HomeMy WebLinkAbout1997 07 28 Consent Item C
COMMISSION AGENDA
ITEM
c
REGULAR
CONSENT X
INFORMATIONAL
July 28. 1997
Meeting
MGR ~T.
Authorization
REQUEST: The General Services Department requests that the City Commission continue the
property/casualty insurance with the Florida League of Cities for Fiscal Year
1997/98 at the current rate that will include a $5,000 increase for the new Public
Safety Complex.
PURPOSE:
The purpose of this Agenda Item is to allow the City Commission to extend the
property/casualty insurance to the Florida League of Cities for Fiscal Year
1997/98,
CONSIDERATIONS:
1. The City received the attached letter from Kurt Heyman, Director of
Marketing with the Florida League, extending current rates to Fiscal Year
1997/98 with a $5,000 increase for the new Public Safety Complex.
2. The City has been contacted by Arthur J, Gallagher & Co. and Risk
Management Associates, Inc" requesting that they may be allowed to bid
on the City property/casualty insurance. Arthur 1. Gallagher & Co. has
indicated that they may be able to under bid Florida League of Cities,
(See attached letters).
July 28, 1997
AGENDA ITEM
Page 2
3. There is not enough time to prepare an RFP between now and October 1,
1997, (Fiscal Year 1998), according to JP Petrencsik, Risk Manager, who
had previously notified Arthur 1. Gallagher & Co, and Risk Management
Associates, Inc. of this, (See attached letters),
4. The City will prepare an RFP for Fiscal Year 1999, and open up the
property/casualty insurance, according to JP Petrencsik, Risk Manager.
5. The City has saved $157,258 since adopting the Stop Loss Program,
ISSUES:
1. Does the City Commission desire to extend property and casualty insurance
coverage at present rates with a $5,000 increase for the Public Safety
Complex?
2. If not, does the City Commission desire staff to extend Florida League
coverage on a monthly basis beyond September 30, 1997 and prepare an
RFP?
RECOMMENDA TION:
That the City Commission extend property/casualty insurance coverage to the
Florida League of Cities at the present rates to Fiscal Year 1998,
IMPLEMENTA TION:
Effective date will be October 1, 1997,
July 28, 1997
AGENDA ITEM
Page 3
ATTACHMENTS:
1. Florida League of Cities' letter from Kurt Heyman, dated May 16, 1997,
2. Letter from Arthur 1. Gallagher & Co. - Orlando, dated May 29, 1997,
3, Letter from Risk Management Associates, Inc., dated May 23, 1997,
4. A letter dated June 25, 1997 to Ms. Sarah Callehan of Arthur 1. Gallagher & Co.,
from JP Petrenscik, Risk Manager,
5. A letter dated June 30, 1997 to Mr. W, Paul Dawson of Risk Management
Associates, Inc, from JP Petrenscik, Risk Manager.
COMMISSION ACTION:
...
.~ ,,;.Gorida League of Cities, Inc.
201 West Park Avenue
Post Office Box 1757
Tallahassee, FL 32302-1757
Telephone (904) 222-9684
Suncom 278-5331
FAX (904) 222-3806
D Reply to
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Florida League of Cities, Inc.
Public Risk Services
135 East Colonial Drive
Post Office Box 530065
Orlando, FL 32853-0065
Telephone (407) 425-9142
Suncom 344-6767
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$ fI.ORIJlI\ IFAGUE Of cmES
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00 Reply to
May 16, 1997
RECEIVED
HAY 1 9 1997
Mr. John Ketteringham
General Services Director
City of Winter Springs
1126 East State Road. 43il- -- -- -
Winter Springs, FL 32708
CiTY of Winte,. Sprl~
GENERAL SERVrCF' .
RE: 1997/98 FMIT Renewal
Dear John,
P~rsuant-t~ our recent meeting and discussions relative to the City's October 1, 1997,
renewal through the League's Florida Municipal Insurance Trust, I would like to provide
the following premium information. Overall, I am pleased to inform you that (with the
exception of the premium for the public safety complex to be added to the policy) we
will be able to keep the same 1996/97 premium rates in effect, with no increase for the
1997/98 fiscal year.
The 1996/97 net billed premium was $236,974 and based on the following exposures:
. Workers' Compensation Payroll of $5,111,663
. 97 Total Vehicles
. 4 rFiill TimePolice Officers, 15 Clerical
. Population of 25,673
As you know, we generally use the most recently audited exposure information when
calculating renewals.
I have compared the 1995/96 audited numbers to those on the present 1996/97 policy
and did not find any major deviations. The workers' compensation payroll is slightly
higher($5,296,988), however, the vehicle and police officer counts are roughly the
same. Please let me know from your standpoint if any significant differences exist from
t.hese exposures. . . .'
