HomeMy WebLinkAboutP.R. 15788: REJECTION OF SOLE COMMERCIAL WINDSTORM COVERAGE PROPOSAL AND ISSUANCE OF NEW REQUEST FOR PROPOSALCITY OF PORT ARTHUR
SAFETY ~ RISK MANAGEMENT
MEMORANDUM
TO: Stephen B. Fitzgibbons, City Manager
FROM: Lisa Cotten, Safety 8< Risk Management Coordinator ~~
DATE: March 15, 2010
SUBJECT: A Resolution Authorizing the Rejection of the Sole Commercial
Windstorm Coverage Proposal, the Issuance of a New Request for
Proposal for Commercial Windstorm Coverage, and the Extension of
the Current Commercial Windstorm Coverage Policy for a Period of
One Month (Through May 1, 2010)
COMMENTS
RECOMMENDATION:
I recommend approval of Proposed Resolution No. 15788 which authorizes the rejection
of the sole Commercial Windstorm coverage proposal, the issuance of a new request for
proposal for Commercial Windstorm coverage, and the extension of the current
Commercial Windstorm coverage policy for a period of one month (through May 1, 2010).
Westchester Surplus/AmRisc (Lloyd's) through McGriff, Seibels & Williams of Texas, Inc.,
the City's current carrier, will extend the City's current Commercial Windstorm coverage at
a cost of $4CI,122.
The Commercial Windstorm policy provides $20,000,000 aggregate limit per named
storm with a $250,000 or five percent per affected unit deductible per occurrence. All
other wind/hail storms (unnamed) carry a deductible of $100,000 per occurrence. Pre-
existing damage must be repaired in order for coverage to apply to a new Toss.
The extended coverage period is from April 1;, 2010 through May 1, 2010 and will provide
Commercial Windstorm coverage for all City properties in the event of Windstorm
damage (hurricane, tornado, etc.)
BACKGROUND:
This insurance provides Commercial Windstorm coverage for all City properties in the
event of Windstorm damage (hurricane, tomado, etc.) with an aggregate limit of
$20,000,000 per occurrence. The total estimated value of listed City properties is
$140,367,983.
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 five percent of the total insurable value per affected uni# subject to a
minimum of $250,000 per occurrence. An unnamed storm (all other wind/hail) carries a
deductible of $100,000 per occurrence.
"REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR"
Stephen B. Fitrgibbons, City Manager
March 15, 2010
Page 2 of 2
The City advertised for bids for Commercial Windstorm coverage. Four agencies
requested and, accordingly, received bid packets. One response was received back,
which was sent to RWL Group, the City's consultant, for analysis and recommendation.
Subsequent to their extensive review of the bid, the consultant submitted its
recommendation (Exhibit "A") that the City reject the sole bid, issue a new request for
proposal, and extend the current policy through May 1, 2010.
BUDGETARY/FISCAL EFFECT:
Proposed funding is as follows:
General Liability Insurance Fund...Account #612-1702-581.52-00 ... $40,122
STAFFING/EMPLOYEE EFFECT:
No effect on staffing levels.
SUMMARY:
I recommend approval of Proposed Resolution No. 15788 which authorizes the rejection
of the sole Commercial Windstorm coverage K>roposal, the issuance of a new request for
proposal for Commercial Windstorm coverage, and the extension of the current
Commercial Windstorm coverage policy for a period of one month (through May 1, 2010).
Westchester Surplus/AmRisc (Lloyd's) through McGriff, Seibels & Williams of Texas, Inc.,
the City's current carrier, will extend the City's current Commercial Windstorm coverage at
a cost of $40,122.
The Commercial Windstorm policy provides $20,000,000 aggregate limit per named
storm with a $250,000 or five percent per affected unit deductible per occurrence. All
other wind/hail storms (unnamed) carry a deductible of $100,000 per occurrence. Pre-
existing damage must be repaired in order for coverage to apply to a new loss.
The extended coverage period is from April 1, 2010 through May 1, 2010 and will provide
Commercial Windstorm coverage for all City properties in the event of Windstorm
damage (hurricane, tornado, etc.)
