HomeMy WebLinkAboutPO 6854: EXECUTE A SETTLEMENT OF AN AUTOMOBILE PHYSICAL DAMAGE CLAIM 4
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INTEROFFICE MEMORANDUM
Office of Safety & Risk Management
Date: April 3, 2020
To: Ron Burton, City Manager
From: Trameka A. Williams, Director of Human Resouris id
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RE: A Resolution Approving a Property Damage Settlement in the Amount of$12,515.00 for
Damages to City of Port Arthur Police Vehicle#2000
Nature of the request: On December 26, 2019, Police Vehicle #2000 was damaged when
the operator was hit by a citizen who failed to yield the right of way on Houston Avenue.
Staff Analysis, Considerations: The City has Physical Damage insurance coverage through
Texas Municipal League Intergovernmental Risk Pool (TML) with a $2,500.00 deductible.
TML has offered the City a settlement of$12,515.00, less the $2,500.00 deductible, making the
final settlement offer $10,015.00 (Exhibit "A" attached). This amount is sufficient in exchange
for the transfer of the title. If additional damages are discovered, TML may issue a supplemental
payment.
Recommendation: I recommend approval of Proposed Ordinance No. 6854 authorizing the
property damage settlement against TML for damage sustained to Police Vehicle #2000 (2014
Chevy Tahoe). TML has offered to settle the claim for $12,515.00, less the $2,500.00
deductible, making the final settlement offer $10,015.00. This is considered a fair and
reasonable settlement.
Budget Considerations: The funds received will be deposited in the Miscellaneous Income-
Insurance Proceeds Account#625-0000-369.85-00.
"Remember we are here to serve the Citizens of Port Arthur"
P.O. No. 6854
04/03/20 TAW
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE CITY MANAGER
TO EXECUTE SETTLEMENT OF AN AUTOMOBILE PHYSICAL DAMAGE CLAIM
IN THE AMOUNT OF $12,515.00 MADE AGAINST
TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOL (TML)
AS A RESULT OF THE PROPERTY DAMAGE TO POLICE VEHICLE #2000
WHEREAS, on December 26, 2019, City of Port Arthur Police Vehicle #2000 (2014 Chevy Tahoe) was
damaged when it was involved in an accident; and,
WHEREAS, as a result of the damage, a claim was filed with the Texas Municipal League
Intergovernmental Risk Pool (TML); and,
WHEREAS, it has been determined that damages sustained by Police Vehicle #2000 were in excess of
the fair market value of the vehicle; and,
WHEREAS, the TML has offered to settle the claim for $12,515.00, less the Automobile Physical
Damage deductible amount of $2,500.00, making the final settlement $10,015.00, which is considered a fair and
reasonable settlement.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR:
Section 1. That, the facts and opinion in the preamble of this Ordinance are true and correct.
Section 2. That, the City Manager is hereby authorized to execute settlement in the amount of
$12,515.00, less the Automobile Physical Damage deductible amount of $2,500.00,
making the final settlement $10,015.00, for the claim against TML in substantially the
same form as delineated in Exhibit "A", in exchange for transfer of title of Vehicle #2000 to
TML.
Section 3. That a copy of this Ordinance be spread upon the minutes of the City Council.
P.O. No. 6854
04/03/2020 TAW
Page 2 of 2
READ, ADOPTED, AND APPROVED this day of , AD, 2020, at a Meeting
of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor
Councilmembers
NOES:
Thurman "Bill" Bartle, Mayor
ATTEST:
Sherri Bellard, City Secretary
APPROVED AS TO FORM:
//sly
Val Tizeno, ity Atto -y
APPROVED FOR ADMINI
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Ronald Burton, City Manager
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SWORN STATEMENT PROOF OF LOSS (Automobile)
Policy No 7587 Ctf No
Policy Coverage at Time of Loss Automobile Physical Damage Company Claim No. A00000000116979
Date Issued October 01,2019 _Agent Texas Municipal League Intergovernmental Risk Pool
Date Expires October 01, 2020 Agency At Austin,Texas
To the Texas Municipal League Intergovernmental Risk Pool
Of Austin,Texas 8y your policy of insurance described above,
you insured Port Arthur
(HEREINAFTER CALLED THE MEMBER)AGAINST LOSS OF OR DAMAGE TO THE AUTOMOBILE DESCRIBED AS FOLLOWS:
TRADE NAME TYPE OF BODY MODEL MODEL
DESCRIPTION (IF TRUCK STATE TONNAGE) (YEAR) VEHICLE IDENTIFICATION NUMBER
of Chevrolet Truck-Sport Utility Tahoe 2014 1GNLC2E0XER172393
AUTOMOBILE
TIME AND A loss caused by Collision with motor vehicle occurred on the 26th day of December 2019 .about the hour of .M,the full
ORIGIN particulars of which are as follows: (State where and how it occurred)
Member's vehicle was hit by OV who failed to yield right of way.
