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11-30-1978 - Workshop ( ;.;. Q o '!#~"'~"'p~- "... #BJ .. z,"~:- f,,(. J'-j;.t..~"..... ~""" ". '"~ f' "", .,. ,f I}~~ .~ E A~r t I ~t. CITY OF EDGEWATER CITY COUNCIL WORKSHOP November 30, 1978 Mayor Christy called the Council Workshop to order at 7:00 P.M. in City Hali. ROLL CALL Mayor Robert H. Christy Councilman Louis J. Rotundo Councilman David C. Ledbetter Councilman Walter B. Sikes Councilman Neil J. Asting City Attorney Judson Woods City Clerk John Wharton Police Chief Earl Baugh Present Present Present Present Present Present Present Present Mayor Christy introduced Mr. Partridge from the Florida Municipal Self-Insurer's Fund. Mr. Partridge said that he was employed by Risk Management, Inc. which is under contract to the Board of Trustees for the Florida Municipal Self-Insurer's Fund. They provide the services such as safety engineering, claims handling and sales. Mr. Partridge explained the program to the Council members and answered their questions concerning the pooling liability pursuant to the terms of the Florida workmen's compo The Council was concerned about whether or not we had to share another cities losses. Mr. Partridge explained that the purpose of the pool is that all the cities join together to have the safety of large numbers. A small city that might try to become individually self-insured could be bankrupted by one large claim. When you are in the pool, if there is a large loss, the pool would pay for it. Your premium dollar paid in would pay for the losses of the cities There are different factors determining the rate. The rates for various jobs are all set by the State. Each city has an individual experience factor which is derived from your insurance losses for the past two or threp. years. The City continues to retain that based on your losses so that the only thing that is shared would be the pool monies paid in and at the distribution at the end of the year, cities with a better loss record would receive more money than cities that had a high loss rate. This year the company has 3,200,000. paid in October 1, 1978. 70% goes to pay losses, 30% goes to expenses. So we have approx. 2.1 million would be for losses. There is also reinsurance to protect the loss fund so that individual members would not have to pay in the event of a catastrophic loss. You have specific and aggragate reinsurance. Specific is per loss so that any loss that goes over 100,000 dollars you have a million dollars specific excess insurance. In the event that there were a number of large losses for example over 50 peOple killed, the maximum under Florida law is $50,000. so you are talking about potentially 2.5 million dollar loss. The City Attorney said that the statute providing the limit of liability on municipalities has not been tested yet. Mr. Partridge said he was referring to workmen's compensation death benefits. The maximum would be that 2.5 million and in the case of that fund, the fund paid the first hundred thousand and the reinsurance paid the remainder of the loss. You have a double buffer against catastrophic losses. This is a very safe, prudent program. We have fifteen other funds operating with the same reinsurance and only one fund in twelve years ever got into the aggragate reinsurance. You could be assessed only for your cities individual liabilities in the event we ever went through all the reinsurance and the premium dollars. The premium dollars put in are drawing interest and that interest is plowed back into the fund. A ~~ o o Councilman Sikes spoke about the thirty day notice to pull us out of the plan. Mr. Partridge said that the Board of Trustees decide that. Councilman Sikes said that an independent carrier might raise your premium but if you are paid for the year they cannot discontinue service. Mr. Partridge said that a domestic carrier looks at the city at the end of the year to see if they have lost money for their business. They will either cancel or put the city in an assigned risk if their business has lost money on the policy with the City. The Self- insurer1s program is made up by the cities for the cities and the Trustees would investigate the cause of the problems that a city might be having that was costing money and their safety engineers would recheck and also work with the city to find out what the problems are and how they could be corrected. The Council discussed the experience modification. care of in the same manner as a domestic carrier. discussed the annual audit and the necessity for records. This is taken The Council also accurate payroll The City Attorney said that he felt this would be a good plan for the City and he was favorably impressed with this type of insurance program. Mr. Partridge said that he would send the Council the cost figures, based on our payroll. The Council will make their decision after they have received this quote. It was the consensus of opinion that this program would be the most suitable for the City and possibly the most advantageous. Mayor Christy thanked Mr. Partridge for appearing before the Council. Councilman Sikes made a motion to adjourn the workshop. Councilman Ledbetter seconded the motion. The workshop was adjourned. 2