012 c 131 s 2,3 Copyright © 2014 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. r2� of LNNESOrp CITIES CONNECTING & INNOVATING SINCE 1913 LIABILITY COVERAGE - WAIVER FORM LMCIT members purchasing coverage must complete and return this form to LMCIT before the effective date of the coverage. Please return the completed form to your underwriter or email to pstech@lmc.org This decision must be made by the member's governing body every year. You may also wish to discuss these issues with your attorney. Cities and other League of Minnesota Cities Insurance Trust members that 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 would be able to recover no more than $500,000 on any claim to which the statutory tort limits apply. The total all claimants would be able to 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 city purchases the optional excess liability coverage. If the member waives the statutory tort limits and does not purchase excess liability coverage, a single claimant could potentially recover up to $1,500,000 for a single occurrence. The total all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to $1,500,000, regardless of the number of claimants. If the member 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 would be 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. Claims to which the statutory municipal tort limits do not apply are not affected by this decision. accepts liability coverage limits of $ Minnesota Cities Insurance Trust (LMCIT). from the League of Check one: ❑ The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minnesota Statutes Section 466.04. ❑ The member WAIVES the monetary limits on municipal tort liability established by Minnesota Statutes Section 466.04, to the extent of the limits of the liability coverage obtained from LMCIT. Date of city council/governing body meeting Signature 145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 r•Ax: (651) 281-1299 ST. PAUL, MN 55103-2044 TOL. FREE: (800) 925-1122 WEB: WWWLMC.ORG