DECEMBER, 2018 Newsletter Learn the Easy Way LEARN THE EASY WAY... 1 LOSS CONTROL TIP OF THE MONTH... 2 PAYROLL VERIFICATION REMINDER... 2 HOLIDAY CLOSINGS... 2 CLAIMS CORNER... 3 RENEWAL QUESTIONNAIRES SENT... 4 CALENDAR OF EVENTS... 5 CAFR NOW ON WEBSITE... 5 By: Kelly Beets I recently had the following question: Can we, the City, provide snow/ice removal for a local school and a local business? Another question a few weeks later: A business in town would like us to use our street sweeper to clean their parking lot and the business will pay the City for the service. This sounds like a great idea for a city to generate cash flow. However, the City is not advised to enter onto private property to conduct maintenance or any other work. The owners of the property could eventually allege the City is responsible for the maintenance and potential liability on such land(s) because they dedicated the land(s) to the City. Dedication requires intention to dedicate by the owner and acceptance by the City. However, under Missouri law, intent may be evidenced by acts of the owner (potentially such as the owner allowing the City to clean the parking lot and driveways) and acceptance by the City can be evidenced by the act of cleaning. Therefore, the City should not clean private parking lots and drives because of the risk that such land would become the City s property through dedication and thus the City would be responsible for future maintenance. Other reasons why MIRMA does not recommend that city crews enter upon private property for the purpose of doing work include: After the initial plowing/salting, the city will have ongoing exposure for the work that has been completed. For example, after the snow or ice refreezes overnight the city will be required to return to re-salt the icy areas. Increased exposure to all of the potential claimants walking to/from their vehicles to the buildings in question. Increased exposure for property damage to the private property as well vehicles, driveways, etc. The property owner could claim the city is responsible for maintenance and potential liability on such land because the property owner has dedicated them to the city. This type of work is generally provided by private contractors. Last, the city should check with the State of Missouri to determine if this is creating a conflict with using public funds for a private purpose. 1
Loss Control Tip of the Month Perform Maintenance or Replace: That is the Question! By: Patrick Bonnot A pothole in a roadway close to our office got me to thinking one day, recently. How much does it cost to repeatedly fill this pothole versus cutting around it and digging the bad section out properly? I believe we can take this to a grander scale when we refer to water and sewer lines, especially sewer projects. We all know the amount of time and expense old sewer lines cause communities. Not only is this a financial burden to municipalities, but the relationship (which can take many years to repair from the last negative event) between residents and the governing body can be greatly harmed by a single rain event. The purpose of this article is meant to bring something to light regarding the value of total replacement. While costly, total replacement of a certain line can indeed prevent future immediate repairs to that section that also take important minutes and hours from a work day or work week for maintenance crews. Have you considered doing the math to add up all that goes into the maintenance for a specific problem area? You may find that projecting those maintenance costs out ten years would be less or significantly more than a somewhat more immediate replacement plan. Construction and labor costs are one thing, but repeatedly repairing a section of water line, sewer line or other infrastructure, also has potential costs that impact the city that may not seem as evident. Due to the labor included on these projects, injuries sometimes occur during the repair process. Those costs can also have a lasting effect on the budget for the next two or three years, depending on severity of the injury or the frequency of injuries. There s a saying in this line of work frequency breeds severity. Just some food for thought as your municipality determines what the best plan of action is regarding the future of your infrastructure. In the next edition I ll outline the potential costs for repair projects and how they relate or compare to replacement costs. Merry Christmas to you and yours! If you or your auditors have not already sent your Payroll Verification Letter for the period ending December 31, 2017, please be reminded that they are due in the MIRMA office by December 31, 2018. MIRMA Resolution Number 90-3 provides for a substantial penalty for late compliance with providing the report. If you have any questions, please refer to the Payroll Verification section of your MIRMA Membership Manual (available on our website), or contact Terri Crane at the MIRMA office (tcrane@mirma.org). In observance of the Christmas and New Year s Holidays, the MIRMA office will be closed on Monday and Tuesday, December 24 th and 25 th, and Monday and Tuesday, December 31 st, 2018 and January 1 st, 2019. We hope everyone has a safe and wonderful holiday season! 2
Claims Corner By: Glenn Price Many of our members have employees who are part of another entity s board or council. For instance, many of our police departments have officers who are part of a joint task force, or even head of the board for the joint task force. Some of the municipalities have employees on various commissions for the MPUA. What if a claim comes in alleging that an officer on the task force used excessive force? What if someone brings a lawsuit against one of the utility commissions and an employee from a member is on that commission? Is there coverage through MIRMA for incidents like these? Does the coverage packet even address this sort of claim? To be sure, the Coverage Packet does address this issue. Remember, claims are covered unless specifically excluded from coverage. In this matter, there is an exclusion AND a condition that changes the exclusion. There are two areas of the Comprehensive Liability Part where issues stemming from involvement in another entity s board or commission could be covered. These are Section V Personal and Advertising Injury, and Section VI Errors & Omissions. Although several exclusions could apply to any claim based upon what