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liability premiums than if the city achieves the same dollar savings by canceling or deferring a construction project,. 3. Reductions in operating expenditures, for pools and beaches, community centers and arenas, go courses, or municipal liquor stores will also have only a minor effect on premiums. These expos are rated on other bases. Expenditum cuts in these areas would have the same relatively ma.aor effect on premiums that cuts in capital expenditures would. Here's how LMCIT will handle liability premium rating in light of anticipated city budget cuts for 2003 and 2004 ffyour city's coverage has already renewed in 2003 and you are significantly reducing city expenditures in 2003 Start with your hest estimate for ghat your actual city expenditures will be for calendar 2003. Compare that with the figures that were used to calculate the city's premiums for the current coverage period. (In some cases, that may have been the city's actual expenditures for 2002; in other cases, it will be the city's original budgeted expenditures for 2003.) If the 2003 expenditures will be significantly less than that, contact your DI GIT underwriter. You'll need to provide specific information on the natum and amounts of the cuts; i.e., which specific services and expenditures the city is eliminating in 2003. We'I1 recalculate the premium for the current coverage penod, using the revised 2003 expenditure figures. We would cation that if the budget cuts the city is rnaling in 2003 are relatively minor, the effect on premiums will be very small as well. As a guideline, it generally won't be worthwhile to go through the re- rating press unless you've made reductions of 10% or more in your 2003 operating budget, or cuts in capital expenditures equal to 40% or more of your 2003 budgeted total expenditures including both capital and operating costs. • If your renewal comes up in the next several months Pmvide your best estimate of what the city's expenditures will be for calendar 2003, and we'll use those figures to calculate the city's premiums. If those figures are signifcantly less than previous years, please also provide specific information on which services and expenditures were reduced and by haw much. 9 For renewals late in 2003 This will affect only a small number of cities whose renewal dates are in the last couple months or so of 2003. If your city formahy adopted a budget for 2004 by the time of your renewal, we'll use those 2004 budgeted expenditures to develop the renewal rates. If the 2004 budget hasn't yet been formally adopted, the esthwted 2003 expenditu=s will be used.