Local Security State Insurance agent Paul Coe came before the city council on Wednesday, October 12 with a premium breakdown by department of the LMCIT renewal.
The city’s renewal premium is $59,880, said Coe, adding that includes the city’s Liquor Liability renewal.
LMCIT liability coverage provides a $2 million per occurrence limit, said Coe. The statutory municipal tort liability limit per occurrence is $1,500,00, with a per claimant limit of $500,000. “The renewal premium assumes that you (city) are electing to waive the statutory limits to the extent of the limits obtained through LMCIT,” Coe said.
While excess liability insurance is available through LMCIT, Coe said a $1 million Excess Liability Policy would cost an additional $5,722. Longtime City Councilor Tim Kennedy said the city hadn’t purchased the Excess Liability since he has served on the council, and after some discussion, the board agreed with Kennedy to not buy the additional policy.
The maximum LMCIT will pay to replace a building is 150 percent of the limit shown on the schedule. “For most typical buildings LMCIT feels the estimated replacement cost should be reasonably accurate,” Coe said, adding the 150 percent provision provides a great safety margin.
Additional optional coverage for utility transmission and distribution line coverage, no-fault sewer back-up, accident coverage for volunteers and primary auto liability coverage are also available for purchase, noted Coe. “But these have been looked at before and not added,” he said. The council, in the end, agreed to buy the same coverage as it has done in the past.
Construction management bids received
Grand Marais City Administrator Mike Roth told the council that the city had received two responses from firms who wanted to be the city’s construction manager for the building of the $4 million garage that will be located one mile west of downtown Grand Marais at the old Tomteboda motel site.
“Both are large Minnesota companies,” said Roth.
Krause-Anderson submitted a bid of $367,000 to perform the work, while McGough submitted a bid of $537,000, a difference of $170,000.
“The onus is on McGough to tell us why they are worth more than $170,000 than Krause-Anderson,” Roth said.
The biggest difference in the two bids, said Roth, was that McGough showed a cost of $235,000 for its construction management fee while Krause-Anderson estimated that same price at $92,000 for the seven month project.
Based on the huge difference in price, Roth said one question begged to be asked, “Are we going to get something less from Krause- Anderson than what we expect?”
A meeting by telephone will be set up with both firms on Tuesday morning, October 18 so both companies can be interviewed. Roth asked if anyone on the council wanted to take part and Mayor Jay Arrowsmith- DeCoux said he would like to attend so he could learn more about the process used to select one of the companies.
Roth said both companies stated they could finish the work next year in the time allotted, but each needed to be notified as soon as possible.
The Grand Marais Community Visioning and Comprehensive Update is kicking off its community engagement process on Tuesday, October 18. To learn more, go to www.GrandMaraisVisioning.org
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