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Home My WebLink AboutPR 13079: FLOOD COVERAGE CITY OF PORT ARTHUR SAFETY & RISK MANAGEMENT MEMORANDUM TO: Stephen B. Fitzgibbon~_., City Manager ~ FROM: Lisa Colten, Safety & Risk Management Coordinator__ ~-/ DATE: March 22, 2005 SUBJECT: Resolution Approving the Purchase of Flood Coverage through Fidelity National Insurance Company in the Amount of $42,162.00 per Annum COMMENTS I recommend approval of Proposed Resolution No. 13079 authorizing the purchase of Flood Coverage through Fidelity National Insurance Company via the Texas Municipal League Intergovemmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co. [(formerly American Governmental Risk & Insurance Programs (AMGRIP)], at a cost of $42,162.00 with a $500.00 per structure per occurrence deductible. The coverage pedod is from April 26, 2005 through April 26, 2006. The amount paid last fiscal year was $42,166.00. The recommended company, Fidelity National Insurance Company, purchased the book of flood business from Omaha Property and Casualty Insurance Company, two years ago. 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. Nine bid specification packets were delivered to: Victor O. Schinnerer & Co. via the TML-IRP Protector's Insurance Agency Larry Womack & Company Ddver Alliant Insurance Services Palmer & Cay of Texas, LLC ABIA Lewis & Ellis McGriff, Seibels & Williams of Tx. Leon J. Petty Insurance The sole bidder was Fidelity National Insurance Company via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co./AMGRIP. The City has been using Victor O. Schinnerer & Co./AMGRIP for its National Flood Insurance Program for many years. Victor O. Schinnerer & Co./AMGRIP acts as the agent for TML-IRP in procuring flood insurance for the City of Port Arthur. The TML-IRP underwrites other property and casualty insurances for the City of Port Arthur, and has been doing so since 1985. The services provided by both Victor O. Schinnerer & Co./AMGRIP and TML-IRP have been satisfactory. "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" Stephen B. Fitzgibbons March 22, 2005 Page 2 of 2 The sole bid was sent to RWL Group, the City's consultant, for analysis and recommendation. Subsequent to extensive review of the bid, the consultant submitted its recommendation (Exhibit "A" attached) that the bid received from Fidelity National Insurance Company (via TML-IRP/Victor O. Schinnerer & Co./AMGRIP) be accepted. The City's Flood Insurance program calls for the purchase of flood insurance through the National Flood Insurance Program (NFIP). The NFIP is the only provider of guaranteed flood insurance for properties across the Nation. Although all premiums and rates are set by the NFIP regardless of the agent used, the City is required to seek proposals for providing this coverage. BUDGETARY/FISCAL EFFECT: The proposed funding is as follows: General Liability Insurance Fund Account No. 612-1702-581.52-00 ..... $42,162.00 Budgeted funds are available to cover this expenditure. STAFFING/EMPLOYEE EFFECT: No effect on staffing levels. SUMMARY: I recommend approval of Proposed Resolution No. 13079 authorizing the purchase of Flood Coverage through Fidelity National Insurance Company via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnerer & Co. [(formerly Amedcen Governmental Risk & Insurance Programs (AMGRIP)], at a cost of $42,162.00 with a $500.00 per structure per occurrence deductible. The coverage period is from April 26, 2005 through April 26, 2006. The amount paid last fiscal year was $42,166.00. The recommended company, Fidelity National Insurance Company, purchased the book of flood business from Omaha Property and Casualty Insurance Company, two years ago. Premiums and rates are set by the National Flood Insurance Program (NFIP) regardless of the agent used. Attachment "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" EXHIBIT "A" 300 N. ¢oj1' Road, ~uJte 8/.0, Richardson, Texas Phone: 972907-9095 Fax: 972-907-9198 E-mail: rw!grouo~t) rwlarou o.com Intemet: _www. rwlqroup.com March 21, 2005 via E-MAIL AND REGULAR MAIL Ms. Lisa Colten Safety/RM Coordinator City of Port Arthur P.O. Box 1089 Port Arthur, TX 77641-1089 Re: TML Flood Insurance Bid Dear Lisa: I have reviewed the proposal to renew your existing program. Since this is the only proposal received, it will be necessary to renew with the existing program. However, concerning your deductible choices, I would recommend that you continue with the current deductible level of $500. The deductible applies per location and separately to the building (and contents where contents are covered). If the City increases the deductible level to $5,000, you are accepting an additional $4,500 deductible per location, per coverage. The total premium savings for all locations is $3,748, and the savings does not support the additional risk the City would be retaining at the higher deductible. The proposal includes the same total insured values as last year. The total premium proposed for the $500 deductible is neady the same as last year ($42,162 vs. $42,166). As for the quote on the fire station garege, it seems rather high. The cost per $100 of value is $12.47; the fire station (right now) is at $6.60 per $100 of value. When is the last time there was a flood in the area of 5030 S. Gulfway Ddve? Is the garage actually situated lower than the fire station? These are things wa should probably discuss. Also, since the pricing on the fire station is being re-valuated by the insurance company, it is possible that there may be an increase. This is another area we should discuss. Please feel free to call me at your convenience. Sincerely yours, Carolyn A. Miller Carolyn A. Miller, CPCU Senior Consultant Risk Management Services P.R. No. 13079 3/22/05 LJC RESOLUTION NO. A RESOLUTION AUTHORIZING THE PURCHASE OF FLOOD COVERAGE THROUGH FIDELITY NATIONAL INSURANCE COMPANY IN THE AMOUNT OF $42,162.00 PER ANNUM PROPOSED FUNDING BY: General Liability Insurance Fund: 612-1702-581.52-00 $42,162.00 Whemes, bid specifications pertaining to the insurance coverage specified below were advertised and made available to interested parties on February 7, 2005, and sealed bids for the same were accepted until 3:00 p.m. on March 16, 2005 (at which time all bids were opened and read aloud) in accordance with State law and the City Charter, and, Whereas, RVVL 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.[(formerly American Governmental Risk & Insurance Programs (AMGRIP)] 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, 2005, through Fidelity National Insurance Company via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Victor O. Schinnemr & Co. [(formerly American Governmental Risk & Insurance Programs (AMGRIP)], as recommended by RVVL Group in Exhibit 'A" which is for $42,162.00 without the inflation option; 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, 2005, pending receipt of the Contracts of Insurance; and, P.R. No. 13079 3/22/05 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., 2005, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor , Councilmembers NOES: Oscar G. Ortiz, Mayor Al'rEST: Evangeline Green, City Secretary APPROVED AS TO FORM: Mark T, Sokolow, City Attorney APPROVED AS TO AVAILABILITY OF FUNDS: Rebecca Underhill, Director of Finance APPROVED FOR ADMINISTRATION: Stephen B Fitzgibbons, City Manager