Loading...
HomeMy WebLinkAboutCCP 02-16-1999 . . . '=~:'1'ltl"F"~; "''''i;~''(~~~,,,.-~'!'i''~'~f~~il~~'~~''''''''rijj.~"J1~'';~~'if~t,~~,,."..."'f!!!~""",~ . .. Ii" CITY OF ARDEN HILLS 4384 WEST ROUND LAKE ROAD ARDEN HILLS. MN 55112.5794 AGENDA CITY COUNCIL WORKSESSION CITY HALL TUESDAY, FEBRUARY 16, 1999, 4:45 P.M. ***NOTE CHANGE OF DA TE*** 4:45 P.M. 1. Call to Order 4:45 P.M. 2. Discussion Items a. Marketing Brochure b. Turnback of Lake Johanna Boulevard c. Liability Insurance Deductible Limits d. Year 2000 7:15 P.M. 3. Miscellaneous Items 7:30P.M. 4. Adjourn The above times may vary depending upon length of issue discussion. PHONE: (612) 633-5676 · FAX (612) 633-7839 . . . CITY OF ARDEN HILLS MEMORANDUM DATE: February 12, 1999 TO: Mayor and City Council Brian Fritsinger, City Administrato~ FROM: SUBJECT: Administrator Comments for the February 16, 1999 Council Worksession 1. Marketing Brochure Staff may have information related to the Marketing Brochure available for City Council review. Staff is still awaiting additional information from the Economic Development Committee before the brochure can be presented to the City Council. 2. Ramsey County Turnbacks The City has been contacted by Ramsey County regarding the turnback of Lake Johanna Boulevard. Staff would like to discuss options related to this turnback. 3. Liability Insurance Cost As briefly mentioned at the last City Council meeting, staffhas been investigating other options related to the cost of the liability insurance carried by the City. Staffhas investigated several options and would like to discuss these with the City Council. 4. Y2K Staffhas completed its preliminary investigation into the various city equipment and services which may be affected by Y2k and would like to provide the Council with a brief update on the status of this issue. J \. ~ . . e CITY OF ARDEN HILLS MEMORANDUM DATE: February 12, 1999 TO: Brian Fritsinger, City Administrator FROM: Dwayne Stafford, Public Works Director ~ Ramsey County Turnback Program SUBJECT: Backl!round Several years ago as part of their Transportation Improvement Program(TIP), Ramsey County Public Works had identified Lake Johanna Boulevard from County Road D to County Road E for turning back to the City of Arden Hills jurisdiction. The City has been reluctant to accept this turnback due to potentially high costs to the City for needed upgrades plus the high traffic counts and the roads natural connection to other County roads. This turnback is identified in the 1999 to 2001 TIP to take place this year. Alternate County ProDosal City staff has been contacted by the Ramsey County Highway, Senior Engineer, Mr. Tim Mayasich, who has offered the City an alternative proposal. Mr. Mayasich has asked if the City would be willing to accept New Brighton Road, between County Road D and County Road E, this year and the remaining segment of New Brighton Road from County Road E to County Road E2 after the County rebni1ds the railroad bridge near Perry Park. As part of the proposal the County would participate in funding City desired improvements, based on the condition of the existing roadway and the improvements the City recommends. Considerations While deciding on this issue, the following are some issues for consideration; . The alternative proposal appears to be approximately 1.7 miles in length including both segments of New Brighton Road . The original proposal of Lake Johanna Boulevard from County Road D to County Road E is approximately .8 miles. . Lake Johanna Boulevard would be much more costly to reconstruct per mile due to the topography, possible increased right-of-way needs, and possible assessment concerns where property owners have land on both sides of the road yet no room for any development on the lake side of the road. . Approximately .5 miles of New Brighton Road serves as a common boundary between the cities of Arden Hills and New Brighton. . Approximately .5 miles of New Brighton Road borders Perry Park and Ramsey County Open Spaces which would be unassessable. Rmsy Cnty Trnbk Page 2 February 12,1999 . To date the City has taken jurisdiction of2.7 miles of roadway from the county and has given back to the County only I.S miles of roadway. Recommendation The Public Works Director recommends the City Council consider this option at their February 16'" Council W orksession. If Council seems interested in the alternative proposal, staff will pursue accurate cost participation amounts from the County to bring New Brighton Road up to City Standards as well as cost comparisons to bringing Lake Johanna Boulevard up to City Standards. ~ I . e e e '. e e - - ~'''\1 \ \lIllE'~ rWIN CITI S o DNANCE ! PLANT I ~ II~'-'O~II) ~ ~~ I~\ '" ~~ -, l i .....