By BECKY KISER
Hays Post
The increase in the renewal of property/liability insurance for the city of Hays was just 2% – $4,475 more than the prior period.
City commissioners Thursday night unanimously approved renewal of the 2019/2020 coverage with Midwest Public Risk (MPR) for $228,228.26 to be funded from the Intergovernmental Insurance and Surety line item in the budget.
The increase was capped at 2% for all MPR members. The city has been with MPR since 2017.
However, a property reappraisal conducted in August 2018, is expected to force a considerable hike in the premium for 2020/2021, according to Kim Rupp, finance director.
“I’ll caution that we’ll likely see a significant increase in our required contributions of the next renewal given [property] values have jumped quite a bit,” Rupp told commissioners. “It could be north of $25,000.”
The most notable valuation change was in buildings with an increase of almost $15.6 million.
MPR is a pool of public entities that includes cities, schools, counties, health departments, fire protection districts, ambulance districts, election boards and housing authorities.
Rupp is pleased with the city’s experience with the group in the past year, both in services offered and claims response.
“We’ve learned our 2% increase is well below the average in the marketplace of 6%,” he reported. “We’ve also learned insurance carriers are becoming more selective due to a huge influx of applications because of rate increases. Carriers are also tremendously cautious particularly due to convective storms that include tornadoes, hail and wind.”
“Given the tornadic activity we’ve seen in the last few years, I think we were very fortunate that we didn’t have some catastrophic weather incident here,” said Commissioner Eber Phelps, “especially when you look at the water treatment plant value at $3.8 million and the new appraised value at $9 million. That would have been quite a blow to the city to have to come up with that for rebuilding purposes.”
Mayor Henry Schwaller also noted the city has been fortunate when it comes to flooding.
“We’ve had a lot of rain last year and this year, and we’ve not had the flooding we’ve had historically.
“Part of it’s nature and city staff has done a really good job making sure the infrastructure is prepared,” said Schwaller.
The anticipated insurance premium increase is figured into the 2020 draft budget.
Commissioners will conduct their first review of the budget at the July 2 work session. Because Thursday falls on the July 4 holiday, the meeting will be held Tuesday.