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HomeMy WebLinkAbout~Master - Special Meeting of the Ames City Council 06/30/1994MINUTES OF THE SPECIAL MEETING OF THE AMES CITY COUNCIL AMES, IOWA JUNE 30, 1994 The Ames City Council met in special session at 12:02 p.m., June 30, 1994, in the Council Chambers, 515 Clark Avenue, pursuant to law with Mayor Pro Tem Parks presiding and the following Council Members present: Brown, Hoffman, Tedesco, Wirth, and Campbell. INSURANCE COVERAGE: Moved by Tedesco, seconded by Brown, to adopt RESOLUTION NO. 94-271 approving Alternative No. 2 to select The St. Paul Companies as the provider of general liability, automobile, excess, and transit coverage with the stipulation that bids are to be received, in order to be acted upon, by the second City Council meeting in May 1995. Bob Kindred, Assistant City Manager, stated that staff met with representatives from Sentry and The St. Paul insurance agencies to clarify questions and issues. A sheet was distributed summarizing the two proposals. The questions was raised concerning whether The St. Paul insurance could be audited at the end of the year which would result in additional cost. The answer was no, both policies are non-auditable. Everything quoted on the policies are firm quotes, except for the auto. Both policies include employee benefit coverage as well. The underlying coverage in the Sentry policy is $500,000 the excess is an additional $5,000,000. The underlying coverage under The St. Paul proposal is $1,000,000. The question was raised whether there was an intentional axe provision included in the automotive coverage. The answer to that was yes, and it was included in both policies. One discrepancy was found in the two proposals, that being the number of vehicles in each. The St. Paul proposal had 206 vehicles quoted, and the Sentry proposal had 179 vehicles quoted. The Sentry premium is less, and The St. Paul premium would need to be adjusted downward to account for the smaller number of vehicles. Staff sent out specifications and requested proposals for the Transit fleet coverage from four markets independent of the quotation received from Sentry and The St. Paul. Staff received proposals back from those markets, but they were rejected as the companies could not meet the basic qualification of being an A-rated carrier. The incumbent transit carrier, Progressive, did furnish a renewal bid. Currently, there is an aggregate of $5,000,000 under Progressive, and The St. Paul proposal is for $6,000,000. It is impossible to quantify the dependability and relationship with Sentry. The St. Paul has offered a three-year policy guarantee to counter. In summary, the three main considerations before Council are: 1) Coverages were not bid on the open market, since this was the “off year.” Therefore, bidding has not been opened up to all interested parties. This raises the issue of fairness with other potential bidders, and also raises a question as to whether the most competitive proposal has actually been received. 2) Staff believes that the relationship with incumbent carriers is a very important, non-quantifiable factor. Sentry Insurance, in particular, has provided these coverages for 12 years, and has stayed with the City through difficult times in the commercial insurance market. 3) Balanced against the above factors is the potential dollar savings under The St. Paul Companies’ proposal. It is difficult to ignore these potential savings when the coverages offered are essentially the same as those offered by the incumbents. In addition to the potential cost savings, The St. Paul proposal also includes higher coverages. Mr. Schainker stated that they were trying to get a second option for the Council to consider, now in a matter of fairness, feels the proposal by The St. Paul should not be thrown out. Sentry now has offered a reduction in premium and The St. Paul has now offered a three-year guarantee. Proposals have been modified since submitted and feels the original proposals should be the ones to be considered. It will be up to the Council to decide on that issue. Council Member Brown: Why did we not have a proposal at least 90 days prior? Mr. Schainker replied there had never been a problem before with incumbents not submitting bids on a timely basis. Council Member Tedesco: Stated he met with the proposers yesterday and wanted to reiterate that when he ran for Council, he took himself out of the bid situation in the insurance profession. It became evident, in this case, there was concern that the renewal quotation from Progressive (who had the transit coverage, because Sentry would not cover it) was dragging their feet. Staff felt they needed to locate an additional source if that coverage was not going to be provided. That is how Gateway was contacted and the proposal was submitted. In all due respect that is a reasonable and prudent way for the staff to practice. We need to lay some perimeters for next spring, and look at the package again, after the budget is certified, so it can be dealt with at the second Council meeting in May 1995. Mayor Pro Tem Parks: Are we still looking at a reduction of changing 206 to 179 vehicles for The St. Paul if we accept that proposal? Mr. Kindred stated that is always subject to audit, but 179 is probably the correct figure. Mayor Pro Tem Parks: Was pleased for the clarification of the situation and feels we were compelled to go after some kind of coverage. Mr. Kindred explained that because the companies were dealing with different numbers of vehicles, the original quotes on auto coverage varied. Both companies were given a list of vehicles so each company could review. Sentry came back with an estimated credit that should be added on top of approximately $48,000. The St. Paul did the same and came back with an $8,000 credit. Council Member Tedesco: The confusing point is that The St. Paul is bidding every city vehicle- including the Transit system. Sentry is only dealing with city vehicles excluding the buses. Rick Hugdahl, representing Sentry, gave a short history of why Sentry took the City’s business and why they have kept it. He gave instances of City happenings and what they have done to overcome the bad claims. He referred to a handout with the background on the City’s policy history. He asked for the opportunity now to bid in a bid situation. Council Member Tedesco: As a long-term client and customer, I somewhat resent that after the meeting yesterday, you now want to reduce that price of $20,000 because “we never asked.” Mr. Hugdahl responded that any year there is