HomeMy WebLinkAboutPR 19197: PURCHASE OF COMMERCIAL WINDSTORM COVERAGE \ /
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INTEROFFICE MEMORANDUM
Human Resources Department
Date: March 23, 2016
To: Brian McDougal, City Manager
From: Lisa Colten,Acting Assistant Director of Human Resources
RE: A Resolution Approving the Purchase of Commercial Windstorm Coverage
Nature of the request: This insurance provides Commercial Windstorm coverage for all
City properties in the event of Windstorm damage (hurricane, tornado, etc.) with an aggregate
limit of $20,000,000 per occurrence. The total estimated value of listed City properties is
$189,028,084.
In the past, City Council has opted, due to cost constraints, to cover only $15,000,000 of listed
City properties, assuming, in the case of catastrophic disaster, the Federal Government will
provide additional assistance necessary to replace such facilities. This policy will provide
coverage of$20,000,000 per occurrence. A named storm carries a deductible of two percent of
the total insurable value per affected unit, subject to a $25,000 minimum/$1,000,000 maximum
per named storm, or a$25,000 per occurrence deductible (wind/hail) for a non-named storm.
StaffAnalysis, Considerations: The City advertised for bids for Windstorm coverage.
Eight agencies requested and received bid packets. Three responses were received back and
analyzed. City staff recommends that the City accept the Commercial Windstorm bid received
and underwritten on a quota share basis by certain Underwriters at Lloyd's of London and
RSUI/Landmark American for a $20,000,000 limit per occurrence, with USI Southwest, Inc.
which provides coverage on all City properties, including streetlights and the Water Treatment
Plant.
"Remember we are here to serve the Citizens of Port Arthur"
Brian McDougal, City Manager
Page 2 of 2
P.R. #19197
Recommendation: I recommend approval of Proposed Resolution No. 19197 authorizing the
purchase of Commercial Windstorm Insurance (limit of $20,000,000 per occurrence) with a
projected budgetary impact of $259,717.51, underwritten on a quota share basis by certain
Underwriters at Lloyd's of London and RSUI/Landmark American from USI Southwest, Inc.
This amount represents a 22% reduction in cost ($72,312.49) when compared to last year's
annualized premium of$332,030.
Damages sustained during Hurricane Rita were less than the $15,000,000 limit carried at that
time. The proposed $20,000,000 limit is recommended as sufficient for coverage.
Budget Considerations: General Liability Insurance Fund#612-1702-581.52-00 $259,717.51
"Remember we are here to serve the Citizens of Port Arthur"
P.R.No. 19197
3/23/16 LJC
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE PURCHASE OF COMMERCIAL WINDSTORM
COVERAGE WITH A PROJECTED BUDGETARY IMPACT OF $259,717.51 PER ANNUM
PROPOSED FUNDING BY: General Liability Insurance Fund:
612-1702-581.52-00 $259,717.51
WHEREAS, bid specifications pertaining to the insurance coverage specified below were
made available to interested parties on January 20, 2016, and sealed bids for the same were
accepted until 3:00 p.m. on March 2, 2016 (at which time all bids were opened and read aloud) in
accordance with State law and the City Charter; and,
WHEREAS, three (3) bids were received back and subsequently reviewed, as shown in
Exhibit"A"(attached); and,
WHEREAS, after due consideration, City staff recommends that the City bind Commercial
Windstorm Insurance (limit of$20,000,000 per occurrence) underwritten on a quota share basis by
certain Underwriters at Lloyd's of London [(Primary $5,000,000), and 66.67% of $15,000,000
(Excess of$5,000,000) for a $10,000,000 participation] and RSUI/Landmark American [(33.33%
of$15,000,000 (Excess of$5,000,000) for a $5,000,000 participation] from USI Southwest, Inc.
with a projected budgetary impact of$259,717.51 per annum.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT
ARTHUR, TEXAS:
Section 1. That the facts and opinions in the preamble are true and correct.
P.R.No. 19197
3/23/16 LJC
Page 2 of 3
Section 2. That the City Manager is hereby authorized to purchase an insurance
contract and bind coverage for Commercial Windstorm Insurance (limit of $20,000,000 per
occurrence) underwritten on a quota share basis by certain Underwriters at Lloyd's of London
[(Primary $5,000,000), and 66.67% of $15,000,000 (Excess of $5,000,000) for a $10,000,000
participation] and RSUI/Landmark American [(33.33% of$15,000,000 (Excess of$5,000,000) for
a $5,000,000 participation] from USI Southwest, Inc. with a projected budgetary impact of
$259,717.51 per annum, with a deductible of two percent of the total insurable value per unit of
insurance, subject to a $25,000 minimum/$1,000,000 maximum per named storm, or a $25,000 per
occurrence deductible (wind/hail only) for a non-named storm; and,
Section 3. That the City Manager is hereby further authorized to execute all necessary
instruments on behalf of the City of Port Arthur, with approval of the City Attorney, and to make
payment of necessary premiums to bind coverage effective May 1, 2016, pending receipt of the
Contracts of Insurance.
Section 4. That a copy of the caption of this Resolution be spread upon the Minutes of
the City Council.
READ, ADOPTED, AND APPROVED this day of , A.D., 2016, at a
Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES:
Mayor , Councilmembers
•
NOES:
P.R.No. 19197
3/23/16 LJC
Page 3 of 3
Deloris "Bobbie"Prince, Mayor
ATTEST:
Sherri Bellard, City Secretary
APP^^R��OV D AS TO FORM:
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Val Tizeno, C Attorney
APPROVED AS TO AVAILABILITY OF FUNDS:
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Jerry llT Director of Finance goc4' ' ".4
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Clifton Williams, Acting Purchasing Manager
APPROVED FOR ADMINISTRATION:
Brian McDougal, City Manager