City drops earthquake coverage
SIKESTON - As a result of skyrocketing premiums, the City of Sikeston will do without earthquake insurance this year.
The Sikeston City Council accepted the sole bid for the city's liability insurance - minus earthquake coverage - during their monthly special briefing session today.
Karen Bailey, city treasurer, asked for immediate action on the insurance from the Council as the bid would expire before the council's regular meeting April 7. "The bid was only good for 30 days," she explained.
Liability insurance is bid out every three years, Bailey explained. Next year and the year after, the council can opt to just renew the contract or may seek new bids.
Bailey said she sent 12 bid packets out this year. "In return, I got one agent who responded," she said.
The responding agent offered coverage through the St. Paul's and Hartford insurance companies. Bailey said she also looked into MOPERM, a public entity insurance pool, but found the premiums are higher and the conditions risky.
When liability insurance was bid three years ago, Bailey recalled, it included earthquake insurance at a cost of $30,000.
Bailey said $193,000 was budgeted for liability insurance this year, an increase of 10 percent over last year's budgeted amount. She said this is the second year in a row, however, that the city has seen a 20 percent increase in liability insurance premiums.
"Without the earthquake coverage, we're still over the budget $20,000," Bailey said. With earthquake coverage, the cost would have been an additional $60,000 over budget.
St. Paul's and Hartford are good insurance companies, Bailey said, "They just don't have any competition."
In other City Council action this morning, council members rejected all bids for janitorial services in favor of city staff taking on the extra duties.
"I'd like to see how it goes," said City Manager Doug Friend. "If it doesn't work out, we can rebid."
Friend explained staff was originally looking to save the city some money with "significantly scaled back" janitorial services. The existing services cost $40,000 per year. Scaling back services, "we only saved about $10,000," Friend said.
The city will cancel the remaining contract with Lawson Janitorial of Lilbourn for a savings of $6,500 for this budget year, Friend said.