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Home My WebLink About2008 05-12 500 CMW AMENDED AGENDA COUNCIL-MANAGER WORKSHOP Monday, May 12, 2008 Council Chambers, City Hall 5:00 p.m. A. Call to Order B. Roll Call C. Approval of agenda D. New Business E. Old Business 1. Discussion with Arthur J. Gallagher Co. Regarding City Insurance Coverage with LMCIT. 2. Review of Tax Increment Financing (TIF) Housing Districts ? Paul Steinman - Springsted F. Adjournment Ý·¬§ ±º Ó¿°´»©±±¼ ïèíð Ý±«²¬§ Î±¿¼ Þ Û¿¬ Ó¿°´»©±±¼ô ÓÒ ëëïðçóîéçé Í«³³¿®§ ±º ×²«®¿²½» ðéñðïñîððé ¬± ðéñðïñîððè Ì±²§ Þ»½µ»®ô Ý×Ý Í»²·±® ß®»¿ Ê·½» Ð®»·¼»²¬ ïïðïð Ð®¿·®·» Ô¿µ» Ü®·ª»ô Í«·¬» íëð Û¼»² Ð®¿·®·»ô ÓÒ ëëíìì Ð¸±²» çëîóçïèóíçêë Ûó³¿·´ ©©©ò¿¶¹ò½±³ Our company and our people embrace sincere values and are passionate about customer service. Arthur J. Gallagher Risk Management Services, Inc. is an international insurance brokerage and risk management services firm. Our parent company, Arthur J. Gallagher & Co. is a FORTUNE 1000 , company, traded on the New York Stock Exchange under the symbol AJG and ranked by Business Insurance magazine as the world's fourth largest insurance broker. Gallagher was named one of Forbes magazine'sPlatinum 400 Best Big Companies in America in 2004 and again in 2005. Arthur J. Gallagher Risk Management Services, Inc. plans, designs, and administers a full array of customized, cost-effective property/casualty insurance and risk management programs. The company also furnishes a broad range of risk management services - including claims and information management, risk control consulting and appraisals - to help corporations and institutions reduce their cost of risk. In addition, the company assists clients in all areas of their employee health/welfare and retirement plans, including plan design, funding and administration. Our corporate office is in Itasca, Illinois; we operate in eight countries and do business in more than 100 countries around the world through a network of correspondent brokers and consultants. Working with Gallagher affords advantages not found with other brokers; advantages such as financial strength and industry leadership. We have decades of consistent revenue and pre-tax growth and more tangible net worth than our three closest competitors?combined. This means we can invest in the top talent in the industry, create specialized products, lead advances in technology and, it means that we?ll be here tomorrow. Gallagher has a client-focused culture; we?re committed to doing what?s best for our clients. The values we represent are clearly articulated in ?The Gallagher Way,? a 20-year-old document that stresses our commitment to clients, client service, teamwork and leadership. The Gallagher values are so deeply ingrained in the company, that even now, with more than 8,300 employees generating over $1.5 billion in revenue, Gallagher feels a lot like a family business. We adhere to the highest standards of moral and ethical behavior. We spend considerable time and energy conveying to our employees that we must do the right thing for our clients, even if it means less profit for Gallagher. Arthur J. Gallagher brings fresh enthusiasm and proven local and national expertise and commitment to our clients. Our company and our people embrace sincere values and are passionate about customer service. To learn more about our expertise and resources, visit our website: or call 1-800- 373-2457. 11010 Prairie Lakes Drive, Suite 350 Nationally ? 1927 Eden Prairie, MN 55344-3884Minnesota Office ? 1963 952-944-888539 (Property Casualty) 800-373-2457 Claims ? In-house staff Loss Control ? In-house staff 952-944-9795 www.ajg.com Arthur J. Gallagher & Co., Inc. Two Pierce Place Itasca, IL 60143 P 630.773.3800 F 630.285.4000 78 years of success Employees ? 7,500+ across the U.S., 8,300 worldwide Global broker rdth 3 largest U.S. Insurance Broker, 4 largest in the world 250+ Sales and Service Offices Publicly held ? Traded on N.Y. Stock Exchange under symbol AJG 2004 Revenues -- $1.5 billion Leading provider of integrated risk management services 3 Service Team Tony Becker, CIC Ann Stanton Mary Wells Senior Area Vice President Account Manager Director of Risk Management Telephone: (952) 918-3965 Telephone: (952) 918-3961 Telephone # (952) 918-3995 Responsibilities Include:Responsibilities Include: Responsibilities Include: Coverage Questions Verifying/Clarifying Coverages Workers Compensation claim questions As Needed Consultation Servicing Available for Risk Management Renewal Presentation Binding Coverage consulting Changes/Endorsements 4 Our objective is to consistently provide superior service