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10-27-86 AdjournedMINUTES ADJOURNED REGULAR MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT OCTOBER 27, 1986 The Board of Directors of the South Tahoe Public Utility District met in an adjourned regular session, October 27, 1986, 2:00 P.M., 1900 Lake Tahoe Boulevard, City Council Chambers. BOARD OF DIRECTORS: Chairman Wynn, Directors Madden, Mason, Olson, Jones/late arrival STAFF: Cofer, Fischer, Mamath, B. Eppler GUESTS: Jim Norton, Doug Christianson, Rob Wells-Tahoe Daily Tribune ROLL CALL ITEM FOR BOARD ACTION Manager Cofer told the Board the District had received four (4) quotes on the District Liability Insurance coverage. He requested Finance Officer Fischer summarize the quotations. Finance Officer Fischer reviewed the past coverage and the coverage requested this year and responded to questions from Board members. He also reviewed the com- parisons of the 4 proposals listed on the summary sheet distributed to the Board with their agenda packets. A presentation was made by Jim Norton of Sierra Tahoe Insurance Company. He in- troduced Doug Christianson of RCM In- surance in Folsom who had assisted him in the preparation of his proposal package. Included in Mr. Norton's presentation was an explanation of the "claims made" clause in his quote and how it related to a "Tails Policy". Mr. Norton responded to questions from the Board of Directors. DISTRICT LIABILITY INSURANCE POLICY RENEWAL ADJOURNED REGULAR BOARD MEETING MINUTES - OCTOBER 27, 1986 Paqe 2 Chairman Wynn asked for a recommenda- tion from Manager Cofer. Manager Cofer stated he had discussed the proposals with Attorney Weidman who felt the "occurrence" clause and the $5 Million coverage was important to the District because of our obligations in Alpine County and because of these two reasons he and Attorney Weidman would recommend the insurance coverage offered by Crump/Kindler & Laucci Insurance Brokers but did not recommend the Boiler & Machinery coverage. DISTRICT LIABILITY INSURANCE POLICY RENEWAL (continued) Director Mason asked questions about the "tails" policy. Manager Cofer stated the premium could be very expensive if the insurance company anticipated a claim and that none of the companies had given the District a firm quote and that this was another reason why he was recommending the Crump/Kindler firm. Jim Norton stated his "claims made" policy did provide a 5 year "tails" policy as long as the claim is reported in 60 days. Manager Cofer responded Attorney Weidman had told him people have a year to file a claim against the District and could quite easily extend beyond the policy year before a claim was filed. Director Olson stated he felt very strongly and partial to a local agent's coverage because of the services ren- dered. Director Madden made the motion to accept the proposal from Crump/Kindler of $355,000 which included the $5 Million liability coverage/Motion failed for lack of a 2nd. The Board discussed the possibility of issuing a binder for an insurance package with the understanding the Umbrella coverage would be forthcoming. Director Olson made the motion to accept the proposal from Sierra Tahoe Insurance plus Umbrella coverage of $1 Million with a premium of $60,000 for the first $1 Million and an additional $3 Million forth- cominq with a premium of somethinq less than $120,000 for the remaininq $3 Million Umbrella insurance/Second Jones ADJOURNED REGULAR BOARD MEETING MINUTES - OCTOBER 27, 1986 Page 3 Discussion: Director Mason asked a question regarding the "tails" policy. Manager Cofer Responded. Director Madden asked Finance Officer Fischer how long the Insurance Compan- ies had to prepare their quotes. He responded, "approximately 2 months". Director Madden noted the Crump/Kindler quote was the only company able to re- spond completely to the District's request and the only company offering "occurrence" coverage. Manager Cofer noted he thought Crump/Kindler was the only company offering "occurrence" coverage at this time. Director Mason made the statement he was in favor of keeping the District's in- surance locally, but was worried about switching from "occurrence" coverage to "claims made" coverage if the costs were about the same, and was, therefore, "torn" . Vote: Ayes: Noes: Director Jones, Olson Director Mason, Madden, Wynn Motion Failed. Director Olson moved to accept the pr°- posal of Sierra Tahoe Insurance basic package and accept the Umbrella binder from St. Paul Insurance at $145,000 as identified in the Crump/Kindler/Laucci proposal. Manager Cofer asked for the opportunity to phone Crump/Kindler to see if this alternative was possible. Chairman Wynn stated the Board should be polled before the call was made. Jim Norton stated if he were making the motion he would make Sierra Tahoe In- surance the Agent of Record~ take the Maryland Casualty quote with the package, and take the full quantity Umbrella coverage from the other broker because he i(thelother~broker) had done the work on it. DISTRICT LIABILITY INSURANCE POLICY RENEWAL (continued) ADJOURNED REGULAR BOARD MEETING MINUTES - OCTOBER 27, 1986 Paqe 4 Director Oison stated this was es- sentially what he had proposed in his motion, but thought the Board should be polled before Manager Cofer phoned Crump/Kindler. Director Madden stated this was not an acceptable alternative for her and that she strongly objected to Mr. Norton making motions for the Board. Director Mason and Chairman Wynn both stated they were concerned about the "claims made" coverage and the un- certainity of the "tails" policy premium. Director Mason asked if the Basic P©licy had to be the same ("claims made" or "occurrence") as the Umbrella Policy. Manager Cofer answered, "Yes". The Board poll indicated a negative response to Director Olson's motion. Motion failed for lack of a 2nd. Director Madden moved to accept the proposal from Crump/Kindler/Laucci for $355,000 which included the $5 Million Liability coverage but excluded the Boiler & Machinery coveraGe/Second Mason/Vote: Ayes: Director Jones, Wynn, Mason Madden Noes: Director Olson Customer Relations Manager, Bob Eppler, reported on Commercial Sewer Connections. He read the list of commercial properties who had been sent the 30/day Notices re- questing payment of all current charges or abatement of the unreported connec- tions. He also read the related dollar values for each property and stated he had had response from 2 of the 5 owners. After discussion by the Board and respon- ses to questions from Bob Eppler and Mr. Cofer, Chairman Wynn recommended the Board adopt a policy to change the present Ordinance to address the problem. DISTRICT LIABILITY INSURANCE POLICY RENEWAL (continued) PROGRAM MANAGER'S REPORT ADJOURNED REGULAR BOARD MEETING MINUTES - OCTOBER 27, 1986 Page 5 Manager Cofer stated staff will draft a policy for presentation at the next regularly scheduled Board meeting to address both commercial and residential connection and sewer charges. 3:30 P.M. PROGRAM MANAGER'S REPORT (continued) ADJOURNMENT ATTEST: PAT A. MAMATH, CLERK OF BOARD SOUTH TAHOE PUBLIC UTILITY DISTRICT