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HomeMy WebLinkAbout1988-09-20 - City Commission Special Meeting Minutes7525 NORTHWEST 88TH AVENUE & TAMARAC, FLORIDA 33321-2401 TELEPHONE (305) 722.5900 RECORD OF COUNCIL ACTIONS/DISCUSSION September 9, 1988 SPECIAL MEETING CITY COUNCIL OF TAMARAC, FLORIDA There will be a Special Meeting of the City Council on Tuesday, September 20, 1988, at 10:00 A.M., in Conference Room 1, (Room 103) of City Hall, 7525 NW 88th Avenue, Tamarac. The purpose of this meeting is discussion and possible action on the City's insurance requirements, All meetings are open to the public. FINAL ACTION: • APPROVED renewal of policy with Florida League of Cities with a change in coverage: Option IV-$1,000,000 combined single limit with $10,000 Deductible. General Liability $217,634 Automobile Liability $102,999 Incentive Credit (3%) -- $ 9,619 CAE/gt L7 TOTAL PREMIUM $311.014 -� 4, CAROL A. EVANS CITY CLERK Pursuant to Section 286,0105, Florida Statutes it a person decides to appeal any decision made by the citi Council with respect to any matter considered at such meeting 01 hearing, he will need a retard of the± proceedings and fMr purpose, he may need to ensure that a verbatim record C��d'- the testimony and evidence upon which the appealis o AN EQUAL OPPORTUNITY EMPLOYER POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS CITY OF TAMARAC CITY COUNCIL SPECIAL MEETING TUESDAY, SEPTEMBER 20, 1988 TAPE 1 CALL TO ORDER: Mayor Abramowitz called this meeting to Order at 10:00 A.M. on Tuesday, September 20, 1988 in Conference Room #1 (City Clerk's Office). PRESENT: Mayor Norman Abramowitz Vice Mayor Jack Stelzer Councilman Dr. H. Larry Bender Councilman Bruce Hoffman Councilman Henry Rohr ALSO PRESENT: John P. Kelly, City Manager Richard Doody, City Attorney Ken Burroughs, Finance Director Larry Perretti, Personnel Director Pauline Walaszek, Special Services Secretary The purpose of this meeting was discussion and possible action on the City's insurance requirements. SYNOPSIS OF ACTION: APPROVED renewal of policy with Florida League of Cities with a change in coverage: Option IV - $1,000,000.00 combined single limit with $10,000.00 Deductible. General Liability - $217,634.00 Automobile Liability - 102,999.00 Incentive Credit (3%) - 9,619.00 TOTAL PREMIUM $311,014.00 City Manager Kelly said the Insurance Program was an unresolved item in the Budget. He said Brad Clark, Representative from the Florida League of Cities, was asked to attend this meeting to discuss the services of the Florida League of Cities. He said Larry Perretti, Personnel Director, met with Mr. Clark and discussed some of the City Council's concerns. Larry Perretti, Personnel Director, said at the last Workshop meeting, reports were submitted to the City Council regarding Florida League of Cities' costs and policies available to the City. He said the reports dated back to August 15, 1988 and a summary dated September 1, 1988 was also submitted. Mr. Perretti said the City Council had concerns regarding the type of coverage available by the Florida League of Cites for the City's liability insurance. He said he recommended the City obtain Option IV of the summary which provided $1,000,000.00 combined single limit with a $10,000.00 deductible at a premium of $311,014.00. Page 1 9/20/88 Mr. Perretti said this premium was approximately $150,000.00 less than last year's premium for a $1,500,000.00 coverage with no deductible. He said the recommended coverage included Comprehensive General Liability, Comprehensive Automobile Liability and Automobile and Physical Damage. Mr. Perretti said the City Council requested further information regarding the coverage; therefore, Brad Clark was asked to attend this meeting to answer those concerns. He said this matter had to be decided so it could be implemented on October 1, 1988 and placed in the Budget. C/M Hoffman asked if the Florida League of Cities would cover the City if there was a claim for $99,000.00 at a $100,000.00 coverage. Brad Clark, Representative from the Florida League of Cities, said the League presently had approximately 8 members of the Self -Insured Retention Program and would be supplying Tamarac with excess insurance above the State Statute. He said the City would be responsible for all claims below $100,000.00 plus defense costs and attorney fees. He said the League would handle the right to assign an attorney to the serious cases; however, the City would be responsible for the claims payment. Mr. Clark said the Self -Insured Retention Insurance was $100,000.00 per person and $200,000.00 per occurrence; however, there