TITLE AND The insured was the sole owner of the automobile at the time of the loss or damage and no other person had any interest therein,by
INTEREST bailment lease,condition sale mortgage or other encmberance or otherwise,except
OTHER At the time of this loss,there was no other insurance on said automobile covering the same perils except:
INSURANCE
USE At the time of this loss,the said automobile was being used for
(PLEASURE,BUSINESS OR COMMERCIAL PURPOSE)
and was not being used to carry passengers for compensation or rental or leased of for any illegal purpose except
THE ACTUAL of the property described,the actual loss and damage sustained,and the amount claimed under this Policy are as follows:
CASH VALUE CASH VALUE WHOLE LOSS AMOUNT DEDUCTIBLE AMOUNT CLAIMED UNDER THIS POLICY
$12,515.00 $2,500.00 $10,015.00
SUBROGATION To the extent of the payment made or advanced under this policy,the insured hereby assigns,transfers and sets over to the insurance company all rights,claims or interests that he has
against any person,firm or corporation Sable for the loss or damage to the property for which payment is made or advanced. He also hereby authorizes the insurance company to sue
any such third party in his name
The insured hereby warrants that no release has been given or will be given or settlement or compromise made or agreed upon with any third party who may be liable in damages to the
insured with respect to the claim being made herein
The said loss or damage did not originate by any act,design or procurement on my/our part nor on the pan of anyone having interest in the property insured,or in the said policy of Insurance;nor in consequence of
any fraud or evil practice done or suffered by me/us and that no property saved has in any manner been concealed.
It is expressly understooa and agreed that the furnishing of this blank or the preparation of proof by a representative of the above insurance company is not a waiver of any of its rights.
State of X
County of
INSURED.
Subscribed and sworn to before me this day of
PAYMENT AUTHORIZATION NOTARY PUBLIC.
Insurance Company,
is hereby requested,authorized and empowered to pay.at its option,as follows:
To The sum of$ _
To The sum of$ _
To The sum of$
Amount Claimed Under Policy$
Wtn -.
•
Address TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOL
TITLE
curtness ,Tekage78714-9194 • www.tmlirp.org
Address: By
PROPOSED AGENDA ITEM PRE-APPROVAL PROCESSING FORM
DATE OF SUBMISSION: 3-Apr-20
PROPOSED AGENDA DATE: 14-Apr-20
DEPARTMENT: Human Resources
SUBMITTED BY: Trameka Williams
SIGNATURE
P.R. or P.O. Number: 21350
SUBJECT: Renewal of Windstorm Insurance
Renewal May 1,2020 -May 1, 2021
Account : 612-1702-581.52-00
PRE-APPROVAL SIGNATURES
DEPARTMENT HEAD: OAAJC
dLtL14'1u2
Signature
PURCHASING MANAGER:
Signature (for procurement only)
FINANCE DIRECTOR: ceC '
Sign;ture (for ';lad of funds only)
CITY MANAGER: 401,
A
Sign,
HAS A COPY BEEN GIVEN TO THE CITY SECRETARY'S OFFICE? ❑ YES ❑ NO
***THIS FORM MUST BE COMPLETED AND ATTACHED TO YOUR PROPOSED RESOLUTION AND/OR
ORDINANCE PRIOR TO SUBMITTING TO THE CITY ATTORNEY'S AND CITY SECRETARY'S OFFICE
FOR THE AGENDA.
***REQUIRED SIGNATURE OF THE DEPARTMENT HEAD ON THE PROPOSED
RESOLUTION/ORDINANCE VERIFIES THAT THE DOCUMENT HAS BEEN REVIEWED AS TO GRAMMAR,
CONTENTS,ETC.
City f
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INTEROFFICE MEMORANDUM
Office of Safety & Risk Management
Date: April 3, 2020
To: Ronald Burton, City Manager
cetloFrom: Trameka A. Williams, Director of Human Re
RE: A Resolution Authorizing the Purchase of Windstorm Coverage Renewal from USI —
Effective May 1, 2020
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
$202,768,678. The annual renewal amount for the coverage for the period of May 1, 2019 to
May 1, 2020 is $701,391.61. This amount represents an approximate increase in the amount of
$117,664.06 when compared to last year's annualized premium of$583,727.55.
In the past, City Council has opted, due to cost restraints, 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 three 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.
Staff Analysis, Considerations: The City advertised for bids for Windstorm coverage. One
agency requested and received a bid packet. One response was received back and was analyzed
by RWL Group, The City's Risk Management Consultant. RWL Group and City staff
recommend that the City accept the Commercial Windstorm bid received and underwritten on a
quota share basis by certain Underwriters at Lloyd's of London, Starr and Sompo Endurance for
$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"
Recommendation: I recommend approval of Proposed Resolution No. 21350 authorizing the
purchase of Commercial Windstorm Insurance (limit of $20,000,000 per occurrence) with a
projected budgetary impact of $701,391.61, underwritten on a quota share basis by certain
Underwriters at Lloyd's of London, Starr and Sompo Endurance from USI Southwest, Inc. This
amount represents an approximate $117,664.06 increase when compared to last year's
annualized premium of$583.727.55. This is considered to be fair and reasonable.
The damages sustained during Tropical Storm/Hurricane Harvey were less than the $20,000,000
limit carried. The proposed $20,000,000 limit is recommended as sufficient for coverage.
