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Acting Administrator Collins noted that the comparisons <br />shown by Mrs. Tillman show a savings if we go with the Gallagher <br />plan exclusively as opposed to going with Florida League of <br />Cities exclusively or Schlitt exclusively, but Mr. Baird's <br />recommendation uses a combination of proposals and comes up with <br />a total premium of $913,000, which would give us one million of <br />coverage with no deductible whatsoever. We would be paying <br />Gallagher $638,000 as a premium, which fs substantially less than <br />the premium for being fully insured, but whether or not we would <br />save any money would depend on the Toss we experience in the <br />coming year. <br />Mr. Collins continued to quote the various costs of the <br />Gallagher -Basset package, noting that to begin with you know that <br />you have spent the premium of $638,000; then Gallagher -Bassett <br />recommends that we set aside approximately $260,000 in a Toss <br />fund. That represents the average of our losses over the past <br />few years. If we add our Toss fund for our experienced claims to <br />our premium, we are up to $927,000. We can deduct about $24,000 <br />for the interest we can earn on that fund until we pay it out, <br />but we would also have to pay out about $48,500 for claims <br />service and attorney's fees on each of these claims unless we <br />were going to absorb that cost as part of our deductible. As Mr. <br />Collins saw it, that would bring the total package for the <br />Gallagher -Bassett plan to $951,000 for being partially insured. <br />He noted that the great majority of our claims are in the $1,500 <br />to $15,000 range, and it is very doubtful we would ever hit that <br />deductible except in the event of catastrophic loss. Until we <br />have a solid safety program, he could not recommend we pay more <br />for Tess coverage. <br />Mrs. Tillman advised that the $260,000 figure is incurred <br />losses (that is when you set aside reserves) and $135,000 is the <br />actual paid claims average for the last four years. She did not <br />understand the $48,000 Mr. Collins cited for claims service. <br />55 <br />NOV 11988 <br />BOOK 75 FACE 55 <br />