may be a situation where the City could assume more than $100,000.00. He said the contract was worded that the Florida League of Cities would pay a proportionate amount of the defense cost which proportion would depend on the amount the League would pay on the award. Mayor Abramowitz asked if the City would be responsible for all costs under $10,000.00 if Option IV was selected. Mr. Clark replied, no. Mr. Clark said the Self -Insured Retention made the City responsible for claims; however, a deductible coverage would provide the City with the League's services such as claims handling, Attorneys and defense costs. He said the City would only be responsible for the first $10,000.00 in costs. Mayor Abramowitz said he was uncomfortable with legal fees and other costs involved with litigation. He said he realized that taking Option IV was a tremendous savings; however, after figuring the expense of claims, he found that this Option may not be such a savings. He asked Mr. Clark what he found the experience to be on this type of policy. Mr. Clark said the Florida League of Cities did not have many members who were self -insured and the Cities there were are fairly large and could assume the savings. He said there was always a risk that Tamarac may not save on the Self -Insurance Program especially when all of the costs are being paid by the City. He said there are more and more cases going to the Federal Courts and there were no laws protecting the Cities on Federal Cases. Page 2 1 9/20/88 1 n Mayor Abramowitz asked if the Florida League of Cities protected the Cities on Federal Cases and Mr. Clark replied, yes, providing the Cities had their deductible paid. Mr. Clark said a deductible seemed to be more feasible in protection rather than costs because the defense costs are in addition to the limits of liability. Mayor Abramowitz said the City Council had concerns with the coverage being reduced by $500,000.00 causing the calculated risk to increase. He said he was not comfortable with the risk being increased. C/M Rohr said the City may be in a better position taking Option IV rather than becoming Self -Insured. C/M Hoffman said the difference in premiums was $200,000.00 which was a substantial amount. He asked what cases were being brought to the Federal Courts. Mr. Clark said when dealing with Public Officials there were emissions and Police Professional Liability and the civil rights were invalid. He said improper terminations were a big concern because the cases are being claimed as discrimination cases. V/M Stelzer said for years, the City has had insurance matters taken care of by the Risk Manager or Insurance Personnel. He said this was the first year the City Council had to make insurance decisions because of the elimination of the Risk Manager position. He said the City had an Insurance Advisory Board and Insurance Personnel; therefore, they should not be making the decision as to the Insurance coverage. V/M Stelzer said he was not in favor of the City Council making these types of decisions. He said the City Council should authorize the appropriate City officials to make these decisions with a limitation of funds rather than taking the responsibility of determining the coverage. Joseph Schreiber, Insurance Advisory Board member, said the City Council did not have enough time to explore other avenues of coverage such as Self -Insurance because a policy was needed by October 1, 1988. He said the majority of the claims presented may not even go to trial; therefore, the City could set up a procedure in-house to handle the claims based on their experience, which could result in a cost savings for the City. Mr. Schreiber said every year, the insurance premiums increase and the Florida League of Cities informed the City that, based on their past experience, there would be a 31% modification. He said he would like Mr. Clark to explain how this percentage was arrived at when it increases the rates and causes the premiums to increase. Mr. Schreiber said he was sure that the Florida League of Cities did not pay out as much as they received from the policy holders. He said he did not feel that the experience factor of the City was as bad as it was being reported; therefore, the City Council should be aware that there are other avenues available and should be explored. He said the General and Automobile Insurance were the only policies of concern at this time. Page 3 9/20/88 Mayor Abramowitz said Mr. Schreiber's remarks were sensible; however, in his conversations with the Mayors in the surrounding Cities, there were two Cities facing very large cases in the