League drops city insurance for Greenfield

Citing increased risk, political bickering and even possible open-meeting law violations, the League of Minnesota Cities took the extraordinary step Wednesday of eliminating insurance coverage for the embattled city of Greenfield.

The unanimous decision came at a regularly scheduled meeting of the League Board of Trustees in St. Paul, but it followed months of acrimony and controversy in Greenfield.

A petition drive is underway asking Mayor Jill Krout to resign; the city is looking to hire its third city administrator in two years, and council meetings are as contentious as ever.

Videos of the rowdy meetings have been posted on the Internet, which has only served to inflame political passions on both sides.

Last month, during one such meeting, Krout fired interim city administrator Jim Willis, who had been recommended by the league as someone who might be able to help the city straighten out its political mess.

At the same meeting, Krout said that a fellow council member was "stalking" her and that Willis had "appeared to be dealing with me in a threatening manner."

Add to this allegations of possible open-meeting law violations by the three-member majority on the council, and league trustees said Wednesday that enough is enough.

The Greenfield Council did not have a representative at the meeting and provided no formal response to the league. But Krout did submit a letter to the League of Minnesota Cities Insurance Trust, the group overseeing coverage for the more than 800 Minnesota cities in the insurance co-op.

"The LMCIT is our insurance company," Krout wrote. "An insurer's role is not to run the city nor assume the role of elected officials. Because we do not follow lock-step in the old mold for city government, the LMCIT pressures us to change to the approved template."

The tone of the letter rubbed some of the board members the wrong way, especially when it mentioned that Krout and the council majority wanted to run the city more like a business and hire an administrator with more private- than public-sector experience for the job.

"When I read the mayor's letter, it reinforces the amount of hostility that exists in the city," said Trustee Desyl Peterson, the city attorney for Minnetonka. "I think the risk is even greater than when we extended it the last time."

During the summer, after months of more bickering, including allegations that City Council members might be carrying concealed weapons to meetings, the league increased Greenfield's deductible from $500 to $200,000.

The league estimates that in the past few years it has paid out more than $800,000 in claims for Greenfield while collecting only about $100,000 in premiums. The difference has been passed on to other members of the league's insurance co-op.

"We have a business decision to make," said Trustee Mark Karnowski, who voted to cancel Greenfield's coverage within 30 days. "This organization has to weigh its risk. If I had three DWIs, I would expect my insurance rates to go up."

The league board took the most severe action it could, marking only the second time in its history it has canceled the coverage of a member city.

Among the coverages eliminated was one paying $50,000 per council member for attorneys to defend open-meeting law violations, which some league officials believe might be going on in Greenfield.

In watching videos posted from recent meetings, critics say, there is very little discussion among the majority before votes are taken, such as last month's firing of Willis.

"After watching the video," Tritz said, "I could see where some of the citizens thought that there had been some inappropriate conversations outside of the meeting."