through thoughtful planning, efficient organization, effective use of technology and monitoring procedures. We are passionate about providing the highest levels of customer service. The day to day services make the difference between a good insurance program and a great insurance partnership. We strive to understand your business and always respond with a sense of urgency. We adhere to strict service standards and have outlined team expectations below. Confirmation of Coverage/Binders Within 24 hours of effective date Policy Delivery Within 30 days of receipt from carrier Within 10 days of request Endorsements/Coverage Amendments Certificates of Insurance Within 24 hours of request Auto I.D. Cards, etc. Within 24 hours of request Return Client Phone Calls Within 3 hours of receipt Respond to E-mails Within 3 hours or receipt Outstanding Item Lists Monthly Claims Audit/Review Monthly or Quarterly as requested Relationship Review Annual or bi-annual as requested On-Site Visit Request 1 to 3 business days (depending on request) 5 N-AJGC.PFD ONOOOL OR UNDISCLAIMER League of Minnesota Cities Insurance Trust The is not an insurance entity subject to financial rating by A.M. Best's & Co. The ratings by A.M. Best's & Co. are the basis upon which Arthur J. Gallagher & Co. evaluates the financial strength of insurers used by Arthur J. Gallagher & Co. clients. Accordingly, we are League of Minnesota Cities not able to offer any advice to you regarding the financial strength of Insurance Trust . In addition, we have not undertaken, to date, any efforts to obtain any particular amount of financial information for this entity and are not able to monitor its future financial affairs. We, of course, League of will advise you should we become aware of any significant financial information concerning Minnesota Cities Insurance Trust . However, you should make your own financial evaluation of this entity and take your own measures to track its future financial status. In addition, because entities such as these may not be subject to the same degree to state regulations as traditional insurers, and because these entities are not subject to any guaranty fund protection in the event of insolvency, you should fully consider your League of Minnesota Cities Insurance Trust exposure to loss in the event becomes unable to meet its claims or other financial obligations. Your signature below acknowledges that you understand this disclosure and authorize placement of the League of Minnesota Cities Insurance Trust. 6 The proposal is an outline of the coverages proposed by the insurers, based on the information provided by your company. It does not include all the terms, coverages, exclusions, limitations, or conditions of the actual contract language. The policies themselves must be read for those details. Policy forms for your reference will be made available upon request. In addition to the fees and/or commissions retained by Arthur J. Gallagher & Co., it is understood and agreed that other parties, such as excess and surplus lines brokers, wholesalers, reinsurance intermediaries, underwriting managers, and similar parties, some of which may be owned in whole or in part by Arthur J. Gallagher & Co.?s corporate parent, may earn and retain usual and customary commissions and/or fees in the course of providing insurance products. Any such fees and/or commissions will be the responsibility of client and not Arthur J. Gallagher & Co. The information contained in this proposal is based on the historical loss experience and exposures provided to Arthur J. Gallagher & Co. This proposal is not an actuarial study. Should you wish to have this proposal reviewed by an independent actuary, we will be pleased to provide you with a listing of actuaries for your use. Gallagher from time to time enters into arrangements with certain insurance carriers or those carriers? reinsurers providing for compensation, in addition to commissions, to be paid by such carriers or reinsurers to Gallagher or its affiliates based on, among other things, the volume of premium and/or underwriting profitability of the insurance coverages written through Gallagher by such carriers or reinsurers. In addition, Gallagher and its affiliates provide management and other services to, and receive compensation for those services from, certain reinsurers that reinsure insurance coverages written through Gallagher by other insurance carriers. The insurance coverages you purchase through Gallagher might be issued by an insurance carrier or reinsured by a reinsurer that has such a relationship with Gallagher or its affiliates. 