Federal Courts. He said he would be comfortable with using a deductible providing it would cover Federal Cases. Mr. Clark said the coverage would include Police Professional, Public Official and Emergency Medical Treatment cases. C/M Rohr asked Mr. Clark to respond to Mr. Schreiber's comments. Mr. Clark said the premiums under General Liability were not just for Public Liability such as trips and falls. He said the coverage included errors and omissions, Public Officials and Emergency Medical Treatment Liability. He said the Florida League of Cities was not like regular insurance companies. He said the League was a Self -Insurance Pool and was the largest in the United States with this type of program. Mr. Clark said the League pooled the premiums and paid losses out of a loss fund. He said the League used Insurance Service Office rating formulas to determine the experience modification. He said a debt modification did not occur when the losses exceeded the amount paid in. He said the League based their rates on the experience of the contractors previous 3 years premiums versus the losses. Mr. Clark said for the 1988/89 premiums, the City's 1984, 1985 and 1986 years were reviewed for experience and was being used to determine the rate structure. He said the City's 1984 year was not very good; however, the 1985 and 1986 years were moderate. He said the City exceeded their loss ration during these years which was why the experience modification was high. He said next year, the 1984 experience would be eliminated and the 1987 year would be reviewed with the years 1985 and 1986. He said the 1987 year was very good. C/M Rohr said the experience modification may decrease next year; however, the Florida League of Cities may increase their rates. Mr. Clark said the League did not increase their premiums this year; however, the increase in the City's premiums were due to the General and Automobile Liability. C/M Rohr asked if Mr. Clark could determine next year's decrease at this time. Mr. Clark said this was difficult to determine because the determination of General Liability was based on audited exposures of the total operating costs less the independent contractors exposure and Police expenditures. He said the costs would be increasing year to year because of the exposures increasing. He said the Police Professional Liability was based on the number of Police Officers and this year, Tamarac increased number of Police Officers. He said if the Police vehicles increased, the premiums would increase as well. He said all of these things have to be considered when the rate structure is determined. He said the City's premiums were based on experience exposure and on increase and exposure, 1 1 1 Page 4 .. 9/20/88 1 C/M Rohr asked why there was a large savings in premiums by becoming Self -Insured and Mr. Clark said the bulk of premiums when a policy was rated was in the contractors primary limits. He said the City's primary limits would be $100,000.00 to $200,000.00 and the majority of the cases would be within this limit. He said the premium of $108,041.00 was the Florida Leagues of Cities excess charge. Mr. Clark said there would be a savings; however, he would not advise the City to become self -insured without having their own claims adjuster and defense. He said because of these needs, the savings would not be as good as it seems. Mayor Abramowitz said the City may be facing a sexual harassment matter and he was very concerned with the City's liability. City Attorney Doody said last year, the City had a case where an employee in the Fire Department was fired and the case became a discrimination case; however, the matter was resolved because the City was found as non- discriminatory. He said these types of cases are appearing before the Federal Courts every day. C/M Hoffman asked if the Florida League of Cities handled Health Insurance and Larry Perretti the Florida League of Cities did not submit a bid for Health Insurance. Mayor Abramowitz asked if the Florida League of Cities did not bid because they were not interested and Mr. Clark said there was a time restraint on the bids and the League could not submit an appropriate bid before the bid opening. Mr. Clark said next year, the League would be submitting their bid. * C/M Hoffman MOVED to APPROVE Option IV for $1,000,000.00 * combined single limit with a $10,000.00 deductible, SECONDED * by C/M Bender. V/M Stelzer asked if this Option was recommended by the Risk Manager and C/M Hoffman said the recommendation was given by the Personnel Director who, hopefully, reviewed all factors before recommending it. C/M Rohr