SECTION: NEWS; Pg. 01B

LENGTH: 719 words

HEADLINE: Terrorism insurance strains stadium budget;
Officials seek extra $1.4 million

BYLINE: DON WALKER dwalker@journalsentinel.com

BODY:
Skyrocketing insurance costs for Miller Park, due in part to the Sept. 11 terror attacks and the subsequent need to buy additional terrorism insurance, have gone through the stadium's roof.

Mike Duckett, executive director of the Miller Park stadium district, said Tuesday that the district had budgeted $1.06 million this year for insurance. But district officials are now asking for approval to spend $1.4 million more this year to meet the stadium's insurance needs.

Duckett spoke at a meeting of the district's finance committee, which reviewed other cost increases this year totaling nearly $1.6 million more than the district's $2.78 million annual budget, and the proposed $4.06 million budget for 2003. The catalyst for the huge jumps in insurance costs was the Sept. 11 terror attacks. After Sept. 11, insurance firms ratcheted up property insurance rates all over the country. Also, until Sept. 11, most policies carried a terrorism rider, but insurance companies began to exclude that from policies after the attacks.

As a result, at least a half dozen baseball teams in Major League Baseball opted to pay for additional terrorism insurance. In Milwaukee, buying terrorism insurance cost $250,000.

The decision to buy the additional insurance was driven largely because the Milwaukee Brewers were the host of this season's All-Star Game, a national event that could have been a tempting target for terrorism.

The new terrorism costs, plus the higher property insurance rates, and other related costs, combined to put a crimp in the district's annual budget.

Under the lease agreement between the Brewers and the district, the district and Brewers share most insurance costs.

Duckett said district officials would probably recommend next year that the Brewers not buy terrorism insurance when the premium comes due in April. Still, the district is considering budgeting as much as $2.2 million next year for insurance.

In addition, Duckett said district officials were talking to state officials about the possibility of joining the state insurance pool, which could lower costs.

Besides additional insurance costs, district officials are also asking the board to approve as much as $180,000 in additional costs for increased public communications efforts, accounting and consulting in 2002.

The district had budgeted $300,000 for those three services this year, but now says it will need as much as $180,000 more.

For 2003, the finance committee reviewed a preliminary draft of the $4.06 million budget. Duckett said the district may also see increases in accounting and consulting services, but will review the budget for additional cuts.

The preliminary 2003 budget also calls for $500,000 in legal services, the same as this year. However, Duckett said the $500,000 didn't include the cost of legal work in connection with the district's ongoing dispute with Mitsubishi Heavy Industries of America, which built the stadium roof.

Duckett explained that costs associated with the Mitsubishi dispute had not been calculated yet for consideration by the finance committee.

In addition, Duckett said the district carried insurance that should allow it to be reimbursed for some legal costs.

The district sued Mitsubishi in January for $5 million, accusing the Japanese conglomerate of incompetence and poor management in the construction of the Miller Park roof.

Mitsubishi filed a counterclaim, charging that it was owed $87 million more than the originally agreed upon price to construct the roof.

The two sides also are at odds over the roof's troubled pivot system. The district has already announced that it will go ahead with its own $7 million repair plan. Mitsubishi offered a cheaper plan, but the district said it was inadequate.

District officials on Tuesday also released new sales-tax figures. So far this year, more than $20 million in sales-tax revenue has been collected in the five-county area.

The collections are nearly 5% ahead of what the district had collected this time last year.

Since the 0.1% tax went into effect in 1996, a total of $135.8 million has been collected. The tax is in effect in Milwaukee, Ozaukee, Racine, Waukesha and Washington counties.

LOAD-DATE: October 23, 2002