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Home My WebLink AboutPR 11714: FLOOD COVERAGECITY OF PORT ARTHUR SAFETY & RISK MANAGEMENT MEMORANDUM TO: FROM: 'DATE: SUBJECT: Stephen B. Fitzgibbons, City Manager Lisa Colten, Safety & Risk Management Coordinator March 26, 2002 Resolution Approving the Purchase of Flood Coverage through Omaha Property and Casualty Insurance Company in the Amount of $40,131.00 per Annum COMMENTS RECOMMENDATION: I recommend approval of Proposed Resolution No. 11714 authorizing the purchase of Flood Coverage through Omaha Property and Casualty Insurance Company [via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Amedcan Governmental Risk & Insurance Programs (AMGRIP)], at a cost of $40,131.00. The coverage period is from April 26, 2002 through Apdl 26, 2003. The amount paid last fiscal year was $38,337.00. The principle reason for the increase in this year's premium is the re- appraisal of the City's properties being insured. The recommended company is the City's current provider. Premiums and rates are set by the National Flood Insurance Program (NFIP) regardless of the agent used. The City advertised for bids for Insurance Coverage. Three bids were received, including: AMGRIP/TML Jerry L. Holt Agency Leon Petty Insurance Agency $40,131.00 $40,130.00 $47,251.00 Although the bid submitted by the Jerry L. Holt Agency was $1.00 lower than the bid submitted by Omaha Property and Casualty Insurance Company (TML/AMGRIP), we believe that the recommended bid is the lowest and best bid as it will eliminate the time and effort to process the required paperwork. Further, the City has been using AMGRIP for its National Flood Insurance Program for many years. AMGRIP acts as the agent for the 'I'ML in procuring flood insurance for the City of Port Arthur. The TML undenvrites all other property and casualty insurances for the City of Port Arthur, and has been doing so for over fifteen years. The services provided by both AMGRIP and TML has been satisfactory. "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" Stephen B. Fitzgibbons March 26, 2002 Page 2 of 2 BACKGROUND: The bids were sent to RWL Group, the City's consultant, for analysis and recommendation. · Subsequent to extensive review of the bids, the consultant submitted its recommendation (Exhibit "A" to the attached resolution) that the bid received from Omaha Property and Casualty Insurance Company (via TML/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 ..... $40,131.00 Budgeted funds are available to cover this expenditure. The amount paid last fiscal year was $38,337.00. The principle reason for the increase in this year's premium is the re-appraisal of the City's properties being insured. STAFFING/EMPLOYEE EFFECT: No effect on staffing levels. SUMMARY: I recommend approval of Proposed Resolution No. 11714 authorizing the purchase of Flood Coverage through Omaha Property and Casualty Insurance Company [via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, Amedcan Governmental Risk & Insurance Programs (AMGRIP)], at a cost of $40,131.00. The coverage period is from April 26, 2002 through April 26, 2003. The amount paid last fiscal year was $38,337.00. The principle reason for the increase in this year's premium is the re- appraisal of the City's properties being insured. Attachment "REMEMBER, WE ARE HERE TO SERVE THE CITIZENS OF PORT ARTHUR" RESOLUTION NO. P.R. No. 11714 3/26/02 LJC A RESOLUTION AUTHORIZING THE PURCHASE OF FLOOD COVERAGE THROUGH OMAHA PROPERTY AND CASUALTY INSURANCE COMPANY IN THE AMOUNT OF $40,131.00 PER ANNUM PROPOSED FUNDING BY: General Liability Insurance Fund: 612-1702-581.52-00 $40,131.00 Whereas, bid specifications pertaining to the insurance coverage specified below were made available to interested parties on February 25, 2002, and sealed bids for the same were accepted until 3:00 p.m. on March 25, 2002 (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 Omaha Property and Casualty Insurance Company [via the Texas Municipal League Intergovernmental Risk Pool (TML-IRP) through its agent, 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, 2002, through Omaha Property and Casualty Insurance Company [via the Texas Municipal League Intergovernmental Risk Pool (TML~IRP) through its agent, American Governmental Risk & Insurance Programs (AMGRIP)], as recommended by RWL Group in Exhibit "A"; 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, 2002, pending receipt of the Contracts of Insurance; and, P.R. No. 11714 3/26/02 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., 2002, at a __ Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor , Councilmembers NOES: Oscar Ortiz, Mayor A-I-rEST: Acting City Secretary APPROVED AS TO FORM: (J~ty Attorney ~ APPROVED AS TO AVAILABILITY OF FUNDS: Director of Finance APPROVED FOR ADMINISTRATION: Stephen B. Fitzgibbons, City Manager EXHIBIT 'A" RWLGaou , EXHIBIT "A" Independent Risk Management, Insurance, and Employee Benefits Consultants 300 N. Colt Road, Suite 810, Richardson, Texas 75080-5456 Phone: 972-907-9095 Fax: 972-907-9198 E-mail: rwlgroup@rwlgroup.corn Internet: www. rwlgroup.com March 26, 2002 VIA FAX: 409-983-8282 (Five Pages) OVERNIGHT DELIVERY Ms. Lisa Colten Safety/Risk Management Coordinator City of Port Arthur P.O. Box 1089 Port Arthur, TX 77641-1089 Re: Federal Flood Insurance Program (NFIP) Bids Dear Lisa: RWL Group was commissioned to prepare specifications for competitively bidding the subject in caption. Three bids were received as follows: 1) AmGrip, which is domiciled in Houston, Texas, and is the incumbent agent. The AmGrip proposal is based on building values of $5,609,900 and content values of $2,021,900. The proposed premium is $40,131. The carrier proposed by AmGrip is Omaha Property and Casualty Insurance Company (the incumbent carrier). Please refer to Exhibit 3 from AmGrip's proposal (enclosed). 