asked if the Florida League of Cities provided Risk Management services and Mr. Clark said the League would not operate the City's Risk Management responsibilities; however, the League would assist the City in their loss control through the League's Safety Management Department. Mr. Clark said he would be willing to meet with the City quarterly and review the City's losses, reserves, expected experience, etc. Mayor Abramowitz asked if the City would be charged for this service and Mr. Clark replied, no. Mayor Abramowitz said he was informed that the City never utilized the services provided by the Florida League of Cities. City Manager Kelly said the League has been providing Loss Control advice. Page 5 9/20/88 C/M Bender asked if the recommendation was given after consulting with the Risk Manager and Mr. Perretti replied not with the present Risk Manager; however, he researched the polices through the Florida League of Cities and his colleagues in the surrounding Cities. He said providing there were no increases in the Police Personnel and Vehicles and, on the City's experience for the year's 1985, 1986 and 1987, he recommended Option IV. VOTE: ----------------------------------------------------------------- ALL VOTED AYE At 11:40 A.M., V/M Stelzer WITHDREW from the meeting. Mayor Abramowitz asked if Mr. Perretti was aware what Policies the Florida League of Cities offered for Health Insurance and, if so, were the Policies better than what the City previously had. Mr. Perretti said he was not aware of the League's Policies because, before a quote could be submitted, the League would have to have the City's Actuarial reports, review the City's experience and the single coverage versus the dependent coverage. He said the League handled the City's Health Insurance in the past; however, he was not aware of why it was discontinued. - Mr. Ferretti said if the employees were not satisfied with this year's coverage, he would see that the bidding for next year occurred in enough time for the Florida League of Cities to submit their bid. Mayor Abramowitz asked when the Heath Insurance Polices needed to be renewed and Mr. Perretti replied, September 30. Ken Burroughs, Finance Director, said the Self -Insured program would continue until it was abolished. Mr. Perretti said there were Union negotiations taking place at this time and the Fraternal Order of Police and the International Association of Fire Fighters wanted to keep the Self -Insured Health Insurance; however, the FPE wanted to give their employees an option. C/M Hoffman asked if the City could change to another policy within the year if another option became available and Mr. Perretti said if this was done all of contracts presently in effect would be jeopardized. He said because of the Union Contracts, negotiations would have to take place if the contracts were to be changed. Mr. Perretti said most carriers would only quote the City on a year to year base. He said most Carriers did not want the Cities access insurance without 200 or more people. He said the City would also need to hire a third party administrator. Mayor Abramowitz said he would not like to see the City rushing to obtain insurance in the future as they are having to presently do. He asked Mr. Clark if the Leagues Health Insurance Policies were like the Policies previously approved. Page 6 1 Mr. Clark said the Florida League of Cities had Indemnity Agreement Plans. He said the members were self -insured as a total and the League would offer a set deductible and co-insurance. Mayor Abramowitz asked how the League's rates compared to the Insurance Industry's rates and Mr. Clark said the League's rates were even and possibly lower than the Industry's rates at this time. He said the League was in a competitive market at this time. Mr. Perretti said last year, there were highly named companies that indicated they were not interested in the City's Insurance business and this was why the HMO companies were getting most of the business. Mr. Clark said the Florida League of Cities was very interested in the City's business and would be submitting their bid next year. He said this year they did not submit a bid because there was not enough time. With no further business, Mayor Abramowitz ADJOURNED this meeting at 11:05 A.M. WfARMAN ABRAMOWITZ, MAYOR CAROL A. EVANS, CITY CLERK This public document was promulgated at a cost of $65.70 or $1.83 per copy to inform the general public, public officers and employees of recent opinions and considerations of the City Council of the City of Tamarac." CITY C:-+' TAMARAC APPRQVED AT P,IETING OF /�' J City Clerk Page 7