Budget Considerations: General Liability Insurance Fund #612-1702-581.52-00,
$701,391.61
"Remember we are here to serve the Citizens of Port Arthur"
P.R. No. 21350
04/03/20 TAW
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE PURCHASE OF COMMERCIAL WINDSTORM
COVERAGE IN AN AMOUNT NOT TO EXCEED $701,391.61 PER ANNUM
PROPOSED FUNDING BY: General Liability Insurance Fund
612-1702-581.52-00 $583,727.55
WHEREAS, bid specifications pertaining to the insurance coverage specified below
were made available to interested parties on January 13, 2020, and sealed bids for the same
were accepted until 3:00 p.m. on March 4, 2020 (at which time all bids were opened and
read aloud) in accordance with State law and the City Charter; and,
WHEREAS, one (1) bid was received back and subsequently reviewed, as shown in
Attachment "A" (attached); and,
WHEREAS, after due consideration, RWL Group and 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 Lloyd's of London (Primary $5,000,000), Starr
(Excess of Primary 66.67% of $15,000,000) and Sompo Endurance (Excess of Primary
33.33% of $15,000,000) from USI Southwest, Inc. with a projected budgetary impact of
$583,727.55 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.
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 Lloyd's of London (Primary
$5,000,000), Starr (Excess of Primary 66.67% of $15,000,000) and Sompo Endurance
(Excess of Primary 33.33% of $15,000,000) from USI Southwest, Inc. with a projected
budgetary impact of $701 ,391 .61 per annum, with a deductible of three 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.
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, 2020, pending receipt of the
Contracts of Insurance.
Section 4. That, a copy of this Resolution be spread upon the minutes of the City
Council.
READ, ADOPTED, AND APPROVED this day of , AD, 2020, at a
Meeting of the City Council of the City of Port Arthur, Texas, by the following vote:
AYES: Mayor , Councilmembers
NOES: .
Thurman "Bill" Bartle, Mayor
ATTEST:
Sherri Bellard, City Secretary
APPROVED AS TO THE AVAILABILITY OF FUNDS:
Kandy Daniel, Interim Director of Finance
APPROVED AS TO FORM:
A/ AlAr/i
Val Tizeno,C' y Att. ey
APPROVED FOR AD ► TRQQT ION:
Ronald Burton, City Mana.el.
Attachment "A"
R JTJJGRO1JP Independent Risk Management and Insurance Consultants
300 N. Coit Road,Suite 810,Richardson,Texas 75080-5456
Phone:972-907-9095
Fax:972-907-9198
E-mail: rwlgroup@rwlgroup.com
Internet:www.rwlgroup.com
2020 WINDSTORM RFP RESPONSE ANALYSIS AND RECOMMENDATION
MARCH 13,2020
Currently, the City's wind coverage is $20,000,000 per occurrence subject to a 3% per occurrence deductible,
minimum $25,000, maximum $1,000,000 for named storm wind, and $25,000 deductible for all other wind
losses. The premium at inception for this coverage was $583,727.55. Although four agents requested market
assignments, only the incumbent agent, USI, provided a response to the 2020 Wind RFP.
A broker interview was not held this year for various reasons, not the least of which is the COVID 19 problem
facing the Country this year. However, we did discuss the RFP response with USI and requested: 1) Premium
relief for the one options that was quoted, which was the same limits, terms and conditions as the expiring
program, but with a $2,000,000 maximum named storm deductible rather than $1,000,000; 2) an option for a
$1,000,000 maximum named storm deductible at the $20,000,000 loss limit; and 3) an option for a
$15,000,000 loss limit with a 3% named storm deductible, subject to a $25,000 minimum and $1,000,000
maximum.
Following our discussion, USI approached their underwriters and was advised that there was no premium relief
available on the initial offering submitted. However, the underwriters did provide quotes for the additional two
options as requested. The $20,000,000 per occurrence limit with 3%, minimum $25,000 maximum $1,000,000
deductible option was priced at $720,578.05, which is only $19,186 more than the maximum $2,000,000
deductible option; and the $15,000,000 per occurrence limit with 3%, minimum $25,000 maximum $1,000,000
deductible option was priced at $694,377.61. Each option includes $5,000,000 excess flood coverage.
Considering the limits and coverages offered, I feel either the $20,000,000 loss limit with the 3% minimum
$25,000 deductible/$1,000,000 maximum deductible, or the $15,000,000 loss limit with the 3% minimum
$25,000/$1,000,000 maximum deductible would serve the City's needs. If the City is focused on maintaining
the $20,000,000 limit, the lower deductible is in the City's best interest. If the City is focused on budget
concerns, the $15,000,000 loss limit is the better option. Keep in mind that although the damage from Harvey
exceeded $20,000,000 almost all of the damage was caused by flood, not wind. The largest loss the City has
sustained due to wind in recent years was from Hurricane Rita, and the loss was around $8,000,000.
Consequently, the $15,000,000 loss limit is likely sufficient.
Please let me know if you have any questions.
Sincerely yours,
Carolyn A. eller, CPCU
Senior Consultant
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