### 1 UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C.

In The Matter of Compliance With Federal Obligations By the City of St. Clair, Missouri

___________________________________________________________________________________

To the Office of the Chief Counsel Attention: FAA Part 16 Airport Proceedings Docket
AGC

- 610 Federal Aviation Administration 800 Independence Ave., SW Washington, DC 2059 1

COMPLAINT OF THE Tenants of the St. Clair Regional Airport FILED PURSUANT TO 14 C.F.R. PART 16, RULES OF PRACTICE FOR
FEDERALLY

- ASSISTED AIRPORT ENFORCEMENT PROCEEDINGS

Designation of Persons to Receive Service for Complainants:

Jim De Vries 501 Ridgefield Dr. Pacific, Missouri
63069

REPLY TO THE RESPONDENTS ANSWER FAA DOCKET 16

- 14

- 03 This is the Comlainants reply to the answer submitted by the city of St. Clair to the case docketed by the FAA, no. 16

- 14

- 03.

The city is attempting to Justify the charges to the airport for 5% of its insurance cost. The city has produced no evidence or documentation to justify this PERCENTAGE cost, such as payroll amounts that
show that t he airport is accountable for 5% of the city payroll.

The city has stated in its response that it has charged the airport 5% of its insurance cost “for many years”. When in fact this started in 2009 with the Blum administration.

In 2008 the airport inco me was $3 3
, 00 5, (See page 7 ) and had operating expense for $ 6874 (see page 8 ). The city became aware of the fact that all airport revenue was to be used to operate the airport in June of 2008 by a letter from MoDOT. (see page 9
, 10, 11 )

. In order to s ubstantiate the claims by the city
that

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the airport was a finacial burden to the city, the city started to charge the airport for insurance cost in order to show expenses were greater than income (see page 6 ) and produced a budget for 2009 with a proposed $10,000 insurance cost. The city failed to correct the revenue situation, according to the MoDOT request for information , (See pages 1 3 , 1 4 )and started a policy of revenue diversion by chaging the airport for insurance cost that results in a dissaportion ate allocation of government cost to the airport for the benefit received

.
This led to an informal complaint in 2009. (See pages 1 3, 14 ) and in September of 2010 MoDOT sent a letter addressing the insurance cost for the airport and revenue diversion. Page s 15, 16, 17. The practice of overcharging the airport for insurance has continued until the present time. As noted in the September 2010 letter from MoDOT, Mr. Pestka recommended that the city contact other communities with airports that do not sell fu el to determine how other communities establish their insurance cost. It is not known if the city perused this procedure.

The complainants did do a telephone survey of other communities to find out how MIRMA costs were distributed by other municipaliti es, and every city that responded explained that they did so by payroll percentages, and that their insurance cost were distributed to all departments by each departments percentage of payroll. Cities without airports were also contacted, not one municip ality in the MIRMA system, distributes insurance cost in a like manor to St. Clair. Mirma costs are billed to the city by payroll cost (See exhibit B page3 item 16 of the city’s response).

Mr. Broderson of MIRMA at the request of the complainant answered questions regarding aviation

insurance as shown on page 34 . In the response to the 6 th 

### question.

Please describe how the contracted aviation coverage is included in the MIRMA package. The cost of the aviation liability policy i s spread among th e entire membership. Because this is an insurance pool, each of the 74 members participate in this coverage, and each member’s share of the $48,094 would be $649.92 to cover the 29 airports. Each members cost for each airport would be $22.41 even though e ach member does not contribute equally to the fund. The cost to any one individual sponsor for liability coverage to its own airport would be $22.41.

In a follow up email to Mr. Broderson, the following reply was returned by Mr. Broderson.

From: Jim D e Vries [mailto:jimdevries@live.com] Sent: Thursday, June 26, 2014 6:02 AM To: Matthew Brodersen Subject:

Can you describe how the airport coverage is assessed among the membership, and what determines how the cost is divided among the members? The met hod to divide the assessment among the membership is proprietary information that I will not describe in greater detail.

Can you also send the spreadsheet with the list of airports that show the cost associated with each airport, similar to the one included in the insurance binder? We no longer receive a page listing of the cost of individual airports as part of the aviation liability policy.

### 3

Jim Johnson and Lynn Martin had a telephone conversation with Mr. Broderson in the spring of 2013, in which Mr. Broderson outlined the way MIRMA handles the airport insurance.

In a previous telephone conversation with Mr. Broderson and the complainant

, Mr. Broderson was asked if he was familiar with Federal Aviation Administration Policy and Procedures Concerning the Use of Airport Revenue; and CFR part 225, and he stated that he was not familiar with the two documents.

2. Reasonable costs. A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when governmental units or components are predominately federally

- funded. In determining reas onableness of a given cost, consideration shall be given to:

c. Market prices for comparable goods or services. d. Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the governmental unit, its employees, the public at large, and the Federal
Government. e. Significant deviations from the established practices of the governmental unit which may unjustifiably increase the Federal award’s (airport revenue, or in this case airport. The words airpor t revenue being substituted for Federal Award, as per The federal Register page7719) cost.

The St. Clair Regional Airport has minimal payroll cost. The city documents provided show no payroll expense. The telephone survey of municipalities with airport s similar to the St. Clair Regional Airport revealed that the municipalities that did not have any payroll expense for the airport did not charge the airport for insurance cost, except for Mountain Grove and Maryville.

If St. Clair is following the correct procedure, then the rest of the MIRMA members must be doing it incorrectly.