7 MULTIPERIL POLICY LMCIT COVENANT COVERAGE ? Effective Date 07/01/2007 to 07/01/2008 DEDUCTIBLE ENDORSEMENT - ALL LINES LMCIT shall be liable to the "City or to Others on behalf of the City" only to the amount of damages in excess of the deductible amounts stated below: Each Occurrence - All Lines $50,000 Aggregate $200,000 If the Annual Aggregate of $200,000 is exceeded, then the following deductible applies: $1,000 Per Loss, Per Line Equipment Breakdown Deductible: $1,000 Damages include any legal defense costs. Damages do not include claim adjuster fees. Deductible applies to all LMCIT Package Policy coverages including: Property, Inland Marine, Municipal Liability (including Errors & Omissions), Auto Liability, Auto Physical Damage, Crime, and LMCIT Bonds. Retroactive Dates: Municipal Liability 07/01/87 Limited Pollution Liability Claim 07/01/89 Lead or Asbestos Claim 07/01/93 8 ExpiringRenewal Coverages PremiumPremium Property$27,818$31,944 Equipment Breakdown $6,737$7,031 Inland Marine $5,346$6,584 Employee Dishonesty IncludedIncluded Faithful Performance $1,197$1,192 CrimeIncludedIncluded Municipal Liability $95,402$107,926 Commercial Auto $30,001$35,275 Excess Liability ^$50,242^$59,252 PetrofundIncludedIncluded Compensation Agreement $8,500$9,350 Grand Total $175,226$199,302 Quote is not included in premium totals ? if you wish to bind please request in writing. ^ 9 Policy Period: 07/01/2007 to 07/01/2008 Carrier:The League of Minnesota Cities Insurance Trust Coverage:Property insurance covers your interest against direct physical loss or damage by covered causes of loss to named property that you own or are required to insure Perils:Special Form: All perils are covered except those specifically excluded such as flood, earthquake and utility interruption Schedule of Locations and Values: Per statement of values enclosed Total ALL Property covered under this policy (see $46,798,260 below): Limit (Building, Contents, Property in the Open): $42,920,507 Scheduled Equipment Over $25,000 $1,639,185 See Attached Schedule Unscheduled Equipment Under $25,000 $2,238,568 Deductible: $50,000 Each Occurrence $200,000 Annual Aggregate Valuation:ReplacementCost AgreedCost Covered Property Building/Contents per Schedule Property In The Open per Schedule Mobile Property Scheduled items more than Mobile Property Unscheduled items $25,000 or less $25,000 10 Property Not Covered: Aircraft, Animals (except police dogs) Automobiles (licensed) Money or Securities (except Crime Coverage) Bridges or Other Paved Surfaces (except golf course property) Illegal Contraband Cost of Excavations and Grading etc. Crops and Lawns (except golf course property) Pilings, Piers, Wharves or Docks Underground Buried Pipes, Flues or Drains Foundations of Buildings, etc. (if below the lowest floor surface) RetainingWalls (if not part of specified property) Electrical Transmission Lines Trees and Shrubs not within 100 ft. of a building Additional Loss or Damages: $5,000,000 Annual Aggregate Terrorism Activity Annual Aggregate Limit $1,000,000 Annual Aggregate For damages caused by chemical or biological contamination or by cyber-terrorism $250,000 Asbestos, Clean up, Abatement and Removal (See policy wording for available coverage) $5,000,000 Loss of Revenue, Extra Expense and Expediting Expense per location $50,000 Debris Removal per occurrence (Direct Physical Damage to Covered property 25% of the estimated replacement cost of covered property) (No Direct Physical Damage to Covered Property) $500,000 Leasehold Interest per location $250,000 Pollutant Cleanup and Removal per location $500,000 Errors per occurrence $25,000 Rental Reimbursement Annual Aggregate $5,000 Arson Reward per fire loss $500,000 Accounts Receivable per location 11 $500,000 Valuable papers and Records per location $250,000 Extraordinary Expense $100,000 Utility Services scheduled Sublimits in addition to the blanketlimit Newly Acquired Covered Property ofoccurrence: $5,000,000 Buildings in the Course of Construction, Alterations, Repair $2,000,000 Newly Acquired or Construction Mobile Property $250,000 Vacant Buildings ? Fair market value of building (demolition, debris removal and pollutant cleanup are covered within the limit) Coverage Exclusions Include but not Limited to: War, Nuclear Hazard, etc. Loss Payees: Delage Landen Financial Services ? Ricoh Copier lease contract #24640289 Aspen Equipment ? Rented Equipment Ramsey County Parks & Recreation Department ? Snowmobile rental Citi-Cargo & Storage Co., Inc. ? Storage container rented to City. 12 Policy Period: 07/01/2007 to 07/01/2008 Carrier:The League of Minnesota Cities Insurance Trust Coverage:Equipment Breakdown, also referred