is pled in a lawsuit, the one exclusion that will almost certainly apply is exclusion #46 found in Section III Common Exclusions. It states that there is no coverage for: any acts, decisions or omissions, of any board, commission, council, or other similar body that an employee or other Member representative may be serving on, that is not under the direct and complete control of the Member. So, if an employee of the member is serving as the board president of a joint task force (for example), there is no coverage for any actions taken as the board s president. The reason for this exclusion is because that board is not under the direct and complete control of the Member (emphasis mine). However, because MIRMA recognizes the importance of certain commissions and task forces, we have carved out an additional coverage for the cost of defense for lawsuits in these matters. Many of you are aware that there is a Cost of Defense coverage for some non-monetary claims, such as declaratory relief or injunctive relief. There is also a Cost of Defense coverage when an employee serves on a board or commission that is not under the direct control of the Member. This condition states the following: Notwithstanding Section III, Common Exclusions 46, MIRMA will pay up to a maximum of $25,000 in defense costs to defend a Member or employee that is named as a defendant in a lawsuit arising out of serving on a board or commission that is not under the control of the Member. This coverage applies only when the employee is appointed to or specifically directed to serve on the board or commission in the course and scope of their employment for the Member. Notice a few things here: This coverage is for cost of defense only, which is the cost associated with retaining an attorney to defend an employee in a lawsuit. This coverage does not cover the employee in the event there is a judgment against the board or commission. The coverage limit is set at $25,000. Once the attorney s invoices reach $25,000, there is no more coverage. MIRMA s obligation to provide coverage under this provision ceases once the total reaches $25,000. Although not mentioned above, the Coverage Packet notes the commission or board must be a tax-exempt board, and the underlying claim must be otherwise covered under the Errors & Omissions Coverage. For this coverage to apply, the Member must use one of our panel counsels as their attorney for this matter. 3
Claims Corner Continued By: Glenn Price In a different scenario, coverage would be different. What if one of our police officers is actually on the drug task force as a law enforcement officer and is involved in an altercation not in the city s jurisdiction? Is there coverage? Remember, the exclusion says that if the employee serves on the board there is no coverage. In this scenario, the officer is acting as an officer on the task force not on the board of the task force. The answer is that he would be provided with a full defense and indemnity as offered under the applicable section of the Coverage Packet. There could be a few nuances, or tertiary issues that arise that could amend the coverage for a given situation. But from a standard outlook of any potential claim, coverage would be provided to an individual officer for this scenario. Other questions could arise relating to involvement in a joint task force or utility commissions including coverage for auto accidents, workers compensation, etc. These questions need to be addressed by each entity and each member of that entity through each entity s governing documents. Generally speaking, insurance coverage follows the automobile. MIRMA extends workers compensation coverage to each employee on a task force. Further, it would be a good idea for any joint task force to consider procuring its own errors and omissions and/or liability insurance coverages for potential issues that could arise. If you have any questions related to this article, please do not hesitate to call me at the office, or email me at gprice@mirma.org. Renewal Questionnaires Sent Renewal Questionnaires have been sent via email. These were emailed to each member official representative during the period of December 10-12, 2018. This year the property and heavy equipment schedules were sent in Excel format and you should be able to make any necessary changes directly to the schedules. Please pay particular attention to the third paragraph of the email for directions on updating in Excel. An inflation factor has already been applied to the building values this year, as well, in order to help with determining correct building values. Remember that traffic lights/signals and electric pedestrian crossing signals can now have property coverage, with a $10,000 deductible. To have coverage you must list those signals on the property schedule by intersection or location. Also, the option of properties valued at $5,000 or less at one location being lumped together in one line item is available. Pad-mounted transformers in use, with a value of $5,000 or less, may be lumped together on one line, even if they are not at one location. Please see page three of the questionnaire for further instructions and examples of these types of listings. Also, remember that member property appraisals are available on MIRMA s website to assist you in determining property values. Please remember the questionnaires and pertinent supplemental applications are due in the MIRMA office by January 30, 2019. Please be sure that the property and heavy equipment schedules indicating any changes and all pertinent information are attached. Please contact Terri Crane (tcrane@mirma.org) or Jenne Auck (jauck@mirma.org) with any questions. 4
CALENDAR OF EVENTS February 1, 2019: May 10, 2019: July 24-26, 2019: MIRMA Board of Directors Meeting: Held at the Hilton Garden Inn, located by Bass Pro Shop, Columbia, 10:00 AM MIRMA Board of Directors Meeting: Held at the Hilton Garden Inn, located by Bass Pro Shop, Columbia, 10:00 AM MIRMA Annual Meeting: Held at The Lodge of Four Seasons, Lake Ozark MIRMA s FY2018 Comprehensive Annual Financial Report is Now on the Website! MIRMA s CAFR was emailed to the membership on November 15 th, and is also posted on the website. After logging in, click on the Member Portal (top right), and then click on Financials at the bottom of the Member Menu. There you will find the full CAFR for FY2018. In addition, quarterly financial statements are posted. By: Jenne Auck 5