The documentation that the city is claiming to be adequate to justify the charges to the airport account does not explain the cost of the insurance, but instead attempts to just ify the charges made to the airport. The city and Mr. Brodersen has stated, the cost is not broken down. It is only reasonable to conclude that if a cost cannot be broken down, or does not exist, it cannot be documented; adequate
documentation cannot be provided to meet the documentation requirements of the FAA regulations
and rules.

The FAA Policy and Procedures Concerning the Use of Airport Revenue do not address the reasonableness of a cost, other than “ Market prices fo r comparable goods or services”; it addresses the standard of documentation that must be provided.

### 4

The complainants addressed the insurance cost to MoDOT in 2009. MoDOT experienced personnel changes and therefore the new director did not pursue the insurance issue after Mr. Pestka re signed. Upon the refusal to investigate the issue by MoDOT, the complainants took the issue to the FAA office of Airports in the Central Region. The complainant was not notified by the Central Office until Jan of 2014, that the office was not in a positi on to challenge Mr. Brodersen’s opinion and did not offer an explanation of the position taken by the FAA Central Region Office.

As can be seen by the dates on the letters from MoDOT, the city has perpetuated this issue by not complying with Mr. Pestka’ s request for information, and corrective plans.

Pages 18, 19, 20, 21, 22, 23 show the income and expenses for 2009, 2010, and 2011. The audited city records show the airport losing money for each year. If the undocumented insurance costs are removed from these years, the airport would be self sustaining.

It should also be noted that in 2009 the city charged the airport for 7.8% of its insurance cost. This would mean that the “many years” the city has been charging 5% to the airport, is in reality only 2010, 2011, 2012, 2013, 2014. Five years, all of which take place in the Blum administration.

The city has made the point in its arguments to close the airport, that the airport is a financial burden to the city, and has stated repeatedly that the city audited records show this. This overcharging is intentional, and designed to help accomplish one thing, to provide evidence that th e St. Clair Regional Airport should be closed. The financial and physical condition of the St. Clair Airport did not come about naturally. It happened by design of the City. The city in its attempts to BULLY its way through a closure process, is trying to invent a new way to close an airport by “demolition by neglect”, and financial ruin.

The City of St. Clair is also in violation of the Federal Register/Vol. 64, No. 30/Tuesday, February 16, 1999/Notices 7719

d. Costs billed to the airport under the co st allocation plan must be similarly billed to other comparable units of the airport owner or operator.

The city “percentage plan consist of, 5% airport, 40% water and sewer department, 10% parks, 45% administration, which includes the street department and the police department, and the city hall. In other words, the water and sewer department, along with the airport pay for 45% of the city insurance

cost. The police department alone accounts for 44% to 48% of the city payroll. Water and Sewer

accoun t for less than 20%. See page 32. The total administration percentage of payroll is around 70%.

This percentage breakdown by

- other than payroll

- is designed to shift the expense of the insurance to the business activities of the city, which produce cash

.

In CFR 225 Federal Register / Vol. 70, No. 168 / Wednesday, August 31, 2005 / Rules and Regulations page 5191 3

.
2. Reasonable costs. A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was

### 5

made to incur the cost. The question of reasonablene ss is particularly important when governmental units or components are predominately federally

- funded. In determining reasonableness of a given cost, consideration shall be given to:

c. Market prices for comparable goods or services.

The 5% number does n ot represent a market price for comparable services.

Pages 25

- 31 are a copy of a proposal for the property damage coverage for $1663. The original file is attached to the e

- mail.

There are two clear and distinct points to consider in this case.

1. T he assessment to the airport by the city.
2. The cost to the city by MIRMA. The assessment by the city to the airport is documented by the city. The cost to the city by MIRMA is not determined and is not documented. Clearly the assessment by the city to the a irport does not document the cost to the city by MIRMA.

It is very clear that the city of St. Clair fails to meet the criteria for compliance as stated below in 5190.6b.

b. Preliminary assessment. FAA must make a judgment call in all cases as to whether a sponsor is reasonably meeting its federal commitments. A sponsor meets its commitments when: (1). The federal obligations are fully understood; (2). A program (e.g., preventive maintenance, leasing policies, operating regulations, etc.) is in pla ce that the FAA deems adequate to carry out the sponsor’s commitments; (3). The sponsor satisfactorily demonstrates that such a program is being carried out; and, (4). Past compliance issues have been addressed.

Please investigate this complaint, and re quire the city of St. Clair to restore to the airport account all undocumented charges to the airport account and use all resources available to the FAA to enforce this grant assurance as outlined in the FAA Policy and Procedures Concerning the Use of Airp ort Revenue

.
The complainants here by enter a motion asking the FAA compliance office to require the City of St. Clair to provide the proprietary information referred to in Mr. Brodersen’s email concerning the distribution of the airport coverage among th e MIRMA members.

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Thayer Mo 0

Richland Mo 0

Mansfield Mo 0

Tarkio 0

Hannibal 0

Hermann 0 Maryville by payroll 1 emp Albany 0

Mountain Grove no paid employees $500

### 13

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ST. CLAIR REGIONAL AIRPORT April 29, 2015 SWETT & CRAWFORD 1001 CRAIG ROAD, SUITE 260 April 29, 2014 ST. LOUIS, MO 63146 PLUS INSURANCE SALES PROPOSAL @VANTAGE FOR COMMERCIAL ACCOUNTS POLICY DATE: IN PARTNERSHIP WITH: April 29, 2014 thru This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitation s found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured a nd t he insurance company. Quote: 1563857

- 1 1 @VANTAGE FOR COMMERCIAL ACCOUNTS PLUS INSURANCE SALES PROPOSAL DATE April 29, 2014 BUSINESS CLIENT ST. CLAIR REGIONAL AIRPORT EFFECTIVE DATE April 29, 2014 EXPIRATION DATE April 29, 2015 QUOTE 1563857

