HomeMy WebLinkAboutResolution_83-06/07_09/13/2007VILLAGE OF TEQUESTA
MEETING AGENDA ROUTING SHEET
MEETING DATE: September 13, 2007
REQUESTED ACTION/SUMMARY: Approval for the renewal of a one-year agreement
with the Florida Municipal Insurance Trust (FMIT)
for Property, General Liability, Law Enforcement
Liability, Automobile, Crime and Workers'
Compensation Coverage
RESOLUTION OR ORDINANCE NUMBER: Res # 83-06/07 Ord #
ORIGINATING DEPARTMENT: Human Resources
FUNDING SOURCE: 2007/2008 BUDGET
ACCOUNT NUMBER: Various
CURRENT BUDGETED AMOUNT AVAILABLE: $473,500
AMOUNT OF THIS ITEM: $465,534
AMOUNT REMAINING AFTER THIS ITEM: X7,966
BUDGET TRANSFER REQUIRED: _Yes _ No
APPROPRIATE FUND BALANCE: _Yes _ No
Piggyback Contract Name and #:
Or
Competitive Bid #
APPROVALS:
P '~~~ g
~~~ j` ij P
DEPARTMENT HEAD:
FINANCE DIRECTOR:
VILLAGE MANAGER: -=°~T~`~A~'
VILLAGE MANAGER RECOMMENDATION:
APPROVE ITEM: ^
DENY ITEM: ^
VILLAGE ATTORNEY: APPROVED FOR LEGAL SUFFICIENCY
^ Yes ^ No
^ Not Applicable (n/a)
Memo
To: Michael R Couzzo, Jr., Village Manager
From: Merlene Reid, HR Manager ~~~ ~f~ y
~ ~
Date: September 7, 2007
Re: Property & Casualty Insurance Renewals
I have attached a Property and Casualty evaluation schedule from Florida Municipal
Insurance Trust (EMIT), along with recommendation from the Gehring Group
Professional Services, which shows an 11.85% increase in insurance premiums, for
a total of $465,534 (See Exhibit A). This rise in cost is due mainly to increased values
on our property based on a property appraisal conducted in 2007, as an appraisal
was last completed around 1999. A copy of our Brokers' analysis and
recommendation is also attached as Exhibit B. The schedule includes Property,
General Liability, Law Enforcement Liability, Automobile, Crime and Workers'
Compensation insurance.
It is recommended that the Village renew the 2007/08 insurance contracts with the
Florida Municipal Insurance Trust (EMIT).
RESOLUTION NO. 83-06/07
A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF
TEQUESTA, PALM BEACH COUNTY, FLORIDA, TO RENEW THE
VILLAGE OF TEQUESTA'S PROPERTY, GENERAL LIABILITY, LAW
ENFORCEMENT LIABILITY, AUTOMOBILE, CRIME AND WORKERS'
COMPENSATION COVERAGE WITH THE FLORIDA MUNICIPAL
INSURANCE TRUST (EMIT) (PER ATTACHED EXHIBIT A) FOR A
COMBINED PREMIUM OF $338,919 AND AUTHORIZING THE VILLAGE
MANAGER TO EXECUTE THE APPLICABLE AGREEMENT ON
BEHALF OF THE VILLAGE.
WHEREAS, the attached schedule indicates an overall decrease of 17.08% due
to Council's request to increase the Village's deductible to $100,000 and remove any
properties of value up to $100,000; and
WHEREAS, the cost of the combined premium will be allocated between General
Fund #001, Water Utility Fund #401 and Stormwater Fund #403 as appropriate,
NOW, THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF THE
VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS:
Section 1 Consideration is given to Resolution No. 83-06/07 to renew
insurance coverage services with EMIT for FY 2007/08 for Property, General Liability,
Law Enforcement Liability, Automobile, Crime and Workers' Compensation insurance
and the Village Manager of the Village of Tequesta be authorized to execute renewal on
behalf of the Village.
Section 2 This Resolution shall become effective immediately upon passage.
The foregoing Resolution was offered by Vice-Mayor Watkins who moved its adoption.
The motion was seconded by Council Member Amero and upon being put to a vote, the
vote was as follows:
For Adoption Against Adoption
Mayor Jim Humpage x
Vice-Mayor Pat Watkins x
Council Member Dan Amero x
Council Member Tom Paterno x
Council Member Calvin Turnquest x
The Mayor thereupon declared the Resolution duly passed and adopted this 13th day of
September, 2007.
MAYOR OF TEQUESTA
~~ Humpage ~_
ATTEST:
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Lori McWilliams, CMC
Village Clerk
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tXHIBIT B
Village of Tequesta
Property & Casualty &
Workers' Compensation
Renewal Recommendation
Effective Date: October 1, 2007
The Village of Tequesta elected to place their property and casualty insurance program with the
Florida League of Cities/ Florida Municipal Insurance Trust effective October 1, 2006 due to the
large increases in the "hard" property insurance market last year. As such, the Village's
incumbent carrier provided a renewal quotation for fiscal year 2007/2008, a review of the
quotations received is included in the analysis below.
