HomeMy WebLinkAbout4C Open Mtg Law DefenseCONSENT AGENDA #:
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4 (c)
RALPH TESCHNER FINANCE DIRECTOR
CONSIDER PURCHASE OF OPEN MEETING LAW DEFENSE COST
INSURANCE
FEBRUARY 7, 1994
The League of Minnesota Cities is now offering insurance liability
coverage in the event an open meeting law violation were to occur by
cities. This is provided as separate coverage aside from our basic liability
policy. The purpose for this agenda item is for the Council to consider
election of this optional insurance coverage.
City Council meetings have recently been subject to an ever increasing
level of public scrutiny, from both the media and citizen levels. The
penalties for violation of the Open Meeting law is basically a $100.00 civil
penalty and/or potential loss of office for repeated violations. While this
punishment appears to be fairly minimal, the most significant financial
consequences are the legal costs associated with defending these lawsuits.
No protection is provided by our current policy.
The reason this coverage is not a standard part of our LMCIT policy is
because some cities question whether it is appropriate to expend taxpayer
dollars when an offense of this nature has occurred. However the
following reasons exist which would support the decision to acquire the
insurance coverage:
1. Most violations of the open meeting law are inadvertent.
2. There are cases which have occurreddespite legal opinions of
city attorneys which have stated support for closed sessions.
Even though an accusation may be dismissed or considered
frivolous, substantial legal costs could be incurred in defense
of such actions.
Inconsistencies between thc open meeting law and data
practices law may result in a violation of one due to
compliance with the other.
Under this coverage the LMCIT will reimburse a city official for 80% of
the defense cost associated with an Open Meeting Law lawsuit. It is
important to recognize that the insurance does not provide attorney
services or actually pay legal expenses on behalf of the councilmember. It
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instead reimburses the cost up to the 80% maximum. Also, it does not
provide coverage for either of the following:
1. Fine or penalty for violating the open meeting law.
2. Award of plaintiff's attorney fees.
The Open Meeting Law Defense Costs Reimbursement Agreement is
limited to $20,000 and the premium amount for Prior Lake city officials
would be $925.00 for this year.
Staff would recommend that the Council obtain the insurance coverage. It
provides relatively inexpensive protection in the event of such an
occurrence. Coverage would be bound effective retroactively to 2/1/94
which coincides with the renewal date of our LMCIT insurance policy.
A motion to approve the purchase of the Open Meeting Law insurance at a
premium of $925.00 as part of the consent agenda would be in order.
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