HomeMy WebLinkAboutPR 24867: AUTHORIZING THE PROCUREMENT AND BINDING OF COMMERCIAL WINDSTORM INSURANCE COVERAGE City of
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www.PortArthurTx.gov
INTEROFFICE MEMORANDUM
OFFICE OF THE CITY MANAGER
Date: March 31, 2026
To: Mayor and City Council
From: Dr. Albert T. Thigpen, Assistant City Manager—Administration
Through: Ronald Burton, CPM, City Manager
Re: A RESOLUTION AUTHORIZING THE PURCHASE OF COMMERCIAL
WINDSTORM COVERAGE IN AN AMOUNT NOT TO EXCEED $1,638,725.00
PER ANNUM PROPOSED FUNDING BY: General Liability Insurance Fund 612-
11-025-5410-00-00-000, $1,638,725.00.00
Introduction:
This resolution requests that the City Council acquire or purchase commercial windstorm insurance for
City-owned property. This coverage provides coverage on City-owned property that has been subjected
to damage due to wind or wind-related occurrences. In order to acquire/procure said coverage, it is
necessary that the City Council authorize expenditure up to the annual premium,as well as the execution
of insurance documents. I recommend approval of the Proposed Resolution.
Background:
This insurance provides Commercial Windstorm coverage for all City properties reflected on the
Schedule of Insured Values in the event of Windstorm damage with an aggregate limit of$25,000,000
per occurrence. The annual renewal premium for coverage from May 1, 2026, through May 1, 2027,
has been reduced from$1,840,460 to$1,638,725. This represents an approximate decrease of$201,735
from last year's annualized premium.
In addition to the premium reduction, the City will benefit from higher insured values at this renewal.
The total insured value of scheduled City structures has increased by 7%to $355,369,203 compared to
last year's valuation. These values were increased to better reflect regional construction cost inflation
and are now consistent with the TML Property Insurance values effective October 2025.
Last year, the City Council approved a $25 million per occurrence limit for Windstorm Insurance,
assuming, in the case of a catastrophic named storm event, that FEMA/TDEM will provide additional
assistance if expenses related to a declared natural disaster exceed this insurance limit. The
recommended renewal policy will also provide coverage of$25,000,000 per occurrence.
"Remember,we are here to serve the Citizens of Port Arthur."
444 4th Street X Port Arthur,Texas 77641-1089 X 409.983.8182 X FAX 409.983.8294
This renewal program includes the same deductible structure as the expiring plan approved by Council
last year, three (3) 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. The City buys down the deductible from three (3) percent with a maximum of
$1,000,000 to a flat amount of$100,000. This renewal option is included and accounted for in this
proposal.
McGriff-Marsh consultants have recommended renewing the program as presented. City staff has
reviewed the recommendation and concur therewith. Therefore, it is recommended that the City accept
the Commercial Windstorm proposal received and underwritten on a quota share basis by Lexington,
Aurenity, Sompo-Endurance, Lloyds, Kemah, Markel, RSUI, and Risksmith, with a $25,000,000 limit
per occurrence, with McGriff-Marsh, which provides coverage for all scheduled City structures,
including fire stations, streetlights, and the Water Treatment Plant.
Budgetary Impact:
Approval of this resolution will authorize the binding of Commercial Windstorm Insurance for City
property with a not to exceed premium of$1,638,725.00, funding available in the General Liability
Insurance Fund 612-11-025-5410-00-00-000.
Recommendation:
It is recommended that the Proposed Resolution No. 24867 authorizing the purchase of Commercial
Windstorm Insurance (limit of $25,000,000 per occurrence) with a projected budgetary impact of
$1,638,725.00,underwritten on a quota share basis by Lexington, Aurenity, Sompo-Endurance,Lloyds,
Kemah, Markel, RSUI and Risksmith with a $25,000,000 limit per occurrence, with McGriff-Marsh,
which provides coverage on all City properties be approved. This recommendation provides for a
premium decrease of$201,735 compared to last year's premium.
"Remember,we are here to serve the Citizens of Port Arthur."
