HomeMy WebLinkAboutP.R. 15789: FLOOD INSURANCE COVERAGECITY OF PORT ARTHUR
SAFETY & RISK MANAGEMENT
MEMORANDUM
TO: Stephen B. Fitrgibbons, City Manager
FROM: Lisa Colten, Safety & Risk Management Coordinator ~~
DATE: March 15, 2010
SUBJECT: Resolution Approving the Purchase of Flood Coverage through Fidelity
National Insurance Company in the Amount of $25,285.00 per Annum
COMMENTS
RECOMMENDATION:
I recommend approval of Proposed Resolution No. 15789 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 $25,285.00 with a $1,000.00 deductible, not including the Sabine Pass
Fire Station #4, the Sabine Pass Fire Garage, or the Sabine Pass Wastewater Treatment Plant
site. This represents approximately a 0.1 % increase above last year's cost.
Pre-existing damage must be repaired in order for coverage to apply to a new loss. Due to flood-
related destruction from Hurricane Ike on September 13, 2008, the Sabine Pass Fire Station #4
was deemed a total loss (and thus demolished) and the Sabine Pass Fire Garage suffered heavy
damages. Therefore, these two locations wrill be eligible for insurance coverage once
rebuilt/replaced. Coverage for the Sabine Pasts Wastewater Treatment Plant will be offered
through an alternate program.
City staff and RWL Group, the City's insurances 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. Three agencies requested and, accordingly,
received bid packets. Three responses were received back, which were sent to RWL Group, the
City's consultant, for analysis and recommendation. Subsequent to their extensive review of the
bids, the consultant submitted its recommendation (Exhibit "A") that the bid received from Fidelity
National Insurance Company (via TML-IRP/Victor O. Schinnerer 8~ Co.) be accepted.
BUDGETARY/FISCAL EFFECT:
The proposed funding is as follows:
General Liability Insurance Fund Account No. X312-1702-581.52-00 ..... $25,285.00
"REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR"
Stephen B. Fitzgibbons
March 15, 2010
Page 2 of 2
STAFFING/EMPLOYEE EFFECT:
No effect on staffing levels.
SUMMARY:
I recommend approval of Proposed Resolution No. 15789 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 $25,285.00 with a $1,000.00 deductible, not including the Sabine Pass
Fire Station #4, the Sabine Pass Fire Garage, or the Sabine Pass Wastewater Treatment Plant
site. This represents approximately a 0.1 % increase above last year's cost.
Pre-existing damage must be repaired in order for coverage to apply to a new loss. Due to flood-
related destruction from Hurricane Ike on September 13, 2008, the Sabine Pass Fire Station #4
was deemed a total loss (and thus demolished) and the Sabine Pass Fire Garage suffered heavy
damages. Therefore, these two locations will be eligible for insurance coverage once
rebuilt/replaced. Coverage for the Sabine Pas:> Wastewater Treatment Plant will be offered
through an alternate program.
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. 15789
3/15/10 LJC
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE PURCHASE OF FLOOD COVERAGE
THROUGH FIDELITY NATIONAL INSURANCE COMPANY
IN THE AMOUNT OF $2!i,285.00 PER ANNUM
PROPOSED FUNDING BY: General Liability Insurance Fund:
612-1702-581.52-00 $25,285.00
Whereas, bid specifications pertaining to the insurance coverage specified below were
advertised and made available to interested parties on January 20, 2010, and sealed bids for the
same were accepted until 3:00 p.m. on March 10, 2010 (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, 2010, 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 $25,285.00 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, 2010, pending receipt of the Contracts of
Insurance; and,
P. R. No. 15789
3/15/10 L,JC
Page 2 of 2
THAT a copy of the caption of this Resolution be spread upon the Minutes of the City Council.
READ, ADC)PTED, AND APPROVED this __ day of , A.D., 2010, 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:
City Secretary
APPROVED AS TO FORM:
~/- G, ~~
~~ ~
City Attorney-~
APPROVED AS TO AVAILABILITY OF FUNDS:
~ .~
~ `{
.~; ° L. C~` .L . ~r
Director of Finance
APPROVED FOR ADMINISTRATION:
City Manager
EXHIBIT "A"
Exhibit "A"
Lisa Cotten
From: Carolyn Miller [carolyn@rwlgroup.com]
Sent: Monday, March 15, 2010 12:06 PM
To: 'Lisa Cotten'
Subject: 2010 Flood RFP Responses -Analysis and Recommendations
Attachments: RFP Response Comparison.doc
Lisa
Attached you will find a comparison between the three Flood ItFP responses.
The current coverage is written through Victor O. Shinnerer (VOSCO) as a representative for TML. There are three
properties that were nat included in the VOSCO proposal. There was a request for an elevation certificate for the EDC
Office Building. II am presuming that the requested certificate was not provided, and, therefore, coverage for that
building was not include in the proposal. The Fire Truck Garage at 5030 S. Gulfway Drive is under repairs, and you
requested that that structure not be included in the VOSCO proposal.
The last building not included is the Sabine Pass Waste Water Treatment Plant Site. This location has been identified as
a "Severe Repetitive Loss" property. According to the criteria, either the location has sustained 4 or more losses since
1978; or sustained two or more losses where the total paymeints exceed the current market value of the property. I am
not sure what the market value of the property is, but there have been two losses and the total $98,456.95. We
currently have this location insured for $500,000 on the building and $500,000 on the contents. The coverage for this
location, based on the VOSCO proposal, will be offered through a special program directly from Special Direct Facility,
the servicing agent for NFIP. There is no indication regarding the premium for the coverage.
Without these three properties, the VOSCO proposal totals $2!5,285.00 and is being offered through the current flood
carrier, Fidelity National Property and Casualty Insurance Company. This company has a Best rating of A-: VIII.
Both of the other responses were offered through Texas Farmers Insurance Company, which has a Best rating of A: XV.
Both quotes include the above three properties. However, neiither agent had loss information to work from and the
quote on the Sabine Pass Waste Water Treatment Plant may not be viable. In addition, neither agent was aware that
the Fire Truck. Garage was under repair, and the coverage may not be able to be put in place until the repairs are
completed. In addition,, I believe an elevation certificate would be required on the EDC Office Building before coverage
could be bound. Larry 13attarbee's proposal totaled $47,129.OiD; Janie Morman's proposal totaled $48,492.
As you can see, the pricing is almost identical on all three quotes, with the exception of a few properties. Those
differences are significant. When the proposals are considered on all properties except the three in question above, the
VOSCO proposal is the most favorable to the City as far as premium is concerned. Although Texas Farmers Insurance
Company enjoys a better Best rating that Fidelity National Flood Property and Casualty Insurance Company, the A-: VIII
rating meets the minimum requirement of A-: VII contained in the RFP specifications.
Based an the above information, it is my recommendation that the City accept the VOSCO proposal and proceed with
the renewals through Fidelity National Property and Casualty Insurance Company.
Please Net 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
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