- 1 IN PARTNERSHIP WITH SWETT & CRAWFORD 1001 CRAIG ROAD, SUITE 260 ST. LOUIS, MO 63146 UNDERWRITING COMPANY Atlantic Specialty Insurance Company 150 Royall Street Canton, MA 02021 This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured a nd the insurance company. Quote: 1563857

- 1 2 

### ABOUT ONEB EACON OneBeacon Insurance Group, Ltd. is a Bermuda

- domiciled holding company that is publicly traded on the New York Stock Exchange under the symbol "OB". OneBeacon's underwriting companies offer a range of specialty insurance products sold through independent agencies, regional and national brokers, wholesalers and managing general agencies. Each business is managed by an experienced team of specialty insurance professionals focused on a specific customer group or industry seg ment. OneBeacon's solutions target professional liability; ocean and inland marine;entertainment, sports and leisure; excess property;environmental;group accident; programs; public entities; commercial surety; technology; and tuition refund. For further in formation about our products and services visit www.onebeacon.com and to remain up to date on OneBeacon's news, follow

us on Twitter @OneBeaconIns or visit our online newsroom: www.onebeacon.com/newsroom. This proposal contains only a general description o f the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured a nd the insurance company. Q uote: 1563857

- 1 3 

## @vantage for Commercial Accounts Plus Quote Proposal Payment Plan Agency Bill

- Annual

- Payment in Full No Installments 

### Premium Summary for ST. CLAIR REGIONAL AIRPORT Coverage

### 26

Coverages Premium Property Coverages $1,616 Terrorism Coverage $47 Premium When Excluding Terrorism Coverage $1,644 Premium When Including Terrorism Coverage $1,663 This proposal contains only a general description of the coverages and does not include all of the benefits, terms, condition s, exclusions and li mitations found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured a nd the insurance company. Quote: 1563857

- 1 4 

### Common Policy Forms Form Description 4 VIL 100 10 98 COMMON POLICY DECLARATI ONS ASC 00 02 01 98 PREMIUM STATEMENT ASC 00 12 01 98 SCHEDULE OF LOCATIONS VIL 001 02 05 COMMON POLICY CONDITIONS

- (N/A TO VA AUTO) VIL 645 MO 02 13 MO CHANGES

- CANCELLATION & NONRENEWAL ASC 00 11 01 98 Schedule 1

- LIST OF COMMON DEC FORMS 

### Non

- Policy Fo rms Form Description CLD 132 01 08 POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM INSURANCE COV CLD 149 01 08 MO TERRORISM INSURANCE DISCLOSURE NOTICE SUPPLEMENT IL P 001 01 04 U.S. TREASURY DEPT OFFICE OF FOREIGN ASSETS NOTICE VGN 002 01 10 SPECIAL PROPERTY PLUS COVERAGE FORM QUICK REFERENCE GUIDE This proposal contains only a general description of the coverages and does not include all of the benefits, terms, condition s, exclusions and limitations found in the policy. The insurance policy itself, not this d escriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857

- 1 5 

### SCHEDULE OF LOCATIONS Loc Bldg Address 1 1 HANGAR 1 ST. CLAIR REGIONAL AIRPORT SAINT CLAIR, MO 63077

- 3310 2 HANGAR 2 ST. CLAIR REGIONAL AIRPORT SA INT CLAIR, MO 63077

- 3310 3 HANGAR 3 ST. CLAIR REGIONAL AIRPORT SAINT CLAIR, MO 63077

- 3310 4 HANGAR 4 ST. CLAIR REGIONAL AIRPORT SAINT CLAIR, MO 63077

- 3310 This proposal contains only a general description of the coverages and does not include all of the be nefits, terms, conditions, exclusions and limitations found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured a nd the insurance company. Quote: 1563857

- 1 6 

### Property Location Coverages Prop erty Policy Coverages Property Policy Coverage Enhancements Loc Bldg Coverage Limit Deductible Val Premium 1 1 Building $349,000 $1,000 RC $1,043 2 Building $76,800 $1,000 RC $229 3 Building $38,400 $1,000 RC $115 4 Building $76,800 $1,000 RC $229 Coverage Limit Deductible Val Premium Equipment Breakdown Portfolio Included Expediting Expenses $100,000 Hazardous Substances $100,000 Perishable Goods $100,000

### 27

CFC Refrigerants $100,000 Business Income Coverage Limit Deductible Val Premium Bucket Per Occurrence $250,000 Personal Effects of Officers, Partners & Employees Valuable Information Property Accounts Receivable Outdoor Property Fine Arts

- Per Item $5,000 Hardware and Media Fire Extinguisher and Automatic Extinguishing System Recharge Emergency Response S ervice Charge Conditional Sales Agreement Decreased value of Stock due to Damage to another part or parts of Stock Tenants Improvements & Betterments Electronic Data Damage or Destruction from Inland Marine Causes of Loss Electronic Data Loss of Income and Extra Expense from Inland Marine Causes of Loss This proposal contains only a general description of the coverages and does not include all of the benefits, terms, condition s, exclusions and limitations found in the policy. The insurance policy itself, no t this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857

- 1 7 

### Property Policy Coverage Enhancements Coverage Limit Deductible Val Premium Property in Transit $1,000 Per Occurrence $25,000 Internationa l Air Shipments $1,000 Per Occurrence $10,000 Property at Other Locations $1,000 Per Occurrence $25,000 Crime Limit of Insurance $10,000 $1,000 Money and Securities Employee Theft Money Orders and Counterfeit Paper Currency Forgery and Alteration Inside th e Premises