P.O. Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743
P.R. No. 24867
04/01 /26 ATT - TNR
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE PROCUREMENT
AND BINDING OF COMMERCIAL WINDSTORM
INSURANCE COVERAGE FOR CITY-OWNED PROPERTY;
APPROVING AN ANNUAL PREMIUM IN AN AMOUNT
NOT TO EXCEED $1,638,725; PROPOSED FUNDING BY:
GENERAL LIABILITY INSURANCE FUND 612-11-025-5410-
00-00-000, $1,638,725
WHEREAS, the City of Port Arthur maintains a portfolio of public facilities and infrastructure
requiring adequate insurance coverage against windstorms and related perils; and
WHEREAS, City staff, in accordance with Chapter 271 of the Local Government Code, the
City Charter, and cooperative purchasing authority, engaged McGriff-Marsh, an approved purchasing
cooperative vendor, to procure competitive proposals for Commercial Windstorm Insurance coverage
for the policy period of May 1, 2026,through May 1, 2027; and
WHEREAS, renewal terms and conditions for such coverage were received and evaluated by
City staff and its insurance consultants, as set forth in Attachment"A," attached hereto; and
WHEREAS,based upon such evaluation, McGriff-Marsh and City staff recommend placement
of commercial windstorm insurance coverage providing limits of $25,000,000 per occurrence,
underwritten on a quota share basis by a panel of insurers including Lexington, Aurenity, Sompo-
Endurance, Lloyd's, Kemah Capital (primary layer), and Markel, RSUI, and Risksmith(excess layers);
and
WHEREAS, the proposed renewal reflects a reduction in annual premium from $1,840,460 to
$1,638,725, representing a cost savings to the City of approximately $201,735, while simultaneously
increasing the total insured value of scheduled City assets to $355,369,203, consistent with updated
valuations and regional construction cost indices; and
WHEREAS, the policy includes a deductible structure consisting of three percent (3%) of total
insurable value per affected unit, subject to a minimum of$25,000 and a maximum of$1,000,000 per
named storm, with a buy-down option to a flat $100,000 deductible per named storm, and a $25,000
per occurrence deductible for non-named wind or hail events; and
WHEREAS, sufficient funds are anticipated to be available in the General Liability Insurance
Fund, Account No. 612-11-025-5410-00-00-000; and
WHEREAS, the City Council finds that the proposed coverage is necessary and in the best
interest of the City to protect public assets and mitigate financial risk associated with windstorm
events.
P.R. No. 24867
04/01 /26 ATT - TNR
NOW,THEREFORE,BE RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PORT ARTHUR,TEXAS:
Section 1. The facts and opinions in the preamble are true and correct.
Section 2. The City Manager is hereby authorized to procure,bind,and maintain Commercial
Windstorm Insurance coverage for City-owned properties for the policy term of May 1, 2026,through
May 1,2027,with coverage limits of$25,000,000 per occurrence,underwritten on a quota share basis by
Lexington,Aurenity, Sompo-Endurance,Lloyd's,Kemah Capital,Markel,RSUI, and Risksmith, as more
particularly described in Attachment"A."
Section 3. The total annual premium for such coverage shall not exceed $1,638,725, and funding
for the same is hereby authorized by the General Liability Insurance Fund, Account No. 612-11-025-
5410-00-00-000.
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, 2026, at a
Meeting of the City Council of the City of Port Arthur,Texas,by the following vote: AYES:
Mayor , Councilmembers
NOES:
Charlotte M. Moses, Mayor
P.R. No. 24867
04/01/26 ATT - TN R
Sherri Bellard, City Secretary
APP VED AS TO THE AVAILABILITY OF FUNDS:
4
1,04,Loc_coa(
L n a oswell, Dir c or of Finance
APPROVED AS TO FORM:
Roxann Pais Cotroneo, City Attorney
APPROVED FOR :DMINISTRATION:
Ronald Burton, C' 1PPF-Manager
Attachment "A"
City of Port Arthur ,,
Windstorm Insurance — 2026-27 Renewal Comparison
Year Lead TIV Per Occurrence Limit/Sub-Limits Per Occurrence Deductible Premium
Current Berkshire $332,259,415 • $25M Loss Limit All Wind & Hail • Windstorm or Hail: $25,000 Per Occurrence $1,840,460
25-26 (National Fire)
Term • Sub-limits are Excess of TML Limits: • Named Storm: 3%of TIV per unit of insurance at
$2.5M Flood& Storm Surge — each location, subject to a minimum deductible
SFHA/High Hazard Zones of$25,000 any one Occurrence and a maximum
$ 5M Flood &Storm Surge —All of$100,000 any one Occurrence
Other Zones • Flood/Storm Surge: Excess of NFIP&TML's
$ 5M Max for All Zones Combined limits&deductibles.
-Per Occ/Annual Aggregate
• Coverage Limits are Per Schedule of
Values, subject to 110%Margin
Clause
Renewal Lexington $355,369,203 • $25M Loss Limit All Wind& Hail • Windstorm or Hail: $25,000 Per Occurrence $1,633,725
26-27 (AIG)
Term • Sub-limits are Excess of TML Limits: • Named Storm: 3%of TIV per unit of insurance at
$2.5M Flood& Storm Surge — each location, subject to a minimum deductible
SFHA/High Hazard Zones of$25,000 any one Occurrence and a maximum
$ 5M Flood &Storm Surge — All of$100,000 any one Occurrence
Other Zones • Flood/Storm Surge: Excess of NFIP&TM L's
$ 5M Max for All Zones Combined limits&deductibles.
