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Home My WebLink AboutPR13355: WINDSTORM INSURANCE CITY OF PORT ARTHUR HUll/IN RESOURCE DEPARTMENT MEMORANDUM TO: Mayor and City Counci, ~,/.,~ ~ FROM: Harvey L Robinaon, Assistant City' Manager DATE: November 30, 2005 SUBJECT: A Resolution Authorizing Acceptance of an Advance Payment of $5,000,000.00 from the City's Windstorm Insurance Cartier (McG~f, Seibels & Williams) COMMENTS I recommend approval of Proposed Resolution No. 13355 which authorizes the City Manager to do all things necessary to acoept the offer of advance payment in the amount of $5,000,000.00 from the City's Windstorm Cartier (McGdff, Seibets & Williams) for estimated windstorm damage related to Hunicane Rita. This amount represents an advance payment only for wind related damages. Investigation of the loss(es) continues and is not complete. If it is determined after rite investigation is complete there was an overpayment, the City must reimburse the overpaid amount. However, if it is later determined that related damages exceed the advance payment amount, lhen the City will expect to receive additional payment for the difference. RVVL Group, the City's Risk Management Consultant, has reviewed the advance payment offer and mcommends acceptance. BACKGROUND: On September 24, 2005, Hurricane Rite struck the Cit~ of Port Arthur. City buildings and contents suffered windstorm damage as a result. McGriff, Seibels & Williams has offered an advance payment in the amount of $5,000.000.00. Inasmuch as the City to date has spent in excess of $5,000,000.00 of non-budgeted funds on related hurricane damages, the timely receipt of the advance payment is important to the City's continued efficient and effective operation. Therefore, I thought it necessary that I anticipate City Council's approval and have executed rite required documents. If the City Council disagrees with this action, steps can be taken to rescind the request. BUDGETARY/FI,~CAL EFFECT: The funds received will be deposited in the appropriate account designated by the Finance Director. STAFFINC~/EMPLOYEE EFFECT: No effect on staffing levels: SUMMARY; I recommend approval of Proposed Resolution No. 13355 which authod~._es the City Manager to do all things necessary to accept the offer of advance payment in the amount of $5,000,000.00 from the City's Windstorm ~ (Nk:Griff, Seibeis & Williams) for estimated windstorm damage related to Hurricane Rita. This amount represents an advance payment only for wind related damages. Investigation of the loss(es) continues and is not complete. If it is determined after the investigation is complete them was an overpayment, the City must reimburse the overpaid amount. However, if it is later determined that related damages exceed RWL Group, the City's Risk Management Consultant, has reviewed the advance payment offer and recommends acceptance. 'REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR' P.R. No.13355 11/3(}/05 HLR RE=~OLUTION NO. A RESOLUTION AUTHORIZING ACCEPTANCE OF AN ADVANCE PAYMENT OF $5,000,000.00 FROM THE CITY'S VVlNDSTORM INSURANCE CARRIER (MCGRIFF, SEIBELS & WILLIAMS) WHEREAS, the City has $15,000,000.00 in windstorm propen'y insumr~e; and, WHEREAS, an advance payment of $5,000,000.00 has been offered by MoGfilf, Seibels & Williams, the City's windstorm insurance can~er, as denoted in Exhibit 'A'; and WHEREAS, the Ci~ to date has spent in excess of $5,000,000.00 of ~ed funds on miatad Hun~cane Rita damages; and, WHEREAS, this advance payment is impo~nt to the City's continued efficient and effective oparation. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, I r=XAS: Section 1. That, the facts and opinions in the pmamble are tme and con'ect. Section ~. That, the Cib/Manager is herein authorized to do all things necessa~j to accep¢ an advance payment of $5,000,000.00 from the City's Windstorm Insurance Carrier (McGriff, Seibets & Williams). Section 3. That, a copy of this Resolution be spread upon the minutes of the City Council. READ, ADOPTED, AND APPROVED this day of , AD, 2005, at a Meeting of the City Council of the Cib/of Port Arthur, Texas, by the following vote: AYES: Mayor , Councflmernbers Oscar G. Ortiz, Mayor A ! i t:ST: Evangeline Green, City Secretary APPROVED AS TO FORM: Mark Sokolow, City Attorney APPROVED FOR ADMINISTRATION: S~hen Fltzgibbons, City Manager EXHIBIT "A" CITY OF PORT ARTHUR SAFETY & RISK MANAGEMENT MEMORANDUM TO: Stephen B. Fitzgibbons, City Manager FROM: Lisa Colten, Safety & Risk Management Coordinator DATE: November 23, 2005 SUBJECT: Hurricane RJta- Windstorm Insurance Advance Payment COMMENTS · · Attached is an offer of Advance Payment in the amount of $5,000,000.00 from the City's windstorm carrier, McGriff, Seibels & Williams (McGrif0. McGriff has offered this Advance Payment with the understanding that should the City's claim total under this amount, the City will reimburse the difference. Ms. Sina Alvarado, adjuster with Paul R. White & Company, has indicated that the City wilt receive the funds within a few days after their receipt of the attached forms. If you choose to accept this Advance Payment, please sign and have notarized both · · forms (Sworn .Statement of Proof of Loss and Advance Payment Request)· Forward directly to Ms. Alvarado or to me; however, I will be out of the office through Tuesday, November 29. If you have any questions, please feel free to contact me at Extension 8215. Thank you. Attachments: Sworn Statement in Proof of Loss - Advance Payment Request Correspondence from Ms. Alvarado, Paul R. VVhite & Company c: 'Harvey L. Robinson Rebecca Underhill Carolyn Miller, RWL Group "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" ADVANCE PAYMENT REQUEST Insured : The City of Port Arthur, Texas Policy No. ' 0RC14009 Claim No. : 482230 Date of Loss : September 24, 2005 (CAT 51) Location Various Advance : $5,000,000.00 This agreement acknowledges you have sustained a wind loss on the above date at various locations owned by the City. The Certain Underwriters at Lloyd's London agree to advance you $5,000,000.00 against the final payment of your less. It is understood, by you, that the investigation of your loss is not comp]ete at this time. It may be established, after the investigation of your loss, that The Certain Underwdtem at Lloyd's London have no legal obligation for payment of your claim. If it is determined your claim is not a valid claim under your~ insurance policy, you agree to reimburse The Certain Undem~iters at Lloyd's London the $5,000,000.00 advanced to you. Issuance of an advance payment by us is not an admission of liability on our part. Acceptance by you does not represent a satisfaction or release of all claims. This is not a Proof of Loss as required by the policy. A Proof of Loss must still be submitted to the Company within sixty (60) days of the Company's request that you submit a Proof of Loss, as stated in your policy. This agreement or payment of this advance is not intended to change or modify any of the conditions, terms, provisions, or requirements contained in the policy. Any obligations or legal rights which may now or hereafter be available to you or the company are reserved. Insured The C. ity of Port Arthur, Texasi ( igna ra) HaT, v~y T,_ Rnh~nmnn (pdnted name) Title: Acting City Manager State of Texas County of Jefferson S ' . this 30 day of November , 200B Notary Public City Attorney Date SWORN STATEMENT IN PROOF OF LOSS 15,000,000.00 ~ p~ CIC14009 $ Octob3_r 1, 2004 McGz-iff, ~,~j_bl~ & ¥~411~a~r~ ( ~ 1, 2005 I~ouston, Texas Tome &To~lksura~e: 'Th~{l:,l{~{m'~xmnt~inml'mmimmmePn%OmtYd~r,c, db~x{bY{hk{)okYm,mtme{in~'h'~m,$ 15,000,000.00 , - ~e: Acting City Manager ~~.~30 ~ Nov8mbsr ,2005 City Attorney