- Robbery or Safe Burglary of Other Property ERISA Employee Theft $0 Per Occurrence $10,000 Credit, Debit or Charge Card Forgery $1,000 Per Occurrence $5,000 Newly Acquired or Constructed Property $1,000 Building $1,000,000 Days 120 Personal Property $500,000 Days 120 Claim Expense $0 Per Occurrence $25,000

### 28

Reward $0 Per Occurrence $25,000 Contractual Penalties $0 Per Occurrence $25,000 Automatic Seasonal Increase (Peak $1,000 Season) This proposal contains only a general description of the co verages and does not include all of the benefits, terms, conditions, exclusions and limitations found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured a nd the insurance company. Quote: 15 63857

- 1 8 

### Property Policy Coverage Enhancements Coverage Limit Deductible Val Premium Per Occurrence $50,000 Brands and Labels Expense $1,000 Per Occurrence $25,000 Food Contamination $1,000 Per Occurrence $10,000 Lessee's Leasehold Interest Coverage Per O ccurrence $10,000 Limited Coverage for Fungus, Wet Rot, $1,000 Dry Rot and Bacteria Annual Aggregate $15,000 Electronic Data Damage or Destruction

- $1,000 Cyber Vandalism

- Employee Annual Aggregate $25,000 Electronic Data Damage or Destruction

- $1,000 Cyber Vandalism

- Non

- Employee Annual Aggregate $5,000 Electronic Data Loss of Income and Extra Expense

- Cyber Vandalism

- Employee Annual Aggregate $25,000 Waiting Period

- 72 hours Electronic Data Loss of Income and Extra Expense

- Cyber Vandalism

- Non

Employee Annual Aggregate $5,000 Waiting Period

- 72 hours Denial of Service Coverage Annual Aggregate $5,000 California Hardware, Media and $1,000 Electronic Data Earthquake Per Occurrence $100,000 Preservation of Property

- Expense $0 This proposal con tains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the in sured and the insurance company. Quote: 1563857

- 1 9 

### Property Policy Coverage Enhancements Property Location Coverage Enhancements Coverage Limit Deductible Val Premium Per Occurrence $25,000 Lock Replacement Per Occurrence $5,000 Catastrophe Allowance $0 Annual Aggregate $25,000 Expediting Expenses $0 Per Occurrence $25,000

### 29

Soft Costs $0 Per Occurrence $10,000 Temporary Relocation of Property $0 Coverage During Renovation or Remodeling Per Occurrence $50,000 Days 90 Salesmen's Samples $1,000 Per Occurrence $10,000 Green Upgrades Additional Coverage Per Occurrence $25,000 10% Green Upgrades Percentage Loc Bldg Coverage Limit Deductible Val Premium The following coverages are at each Location/Building with Building Coverage unless otherwise stated: Building O rdinance Combined Coverages B&C $0 Coverage A included in Building Limit Coverages B&C $250,000 This proposal contains only a general description of the coverages and does not include all of the benefits, terms, condition s, exclusions and limitations found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857

- 1 10 

### Property Location Coverage Enhancements 

### Additional Terms, Conditions, and Underwriter Comm ents: AGREED VALUE APPLIES TO BUILDING COVERAGE

_______________ THE FOLLOWING EXCLUSION APPLIES: VCP 475 01 10 BROAD WATER EXCLUSION Loc Bldg Coverage Limit Deductible Val Premium The following coverages are at each Location/Building unless otherwise
state d: Pollutant Clean Up and Removal $25,000 $1,000 Debris Removal $50,000 $1,000 Special Theft Limits of Insurance Furs $10,000 $1,000 Jewelry $10,000 $1,000 Precious Metals $10,000 $1,000 Stamps $1,000 $1,000 

### Property Forms Form Description ASC 00 03 01 98 PROPERTY COV PART DEC

- POLICY LEVEL LIMITS OF INSURANCE ASC 00 13 01 10 SUPPLEMENTAL PROPERTY DEC IL 01 05 10 08 MO CHANGES

- POLLUTION IL 09 52 03 08 CAP ON LOSSES FROM CERTIFIED ACTS OF TERRORISM IL 09 95 01 07 CONDITIONAL EXCLUSION OF TERRORISM VCP 001 01 10 SPECIAL PROPERTY PLUS COVERAGE FORM VCP 003 01 10 PROPERTY CONDITIONS VCP 004 01 10 CRIME CONDITIONS VCP 100 01 10 COMMERCIAL PROPERTY DEC VCP 470 01 10 GREEN UPGRADES ADDITIONAL COVERAGE

### 30

VIL 663 MO 01 10 MO CHANGES ASC 00 11 01 98 Schedule 2

- PROP ERTY FORMS LIST 

## POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM INSURANCE COVERAGE You are hereby notified that under the Terrorism Risk Insurance Act (the Act), as amended, that you now have a right to purchase insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act: The term “act of terrorism” means any act that is certified by the Secretary of the Treasury, in

