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Home My WebLink AboutPR 17860: PURCHASE OF FLOOD INSURANCE FOR FIRE STATION #4 CITY OF PORT ARTHUR SAFETY & RISK MANAGEMENT MEMORANDUM TO: Floyd T. Johnson, City Manager FROM: Lisa Cotten, Safety & Risk Management Coordinator DATE: August 15, 2013 SUBJECT: Resolution Approving the Purchase of Flood Coverage for Fire Station #4 and Fire Garage in Sabine Pass through Wright National Insurance Company in the Amount of $69,498.00 per Annum COMMENTS RECOMMENDATION: I recommend approval of Proposed Resolution No. 17860 authorizing the purchase of Flood Insurance coverage through the City's current Flood Insurance carrier, Wright National Insurance Company (formerly Fidelity National Insurance Company) via Texas Municipal League Intergovernmental Risk Pool (TML -IRP) through its agent, Victor O. Schinnerer & Co. (VOSCO), in the amount of $69,498.00 per annum for Fire Station #4 and the Fire Garage in Sabine Pass, with a $25,000.00 deductible for each location. Due to flood - related destruction from Hurricane Ike on September 13, 2008, Fire Station #4 was deemed a total Toss (and thus demolished), and the Fire Garage suffered heavy damages. Pre- existing damage must be repaired in order for coverage to apply to a new loss. Since new construction and repairs are now complete, these two locations are once again eligible for insurance coverage. City staff has reviewed and do concur with the recommendation provided by RWL Group, the City's Risk Management Insurance Consultant (Exhibit "A "). Premiums and rates are set by the National Flood Insurance Program (NFIP) regardless of the agent used. BACKGROUND: In January 2013, the City advertised for bids for Flood Insurance coverage. Flood coverage was subsequently placed with Wright National Insurance Company (formerly Fidelity National Insurance Company) via Texas Municipal League Intergovernmental Risk Pool (TML -IRP) through its agent, Victor O. Schinnerer & Co. on eligible properties. Two additional City properties (Fire Station #4 and the Fire Garage in Sabine Pass) are now eligible for Flood Coverage. RWL Group has reviewed the deductible options submitted by VOSCO and has provided their recommendation to accept the premium quotes for Fire Station #4 ($45,079.00) and Fire Garage ($24,419.00), with a $25,000.00 deductible each. "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" Floyd T. Johnson, City Manager August 15, 2013 Page 2of2 BUDGETARY /FISCAL EFFECT: The proposed funding is as follows: General Liability Insurance Fund Account No. 612 - 1702 - 581.52 -00 $69,498.00 STAFFING /EMPLOYEE EFFECT: No effect on staffing levels. SUMMARY: I recommend approval of Proposed Resolution No. 17860 authorizing the purchase of Flood Insurance coverage through the City's current Flood Insurance carrier, Wright National Insurance Company (formerly Fidelity National Insurance Company) via Texas Municipal League Intergovernmental Risk Pool (TML -IRP) through its agent, Victor O. Schinnerer & Co. (VOSCO), in the amount of $69,498.00 per annum for Fire Station #4 and the Fire Garage in Sabine Pass, with a $25,000.00 deductible for each location. Due to flood - related destruction from Hurricane Ike on September 13, 2008, Fire Station #4 was deemed a total Toss (and thus demolished), and the Fire Garage suffered heavy damages. Pre- existing damage must be repaired in order for coverage to apply to a new Toss. Since new construction and repairs are now complete, these two locations are once again eligible for insurance coverage. City staff has reviewed and do concur with the recommendation provided by RWL Group, the City's Risk Management Insurance Consultant (Exhibit "A "). Premiums and rates are set by the National Flood Insurance Program (NFIP) regardless of the agent used. Attachment: Exhibit "A" P RT ARTHUR" "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF O P.R. No. 17860 8/15/13 LJC RESOLUTION NO. A RESOLUTION AUTHORIZING THE PURCHASE OF FLOOD COVERAGE FOR FIRE STATION #4 AND FIRE GARAGE IN SABINE PASS THROUGH WRIGHT NATIONAL INSURANCE COMPANY IN THE AMOUNT OF $69,498.00 PER ANNUM PROPOSED FUNDING BY: General Liability Insurance Fund: 612 - 1702 - 581.52 -00 $69,498.00 Whereas, a quote was requested from the City's current Flood Insurance carrier, Wright National Insurance Company (formerly Fidelity National Insurance Company) via Texas Municipal League Intergovernmental Risk Pool (TML -IRP) through its agent, Victor O. Schinnerer & Co., pertaining to Fire Station #4 and Fire Garage in Sabine Pass; and, Whereas, RWL Group has recommended that coverage be obtained from Wright National Insurance Company (formerly 