to as Boiler & Machinery, is a type of property insurance that covers boilers and other pressure vessels, fired and unfired, as well as machinery, heating, cooling equipment, or electrical apparatus. The right to inspect is reserved by the company for the well-being of the insured, as well as for compliance with state and/or local statutes. $46,798,260 CoveredBlanket Limit - Locations: Per Any One Accident Combined Property Damage Loss of Revenue $5,000,000 and Extra Expense Deductible:$1,000 Any one accident Sublimits:$100,000 Service Interruption $100,000 Perishable Goods $100,000 Data Restoration $100,000 Demolition and ICC $100,000 Expediting Expense $100,000 Pollutants $100,000 CFC Refrigerants $50,000 Ice Rink Buried Piping Coverage Comprehensive Form Boiler & Machinery ? Excluding Production Equipment Includes: Joint Loss Agreement Unlimited Form Boiler & Machinery Off-premises Power Failure ? Direct Damage Off-premises Power Failure ? Business Income Extra Expense 13 Hazardous Waste Cleanup Consequential Damage Endorsement Furnace Explosion Explosion Coverage In Use or Connected Ready for Use Repair or Replacement Included Coverage Depletion, deterioration, corrosion, erosion, wear & tear or other gradually Exclusions developing conditions Include but not Enforcement of any law or ordinance, regulation, ruling or restricting repair, Limited to: replacement or alteration, use operation, construction or installation (except as specifically included Demolition and ICC, Pollutants or CFC Refrigerants) Earth movement, including but not limited to earthquake, subsidence, sinkhole collapse, landslide, mudslide, earth sinking, tsunami or volcanic action Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not. Windstorm or hail (except if a loss is suffered as a result of an accident caused by rain, snow, sand or dust and the structure did not first sustain wind or hail damage to its roof or walls through which the rain, snow, sand or dust entered) Nuclear reaction or radiation or radioactive contamination War, including undeclared or civil war Fire or combustion explosion Hydrostatic, pneumatic or gas pressure test of any boiler or pressure vessel or an insulation breakdown test of any electrical equipment Water or other means used to extinguish a fire Lightning, Explosion (except for steam or centrifugal explosion), Smoke, Aircraft or Vehicles, Riot or Civil Commotion, Vandalism or Sprinkler leakage, Breakage of Glass, Falling Objects, Weight of Snow, Ice or Sleet or Water Damage, Freezing, Collapse or Molten Material Mold (except as specifically covered) Loss resulting from Defect, Programming Error, Programming Limitation, Virus, Loss of Data, Loss of Access, Loss of Use, Loss of Functionality or media of any kind (except loss resulting from an accident) 14 Policy Period: 07/01/2007 to 07/01/2008 Carrier:The League of Minnesota Cities Insurance Trust Covered Locations: Buildings/Contents or Property In The Open designated as: Limit of Liability / $500,000Per Occurrence Loss Limit: $500,000Annual Aggregate Deductibles: $50,000 Flood ? Per Occurrence $200,000Flood ? Annual Aggregate Code A: Coverage applies with no additional exclusions (only locations determined eligible by FEMA/FIRM maps to be outside the 500 year flood plain, and designated Code A on the policy) Code B: Coverage applies in addition to and in excess of the applicable National Flood Insurance Program (NFIP) coverage (Coverage ? only if the City has purchased both the NFIP maximum coverage and the LMCIT Supplemental Flood Coverage and not available for Property In The Open). Code C: No coverage for any loss or any damage resulting from any Occurrence for which a National Flood Insurance Program would cover any loss or any damage (coverage for non-flood water damage and overflow of any body of water, and any additional flood related causes described in the policy). 15 Policy Period: 07/01/2007 to 07/01/2008 Carrier:The League of Minnesota Cities Insurance Trust Limits: Reimbursable Costs & Defense Costs Each Tank Release $250,000 Reimbursable Cost and Defense Costs Agreement Term Aggregate $250,000 Deductible:Does not apply Coverage Stipulation: Underground tanks must be registered with the Minnesota Pollution Control Agency for coverage to apply. 