concurrence with the Secretary of State a nd the Attorney General of the United States, to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property, or infrastructure; to have resulted in damage within the United States, or outside the United States in the ca se of certain air carriers or vessels or the premises of a United States mission; and to have been committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect th e conduct of the United States Government by coercion. COVERAGE TO BE PROVIDED BY THE POLICY FOR LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM, AS DEFINED IN THE ACT, MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES GOVERNMENT IN ACCORDANCE WITH A FORMULA E STABLISHED UNDER THE ACT. UNDER THE FORMULA, THE UNITED STATES GOVERNMENT WOULD PAY 85% OF COVERED TERRORISM LOSSES THAT EXCEED THE STATUTORILY IMPOSED DEDUCTIBLE FOR WHICH THE INSURANCE COMPANY IS RESPONSIBLE. THE PREMIUM TO BE CHARGED FOR THIS COVERAGE I S PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT. THE ACT CONTAINS A $100 BILLION CAP THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS’ LIABILITY FOR LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH LOSSES EXCEEDS $100 BILLION IN ANY ONE CALENDAR YEAR. IF THE AGGREGATE INSURED LOSSES FOR ALL INSURERS EXCEED $100 BILLION, YOUR COVERAGE MAY BE REDUCED. SELECTION OR REJECTION OF TERRORISM INSURANCE COVERAGE The prospective premium required for your terrorism coverage is: $ _____________. If you wish to reject this offer of coverage, you should check the box below, sign this notice and send it to your agent. An exclusion of terrorism losses, as defin ed by the Act, will then be made part of your policy. If you wish to reject this offer of coverage, you should check the box below, sign this notice and send it to your agent. An exclusion of terrorism losses, as defined by the Act, will then be made part of your policy. I hereby reject the offer of terrorism coverage. I understand that I will have no _____ coverage for losses arising from acts of terrorism, as defined in the Act. Possibility of Additional or Return Premium The premium shown above is calcul ated based in part on the federal participation in payment of terrorism losses as set forth in the Terrorism Risk Insurance Act. The federal program established by the Act is

### 31

scheduled to terminate at the end of 12/31/14. If the federal program terminates or if the level or terms of federal participation change, the estimated premium shown above may not be appropriate. If this policy contains a Conditional Exclusion, continuation of coverage for certified acts of terrorism, or termination of such coverage, will be determined upon disposition of the federal program, subject to the terms and conditions of the Conditional Exclusion. If this policy does not contain a Conditional Exclusion, coverage for certified acts of terrorism will continue. In either case, w hen disposition of the federal program is determined, we will recalculate the estimated premium shown above and will charge additional premium

or refund excess premium, if indicated. If we notify you of an additional premium charge, the additional premium will be due as specified in such notice. CLD 130 01 08
ST. CLAIR REGIONAL AIRPORT Atlantic Specialty Insurance Company Quote Number: 1563857

- 1 OneBeacon Insurance Group LLC 47 Copyright 2008, Page 1 of 2 Insured Name and Address: 150 Royall Street Canton, MA 02021 If your policy includes Property Coverage in one or more of these states: CA, CT, GA, HI, IA, IL, MA, ME, MO, NC, NJ, NY, OR, RI, VA, WA, WI, or WV; the following statement applies: The terrorism exclusion makes an exception for (and thereby conti nues your coverage for) property fire losses resulting from an act of terrorism. Therefore, if you reject the offer of terrorism coverage, that rejection does not apply to fire losses resulting from an act of terrorism

- the coverage in your policy for

suc h fire losses will continue. If such a loss occurs, and is certified under the Act, the loss will be reimbursed by the United States under the formula detailed above. The portion of your policy premium attributable to terrorism (fire only) coverage in all of the states listed above, in which your policy provides property coverage, is $_______

______ ___. This amount is included in your policy premium and cannot be rejected. Policyholder/Applicant’s Signature Insurance Company

Print Name Date

If you have any questions about this notice, please contact your agent.

CLD 130 01 08 Copyright 2008, OneBeacon Insurance Group LLC Page 2 of 2 28 Atlantic Specialty Insurance Company

### 32

The following is from the minutes for December 5, 2011,

http://stclairmo.com/stclairmo/pdf/minutes/2011/12052011.pdf

Public comments:

Mr. Jim Devries, 501 Ridgefield Drive, Pacific, MO. a tenant of the St. Clair Regional Airport. Mr. Devries asked the insurance cost for the airport in 2012. Administrator Childers responded, “The budgeted number is $6,900, and in 2011 it is $6,736 to date which is a split of 50% of the general fund, which is 45% Administration, 5% Airport, 10% Parks, 20% Water and 20% Sewer. Mr. Devries discussed an FAA cost guideline th at pertains to how insurance costs are allocated on airport fund. Mr. Devries is questioning the cost of $6,000 for insurance when MIRMA is only paying $1,500. Administrator Childers responded this was discussed with both MIRMA and

MoDOT Aviation. MIRMA is on record stating they believe the allocation formula the City of St. Clair uses is adequate and accurate. Mr. Devries responded MIRMA is not the governing body of the FAA. Mayor Blum advised Mr. Devries, “The FAA is fully aware of what we charge them and we have not received any complaints from them.”

### 33

Jim Dc Vries 501 Ridgetield Dr.
Pacific MO 63069
To Mat Brodersen
Mirma 3002 Falling Leaf Court Columbia, MO 65201 Thank you for agreeing to answer my Questions. Mr DeVries, My answers are found below in bold type and are current as of 6

- 25

- 2014 How much is the current contract for aviation coverage? The current aviation liability policy that MIRMA purchased was $48,094. How many airports are in the Mirma system? 29 How many memb ers are there in the Mirma System? 74 Does each member of MIRMA share equally in the expense of the airport contracted coverage? No, the cost of the aviation liability policy is spread among the entire membership but the amount each
member contributes is n ot equal. What is the approximate percentage of a municipality’s premium account for workman’s compensation? (Ballpark figure in the case of St. Clair Missouri) MIRMA does not rate by line of coverage and does not divide membership costs by department or b y line of coverage. Please describe how the contracted aviation coverage is included in the MIRMA package. The cost of the aviation liability policy Is spread among the entire membership. Does the contracted aviation coverage only cover the operations (lia bility) portion of the airport? The aviation liability coverage is a group purchase and covers only the risks associated with aviation. Does Mirma provide the property damage portion of the coverage? MIRMA provides coverage for damage to the property locat ed at the airport that is owned by the city

. Is it a standard practice for the MIRMA members to distribute the MIRMA cost among its departments based on Payroll percentages of the individual departments? I cannot speculate on the various methods used by th e membership to distribute the MIRMA costs among their departments. MIRMA does not rate by line of coverage and does not divide membership costs by department or by line of

coverage. Date 6/2512014

### 34

Mr DeVries, See bold type below.



