Prichard hours away from losing insurance coverage; council declares garbage collection ‘emergency’

PRICHARD, Ala. (WALA) - City Council President Traci Hale did not mince words at a specially called meeting to address American Municipal Insurance Corp.’s decision to cancel the city’s municipal insurance.

Hale said the council learned Friday that the company had denied Prichard’s appeal and is sticking by its decision to end coverage.

“As of 12:01 (a.m.) … we will no longer have insurance covered by AMIC,” she said from the podium.

The consequences could be enormous. Normally, if a city employee gets into an accident on the job – or gets sued for any reason related to their work – the city’s insurance company will cover the legal defense. Insurance also covers damages up to a certain amount that a court might award.

With the cancellation taking effect, City Council Attorney Moshae Donald Walker said during the meeting, employees will not have a backstop.

“They should expect if there’s any liability or loss that occurs within the scope of their employment that the city of Prichard will not indemnify them,” she said.

After the meeting, Walker added that any employee driving a city vehicle after midnight could be taking a personal risk.

“That’s not to say that the city does not have a legal duty to indemnify them, but with where the city’s finances are currently, the city probably will not be able to pay for a defense for any city employee that is operating within the lines of their employment,” she said.

Council members voted 3-0 Friday to recall all non-emergency city vehicles. It marks the third time the council has asked city employees to turn in their government vehicles, but none did after the previous two requests. The recall does not affect emergency vehicles, but Walker conceded that first responders also are losing coverage. Asked if the Fire Department will show up if someone calls Saturday, she said, “We hope so. They should show up.”

Council members also could not offer a certain answer to a question posed by a man who identified himself as a Prichard police detective.

“If we can’t work, we can’t drive these vehicles, are we still getting paid?” he asked.

The council also voted 3-0 to declare a “state of emergency” related to garbage collection since the insurance lapse affects garbage trucks, as well. Hale said that RDK Truck Sales, the company that leases the trucks to Prichard, has demanded their return because of the pending loss of insurance.

Council members said an outside company – presumably under a contract signed by Mayor Carletta Davis – has been picking up garbage for about a week. That is consistent with the mayor’s statement earlier this week that she wants to outsource the service. Council members said Friday they oppose that in the longer term and have not voted on a contract. But they voted Friday to allow it on a short-term basis because of the insurance crisis.

American Municipal Insurance Corp. told the city that it was canceling the policy because of the high number of claims it has made and because its adjusters have had difficulty getting information from the city about those claims during the previous administration.

The mayor’s office did not immediately respond to questions Friday afternoon. At a news conference Thursday, Davis downplayed the prospect of losing insurance. She said the city had paid for insurance through Oct. 17. She said she expected quotes from other companies on Monday in case the current coverage lapsed.

“We are hopeful that we’ll be able to get some things put in place before we … have to take any those drastic measures like not being able to service or use any of our vehicles,” she said.

Councilman Roy Smith II said after the meeting that the mayor had not communicated that to the council.

“That’s news to my ears. … I’m the VP of the City Council and I’m the chair of the Bid Committee,” he said. “I would love to have that come across my desk.”

Walker said it is common for cities to pay for coverage months in advance. But she said that does not change the fact that coverage ends on Saturday and added that Prichard would receive a partial refund. Hale urged the mayor to show greater urgency.

“We need to stop portraying to the citizens and the employees of the city that they are OK and fine, and that we have insurance coverage,” she said.

Some folks attending Friday’s meeting expressed anger toward the mayor.

“We should have her impeached,” resident Katie Davis said. “I don’t know how we do it, but I do believe she came into this office to destroy this city.”

Ivan Peterson, who is in the process of moving to Hollinger’s Island from New Jersey, attended the meeting because he is considering opening a comedy club in Prichard.

“It’s a concern,” he said. “You know, because we – you know, the police vehicles are under that policy. But we need to have, you know, some type of safety. … If we don’t have that, it could be a problem. However, I do believe this could be turned around.”