2) Jerry L. Holt Agency, which is domiciled in Pedand, Texas. The Holt Agency proposal is identical to the AmGdp proposal, except that the quoted premium is S40,130 (or $1 less than AmGrip). The carrier proposed by Holt Agency is American Bankers Insurance Company of Florida. Please refer to Exhibit 2 from the Holt Agency's proposal (enclosed). 3) Leon Petty Insurance Agency, which is domiciled in Abilene, Texas. The proposal from the Leon Petty Agency is based on the same building and content values as the AmGrip and Holt proposals. The premium quotation amounts to $47,251. The carrier proposed by the Petty Insurance Agency is Bankers Insurance Company. Please refer to Exhibit I from the Petty Agency proposal (enclosed). The bids that were submitted by each agent are identical in terms of coverage. The bids are also all in compliance with the insurance specifications. The expiring premium for approximately the same limits of insurance and exact coverages is $38,317. In essence, the NFIP is a rate and form regulated program administered by HUD; therefore, the premiums for identical coverages should have been the same. For some inexplicable reason, Mr. Petty's quotation is approximately $7,000 higher than the other two agencies. Ms. Lisa Colten Page Two March 26, 2002 The City has been using AmGrip for its~National Flood Insurance Program for some time now. .'AmGrip acts as the agent for the Texas Municipal League (TML) in procuring flood insurance for the City of Port Arthur. The TML underwrites all other property and casualty insurances for the City of Port Arthur, and has been doing so for over fifteen years. The services provided by both AmGrip and TML have been satisfactory. Therefore, it is our recommendation that coverage be awarded to Omaha Property and Casualty Insurance Company via its agent, AmGrip, with one qualification - it should be borne in mind that the Leon Petty Insurance Agency is certified by the State of Texas as an Historically Underutilized Business (HUD); by the U.S. Small Business Administration as a Small Disadvantaged Business (SE)B); and by the Texas Department of Transportation as a Disadvantaged Business Enterprise (DBE). In this vein, we are unsure, and can express no definitive opinion, as to whether the Leon Petty Insurance Agency is entitled to any special considerations that would supercede the recommendation contained in this report. Accordingly, our recommendation to award the NFIP program to Omaha Property and Casualty Insurance Company via its agent, AmGrip, is subject to any overriding entitlements that would inure to the benefit of the Leon Petty Insurance Agency and which may adse out of Federal, state or local laws or guidelines. We suggest that these particular questions be specifically referred to the Port Arthur City Attorney for comment. Please do not hesitate to contact me if you have any questions. Very truly yours, Robert W. Lazarus, ARM President/Senior Consultant Risk Management Services Enclosures EX]{IBIT I LEON PETTY INSURANCE AGENCY PREMIUM OPerationS Center '201: H;O. M~tls Blvd.;::..~ ~ ?-,;,~!,':.?,!~.~ :~;;;,?i:;:~?;?:.?~,..:: : : ' $5 ...0.~ Munc~pa Serv ce Stat on ,103H0 M sBvd ,~...~..>~.~,~, .$609 WaterSe~ce Center ::~,1~ 1 East H.O:,Mdls Blvd.:<:::?;;'~?~;,~¢~?;::~ -.:'~$69~ Sab ne Pass'WasteWater :8530 South Ath Po~ Acres.~asteWater~2992 H~-365 ~. .... ,,.,-=-~ ..... ,~.. ..... ~ .......... ~. % ~. 1.03, F~re. Stabon ~5.~6760 N~nth Ave ::-, .,'::-~ :~, .,.,,:~. ,, ~ 5Z~ ~umR Stabon ~50th,& Shreeve o~ Street, ~,.. ,,. Foster Eastern PureB stat on Golf Coupe 3500 75th Street Cub House Fac ty :. G61fCa~ S~orage ~a~i~ ~0075th. s~ree~-' ~:~.~ Ma ntananceBIdg Facility 3500 75t5 ~olf Cgurs~ ~umP House 2 3gO6:~5th :S~h~e(:. ~;'~'~ 5030 SOoth 8UMagDr Ve · ' ;: se~i~e Center 101 W H.'O. Mills Blvd. ;. TOTAL PREMIUM · "-- "" ' $47~ 2~ Synopsis o~ Properties and Costs Address EXHIBIT 2 JERRY L. HOLT AGENCY Costof Descri~ion Insurance 6790 9th Avenue 6099 Lewis Foster Ddve 2992 Hwy. 365th 853~ S. Gulfway 201 WHO Mills Bird 103 WHO Mills BIvd 101 WHO Mills Blvd 111 HOeMills Bird 111 E. Hwy 73rd 3500 75th Street 3500 75th Street 3500 75th Street 3500 75th Street 3500 75th Street 6000 Lewis 7800 9th Avenue 5030 S. Gulfway Dr. 50th St. Shrevepod YMCA $526 Fire Station #5 $570 Port Acres WNV $1,122 Sea Rim Pump $940 P.W.Operations $4,351 Municipal garage $5,064 Service Station $3,326 Water Service Ctr $696 Water Warehouse $773 Golf Cts. P/H 1 $273 Golf Crs. P/H 2 $273 Maintenance $252 Storage $222 Clubhouse $391 Foster Estate $345' Fire Station #8 $570 Fire Station ~f4 $20,122 Vista Village P/S $314 $40,130 Total o~U'9 ~-. ~ oo ~ =o'~ o ~ ~ ~* Z 0 >~>>>>>>>>>>>>~>>>