PROPERTY, INLAND MARINE, GENERAL LIABILITY, LAW
ENFORCEMENT LIABILITY, AUTOMOBILE
The incumbent provider for Property, Inland Marine, General Liability, Law Enforcement and
Automobile coverage is the Florida Municipal Insurance Trust (FMIT) administered through the
Florida League of Cities. Regarding Property, the FMIT renewal quotation is $216,453 based
upon an increased Total Insured Value (TIV) of $17,372,101 per the recent appraisal completed
by Specialty Property Services. The expiring premium is $154,123 based upon a TIV of
$15,580,351. The renewal quotation represents an increase in premium of $62,330 above the
expiring premium. The All Other Perils deductible remains unchanged at $10,000; Named
«'indstorm deductible remains 5% of the TIV per building, per location, subject to the policy
deductible or whichever is greater.
As the renewal quotation resulted in a 40% increase in the property premium, the Gehring Group
requested the FMIT provide alternative options. The first option is to increase the expiring
deductible for All Other Perils to $25,000. All Other Perils applies to losses caused by fire,
lightning, explosion, smoke, sprinkler leakage, theft, vandalism, etc. Increasing the deductible
provides an immediate premium savings of $21,306 from the renewal quote. However, the
Village's potential loss exposure increases by $15,000 for each building listed on the property
schedule. Currently, the Village insures sixty four locations with the FMIT. The second option
is to insure property at less then 100% of replacement cost. While this option provides
GFHRING,!GROLTP
immediate premium relief, the Village would be shifting its' risk and increasing potential
catastrophe losses by not insuring at full value. To weigh the potential savings, we requested a
quotation showing the insurance carrier providing coverage for 80% of the replacement cost per
location and the Village self-funding the remaining 20% of replacement cost for each scheduled
location. Applying the current deductible of $10,000 All Other Perils, and 80% co-insurance the
premium savings would be $18,359 from the renewal quotation. Applying a $25,000 deductible
All Other Perils with 80% co-insurance provides a premium savings of $46,551. Due to the
normally conservative views of public sector entities, the Gehring Group is recommending that
the Village increase its' AOP deductible to $25,000 while continuing to insure property at 100%
of its replacement cost.
FMIT, as the incumbent provider for General Liability, Public Officials Liability/Employment
Practices Liability and Law Enforcement Liability, offers a renewal quote of $92,894, a 2%
decrease from the current year's premium of $94,724. FMIT also provided a renewal quotation
for Automobile Physical Damage at $5,530, a decrease of 8.36% from the expiring premium of
$6,034. The FMIT offered a renewal quotation for Automobile Liability of $24,810, a decrease
of 15.53% from the expiring premium. The decreases in the above lines of coverage equate to a
premium savings of $6,896 to the Village of Tequesta.
WORKERS' COMPENSATION
FMIT is also the incumbent carrier for the Village's workers' compensation program. As such,
it has provided a renewal quotation of $140,526, an increase of 6.49% from the expiring
premium of $131,968. This slight increase is due to an increase in the experience modification
factor for the Village from a .80 to a .89. The FMIT continues to offer the Village the standard
credits for maintaining and enforcing a Drug Free Workplace (5%) and Safety Program (2%).
Gehring Group will also work with staff to review current policies and procedures, assist in
safety committee meetings and provide documentation such as safety check-lists to help improve
the overall loss ratio of the Village.
CRIME
The Village has maintained three types of crime and fidelity coverage's as follows:
1. Public Officials Bond
2. Employee Crime Policy
GEHRING,,!GROUP
3. Pension Plan Bond
The Village recently requested the Gehring Group secure renewal quotations for the above lines
of coverage as they all coincide with the Village's October lst renewal schedule. All insurance
carriers have been contacted, however, renewal quotations were not received in time to submit
this recommendation. As such, the Gehring Group recommends staff budget a 10% increase per
line of coverage to ensure adequate funds are secured for these important coverage's.
SUMMARY
• The Gehring Group recommends that the Village of Tequesta place its Property,
Inland Marine, General Liability, Law Enforcement Liability, Automobile and
Workers' Compensation coverage with the FMIT for a combined premium of
$458,907. For Property Coverage, the Gehring Group recommends that the Village
increase its' deductible for All Other Perils to $25,000 and covering property at 100%
of replacement value. This recommendation represents an overall increase to the
Village of 10% from the expiring premiums.
The Gehring Group provides the above recommendations based upon information supplied to
our office. Please note that the premiums illustrated are subject to alteration based upon revised
deductibles or limits of coverage. Staff and Members of the Council will be fully advised of any
changes in the recommendation at the September 13, 2007 Council meeting.
GEHRINGGROUh