### Matthew Brodersen Executive Director

3002 Falling Leaf Ct Columbia MO 65201 (573) 817

- 2554 (573) 441

- 0515 fax mbrodersen@mirma.org

From: Jim De Vries [mailto:jimdevries@live.com] Sent: Thursday, June 26, 2014 6:02 AM To: Matthew Brodersen Subject:



### Can you describe how the airport coverage is assessed among the membership, and what determines how the cost is divided among the members? The method to divide the assessment among the membership is proprietary information that I will not describe in greater detail.



### Can you also send the spreadsheet with the list of airports that show the cost associated with each airport, similar to the one included in the insurance binder? We no longer receive a page listing of the cost of individual airports as part of the aviation liability policy.

### 35**ST. CLAIR REGIONAL AIRPORT**

**April 29, 2015**

**SWETT & CRAWFORD 1001 CRAIG ROAD, SUITE 260** 

**April 29, 2014 ST. LOUIS, MO 63146**  PLUS INSURANCE SALES PROPOSAL @VANTAGE FOR COMMERCIAL ACCOUNTS

POLICY DATE:

IN PARTNERSHIP WITH: **April 29, 2014 thru**This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 1 @ V A N T A G E F O R C O M M E R C I A L A C C O U N T S P L U S
I N S U R A N C E S A L E S P R O P O S A L

D A T E April 29, 2014

B U S I N E S S C L I E N T ST. CLAIR REGIONAL AIRPORT

E F F E C T I V E D A

T E April 29, 2014
E X P I R A T I O N D A

T E April 29, 2015

Q U O T E 1563857-1

I N P A R T N E R S H I P W I T H SWETT & CRAWFORD 1001 CRAIG ROAD, SUITE 260 ST. LOUIS, MO 63146

U N D E R W R I T I N G C O M P A N Y Atlantic Specialty Insurance Company 150 Royall Street Canton, MA 02021This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 2 

### A B O U T O N E B E A C O N
OneBeacon Insurance Group, Ltd. is a Bermuda-domiciled holding company that is publicly traded on the New York Stock Exchange under the symbol "OB". OneBeacon's underwriting companies offer a range of specialty insurance products sold through independent agencies, regional and national brokers, wholesalers and managing general agencies. Each business is managed by an experienced team of specialty insurance professionals focused on a specific customer group or industry segment. OneBeacon's solutions target professional liability; ocean and inland marine;entertainment, sports and leisure; excess property;environmental;group accident; programs; public entities; commercial surety; technology; and tuition refund. For further information about our products and services visit www.onebeacon.com and to remain up to date on OneBeacon's news, follow us on Twitter @OneBeaconIns or visit our online newsroom: www.onebeacon.com/newsroom.This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 3 

## @ v a n t a g e f o r C o m m e r c i a l A c c o u n t s P l u s Q u o t e P r o p o s a l

P a y m e n t P l a n Agency Bill - Annual - Payment in Full No Installments 

### Premium Summary for ST. CLAIR REGIONAL AIRPORT

C o v e r a g e C o v e r a g e s P r e m i u m

Property Coverages $1,616 Terrorism Coverage $47

Premium When Excluding Terrorism Coverage $1,644

Premium When Including Terrorism Coverage $1,663This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 4 

### C o m m o n P o l i c y F o r m s

F o r m D e s c r i p t i o n

4 VIL 100 10 98 COMMON POLICY DECLARATIONS
ASC 00 02 01 98 PREMIUM STATEMENT
ASC 00 12 01 98 SCHEDULE OF LOCATIONS VIL 001 02 05 COMMON POLICY CONDITIONS- (N/A TO VA AUTO)
VIL 645 MO 02 13 MO CHANGES - CANCELLATION & NONRENEWAL ASC 00 11 01 98 Schedule 1 - LIST OF COMMON DEC FORMS



### N o n
- P o l i c y F o r m s

F o r m D e s c r i p t i o n

CLD 132 01 08 POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM
INSURANCE COV
CLD 149 01 08 MO TERRORISM INSURANCE DISCLOSURE NOTICE
SUPPLEMENT
IL P 001 01 04 U.S. TREASURY DEPT OFFICE OF FOREIGN ASSETS
NOTICE VGN 002 01 10 SPECIAL PROPERTY PLUS COVERAGE FORM QUICK
REFERENCE GUIDEThis proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 5 

### S C H E D U L E O F L O C A T I O N S

L o c B l d g A d d r e s s 1 1 HANGAR 1 ST. CLAIR REGIONAL AIRPORT SAINT CLAIR, MO 63077-3310

2 HANGAR 2 ST. CLAIR REGIONAL AIRPORT SAINT CLAIR, MO 63077-3310

3 HANGAR 3 ST. CLAIR REGIONAL AIRPORT SAINT CLAIR, MO 63077-3310

4 HANGAR 4 ST. CLAIR REGIONAL AIRPORT SAINT CLAIR, MO 63077-3310This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 6 

### P

r o p e r t y L o c a t i o n C o v e r a g e s

P

r o p e r t y P o l i c y C o v e r a g e s

P

r o p e r t y P o l i c y C o v e r a g e E n h a n c e m e n t s L o c B l d g C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m 1 1 Building $349,000 $1,000 RC $1,043

