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Home My WebLink AboutPR 15158: FIDELITY NAT'L INSURANCE - FLOOD COVERAGECITY OF PORT ARTHUR SAFETY 8~ RISK MANAGEMENT MEMORANDUM TO: Stephen B. Fitzgibbons, City Manager ~ ,~ FROM: Lisa Colten, Safety 8~ Risk Management Coordinator ~. L DATE: March 16, 2009 SUBJECT: Resolution Approving the Purchase of Flood Coverage through Fidelity National Insurance Company in the Amount of $25,260.00 per Annum COMMENTS RECOMMENDATION: I recommend approval of Proposed Resolution No. 15158 authorizing the purchase of Flood Insurance coverage through Fidelity National Insurance Company via Texas Municipal League Intergovemmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co. (the City's current carrier) at a cost of $25,260.00 with a $500.00 deductible, not including the Sabine Pass Fire Station #4. There was not a request for proposal as to the Sabine Pass Fire Garage. This represents approximately a 9.1 % increase above last year's cost. Pre-existing damage must be repaired in order for coverage to apply to a new loss. The Sabine Pass Fire Station #4 and Sabine Pass Fire Garage were both deemed total losses due to flood damage from Hurricane Ike on September 13, 2008. Therefore, these two locations will be eligible for insurance coverage once rebuilt/replaced. City staff and RWL Group, the City's insurance consultant, do not recommend accepting the inflation option. Premiums and rates are set by the National Flood Insurance Program (NFIP} regardless of the agent used. BACKGROUND: The City advertised for bids for Insurance Coverage. Two bid specification packets were requested by and delivered to: Victor O. Schinnerer & Co. via TML-IRP Key & Piskuran Insurance Agency The sole bidder was Fidelity National Insurance Company via Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co. Victor O. Schinnerer & Co. acts as the agent for TML-IRP in procuring Flood Insurance for the City of Port Arthur. "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" Stephen B. Fitzgibbons March 16, 2009 Page 2 of 2 The sole bid was sent to RWL Group for analysis and recommendation. Subsequent to extensive review of the bid, RWL Group submitted its recommendation (Exhibit "A" attached) that the bid received from Fidelity National Insurance Company (via TML-IRPNictor O. Schinnerer & Co.) be accepted. BUDGETARY/FISCAL EFFECT: The proposed funding is as follows: General Liability Insurance Fund Account No. 612-1702-581.52-00 ..... $25,260.00 STAFFINGIEMPLOYEE EFFECT: No effect on staffing levels. SUMMARY: I recommend approval of Proposed Resolution No. 15158 authorizing the purchase of Flood Insurance coverage through Fidelity National Insurance Company via Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co. (the City's current carrier) at a cost of $25,260.00 with a $500.00 deductible, not including the Sabine Pass Fire Station #4. There was not a request for proposal as to the Sabine Pass Fire Garage. This represents approximately a 9.1 % increase above last yeaPs cost. Pre-existing damage must be repaired in order for coverage to apply to a new loss. The Sabine Pass Fire Station #4 and Sabine Pass Fire Garage were both deemed total losses due to flood damage from Hurricane Ike on September 13, 2008. Therefore, these two locations will be eligible for insurance coverage once rebuilt/replaced. City staff and RWL Group, the City's insurance consultant, do not recommend accepting the inflation option. Premiums and rates are set by the National Flood Insurance Program (NFIP) regardless of the agent used. Attachment: Exhibit "A" - - "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" P.R. No. 15158 3/16/09 LJC RESOLUTION NO. A RESOLUTION AUTHORIZING THE PURCHASE OF FLOOD COVERAGE THROUGH FIDELITY NATIONAL INSURANCE COMPANY IN THE AMOUNT OF $25,260.00 PER ANNUM PROPOSED FUNDING BY: General Liability Insurance Fund: 612-1702-581.52-00 $25,260.00 Whereas, bid specifications pertaining to the insurance coverage specified below were advertised and made available to interested parties on January 20, 2009, and sealed bids for the same were accepted until 3:00 p.m. on March 11, 2009 (at which time all bids were opened and read aloud) in accordance with State law and the City Charter; and, Whereas, RWL Group has recommended that coverage be obtained from Fidelity National Insurance Company via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co., as delineated in Exhibit "A"; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: THAT the City Manager is hereby authorized to purchase insurance contracts and bind coverage for Flood Insurance, effective April 26, 2009, through Fidelity National Insurance Company via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co., as recommended by RWL Group in