-.. \~- ! f, ~_., )] '=. ,~~ ~ ~0 (~fm '(\i) ~ \\ (I 'JIIl~ V' )./t. --r ~ '. ..llliIi' # \'\ =:= I \ t .~ II ~ I' \ I 1iiiJ~ -\ \ -... g~ \ \ ~ fi--t=T~~[ . t@~~'; :V~~ ~I:' . 1~3~ " \- .L- _~ I I' .... "'t~ ~ ' .J.b~~ / \ $~/.....l i.. ~ ",'" ~ ~ ---- d -+~ ..'tot- ....t .." " d t:./ J 1\ ,,~- . I "I / - .~>~ 1-- - l:u"'l>Ieo 1>""" ~ '\"a. R~M~E.,,( CblJN'i''1 ........ "to OA:rE. ~ I ~ \.\~"L\~t. /1.."". COo.llN"C't ~o ~ '~-~DMT '11111 ~.... '-"-'-'c ,I:: .~~~.. :1- .... II b U;m.,. -. 1')11I1 ..IID" r~_ mil . w._ lJlI~t 1111 "-.1'1 :Jt"DS . So.. il.' ..- ".' .' _1~\\:....: 5l~ '-,) I ~~![==== ~ ,. , ~Lb]' -1,r~ ,,:\(1- i )\~~~ '~t~ '~ ',>---/7) L [ ~~,'\, ~"~... " ~ I "" ' T"R... "''''"'' - """'- !~\ -" "Td AR..... W,u.s: ~\I ~\ '- ~ / ""- - LA~.V"LEl\IT..& Ro. .", II -~ \ - _,""", '--", S....w.Avo. ~"...c. "r!) ~Ir- f/!,o~s:~c.u:.i!G At/'f.. ...",,0[ \\ I/" II ./ ~\l'''''''. ""'E. '--'>. ~ ~ \ lL ,_ T L Iwr........ (lO. ~~ v.::::: 1;;[/ ~ 1\-1' '- / L l22 all l@I!IIIIIII: :r ~ / ,; ~WI[7 I ;7[! /j ~ V "'" -'-' - ~\~- '\ -- ~ .';'F ~ .; .I'll ~ III -r:r !;::,J' if . ~ I r/"'.." ~ L . .. \. ~ - . -- - i ~'l ~","i. I',lIt 1511L:c-L JQ$f." T :I:I'll1\' ~ . Ei:- CITY OF ARDEN HILLS ...., , ~ ~~~ ! rWIN CITI S 0 DNANCE PLANT I A / ~~ 'iiii"'dfDl... ". III A).. \ r~, '\: u:... 1.1 ....... ..~.. .... :J ~~:~.K . ". ~. " ,.' ;0... "'",. :~ I'ir:~ M1")""-~ ~ J[ ~ ~ ~~~~ f11jl21ti\\, !~~ ,-===, i V) " .)~~ \ - -~ ~ .iJt;.IJj 00nA 1 [tD~1 ~~,~ T3dJ~=--l p \ '\ == ~~~I)~" ~~'t..." \11 ~~7il ~AM$e~Cou,,~ I \" tii\ "'~, '\ >:~ L f>.L..EU'.....1!. \-.>0.",1),,,... . '7 I ~I ~~... ' PR<.9....A'-' i \ I .....13E1~L """'- \)\~ -' ..... ~...l'>II."''''''''\(''' : . Ii! l..EIt::m:1 c:cumE: 11"\ -/. J Q.ll'tWeetJ \ \ 'lfgilmffi ",..,., \\ k=~( ) / ~-...-/' CO.>'NI<oO .u.!;.'l. "- V ffiflmI "., \\ f A =T"l( :lo.. U !(.....I---- tb~ '~=: '-/."'- ~~~l." ~ 1m Li-, ~\oa -. iBJ ;1~..-? \ . ->:?' - '\ ~t: ~ C, ~;/T 'ClfmI~ ~ '; ~~" : 1:3l'~~ -E5= I I)) ;: RlIIS<< c-1>l I \ ":;.;....1 ~ ~ / W f( ..<<"",......... "\uQ",-.,. L .,/~<<<<< ~.I:~6v:g:-: .,' - ~ 'M'~ ~ ~ /:, I ~'igj III r-L I !I! p~ /f.:.=o. ~\..7 L, i ~) Eib/( , .,.::' \.~.. OIL 'L_ ~ ~O,,~.~I ,~_J ~'7 ~ CITY OF ARDEN HILLS il . " ~ J S1tJW[A'lt ~"D' ! ; , ~ , -- b... ...d b.....d l '1/--- , ... ~ --' ..... , . , .' e e . CITY OF ARDEN HILLS MEMORANDUM DATE: February 12, 1999 TO: Brian Fritsinger, City Administrator Terrance Post, City Accountant ~ City Liability Insurance Premium Options FROM: SUBJECT: The City's insurance broker, T.C. Field & Company, has provided several pricing options for 1999 liability insurance coverage. Among the options are higher deductibles and higher excess liability coverages with and without waivers. For 1998, the City opted for $1,000 deductible coverage and a $1,000,000 excess liability coverage without waiver. Before evaluating the merits of these pricing options, some other factors should be discussed, including Insurance Deductible Fund No. 230, League of Minnesota Insurance Trust (LMCIT) dividends, and risk management philosophy. Insurance Deductible Fund No. 220 This special revenue frmd was created in 1996. Its purpose was to capture LMCIT dividends, frmd claim costs (instead of the department budgetary responsibility of where incurred), and to provide a vehicle to consider other deductible options or risk management philosophies. The Fund had a balance of$56,971 on January I, 1998, and an estimated balance of $89,240 on December 31,1998. The creation of Fund No. 230 marked a change in accounting practice. Prior to 1996, LMCIT dividends were