16 Policy Period: 07/01/2007 to 07/01/2008 Carrier: The League of Minnesota Cities Insurance Trust $100,000 A: Theft, Disappearance, Destruction ? Inside Premises $100,000 B: Theft, Disappearance, Destruction, - Outside Premises $100,000 C: Forgery or Alteration (instruments of payment) Deductible: $50,000 Each Occurrence $200,000 Annual Aggregate 17 Policy Period: 07/01/2007 to 07/01/2008 Carrier: The League of Minnesota Cities Insurance Trust $500,000 Limit: Deductible: $50,000 Each Occurrence $200,000 Annual Aggregate Coverage: Bond Faithful Performance including Employee Dishonesty Coverage Included:Relief Association Members, Officers, and Employees Excluded:Joint Powers Entity, unless specifically named Port Authority, EDA, HRA, or similar, unless specifically named Notes: 18 Policy Period: 07/01/2007 to 07/01/2008 Carrier:The League of Minnesota Cities Insurance Trust Coverage:Your legal liability to members of the public for claims arising out of your premises, operations, Defense products, or completed operations. Costs are inside the policy limits. Limits: $400,000 ? Tort Limit Not Waived Each Claimant Limit Each Occurrence Limit $1,200,000 Products/Completed Operations Aggregate: $1,000,000 Failure To Supply Claim Aggregate $1,000,000 EMF Annual Aggregate $1,500,000 Mold Claim Limit $1,500,000 Fire Damage Limit $50,000 Medical Expense Limit $1,000 Each Occurrence $10,000 Aggregate Limit Limited Pollution Liability: $1,000,000 per ?sudden? Occurrence $1000,000 annual aggregate Lead or Asbestos Claim Limit $200,000 per Claim $200,000 Annual Aggregate Outside Organization Claim Limit $100,000 Annual Aggregate Land Use Regulation Claim* $1,000,000 Deductible: $50,000 Each Occurrence $200,000 Annual Aggregate Retroactive Dates: Municipal Liability 07/01/87 Limited Pollution Liability Claim 07/01/89 Lead or Asbestos Claim 07/01/93 Included In coverage: Any other Boards or Committees doing work on behalf of the City. Tort Liability Limit ? Signature required on Tort Liability form, dated and date of the resolution to waive the limit is you have chosen to waive the limit. *Defense included in the limit. Claims Made This policy is a policy. The premium is based on the financial figures that you provided on your application.. 19 Additional Liability Coverage: Personal Injury (False Arrest or Detention, Libel, Slander or Defamation of Character; wrongful Eviction) Employees as Additional Insured (Including Elected Officials & Volunteers while acting within the cope of their business) Broad Form Property Damage Failure to Supply Utilities, Including electricity, gas, water or steam Contractual Liability policy ?covered contracts? Non-owned Watercraft (26? limit) Incidental Malpractice ? Including Paramedical Services Employment Practices Liability Employee Benefits Liability Firefighters? Professional Liability Fiduciary Liability (for relief association board members) Property of Others in Care Custody and Control of Public Safety Personnel Exclusions: Any Operations Associated with the Ownership of an Airport. Any Ownership/Operations of a Municipal Hospital or Nursing Home. Any Injury to a Volunteer Fireman. Failure or bursting of any: a. DNR Class I or II Dam b. Any dike, levee, or similar structure. The Policy Does Not Apply to the Use of Watercraft if: a. The Boat is Over 26 Feet. b. The Boat is Used to Carry People or Property for a Charge. c. The Boat is Rented to Others. The Policy Does Not Cover the Failure to Give or the Giving or Any Professional Services, e.g.: a. Attorney. b. Architect. c. Doctor of Medicine, Dentist, and Pharmacist. d. Nurse, except in capacity as emergency medical technician or first responder. e. Accountant, unless an employee. f. Professional Engineer, unless an employee. The Policy Excludes any Coverage for "Special Events" that Involve the Operation of: a. Mechanically Operatedmusement Devices. A b. Automobile, Snowmobile or Motorcycle Racing or Stunting. c. Rodeos. 20 *d. Fireworks Displays or Exhibitions , when owner, sponsor and/or operator. Pollution Exclusion With "Limited Pollution Liability" Coverage Per Policy. Exception: Lead and Asbestos Exposures - $250,000 per Claim and $250,000 Aggregate per Year. Coverage Does Not Apply to Landfills, Dumps or Other Waste Facilities. Liability Arising Out of the Activities of Joint Powers Entity.