Officials have hit Lake Elmo with a penalty for the poor behavior of its city council — $200,000 per insurance claim.

The Insurance Trust Board of the League of Minnesota Cities decided Wednesday to raise the deductible payments from $500 to $200,000 for the city. The increase means that insurance claims in the future will cost the city $200,000 apiece, with the city’s insurance paying the rest.

The board decided that the city is at risk for increased insurance claims because of the way council members treat employees, other government units and each other.

Trust assistant administrator Dan Greensweig said in a memo that Lake Elmo is being managed in a way that creates too much risk of lawsuits. “We have not always waited for a building to burn down before we decide not to cover it,” he wrote.

The new deductible applies to personnel-related claims against the city, not claims related to property damage or physical injury.

The move is the fourth time in the league’s history that penalties have been imposed because of a city council’s inability to function properly. The other cities that have been penalized are Maplewood in 2007, 2,800-resident Greenfield in 2009, and 78-resident McGrath in 2009.

Lake Elmo Mayor Mike Pearson said the city attorney argued to keep the deductible as low as possible. The staff of the board recommended imposing a $250,000 deductible, so the $200,000 penalty is a modest improvement.

“This is the result of council behavior over the past 20 months,” he said.

Pearson has said that the city’s problems stem from the arrival of two council members in January 2015 — Julie Fliflet and Jill Lundgren.

But those two and council member Anne Smith blame the behavior of council member Justin Bloyer for the council’s dysfunction.

In a memo, Greensweig said the Lake Elmo City Council was in a continuing state of conflict. Specifically:

Council member Smith was censured in 2014 for harassment of employees and ordered not to communicate with them without another council member present. One month later, a newspaper reporter reported that Smith harassed her in a parking lot. The month after that, city administrator Dean Zuleger said Smith verbally and physically harassed him and other employees.

The council censured council member Bloyer for abusive comments to an employee during a council meeting in October 2015. He was ordered not to speak to employees during council meetings. The council censured him again in July. In August, after lawyers said the restrictions were illegal, the council imposed a “voluntary” censure against Bloyer.

Political campaigns have been marked by alleged Internet sabotage. In November 2014, a phony website was established, purporting to belong to one of the candidates for city council. In July 2015, someone set up a fake Facebook page showing Smith in an altered photo with a Confederate flag.

Employee turnover is high. Eight city hall workers have left since March 2015. The city’s administrator is the sixth one hired in seven years. The council voted in March 2015 to terminate the contract of then-administrator Zuleger. Two weeks later, it reversed itself. It reversed itself again in June 2015, voting to accept his resignation.

Greensweig said the League of Minnesota Cities has tried to help Lake Elmo. In 2015, it provided two “communications facilitators” to coach council members to behave more effectively. The league spent “75 to 100 hours of staff time” on Lake Elmo training. But in January, the facilitators quit, citing a lack of progress by council members.

The league said the city council doesn’t have good relationships with the public or other units of government. In June, a Washington County commissioner came to a meeting to talk about the city’s library. But by a 3-2 vote, the council decided to end the public comment period before he had a chance to speak.

In a meeting in July, the council suspended the comment period after citizens made comments that were critical of Bloyer’s censure.

Mayor Pearson said the increased insurance deductible might serve as a wake-up call. “Hopefully,” he said, “the council can get its act together.”