Finance director reports insurance spike, negative capital improvement balance

At the meeting the board received a monthly financial update from finance staff (addressed in the meeting as Justin). Justin said the general fund is currently slightly positive but warned that one-time payments during the fiscal year could change that picture. He reported the capital improvement fund has a negative balance and said the upcoming budget will address that shortfall, likely by reducing planned capital spending.

Justin reviewed the city’s liability insurance renewal and said quotes returned indicated an approximate $51,004 increase for the year, driven principally by higher auto and general-liability costs. He said the portfolio of policies is up about 23.5% year over year and that the average of all funds has risen about 71% since 2023, attributing the increase to a mix of inflation and rising claims costs. Justin noted the city has recorded 17 auto claims in the period cited, including one large loss approaching roughly $700,000, and urged staff to pursue operational and safety measures to reduce exposure and identify savings where possible.

Board members asked whether the insurance increase could be isolated to inflation versus claims experience; Justin said both factors contribute and that he had removed nearly $818,000 in lingering or no-longer-needed insured items from the schedules to reduce premiums. He recommended continued review of coverages and exploration of discounts with insurers.

The board did not take formal action on the insurance renewal during the meeting; Justin indicated budget adjustments and further work will be part of the next budget cycle and any procurement decisions for coverage.