DUMMERSTON — The Selectboard has blunted a spike in property replacement valuations for town buildings, but it has some work to do before the board re-signs with the town's insurance carrier.
Overall, property replacement valuations shot from roughly $400,000 to $1.1 million, selectmen recently learned when the time came to renew annual insurance coverage through the Vermont League of Cities and Towns.
According to published reports, one estimate shows the town's property insurance premium, now at $8,186, rising by $6,000 had the new values taken effect.
The increase - “exorbitant,” selectmen said - sent them scrambling for answers and reductions.
Meanwhile, renewing the contract is essentially overdue, with the policy set to turn over January 2014. “They're waiting for us courteously, I guess you would say,” Bill Holiday reported to fellow Selectboard members Nov. 13.
The board and other town leaders were working to hold the line on valuations at the town garage, community center/library, historical society, and two fire stations.
Holiday said negotiations and fact checking already had helped knock $47,564 off the proposed revaluation hike for the Historical Society building, and another $204,098 from the increase in the town garage.
The valuations were set after Connecticut-based Property And Casualty Intermunicipal Fund (PACIF) examined the buildings as part of a five-year update, and keyed Dummerston's ZIP code into a computer application, Holiday said.
“I said, I don't think they punched in the right ZIP code; I don't think they're going by Vermont. We've got contractors around here who have said it's not going to cost $40,000 for the foundation work where [PACIF] says it's going to,” White said.
Of the Community Center, which saw a “whopper” of an increase, in Holiday's term, the evaluation was predicated on replacement for a historic building, which it need not be: Officials said in the event of a catastrophe the building could be returned to the same square footage, “but in a more modern and less historic way.”
Next on selectmen's to-do list: at the suggestion of Ken Canning, director of risk management services for VLCT, persuading three local contractors to come up with square-foot replacement cost estimates for the town garage and historical society building, the valuation hikes of which remain contested.
“Everything else is solved to our satisfaction,” Holiday said.
Member Lewis White said Canning advised that if local estimates ring in at less than Connecticut-based insurer's evaluation, VLCT would guarantee the local numbers - and peg the town's premiums to those.
“That's just as good, if not better, than the appraisal,” White characterized Canning as saying.
Holiday set out a philosophy for convincing builders here to take on the project: “It would save us and save them tax dollars. It would save the townspeople [money].”
Founded in 1967, VLCT is a nonprofit, nonpartisan organization that serves Vermont's municipal officials, including providing insurance through PACIF.
VLCT PACIF provides coverage for losses to member municipalities for property damage, auto accidents, injured employees, public official liability and employment practices liability.
Competing insurers 'on hold'
At the meeting, White said Canning reacted to The Commons coverage of the Selectboard's previous meeting, at which the paper quoted Holiday as reporting Dummerston had been approached by a competing carrier and that he had contacted another.
“I said it was mentioned by one member of the board, and we were really concerned that the rise in the values of these buildings well-over doubled, and I said, 'So is our premium going to go up over double?'” White explained.
“And he said, 'No, it's going to go up,' but they could work on the fact that it will not double; they're not going to go for a double, dollar-for-dollar amount.”
White continued: “How much is the total insurance going to be between what it was and what it is? And he [Canning] said he didn't know. He gave me his cell phone number. He was really concerned about all this.”
Canning reportedly reminded White that Dummerston was under contract, “and you have to give us so much notice when your time is up,” White characterized him as saying.
Holiday then said three other carriers by this point “are out there kind of wondering what we're going to do, and I've got them all on hold.”
Selectmen and their assistant, Laurie Frechette, then discussed the wider benefit of remaining members of VLCT.
Reached by e-mail, Canning told The Commons that, “Yes, there was a significant increase in a few of [Dummerston's] buildings from five years ago. VLCT staff at that time worked with the town that resulted in those negotiated values.”
Asked to explain where Dummerston is in relation to other municipalities in the county insured by PACIF, he said, “Most other members are not in the same situation as Dummerston, as they accepted the Marshall and Swift [software] values five years ago and are seeing only modest increases this time around.”
He said the software used to set revaluation “is not above the possibility of errors,” and that VLCT is “happy to discuss the resulting values with a member [if] there is a concern as to the accuracy of the inputs and parameters.”
Finally, he said, VLCT has advised the town that it will work with officials on their 2014 renewal premium contribution, “and that even if our figures are correct, their contribution will not increase in the same proportion. It will likely increase to some degree to reflect the amount of protection we are providing but will not double even if the values do.”
At White's suggestion, member Steve Glabach is going to line up the three necessary contractors; he himself would call Canning to verify related information.
Member Joe Cook summed it up: “When all this work is done and we can get an idea of what the premium will be for this and such for guaranteed replacement, then we will have more information when it comes to that point, and we can decide which way we want to go.”