Attachment: Exhibit "A"
'"REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR"
P.R. No. 15788
3/15/10 LJC
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE REJECTION OF THE SOLE
COMMERCIAL WINDSTORM COVERAGE PROPOSAL, THE ISSUANCE OF A NEW
REQUEST FOR PROPOSAL FOR COMMERCIAL WINDSTORM COVERAGE, AND THE
EXTENSION OF THE CURRENT COMMERCIAL WINDSTORM COVERAGE POLICY
FOR A PERIOD OF ONE MONTH (THROUGH MAY 1, 2010)
PROPOSED FUNDING BY: General Liability Insurance Fund:
Ei12-1702-581.52-00 $40,122
WHEREAS, bid specifications pertaining to the insurance coverage specified below
were 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, 20'10 [at which time all bid(s) were opened and
read aloud] in accordance with State law and the City Charter; and,
WHEREAS, one (1) bid was received back and thereby submitted to RWL Group, the
City's consultant, for analysis and recommendation, as described in the memo attached as
Exhibit "A"; and,
WHEREAS, after due consideration, RWL Group and City staff have recommended that
the City reject the sole Commercial Windstorm coverage proposal, issue a new Request for
Proposal for Commercial Windstorm coverage, and extend the current Commercial Windstorm
coverage, through Westchester Surplus/AmRisc (Lloyd's) through McGriff, Seibels & Williams
of Texas, inc., for a period of one month (through May 1, 2010).
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT
ARTHUR, TEXAS:
Section 1. That the facts and opinions iin the preamble are true and correct.
Section 2'~ That the City Manager is hereby authorized to reject the sole Commercial
Windstorm coverage proposal.
P.R. No. 15788
3/15/10 LJC
Page 2 of 3
Section 3_ That the City Manager is hereby authorized to issue a new Request for
Proposal for Cormercial Windstorm coverage.
Section 4_ That the City Manager is hereby authorized to extend the current
Commercial Windstorm coverage, through Westchester Surplus/AmRisc (Lloyd's) through
McGriff, Seibels & Williams of Texas, Inc., for a period of one month (through May 1, 2010) at a
cost of $40,122, with a $100,000 per occurrence deductible (Wind/Hail only) or, for a Named
Storm, a deductible of five percent of the total insurable value per affected unit subject to a
minimum of $250,000 per occurrence; and,
Section 5. 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 1, 2010, pending
receipt of the Contracts of Insurance.
Section 6. 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., 2010, at a
Meeting of the City Council of the City of Port ~4rthur, Texas, by the following vote: AYES:
Mayor
Councilmembers
NOES:
P.R. No. 15788
3/15/10 LJC
Page 3 of 3
ATTEST:
City Secretary
APPROVED AS T FORM:
City Attorn
L
APPROVED AS TO AVAILABILITY OF FUNDS:
a '' ~ .~
~.
Director of Finance
APPROVED FOR ADMINISTRATION:
Deloris "Bobbie" Prince, Mayor
City Manager
EXHIBIT "A"
Exhibit "A"
Lisa Colten
From: Carolyn Miller [carolyn@rwlgroup.com]
Sent: Thursday, March 11, 2010 4:48 PM'.
To: 'Lisa Colten'
Subject: Wind RFP Response
Importance: High
Lisa
As you know, only one response to the Wind RFP was received. This response was from Victor 0. Shinnerer (VOSCO)
and provides a quote through the Texas Wind Insurance Associiation (TWIA). The premium quoted was in excess of
$800,000 compared to i:he $499,000 for the current program.
I do not feel the VOSCO proposal through TWIA is responsive to the RFP itself or to the City's needs. First, the proposal
does not include any of the proposal forms for coverage information. In addition, some of the structures that were
included on the City's schedule of structures to be insured have been removed, and coverage is not being offered.
Furthermore, there is no guaranty that coverage will be provided for all of the structures included in the proposal since
various documentation is required in order to assure that each structure will be covered-from photographs to specific
completed forms on most, if not all, of the structures. Coverage could be bound, but if the required documentation is
not received within a specified time frame (usually 60 days) the' structures lacking the documentation will be dropped
from the policy.
Consequently, it is my recommendation as fallows: 1) that the VOSCO bid be rejected; 2) that the current program be
extended to May 1, 2010; and 3) that a new RFP be issued witF~ a short turnaround time to allow for an effective date of
May 1, 2010.
Please let me know if you have any question:>.
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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