** Land Use, Development or Franchise Litigation Coverage Limitations (Subject to policy deductible) a. 100% of the first $50,000 of defense costs, 85% of the next $200,000 of defense costs, and 60% of any defense costs in excess of $250,000 after reported to LMCIT. b. 50% of defense costs prior to reporting to LMCIT. c. 85% of any damages which the ?City? shall be required to pay. Inter-City litigation: litigation costs or damaged will be one-half of the above percentages. Additional Covered Party: Independent School District #622 ? Gymnasium and Locker Room Facilities at Carver Elementary School Independent School District #623 ? Gymnasium and Locker Room Facilities at Edgerton Elementary School Delage Landen Financial Services ? Ricoh copier leased contract #24640289 Ramsey County Parks & Recreation Department ? rental of snowmobile Citi-Cargo & Storage Co., Inc. ? Storage container rented to City. 21 ÌÑÎÌ ÝßÐ Ô×Ó×Ì ÛÈÐÔßÒßÌ×ÑÒ The 2007 legislature increased the municipal tort liability limits to $400,000 per claimant, $1,200,000 per occurrence, effective January 1, 2008. At the same time, the current covenant language that waives the per-claimant portion of the statutory limit has been eliminated. This will enable cities and LMCIT to take advantage of the per-claimant limit. Cities will still have the option to reinstate that waiver, for an additional charge. Please complete the LMCIT Liability Coverage Waiver Form if you want to waive the $400,000 per claimant limit up to $1,200,000 per occurrence. If you have Excess Coverage, you have two options: 1. If you waive the municipal tort liability limits from $400,000 per claimant to $1,200,000 per occurrence; and you purchased Excess Liability Coverage you are automatically waiving the statutory limits to the extent of the excess coverage purchased. 2. If you have not waived the municipal tort liability limits of $400,000 per claimant/$1,200,000 per occurrence; and you have purchased Excess Liability Coverage, you are automatically not waiving the statutory limit to the extent of the excess coverage purchased. 22 Policy Period: 07/01/2007 to 07/01/2008 Carrier:The League of Minnesota Cities Insurance Trust Coverage:Your legal liability arising out of the use of owned, leased, hired, and non-owned vehicles Defense Costs are in as described below. addition to policy limits. Limits:This is a Fleet Policy Bodily Injury/Property Damage Combined Single $1,200,000 Limit: Hired/Borrowed Auto Liability: $1,200,000 Employer?s Non-Owned Auto Liability: $1,200,000 Uninsured/Underinsured Motorists: $1,000,000 *(excludes Unregistered Vehicles) Personal Injury Protection (No-Fault): Statutory *(excludes Unregistered Vehicles) Endorsements and or policy language includes: Rented Auto Physical Damage Coverage Freezing of Fire Vehicles Pumping Apparatus Includes Liability coverage primary for vehicles used by specified individuals ? Full Time & Regular Part- Time, excluding temporary & seasonal employees $50,000 Deductible:Comprehensive (includes Hired and Non-Owned Auto) $50,000 Collision 23 Coverage Exclusions Include but are not Limited Expected or Intended Injury to: Workers? Compensation Employers? Liability Property Damage to Property Owned or Transported by you Pollution Other standard policy exclusions apply Replacement Cost Vehicles Year/Make/ModelVIN#Value 2000 Aerial Fire Truck 0869$950,000 2002 Telesquirt Fire Truck 0804$650,000 Review this schedule carefully and advise of any corrections. Items over 10 years old, must be updated/overhauled and certified by the City. 24 Policy Period: 07/01/2007 to 07/01/2008 Carrier:The League of Minnesota Cities Insurance Trust Coverage:Bodily Injury and Property Damage Coverage A: Excess Liability applicable to losses in excess of underlying schedule of liability Coverage B: Broad Legal Liability subject to the self-insured retention and policy terms, and applicable to losses not otherwise covered by underlying insurance Limits of Liability $1,000,000Each Occurrence $1,000,000AnnualAggregate Retained Limit: $0 Coverage Workers? Compensation, Auto No Fault, Uninsured/Underinsured Motorists, Exclusions Include Disability, and Unemployment Compensation Laws but are not Limited Asbestos to: Physical Damage to Property in Insured?s Care, Custody, or Control Products Recall Employers? Liability Employment-Related Practices Total Pollution Exclusion Professional Liability TRIA (Terrorism Coverage) Special Pay on Behalf of Basis Endorsements / First Dollar Defense Conditions: 25 Wholesaler MGA or Intermediary Bindable Quotes for LineEst. AnnualCommission CommissionAJG Owned of CoveragePremiumFee Income% * Name%Yes/No Property LMCIT$31,944$9,350N/AN/AN/AN/A Equipment Breakdown LMCIT$7,031N/AN/AN/AN/AN/A Inland Marine LMCIT$6,584N/AN/AN/AN/AN/A Faithful Performance LMCIT$1,192N/AN/AN/AN/AN/A General Liability LMCIT$107,926N/AN/AN/AN/AN/A Commercial Auto LMCIT$35,374N/AN/AN/AN/AN/A Umbrella Liability - Quoted LMCIT$59,252N/AN/AN/AN/AN/A Surplus Lines Taxes * Commission rate as a % of annual premium Non-Admitted CarriersStateTax %Actual Tax Dollars ** The non-Gallagher intermediary/wholesaler did not provide N/A their compensation information for this proposal. The usual and customary compensation to a wholesaler/intermediary ranges from 5%to 12%, but we cannot verify that range is alicable in connection with this roosal. pppp 26 CarrierPayment Schedule Insurance CarrierCarrier?s Position Coverages (Quoted/Declined & Reason) (use * where applicable) The League of Minnesota Cities Commercial Package Policy Quoted Insurance Trust *We were unable to obtain more advantageous terms and conditions for youdirectlyfrom the insurance carrier(s), so this quotation was obtained through an intermediarywholesaler. 