I don’t know whether this article is about people who do not know the meaning of words they use or if it is about people who use words to mislead.
I listened to the city’s recording of the November 27, 2012 meeting of city council because I wanted to hear the discussion about the effort to save the stacks at Asarco.
At two hours and ten minutes into the recording I heard our mayor display his ignorance of basic money matters. Or maybe he was trying to mislead us. You can see it here (at 2 hours and 10 minutes).
Council was discussing the issue of insurance to cover potential lawsuits relating to the past operation of the smelter. The trustee in charge of the process indicated that he had estimated the premiums to cover the potential liability would cost about $4 million.
The mayor interrupted the conversation and pointed out that if the city was to acquire the property the city would be self insured and therefor would not have to pay the $4 million premium.
Let’s talk about insurance. The insurance company charges it’s premiums based on a gamble. For $4 million dollars they are taking a bet that any legal costs will be less than the amount they charge. After all, they are in business to make a profit. They might get lucky and not pay anything out, or they may lose and pay more than $4 million. More likely they would pay out a portion of the $4 million.
The mayor is correct in that if the city is self insured it will not pay a premium for an insurance policy. It will however pay out any amounts that the legal process dictates they pay. In other words, if they lose in court or make a settlement the city will have to pay out real money (with our taxpayer dollars).
To imply that there will be no cost because the city is self insured either shows ignorance of the way insurance works or a deliberate effort to mislead us.
Making matters worse, two members of council seemed to have taken the mayor’s statement at face value and did not challenge him or attempt to educate him.
Are they ignorant or are they trying to deceive us? Or are they both?
The price of liberty is eternal vigilance
elpasospeak 