HomeMy WebLinkAbout1988-09-20 - City Commission Special Meeting Minutes7525 NORTHWEST 88TH AVENUE & TAMARAC, FLORIDA 33321-2401
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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
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TOTAL PREMIUM $311.014
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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
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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.
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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.
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9/20/88
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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.
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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,
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9/20/88
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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