-Per Occ/Annual Aggregate
• Coverage Limits are Per Schedule of
Values, subject to 110% Margin
Clause
The above summary is intended for reference purposes and does not replace, amend or modify the actual insurance policies.
"CONFIDENTIAL-NOT SUBJECT TO PUBLIC INFORMATION ACT" McGriff
City of Port Arthur
Windstorm/Hail Insurance Summary -May 1, 2026
Effective 05/01/26
Lexington Insurance Company
Lead Carrier(s): A.M. Best Rating: A+XV
Direct Physical Loss or damage from a risk of loss caused by,associated
Covered Perils: with or resulting from All Wind/Hail including Named Windstorm
Total Insured Value: $354,436,003
Per Occurrence Limit of Liability $25,000,000
Scheduled Limits: Coverage Limited Per Schedule of Values
Margin Clause: 110%Margin Clause
Per Occurrence Sub-Limits(Part of and not
in addition to the Policy Limit of Liability):
Accounts Receivable $2,500,000
Arson Reward $100,000
Control of Damaged Property $1,000,000
Course of Construction including Soft Costs $5,000,000
Debris Removal $5,000,000
Decontamination Costs $250,000
Demolition&Increased Cost of Construction:
A. Undamaged Portion Coverage A: Included
B. Demolition Coverage B: $10,000,000
C. Increased Cost of Const Coverage C: $10,000,000
Electronic Data Processing Equipment $5,000,000
Errors or Omissions $5,000,000
Expediting Costs $5,000,000
Fine Arts $5,000,000 (max$100,000 per any one Item)
Fungus Cleanup $250,000-Annual Aggregate
Land/Water Pollutants $100,000 Annual Aggregate
Landscaping $500,000
Lock& Key $25,000
Miscellaneous Locations Coverage $5,000,000
Mobile Equipment Excluded (Covered under TML Policy)
Mobile Equipment Unscheduled $500,000
New Locations $10,000,000 (90 Days)
Scheduled Outdoor Property $2,500,000
Professional Fees $750,000
Protection and Preservation of Property, and $2,500,000
Fire Brigade Charges
Temporary Removal of Property $250,000
Transit $1,000,000
Valuable Papers and Records $5,000,000
Electronic Data and Media $2,500,000
Wage "CONFIDENTIAL-NOT SUBJECT TO PUBLIC INFORMATION ACT" McGriff
City of Port Arthur
Effective 05/01/26
Library Books(Unscheduled) $500,000($100 Max Per Book)
Personal Effects of Employees $5,000
Rented Equipment and Rented Mobile $100,000
Equipment
Signs& Fences (Unscheduled) $500,000
Tunnels and Bridges(Unscheduled) $1,000,000
Track and Fields(Unscheduled) $5,000,000
Spoilage(Not caused by Equipment $1,000,000
Breakdown)
Loss of Business Income/Rental Value No Coverage Provided
Extra Expense $5,000,000
$5,000,000
Interruption by Civil or Military Authority (30 Days of Interruption/within 5 miles of an Insured Location)
$5,000,000
Interruption to Ingress/Egress (30 Days of Interruption/within 5 miles of an Insured Location)
Service Interruption(Property Damage and $5,000,000
Time Element,Combined) (24 Hour Waiting Period Per Location)
Wind-Driven Rain Included
Valuation/Coinsurance: Coverage shall be excess of other coverage provided by TML or NFIP
Buildings and Contents: Replacement Cost
Time Element: Actual Loss Sustained
Per Occurrence Deductibles
Windstorm or Hail: $25,000 Per Occurrence
3%of the total insurable values at the time of loss per unit of insurance
involved in the loss or damage at each location,subject to a minimum
Named Storm:
deductible of$25,000 any one Occurrence and a maximum of$1,000,000
any one Occurrence: DEDUCTIBLE BUY DOWN: $100,000 Per Occurrence
TOTAL ANNUAL PREMIUM: $1,638,725
The above summary is meant for illustrative purposes only and does not replace, amend or modify the actual carrier
quotations or insurance policies. The entire content of this summary shall be considered confidential and proprietary
information as allowed by any prevailing public information statue, law or OAG opinion.
Wage page "CONFIDENTIAL-NOT SUBJECT TO PUBLIC INFORMATION ACT" %P McGriff