2 Building $76,800 $1,000 RC $229 3 Building $38,400 $1,000 RC $115 4 Building $76,800 $1,000 RC $229

C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m

Equipment Breakdown Portfolio Included Expediting Expenses $100,000 Hazardous Substances $100,000
Perishable Goods $100,000 CFC Refrigerants $100,000
Business Income

C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m

Bucket
Per Occurrence $250,000 Personal Effects of Officers, Partners & Employees Valuable Information Property
Accounts Receivable Outdoor Property
Fine Arts - Per Item $5,000
Hardware and Media Fire Extinguisher and Automatic Extinguishing System Recharge Emergency Response Service Charge Conditional Sales Agreement
Decreased value of Stock due to Damage to another part or parts
of Stock Tenants Improvements & Betterments Electronic Data Damage or
Destruction from Inland Marine
Causes of Loss
Electronic Data Loss of Income and Extra Expense from Inland Marine
Causes of LossThis proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 7 

### P

r o p e r t y P o l i c y C o v e r a g e E n h a n c e m e n t s

C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m

Property in Transit $1,000
Per Occurrence $25,000

International Air Shipments $1,000
Per Occurrence $10,000

Property at Other Locations $1,000
Per Occurrence $25,000

Crime Limit of Insurance $10,000 $1,000 Money and Securities Employee Theft Money Orders and Counterfeit Paper Currency Forgery and Alteration Inside the Premises - Robbery or Safe Burglary of Other Property

ERISA Employee Theft $0
Per Occurrence $10,000

Credit, Debit or Charge Card Forgery $1,000
Per Occurrence $5,000

Newly Acquired or Constructed Property $1,000 Building $1,000,000 Days 120 Personal Property $500,000 Days 120

Claim Expense $0
Per Occurrence $25,000

Reward $0
Per Occurrence $25,000

Contractual Penalties $0
Per Occurrence $25,000

Automatic Seasonal Increase (Peak $1,000 Season)This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 8 

### P

r o p e r t y P o l i c y C o v e r a g e E n h a n c e m e n t s

C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m Per Occurrence $50,000

Brands and Labels Expense $1,000
Per Occurrence $25,000

Food Contamination $1,000
Per Occurrence $10,000

Lessee's Leasehold Interest Coverage
Per Occurrence $10,000

Limited Coverage for Fungus, Wet Rot, $1,000 Dry Rot and Bacteria Annual Aggregate $15,000

Electronic Data Damage or Destruction - $1,000 Cyber Vandalism - Employee Annual Aggregate $25,000

Electronic Data Damage or Destruction - $1,000 Cyber Vandalism - Non-Employee Annual Aggregate $5,000

Electronic Data Loss of Income and Extra Expense - Cyber Vandalism - Employee Annual Aggregate $25,000 Waiting Period - 72 hours

Electronic Data Loss of Income and Extra Expense - Cyber Vandalism - Non- Employee Annual Aggregate $5,000 Waiting Period - 72 hours

Denial of Service Coverage Annual Aggregate $5,000

California Hardware, Media and $1,000 Electronic Data Earthquake
Per Occurrence $100,000

Preservation of Property - Expense $0This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 9 

### P

r o p e r t y P o l i c y C o v e r a g e E n h a n c e m e n t s

P

r o p e r t y L o c a t i o n C o v e r a g e E n h a n c e m e n t s C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m Per Occurrence $25,000

Lock Replacement
Per Occurrence $5,000

Catastrophe Allowance $0 Annual Aggregate $25,000

Expediting Expenses $0
Per Occurrence $25,000

Soft Costs $0
Per Occurrence $10,000

Temporary Relocation of Property $0 Coverage During Renovation or Remodeling
Per Occurrence $50,000 Days 90

Salesmen's Samples $1,000
Per Occurrence $10,000

Green Upgrades Additional Coverage
Per Occurrence $25,000 10% Green Upgrades Percentage

L o c B l d g C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m

T h e f o l l o w i n g c o v e r a g e s a r e a t e a c h
L o c a t i o n / B u i l d i n g w i t h B u i l d i n g C o v e r a g e

u n l e s s o t h e r

w i s e s t a t e d :

Building Ordinance Combined Coverages
B&C $0 Coverage A included in Building
Limit Coverages B&C $250,000This proposal contains only a general description of the coverages and does not include all of the benefits, terms, conditions, exclusions and limitations

found in the policy. The insurance policy itself, not this descriptive proposal, will form the contract between the insured and the insurance company. Quote: 1563857-1 10 

### P

r o p e r t y L o c a t i o n C o v e r a g e E n h a n c e m e n t s



### A d d i t i o n a l T e r m s , C o n d i t i o n s , a n d U n d e r w r i t e r C o m m e n t s :

AGREED VALUE APPLIES TO BUILDING COVERAGE

_______________ THE FOLLOWING EXCLUSION APPLIES: VCP 475 01 10 BROAD WATER EXCLUSION L o c B l d g C o v e r a g e L i m i t D e d u c t i b l e V a l P r e m i u m

T h e f o l l o w i n g c o v e r a g e s a r e a t e a c h
L o c a t i o n / B u i l d i n g u n l e s s o t h e r w i s e

s t a t e d :

Pollutant Clean Up and Removal $25,000 $1,000

Debris Removal $50,000 $1,000

Special Theft Limits of Insurance
Furs $10,000 $1,000 Jewelry $10,000 $1,000
Precious Metals $10,000 $1,000 Stamps $1,000 $1,000