27 A.M. Best?s Rating Proposed Carriers (Effective Date) Admitted/Non-Admitted LMCITNotRatedNon-Admitted If the above indicated coverageisplacedwith a Non-Admitted Carrier, the carrier is doing businessin the state as a surplus linesor non-admitted carrier. As such, this carrier is not subject to the same regulationswhich apply to an admitted carrier nor do theyparticipate in any insuranceguarantee fund applicable in that state. LevelCategoryLevelCategoryLevelCategory A++, A+.......................SuperiorB, B-.................................FairD...............................................Poor A, A-............................ExcellentC++, C+...................MarginalE.....Under Regulatory Supervision B++, B+...................Very GoodC,C-.............................WeakF................................InLiquidation S........................Rating Suspended Financial Size Categories FSC IUp to 1,000 FSC VIII100,000to250,000 FSC II 1,000to2,000FSC IX250,000to500,000 FSC III 2,000to5,000FSCX500,000to750,000 FSC IV 5,000to10,000FSCXI750,000to1,000,000 FSC V 10,000to25,000FSCXII1,000,000to1,500,000 FSC VI25,000to50,000FSCXIII1,500,000to2,000,000 FSC VII50,000to100,000FSCXIV2,000,000or more (In $000 of Reported Policyholders? Surplus Plus Conditional Reserve Funds) Best?s Insurance Reports, published annually by A.M. Best Company,Inc.,presents comprehensive reports on po the financialposition, history, and transactions of insurance companies operating in the United States and Canada. Companies licensed to do business in the United States are assigned a Best?s Rating whichattempts to measure the comparative positionof the company or association against industry averages. 28 It is important that we be advised of any changes in your operations that may have a bearing on the validity and/or adequacy of your insurance. The types of changes that concern us include,but are not limited to, those listed below: 1.Changes in any operation such as expansion to other state, new products. 2.Mergers and/or acquisition of new companies. 3.Any newly assumed contractual liability, granting of indemnities, or hold harmless agreements. 4.Circumstances which may require an increased liability insurance limits. 5.Any changes in fire or theft protection, such as the installation of or disconnection of sprinkler systems, burglar alarms, etc. This includes any alterations to same. 6.Immediate advice of any changes to scheduled equipment such as contractors' equipment, electronic data processing, etc. 7.Property, of yours that is in transit, unlesswe have previously arranged for the insurance. 8.Any changes in existing premises including vacancy, whether temporary or permanent, alterations, demolition,etc. Also, any new premises either purchased, constructed, or occupied. 29 Ð®±°±¿´ Ü·½´¿·³»® The proposal is an outline of the coverages proposed by the insurers, based on the information provided by your company. It does not include all the terms, coverages, exclusions, limitations, or conditions of the actual contract language. The policies themselves must be read for those details. Policy forms for your reference will be made available upon request. ß½¬«¿®·¿´ Ü·½´¿·³»® The information contained in this proposal is based on the historical loss experience and exposures provided to Gallagher representatives. This proposal is not an actuarial study. Should you wish to have this proposal reviewed by an independent actuary, we will be pleased to provide you with a listing of actuaries for your use. Ý±³°»²¿¬·±² Ü·½´±«®» One of the core values highlighted in The Gallagher Way states, ?We are an Open Society,? and our open society extends to the compensation Gallagher receives. On request,each client?s Gallagher representative can describe the compensation arrangements Gallagher and its subsidiaries and affiliates receive in relation to the coverages placed for that client. In general, Gallagher may be compensated as follows: 1. Gallagher companies are primarily compensated from the usual and customary commissions or fees received from the brokerage and servicing of policies handled for a client?s account. As permitted by law, Gallagher companies occasionally receive both commissions and fees. 2. Gallagher companies may also receive investment income on fiduciary funds temporarily held by them, such as premiums or return premiums. 