News

August 7, 2008

Officials: Police liability could break Exeter

Only insurer to offer coverage requires borough to pay first $100,000 of any claim.

IAN CAMPBELL Times Leader Correspondent

EXETER – Any future police legal settlements could literally break the bank, borough residents were told on Tuesday.

That was when council announced that a new carrier for the police liability coverage would require a self-insurance retention of $100,000 per claim, up from $10,000 previously.

The cost of the insurance had also increased, from around $10,000 to $41,475.

The retention is effectively coverage of the first $100,000 of any legal cost, so if a case settled for $125,000, the borough would have to cover the first $100,000, with the insurer covering the balance.

Councilman Joseph Esposito had noted at previous council meetings that the borough’s history of lawsuits arising from claims against the police department would make renewing insurance very difficult, and only one carrier out of the seven that the Joyce Agency approached was willing to write a policy for the department.

There are three cases pending against the department, all involving Sgt. Len Galli.

The costs involved in those cases will be handled by the borough’s current insurer, solicitor Peter Moses said Wednesday, although the borough is still liable for the self-insurance aspect, about $30,000.

The new insurance took effect Aug. 1, and runs for one year, Borough Secretary Debra Serbin said Wednesday.

Some of the costs that may put Exeter in the red at the end of the year include an initial shortfall of $20,000, the $30,000 in police costs, and $23,000 in unbudgeted pumping costs related to flooding earlier in the year, Esposito said.

Problems involving Exeter’s budget have been recurrent in recent years, and trying to balance the revenues and costs had been cited by one former council member as playing a part in his decision to step down.

Serbin noted the borough had few options open for raising revenue.

It is operating at its maximum tax levels under state law, and the staff levels were already reduced as much as possible.

The borough may consider options such as shared services agreements, Serbin said.

Esposito has said in the past he was concerned that the borough would borrow money to cover the budget shortfalls without addressing the underlying issues that contributed to the problem.

He reiterated his stand against a “borrowing” approach on Tuesday.

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