### P r o p e r t y F o r m s

F o r m D e s c r i p t i o n ASC 00 03 01 98 PROPERTY COV PART DEC - POLICY LEVEL LIMITS
OF INSURANCE
ASC 00 13 01 10 SUPPLEMENTAL PROPERTY DEC
IL 01 05 10 08 MO CHANGES - POLLUTION
IL 09 52 03 08 CAP ON LOSSES FROM CERTIFIED ACTS OF
TERRORISM
IL 09 95 01 07 CONDITIONAL EXCLUSION OF TERRORISM
VCP 001 01 10 SPECIAL PROPERTY PLUS COVERAGE FORM
VCP 003 01 10 PROPERTY CONDITIONS
VCP 004 01 10 CRIME CONDITIONS
VCP 100 01 10 COMMERCIAL PROPERTY DEC
VCP 470 01 10 GREEN UPGRADES ADDITIONAL COVERAGE
VIL 663 MO 01 10 MO CHANGES ASC 00 11 01 98 Schedule 2 - PROPERTY FORMS LIST

## POLICYHOLDER DISCLOSURE

NOTICE OF TERRORISM INSURANCE COVERAGE

You are hereby notified that under the Terrorism Ri sk Insurance Act (the Act), as amended, that you no w have a right to purchase insurance coverage for losses ari sing out of acts of terrorism, as defined in Sectio n 102(1) of the Act: The term “act of terrorism” means any act tha t is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney Genera l of the United States, to be an act of terrorism; to be a violent act or an act that is dangerous to human life, prop erty, or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of certain air carriers or vessels or the prem ises of a United States mission; and to have been committed by an in dividual or individuals as part of an effort to coe rce the civilian population of the United States or to infl uence the policy or affect the conduct of the Unite d States Government by coercion.

COVERAGE TO BE PROVIDED BY THE POLICY FOR LOSSES CA USED BY CERTIFIED ACTS OF TERRORISM, AS DEFINED IN THE ACT, MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES GOVERNMENT IN ACCORDANCE WITH A FORMULA ESTABLISHED UNDER THE ACT. UNDER THE FORMULA, THE UNITED STATES GOVERNMENT WOULD PAY 85% OF COVERED TERRORISM LOSSES THAT EXCEED THE STATUTORILY IMPOSED DEDUCTIBLE FOR WHICH THE INSURANCE COMPANY IS RESPONSIBLE. THE PREMIUM TO BE CHARGED FOR THIS CO VERAGE IS PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS COV ERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.
THE ACT CONTAINS A $100 BILLION CAP THAT LIMITS U.S . GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS’ LIABILITY FOR LOSSES RESULTING FROM CE RTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH LOSSES EXCEEDS $100 BILLION IN ANY O NE CALENDAR YEAR. IF THE AGGREGATE INSURED LOSSES FOR ALL INSURERS EXCEED $100 BILLION , YOUR COVERAGE MAY BE REDUCED.

SELECTION OR REJECTION OF TERRORISM INSURANCE COVER AGE The prospective premium required for your terrorism coverage is: $ _____________. If you wish to rej ect this offer of coverage, you should check the box below, sign this notice and send it to your agent. An exclusion of terrorism losses, as defined by the Act, will then be made part of your policy. If you wish to reject this offer of coverage, you s hould check the box below, sign this notice and sen d it to your agent. An exclusion of terrorism losses, as defined by the Ac t, will then be made part of your policy.

**I hereby reject the offer of terrorism coverage. I understand that I will have no**

**__** ___ **coverage for losses arising from acts of terrorism, as defined in the Act.**
Possibility of Additional or Return Premium The premium shown above is calculated based in part on the federal participation in payment of terrori sm losses as set forth in the Terrorism Risk Insurance Act. The federal program established by the Act i s scheduled to terminate at the end of 12/31/14. If the federal program terminates or if the level or t erms of federal participation change, the estimated premium shown above may not be appropriate. If this policy contains a Conditional Exclusion, co ntinuation of coverage for certified acts of terror ism, or termination of such coverage, will be determined up on disposition of the federal program, subject to t he terms and conditions of the Conditional Exclusion. If th is policy does not contain a Conditional Exclusion, coverage for certified acts of terrorism will continue. In either case, when disposition of the federal progra m is determined, we will recalculate the estimated premi um shown above and will charge additional premium o r refund excess premium, if indicated. If we notify you of an additional premium charge, t he additional premium will be due as specified in s uch notice.

CLD 130 01 08 ST. CLAIR REGIONAL AIRPORT Atlantic Specialty Insurance Company

1563857-1 Quote Number:

OneBeacon Insurance Group LLC 47

Copyright 2008, Page 1 of 2 Insured Name and Address: 150 Royall Street Canton, MA 02021If your policy includes Property Coverage in one or more of these states: CA, CT, GA, HI, IA, IL, MA,

ME, MO, NC, NJ, NY, OR, RI, VA, WA, WI, or WV; the following statement applies: The terrorism exclusion makes an exception for (and thereby continues your coverage for) property fire losses resulting from an act of terrorism. Therefo re, if you reject the offer of terrorism coverage, that rejection does not apply to fire losses resulting f rom an act of terrorism - the coverage in your poli cy for such fire losses will continue. If such a loss occ urs, and is certified under the Act, the loss will be reimbursed by the United States under the formula d etailed above.

The portion of your policy premium attributable to terrorism (fire only) coverage in all of the states listed above, in which your policy provides property cover age, is $_______

______ ___. This amount is included in your policy premium and cannot be rejected.

Policyholder/Applicant’s Signature Insurance Compa ny

Print Name Date

If you have any questions about this notice, please contact your agent.

CLD 130 01 08 Page 2 of 2 OneBeacon Insurance Group LLC Copyright 2008, 28

Atlantic Specialty Insurance Company