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 on the 30 calendar day after Wright National Insurance Company (formerly 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 ", receives the application and payment of premium which is $69,498.00; 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 pending receipt of the Contracts of Insurance; and, P.R. No. 17860 8/15/13 LJC Page 2of2 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., 2013, 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: Sherri Bellard, City Secretary APP OV i AS TO FORM: \/ 'i / D Va Tizen • , ity ;p► rney APPROVED AS TO AVAILABILITY OF FUNDS: Deborah Echols, Director of Finance APPROVED FOR ADMINISTRATION: Floyd T. Joh ; :on City Manager .ems!; - , Ji ,' Dr. A . -rt . •'gpen, _ ` Direc :r of Human Resources Exhibit "A" I ndependent Risk Management, Insurance, and Employee Benefits Consultants RWLGROUP 300 N. Coit Road, Suite 810, Richardson, Texas 75080 -5456 Phone: 972- 907 -9095 Fax: 972 - 907 -9198 E -mail: rwlgroup @rwlgroup.com Internet: www.rwlgroup.com August 13, 2013 Ms. Lisa Colten Safety /Risk Manager Coordinator P. 0. Box 1089 Port Arthur, TX 77641 -1089 RE: Flood Quotes for Fire Station #4 and Garage Analysis and Recommendation Dear Lisa: The cost to insure the above buildings for flood has increased substantially. However, at this time I still think it is prudent for the City to cover these new buildings for flood. I have reviewed all of the quotes received from Victor 0. Shinnerer and recommend that you accept the quote at the $25,000 deductible for the coming year, $45,079 for the fire station and $24,419 for the garage. The NFIP program does not offer short term policies, but they will rewrite later to achieve an effective date to coincide with your other flood coverages. When we issue the flood RFP for 2014 we will need to look at rewriting this coverage, as well as other potential options for these two buildings. Please let me know if you have any questions. Sincerely yours, e a4,0-4, ) „, y' Carolyn A. Miller, CPCU Senior Consultant CAM:pc FLOOD PROPOSAL ENTITY: City of Port Arthur INSURER: Wright National Insurance Company COVERAGE: Flood Insurance TERM: One Year VALUATION: Actual Cash Value LOCATION: 5030 South Gulfway Dr. OCCUPANCY: Fire Station #4 LIMIT: $500,000 Building $50,000 Contents DEDUCTIBLE: Applies separately to building coverage and contents coverage Select Deductible PREMIUM: Deductible Premium Option Desired $10,000 $55,233 ❑ $15,000 $51,849 $20,000 $48,464 n $25,000 $45,079 n This is not a binder. This proposal will remain valid until September 4 Should coverage be accepted, it is required that the following items be provided: Signed Flood Proposal Acceptance Form Premium Payment - Check made payable to: Wright National Insurance Company The effective date of the new policy will be 12:01 a.m., local time, on the 30 calendar day after Fidelity National Insurance Company receives the application and payment of premium. Note: Regardless of the terms and conditions requested, this quote contemplates only the terms, conditions, warranties and exposures represented above. This company shall not be bound for any other terms or conditions than those stated above unless agreed to by the company prior to binding. Rates are subject to change pending Company and /or NFIP approval. ACCEPTED BY: DATE: 08/07/13 FLOOD PROPOSAL ENTITY: City of Port Arthur INSURER: Wright National Insurance Company COVERAGE: Flood Insurance TERM: One Year VALUATION: Actual Cash Value LOCATION: 5030 South Gulfway Dr. OCCUPANCY: Fire Station #4 - Garage LIMIT: $200,000 Building $20,000 Contents DEDUCTIBLE: Applies separately to building coverage and contents coverage Select Deductible PREMIUM: Deductible Premium Option Desired $10,000 $29,911 ❑ $15,000 $28,080 n $20,000 $26,250 n $25,000 $24,419 n This is not a binder. This proposal will remain valid until September 4 Should coverage be accepted, it is required that the following items be provided: Signed Flood Proposal Acceptance Form Premium Payment - Check made payable to: Wright National Insurance Company The effective date of the new policy will be 12:01 a.m., local time, on the 30 calendar day after Fidelity National Insurance Company receives the application and payment of premium. Note: Regardless of the terms and conditions requested, this quote contemplates only the terms, conditions, warranties and exposures represented above. This company shall not be bound for any other terms or conditions than those stated above unless agreed to by the company prior to binding. Rates are subject to change pending Company and /or NFIP approval. ACCEPTED BY: DATE: 08/07/13