not a bid, the Risk Manager is asked what the premium would be. In order to save the business, sometimes it is undercut. The City is a good account for Sentry, and Sentry has been good for the City. Council Member Wirth: I am not comfortable with the process and will not vote for a change. I would continue to go with Sentry for one year. Mr. John Langeland, owner of Gateway Insurance Service. We were not seeking the bid to the City this year. We were asked to help solve a problem, and we asked what the parameters were. Those parameters were that we come in with a bid equal to or better than what existed in coverage and price. The vehicle discrepancy came from the fact that the total account was being looked at including Cy-Ride. His quote included a bus that was not included in Progressive’s bid. He thanked staff and Council for considering their proposal. Council Member Hoffman: Asked Ms. Judy Parks, Assistant City Attorney, if the City was at any risk if The St. Paul was accepted. Ms. Parks responded there would be no problem. Roll Call Vote: 5-1. Voting Aye: Campbell, Parks, Brown, Tedesco, Hoffman. Voting Nay: Wirth. Resolution declared adopted, signed by the Mayor, and hereby made a portion of these minutes. Council Member Hoffman left at 12:30 p.m. DEPOT DEVELOPER’S AGREEMENT: Moved by Tedesco, seconded by Wirth, to adopt RESOLUTION NO. 94-281 amending Depot Developer’s Agreement to allow lender to assign 2 lease to new developer in the event of a foreclosure; and, to allow developer until August 1, 1994, to satisfy loan commitment/equity requirements. Mr. Schainker explained that good things have happened since the last meeting. The developer has engaged the services of an architect, plans are complete, permits and site plans have been reviewed by the City staff, and permits have been issued. Before we release the site, the developer and the city wanted to make sure equity was in place. The deadline was July 1 and Brenton Bank has signed a loan commitment with Hubbell Company for this project. However, some changes have been presented by the bank and the following material items will need to be resolved by August 1, 1994. The Development Agreement will need to be amended to allow for the assignment by the bank of the Developer Agreement following foreclosure without the consent of the City, (ii) we will need to agree upon the form of Hubbell Realty Company’s guarantee, (iii) we will need to obtain a title opinion showing that the City of Ames has good and merchantable title to the property and that the property is free and clear of liens and encumbrances, and (iv) we will need to obtain a legal opinion with respect to the actions taken by the City with respect to the Development Agreement and that the agreement and the lease are in full force and effect and are legally binding obligations of the City. Mayor Pro Tem Parks: When was the last modification and extension of this proposal? Mr. Schainker replied there was never a language change and the last extension was May 24. Discussion was held regarding the provisions for the development of the property and it was stated that close to 65 percent of the project was committed with a lease at this time. Mayor Pro Tem Parks: I have not seen the final revised plans showing the project lessened by dropping the wings on the Depot building. The architect brought forward plans for his review. Council Member Tedesco: When will the dirt be turned? Mr. Rick Tollakson replied that ground-breaking will be in two weeks and is expecting everything to go well. The abstracting has been dragging on as there was a loop-hole as to who was going to do it. It is taking a little more time than anticipated. Council Member Tedesco: I will support this, however, this has been going on a little too long. Mayor Pro Tem Parks: Will support now, but this is the last extension he will support. Roll Call Vote: 5-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these minutes. Council Member Brown: Despite the delays, it will be a much nicer project. COMMENTS: Council Member Parks: We walked along the railroad tracks this morning. A drive took place on the tracks from Top-O-Hollow to 9th Street; with a walk back, and video-taping. Riding the rail did give an interesting perspective. A representative was present from the neighborhood group, a representative from Ralph Rosenberg’s office, himself, City staff and staff from the railroad. There are some significant safety problems the railroad is not willing to compromise on. The intersection at 13th is the most severe, and the 20th Street intersection is of concern. The primary concern is the growth around the track and the visibility at intersections. A letter will be hand-delivered to residents of the adjacent areas identifying the problems and that the railroad will be working in that area. The City needs to make a decision regarding liability and what the costs might be. The railroad would like a determination made by the 1st of August. The fencing will not be touched at this point. The stressed concern of the railroad was the hazard problems at the intersections. Council Member Brown left at 12:45 p.m. Council Member Campbell: When you talk “we” in terms of trimming trees—are you meaning the City? Mayor Pro Tem Parks replied that he is not speaking for “us as a City.” He does mean the City in the respect that there are some things that we might want to do, but it would have to 3 be voted on by the City Council. Agreements do need to be reached and hopefully some progress is being made. Mr. Schainker: Mr. Al Raby, LUPP, will be in town the week of July 12, 1994. It may be a good time for a meeting with him, Planning and Zoning, and the City Council. There is a meeting on July 12 1994. Would you be willing to have a workshop with him starting at 5:00 p.m.? It was agreed to have a workshop at that time. Council Member Tedesco: There was a nice crown at the park. This is an excellent program and suggested to Ms. Nancy Carroll that she might want to consider a session at the park in the fall. Council Member Campbell: Complimented the police regarding the action they took regarding the standoff situation. Mr. Schainker stated it was a joint venture for all law enforcement organizations, and they worked extremely well together and the situation was handled very professionally. ADJOURNMENT: The meeting was adjourned at 12:55 p.m. ____________________________________ ____________________________________ Jill Ripperger, Acting City Clerk John Parks, Mayor Pro Tem ____________________________________ Ginger Jones, Recording Secretary 4