Exh DATTACHMENT D
MARCH 28, 2005 COMMISSION MEETING
March 21, 2005
MEMORANDUM
TO: The Honorable Mayor
and Members of the City Commission
FROM: Jim Hanso
City
SUBJECT: City Manag is Report
Interest on Loans and Assessments; Recently the City .Commissionasked staff to look into the
possibility of lowering the interest rate on loans and assessments to line up with the new rates
recently approved for the septic to sewer conversion policy. Finance Director Nelson Van Liere
has prepared a report dated March 11, 2005, which is attached for your information. His
recommendation is to allow for the refmancing of the non-Section H assessments and loans by
request. For information about his recommendation, read the attached report.
Reports on Suits Against the City; City Charter Section 61 was brought up in the last
commission meeting. It reads as follows;
"Upon receiving notice of any suit, the City Manager shall diligently investigate the
matter and file a written report with the City Clerk to be presented to the City
Commission at its next meeting. The City Clerk shall determine if a special meeting
should be scheduled to deal with an emergency situation. Upon receipt of a written claun
for damages by an injured party, the City Commission may, by ordinance, make a
settlement of the claim."
Our City Attorney thinks that this provision was created long ago in a time before cities typically
carried insurance to cover most claims. Now when a claim is received, it is immediately
transmitted to the insurance company and the City Attorney. The insurance company will then
appoint an attorney to investigate the claim and, if they think appropriate, discuss possible
settlements. Because the insurance company's cost for an attorney as well as any settlement
usually exceeds the city's deductible in any particular case, their recommendation for payment is
usually from the insurance company's money and not the city's. However, any defense costs
and/or settlements made goes to the city's experience rating which will be the basis for future
premiums. The process for an insurance company to assign an attorney and then have that
attorney assess the case usually takes at least a couple of months. Consequently, any
recommendation for settlement of the claim at the next commission meeting is unrealistic in the
current legal environment.