Exhibit "A" which is for $25,260.00 without the inflation option; and, THAT the Flood Insurance bid for the Sabine Pass Fire Station #4 is hereby rejected; and, 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 April 26, 2009, pending receipt of the Contracts of Insurance; and, P.R. No. 15158 3/16/09 LJC Page 2 of 2 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., 2009, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor , Councilmembers NOES: Deloris "Bobbie" Prince, Mayor ATTEST: Terri Hanks, City Secretary APPROVED AS TO FORM: Mark T. Sokolow, City Attorney ROVED AS TO AVAILABILITY OF FUNDS: Rebecca Underhill Assistant City Manager/Administration & Director of Finance APPROVED FOR ADMINISTRATION: Stephen B. Fitzgibbons, City Manager Lisa Colten EXHIBIT "A" From: "Carolyn Miller" <carolyn@rwlgroup.com> To: "'Lisa Colten"' <Icolten@portarthur.net> Sent: Tuesday, March 17, 2009 9:13 AM Subject: RE: Flood RFP 4-26-20009/2010 Lisa It is my understanding that the City has not yet sold the 3510 lake Arthur property. The cost to include this location for flood coverage as quoted through VOSCO is $369.00. This will bring the total premium for the recommended renewal option to $25,260. The below analysis has been revised to include the Lake Arthur property in each option. Carolyn Miller From: Carolyn Miller [mailto:carolyn@nvlgroup.com] Sent: Thursday, March 12, 2009 11:17 AM To: 'Lisa Colten' Subject: Flood RFP 4-26-20009/2010 Lisa Once again we have received only one response to the flood RFP and that is from TML through its contracted agent Victor O. Shinnerer & Company, Inc. (VOSCO). They have quoted renewal coverages with the incumbent National Flood Insurance Program carrier Fidelity National Insurance Company. Following is some information of which you need to be aware in considering this renewal proposal. 1. The quote does not include coverage as requested for 4173 39th Street, the EDC Building. An elevation certificate is necessary before a quote can be provided on that property. 2. Sabine Pass Fire Station tt4 has been included in the proposal. I am aware of the fact that this structure was deemed a total loss due to flooding caused by Hurricane Ike, and the premium quoted for this property has been removed from my analysis. 3. The individual property values used in the proposal are as per expiring, not the values included in the RFP specifications. VOSCO has indicated that official documentation must be provided on each property with a value variance verifying the changes requested. 4. The addresses used in the proposal are as per expiring rather than the location addresses provided in the RFP specifications. VOSCO has indicated specific official documentation must be provided (the type is discussed in the proposal) before location addresses can be changed. 5. The proposal includes a premium for 3510 Lake Arthur Drive, effective 4-26-09/10 based on a cancellation of the current policy and re-writing it as of 4-26-09. If this property has been sold, please let me know so I can removed it from my analysis. The renewal premium for this location is quoted at $369 for the current values and deductibles. Overall pricing has increased 9.1% since last year. The cost for 2008/2009 without Sabine Pass Fire Station fi4 was $22,813. The current renewal proposal, at the expiring limits and deductibles, will be $25,260. The proposal contains options to increase deductibles to $5,000 at a premium of $22,036; $10,000 at a premium of $19,710; or $25,000 at a premium of $15,646. Although a higher deductible might be considered if the renewal was for one policy with one deductible, given the structure of the program-separate policy and deductible for each location-I do not feel the premium savings achieved by a higher deductible, either on all locations or specific individual locations, is in the City's best interest given the additional risk the City would be retaining. Therefore, it is my recommendation that the City renewal the current flood coverage written through VOSCO with the '- - Fideiity Nationalinsurance Company.- 3/17/2009 _ __a_ _ __ Please let me know if you have any questions. Carolyn Miller Carolyn A. Miller, CPCU Senior Consultant RWL Group 300 North Coit Rd., Suite 810 Richardson, Texas 75080-5456 Phone: 972.907.9095 Fax: 972.907.9198 CONFIDENTIALITY NOTICE: This a-mail message, including any attachments, is for the sole use of the intended recipient(s). The information contained in this message may be private and confidential, and may also be subject to the work product doctrine. Any unauthorized review, use, disclosure or distribution is prohibited. No virus found in this incoming message. Checked by AVG - www.avg.com Version: 8.0.2371 Virus Database: 270.11.10/1995 -Release Date: 03/11109 20:42:00 3/17/2009