recorded proportionately as miscellaneous revenue to the General Fund, Water Utility, and Sanitary Sewer Utility (on the basis of where the original premium cost was expended). This revenue source was approximately $9,000 per year to these frmds in 1994 and 1995. I ,MelT Dividends The group experience of this municipal pool has generally been very positive, with the City always participating in some level of dividend. The dividends paid to the City of Arden Hills have approximated forty-five percent of premium cost while the group average has been approximately thirty-three percent. This higher City payout percentage is attributable to our lower-than-average claims history. In 1998, LMCIT dividends totaled $32,862. Risk Management Philosophies There appears to be three distinct directions the City could go with respect to risk management: 1. Continue on the historical path of having low deductibles (i.e. $1,000) and go back to the policy of directing LMCIT dividend refrmds back as revenue to the Funds that incurred the premium expenditure. 2. Begin to utilize the current Fund No. 230 Insurance Deductible frmd balance by leveraging it against higher deductible options (e.g. $5,000 - $25,000) and the lower associated premium costs. '" . 3. Make a conscious effort to build the fund balance of Fund No. 230 to such a degree that it becomes economically viable to self-insure. . . Pricine Options Evaluation Agent Mark Lenz ofT.C. Field has provided the City with four (4) price options for increasing the deductible from $1,000 to $5,000; $10,000; $15,000; or $25,000 (Exhibit A). He has highlighted approximate premium savings of each option but has not considered the associated loss of expected LMCIT dividends. The following table attempts to identifY the net costs to the City ofa two-occurrence loss of $50,000 and a two-occurrence loss of $3,000 in 1999 with the various options: $50,000 Losses Option A (1,000) Option B (5,000) Option C (10,000) Option D (15,000) Option E (25,000) $3,000 Losses Option A Option B Option C Option D Option E Premium Rednction Dividend Rednction City Claim Net Impact to Exposure #230 Fund Balance <1,000> <1,000> <5,000> <2,030> <20,000> <15,435> <30,000) <23,818> <50,000> <39,550> City Claim Net Impact to . Exposure #230 Fund Balance <1,000> <1,000> <3,000> <30> <3,000> 1,565 <3,000> 3,182 <3,000> 7,450 Based purely on an interpretation of the risk/reward outcomes of these two cases, and not on endorsement of any of the three risk management philosophies, it does not appear that a strategy of increasing deductible levels has a commensurately higher reward level associated with it. 5,400 <2,430> 8,300 <3,735> 11,240 <5,058> 19,000 <8,550> Premium Dividend Reduction Reduction 5,400 8,300 11,240 19,000 <2,430> <3,735> <5,058> <8,550> With regards to the options of increasing the excess liability with and without waiver, this decision hinges on Council's comfort level of relying on the statutory levels and the likelihood of a suit advancing to Federal Court. Recommendation It is hoped that this memorandum has framed some basic issues concerning the City's insurance _ coverage such that it will facilitate discussion at the February 16, 1999, Council Work Session. ., Enclosure ,. . ", f. 'j.\ib ,f A. " . C~" 000 ~~.tt~b~ f\. OPTIONS: , ili ~ ~ To amend the above deductible from $1,000 to $5,000 the annual premium savings would be approximately $5,400. L. To amend the above deductible from $1,000 to 10,000/20,000/1,000 the annual premium savings would be approximately $8,300. l'\ To amend the above deductible from $1,000 to 15,000/30,000/1,000 V ~ the annual premium savings would be approximately $11,240. ~..... To amend the above deductible from $1,000 to $25,000/100,000/1 ,000 V' the annual premium savings would be approximately $19,000. e $1,000,000 Excess Liability with Waiver: Annual Premium $10,518.00 $3,000,000 Excess Liability without Waiver: Annual Premium $15,283.00 $3,000,000 Excess Liability with Waiver: Annual Premium $18,407.00 $5,000,000 Excess Liability without Waiver: Annual Premium $16,920.00 $5,000,000 Excess Liability with Waiver: Annual Premium $20,379.00 .