3. Gallagher companies may access other facilities, including wholesalers, reinsurance intermediaries, captive managers, underwriting managers and others that act as intermediaries for both Gallagher and other brokers in the insurance marketplace. Some of these facilities may be owned, in whole or in part, by Gallagher companies. If such a facility was utilized in the placement of a client?s account, it may have earned and retained customary brokerage commission or fees for its work. 4. In placing, renewing, consulting on or servicing any retail insurance policy, Gallagher companies no longer participate in contingent commission agreements with insurance companies that provide for additional compensation if underwriting, profitability, volume and retention goals are achieved. Annually you will receive a statement from Gallagher disclosing all property and casualty insurance brokerage compensation excluding treaty reinsurance compensation, received from any insurer or third party in connection with Gallagher?s placement, renewal, consultation on or servicing of insurance for your company. The first Annual Disclosure of Compensation statement will be sent during the first quarter of 2007, based on the compensation earned for the calendar year 2006. If you have specific questions about the compensation received by Gallagher and its affiliates in relation to your insurance placements, please contact your Gallagher representative for more details. In the event you wish to register a formal complaint regarding compensation Gallagher receives from insurers or third parties, please send an e-mail to or send a letter to: AVC Compliance Officer Arthur J. Gallagher & Co. Two Pierce Place, Suite 1820 Itasca, IL 60143 30 Effective January 1, 2005, Arthur J. Gallagher & Co., and its subsidiaries operating as insurance agents/brokers under the corporate holding company known as Arthur J. Gallagher Brokerage & Risk voluntarily discontinued Management Services, LLC, participating in ?Contingent Income Agreements? which are routinely offered by insurance companies. ?Contingent Income Agreements? typically provide insurance Agent/Broker firms an opportunity to earn additional compensation based on the overall performance of the various insurance policies collectively underwritten by an insurance company for a specific Agent/Broker firm. Predetermined performance measurements in areas such as new business written, renewal retention, and loss ratios are compared to actual results in order to establish if, and how much, Contingent Commission has been earned by the Agent/Broker firm. Such agreements have historically been an accepted standard practice throughout most of the insurance industry ? with the vast majority of Agent/Broker firms still participating in such agreements. Because Gallagher?s retail operations have chosen to no longer accept contingent commissions, some insurance markets have modified their commission schedule with Gallagher, resulting in a nominal increase in some commission rates. The additional commissions are known at the effective date of the policy, but some insurance companies are paying the commission increase apart from the commission normally paid at policy issuance. without Any such supplemental commission payments are determined regard to any contingent performance factors such as growth, retention, profitability, etc. The following markets may pay Gallagher additional commission in the manner described above. The additional commission ranges from 1% to 2.5% of written or earned premium on eligible lines of business: CNA Companies Chubb Companies Wausau Companies Note: Upon request, your Gallagher representative can provide more specific information as it relates to this proposal. 31 Work Session Agenda Item E2 AGENDA REPORT TO : City Council FROM: Chuck Ahl, Acting City Manager SUBJECT: Review ofTax Increment Financing ? Housing Districts Paul Steinman- Springsted DATE: May 8, 2008 INTRODUCTION/SUMMARY Paul Steinman of Sprinsted provides the City with professional advice on tax increment financing (TIF) proposals. Mr. Steinman will provide the Council with a brief review of tax increment financing tools and specifics on Housing Districts. He will be using the proposed Gethsemane TIF Housing proposal as an example in preparation of the Council considering calling a public hearing during the regular agenda on that item. Mr. Steinman?s powerpoint slides are attached for review. RECOMMENDED ACTION No action is recommended. Attachments: 1. TIF Power Point Slides