City's insurance costs escalates

PELL CITY — Insurance for the city's assets and operations has jumped up by 27 percent for the coming year.

The new rates began July 1, and coverage will remain through the Alabama Municipal Insurance Corporation.

"The culprit (for the increase) is with reinsurers," said Ron Helms, agent for Helms Insurance of Pell City. "It's what's driving the increases."

Helms addressed members of the City Council about the insurance rate during Monday's regular session.

The city has seen increases in past years, with the most significant being in 2022 with a 7.8 percent increase. Insurance costs in 2023 saw a 6.5 percent increase, but last year, 2024-2025, it was only 1.6 percent.

Reinsurance is supplied to insurance companies to provide insurance for the insurance company. A portion of the primary insurer's risk exposure is transferred to another insurance company, the reinsurer.

The largest areas of increases are found within coverage for police departments and property, Helms said.

The city is adding insurance to cover potential losses in sales taxes due to retail activity. This coverage would provide insurance of $4 million in a loss of sales tax for a city.

"While the city strives to control costs whenever possible, it is also incumbent upon us to carry responsible policy limits that provide adequate coverage to the city's property, equipment and employees," said City Manager Brian Muenger.

He added that increasing costs for construction, along with the costs of equipment and vehicles have also driven an increase in rates for the city.

Muenger said the city's overall losses have not changed, but because of overall market conditions related to insurance, and more specifically, reinsurance, AMIC has been forced to pass down higher premiums to retain appropriate coverage.

Helms told city officials he and Muenger had met with AMIC representatives to see the details of the changes.

"We weren't singled out, for sure," Helms said. "They showed us, in great detail, the information."

Helms also told the Council that other avenues had been suited for the coverage, but there really weren't a lot of options.

"They (AMIC) do look for ways to pay claims, not for a way not to pay," Helms said. "This is the best we've got."

For the coverage provided from July 1, 2025 to 2026, the city will pay $409,030. Last year's premium was $321,771.

The coverage includes property and general liability, employee benefit liability, property and equipment, and other areas.

In other matters, the Council approved appointing Billy Shute and Michelle Greene to the city's Board of Zoning Adjustments.

Reappointment for the board was approved for Will Hardwick.

Reappointments were also approved for the city's Planning Commission, naming Derrol Luker and Pat Wrigley.

The Council approved a request from Ash Arrington, director for the Pell City Center for Education and Performing Arts, to allow the sale of alcohol for an event planned for Aug. 30.

The All Nashville Road Show will be held in the city's Sports Complex area.

The outdoor music festival is designed to deliver an authentic Nashville experience to its audience, with live music performances from Nashville artists, food and drinks, and is an all-inclusive event.

The Council also:

Agreed to maintain its contract with Otis Elevator maintenance and 24 hour dispatching services for the Municipal Complex and City Hall for $4,080

Approved a water leak credit to Marathon Electrical Contractors for $2,115

Received the results of the 2024 Municipal Worker's Compensation audit submitted by Human Resources Director Dawn Childree. It showed a refund to the city of $450, and the city's final expenses for the coverage at $176,062. The audit showed the city's payments for the past three years averaging 1.59 percent of the city's payroll, and a reduction in costs from an average of 4.1 percent cost from 2013-2016

Approved a payment of $250 to Coosa Riverkeepers for testing water samples from 50 recreational sites throughout the Coosa River basin

Approved the lease of two copiers for the Police Department for a monthly lease and maintenance agreement with Kyocera Document Solutions.