Despite an increase in rates, the Scottsbluff city council approved a resolution extending the date for written notice of termination to participate in the League Association of Risk Management (LARM) during Monday’s regular meeting.
Interim-city manager Kevin Spencer informed the council this is a yearly action item for the council. The proposed resolution agreement would extend the LARM insurance for an additional year for a total of three years. The city will receive a 5% rate discount, if approved. However, the rates have increased.
“Unfortunately, the rates are going up about $130,000 total,” Spencer said. “We are going to meet with LARM in the next few weeks and go over some possible ways to reduce that.
“What’s really driving this one up is the property valuations are going up and we have replacement costs,” he added. “That’s what really is driving this up, is the property values.”
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Spencer noted that city officials are happy with LARM insurance.
As the inflation impacts business, LARM insurance has adjusted rate levels with most members seeing property values, contents and property in the open increases of 3-10%. That increase is driven by reinsurance to ensure proper coverage on catastrophic losses. According to a letter from LARM included in the council packet, the board approved the adjustment to the 2022-2023 pool year rate levels as follows: 11% increase in rate adjustment for property, 5.5% increase adjustment level rates for liability coverages and 5% increase in rate adjustment for worker’s compensation.
Council member Jordan Colwell discussed a conversation he had with former city manager Dustin Rief last year about exploring other options as part of the council’s due diligence in securing the best rates and options.
“I know with Dustin last year, he and I had talked about this and I appreciate the comment about LARM, but I’m wondering if it would behoove us to just look locally again at getting a huge bundle bid from a company in town to see if anyone can match that,” Colwell said.
Nathan Green concurred with Colwell’s statement to shop around in the fall.
With the Aug. 15 deadline, there was discussion about making that exploration a topic for next year.
While there is a state statute that allows municipalities to terminate a contract within 180 days’ notice, Spencer said his understanding of the LARM agreement is the city has waived that and agreed to have LARM insurance to receive the 5% discount. Not renewing the contract would result in a smaller discount.
The council moved to approve the contract agreement to meet the deadline.
