League of Cities sends stern warning to Maplewood over squabbles

The League of Minnesota Cities issued a stern and expensive reprimand to this St. Paul suburb after ongoing squabbles at City Hall helped drive up the cost of the city's insurance.

The league insures all but six Minnesota cities, and had considered dumping Maplewood altogether after the contentious atmosphere at City Hall contributed to a spike in lawsuits.

Instead the league's board of directors decided to offer the city a renewal, but with stiff premium and deductible increases.

"The board's concern is the contentious and divisive situation out there," said Pete Tritz, director of the League Insurance Trust. He said the league is concerned that if things don't improve, the city could face even more lawsuits.

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Amid ongoing power struggles between the city's elected leaders and its staff as well as persistent budget problems, four employment-related claims have been filed against the city since 2006; three have been settled.

Earlier this year, former Human Resource Director Sherrie Le won her claim and a $185,000 award. In addition, a land-use lawsuit is pending.

Maplewood's litigation-related losses for the past year exceeded $1 million, said VeNita Schnebele, a representative for the city's insurance agent, Arthur J. Gallagher Risk Management Services Inc.

The league hasn't dropped any city's insurance coverage in 20 years, Schnebele said. The league's coverage is still the city's best option, Schnebele told city officials. That's despite the fact that adjusted premiums will be 123 percent of what an average city would pay, and its deductible will increase from $50,000 to $200,000 per claim, Tritz said.

Maplewood Mayor Diana Longrie took issue with the idea that the city's insurer was threatening to revoke coverage or penalize the city over what it considered "uncooperative" behavior. She said it raised First Amendment issues.

Longrie said she wants more information on how the league handles similar scenarios with other cities to determine whether Maplewood is being "singled out."

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Information from: St. Paul Pioneer Press, http://www.twincities.com