Liability rates rising

After several years without increases, insurance rates are on the rise, the Madras City Council learned June 24, during its insurance coverage presentation.

Overall, insurance premiums are up 28.3 percent, from $176,251.56 paid for the 2013-14 fiscal year, to the proposed rate for 2014-15 of $226,136.29, primarily due to increases in general liability and new railroad liability requirements.

The premium reflects a 26 percent increase in general liability for the city, from $55,791.40 for 2013-14, to $69,966 for 2014-15, as a result of lawsuits against cities and counties across the state, according to Mike McGowan, of PayneWest Insurance.

"It's really killing us, as far as lawsuits coming in," said McGowan. "Overall, it's been a big hit."

Under a new contract with Union Pacific Railroad, the city was required to double its limit for railroad liability from $2 million to $4 million, and add railroad pollution liability insurance. The premium for liability rose from $9,350 for 2013-14, to $13,296 for 2014-15, while the new, three-year pollution liability insurance for 2014-2017 added $25,275.94.

"To add additional rail service to the industrial park, Union Pacific is requiring the city to carry pollution insurance, in addition to the liability insurance, in case of having to clean up a spilled rail car that is caused by the city's rail spur failing," explained Gus Burril, city administrator.

The three-year increase amounts to $8,425.31 per year to provide the new coverage.

"If you adjust the three-year policy for the railroad pollution insurance to the value of one-year's cost, the city moved from $176,251.56 to approximately $207,000, which translates to about a 17.4 percent increase in liability insurance costs," said Burril. "Group insurance rate changes was the majority of that increase."

Fairgrounds restrooms

The city committed to funding a new restroom at the Jefferson County Fairgrounds for an additional five years after a presentation by Sandy Forman, fairgrounds manager, and E.V. Smith, board member.

"We want to address it and make it presentable," said Smith, pointing out that from January through December, there are 84 public events, 192 private events, and 111 youth events taking place at the fairgrounds.

Forman said that they had searched for grants, but added, "There's just nothing."

The new facility they have in mind takes 90 days to be assembled and shipped, so it won't be available for this year's fair. "We want to start moving forward with this," said Smith.

The city unanimously extended its financial commitment of $5,000 per year for another five years.

"It's helping you and it's helping us," Smith said.

Contract Publishing

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