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AGENDA ITEM <br /> <br />Prepared By: RJO Reviewed By: Approved By: <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />1. Purpose. The purpose of this action item is to gain approval of the addition of No-Fault Sewer <br />Insurance to the coverage provided by the League of Minnesota Insurance Trust (LMCIT). <br /> <br />2. Background. The city purchases liability insurance from the LMCIT. The current coverage pays for <br />damages incurred by residents as the result of sewer backups that are deemed the City’s fault. However, <br />not all sewer backups are caused by city negligence, and there is no insurance coverage for the property <br />owner when the city is deemed not at fault. When a citizen learns that they will not be reimbursed for a <br />backup it can lead to anger and lawsuits. <br /> <br />Currently, when a backup occurs, Public Works staff responds and initiates the cleanup process. This <br />happens prior to the determination of fault and obligates the city to some costs regardless of fault and is <br />done to support the property owner during a frustrating and emotional situation. The addition of no-fault <br />insurance coverage would be an extension of this support. <br /> <br />In the past, the City did not quality for this coverage. However, recent improvements in maintenance <br />standards (annual televising and cleaning of lines, use of GIS, I&I reduction efforts, addition of <br />generators, annual CIP adoption, and main replacement/lining) has made the City eligible for the <br />enhanced coverage. <br /> <br />3. Cost. The cost of the insurance is based on the amount of coverage chosen. The average sewer <br />backup claim for the city is less than $25,000. The annual costs based on coverage levels are: <br /> <br /> <br /> <br /> <br /> <br /> <br />4. Funding. This purchase will be funded through the Insurance Fund. <br /> <br />5. Staff Recommendation. Staff recommends approval of the attached resolution authorizing the <br />addition of. <br /> <br />COUNCIL ACTION REQUESTED <br />Motion to approve the attached resolution adding No-Fault Sewer Backup coverage to the City’s <br />insurance coverages <br /> <br />Exhibits <br />A. Resolution <br />B. LMCIT Coverage Guide Excerpt <br />Item No.: 4 Date: February 27, 2023 <br />Item Description: No-Fault Sewer Insurance - Resolution <br />Presenter: Ron Olson <br />Finance Director <br />Agenda <br />Section: <br />Consent Agenda <br />Limit $10,000 $25,000 $40,000 <br />Premium $ 3,413 $ 4,574 $ 5,700