Florida Municipal Self
Insurers Fund (Workers'
Compensation)
Florida Municipal Health
Trust Fund
Florida Municipal Pension
Trust Fund
Florida Municipal Insurance
Trust (Liability and
Property)
.
.- '
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Mr. John Ketteringham
General Services Director
RE: 1997/98 FMIT Renewal
Page Two
The annual property premium to add the new complex will be approximately $5000.
Thus, the City's 1997/98 premiums will be no higher than $242,000 (of course, subject
to final audit) and in fact, may even be lower due to a potential increase in participation
credits.
I have reviewed the information you sent from the PRM program and can basically pass
on that it offers no real advantage over the League's program. They offer restrictive
claims made Public' OfficialsTiaoility coverage, impose a mandatory one year
cancellation provision and do not possess the financial strength to that of the FMIT. In
addition, they do not have available the $25,000 Deductible Plan that has worked
extremely well for the City.
The deductible plan has saved the City $157,258 since its adoption January 1,1996.
We look forward to being of continued service to the City for its insurance needs.
Sincerely,
~+~
Kurt Heyman
Marketing Manager
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ARTHUR J. GALLAGHER & CO. - ORLANDO
May 29, 1997
City of Winter Springs
John Ketteringham
1126 East S.R. 434
Winter Springs, FI. 32708
Dear Mr. Ketteringham:
Arthur J. Gallagher & Co, - Orlando is pleased to present you the following
indication of insurance coverage and price for the upcoming policy year
(October 1, 1997 to Oct. 1, 1998).
An indication is pricing based on limited information and can go up or down
depending on the information received prior to release of a final quotation. The
reason for this is that the insurance company does not have all of the information
on which to base their quotation; they can not justify maximum credits allowable,
nor consider unknown detrimental factors, so they have estimated the unknown
and provided a ball park figure. Once all of the underwriting data is gathered it
is not unusual to see a quotation come in lower than the indication.
I was able to obtain information regarding losses, which weighs very heavily,
budgetary items, and limited other exposures items such as population, number
of employees. Most of the unknown information is departmental facts and
procedures for the police department, parks and recreation, and utilities.
The indication for the Package policy (not Work Comp) is provided by United
States Fidelity and Guarantee (USF&G), an A rated company. There are several
very important items that this company brings to the table that you do not
currently have or that can be improved upon. These items are detailed further
into the indication; loss control, and an A rated company vs. a pooling
arrangement, 100 years of insuring public sector accounts, and on the scene
adjusters in the event of a loss.
We would like you to consider our indication and allow us to proceed with a
quotation. A few minutes with several department heads is all that is required.
Arthur J. Gallagher & Co. is a perfect choice for you to consider for a proposal.
The USF&G indication is a carrot to get your attention, and although we think it
is a fine company, a viable resource, and a strong contender for your coverage,
201 South Orange Avenue, Suite 475 · Orlando, Florida 32801
Phone 407/872-3656 · Facsimile 407/872-3364
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we are not limited to this company in our product offerings.
We are the leader in public sector insurance programs, as the attached list of
clients indicates, We have access to every major insurance company in the
nation providing you with brokerage services, proprietary products and expertise
unsurpassed by any other broker,
More public entities are deciding that they do not get the benefits that they are
seeking when they "bid" their insurance. They have come to realize that it
muddies the waters, fragments the insurance market, and does not provide them
with the best coverage at the best price by one respondent. They know that for
the most part, they are not required by law to "bid" services, and they have
chosen a very beneficial alternative to the "bid" process.
Brokerage services selection is an excellent way to obtain all of the best
products at the best price from one source. When it is known that this broker is
the chosen broker for Winter Springs, in many cases, proprietary products or
"exclusive" programs can be accessed by the selected broker that would not
normally be available to him/her Certainly we would ask all "exclusive" program
sources, to consider coverage for your City, if we were selected as your broker
for brokerage services, These "exclusive" program sources want to participate
in the quotation process but can only bring their program to the table. Their
offering is very limited and in some cases the best choice, but only a broker the
caliber of Gallagher can bring everything to the table.
I have enclosed our brochure, annual statement, and three publications that are
my contribution to the City for their use. I feel that all three demonstrate our
commitment to our clientele: The Gallagher Way, Employment Practices Liability
Research Manual, and Law Enforcement Article Reprints.
Your consideration for Arthur J. Gallagher & Co. - Orlando to be selected as
your broker will be greatly appreciated. The USF&G proposal is an indication of
what we can do for you for starters.
Regards,
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Sarah L. Callahan, A.A.!.
Account Executive
.,
CITY OF WINTER SPRINGS
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INDICATION OF INSURANCE
10/1/97 TO 10/1/98
Total Insurance to Value - Buildings and Contents
$15,400,000 (Currently the City has $12,768,000)
Special Causes of Loss
Replacement Cost
$5,000 deductible (Currently the City has a $250 deductible)
(Does not include Flood)
General Liability, Public Officials Errors and Omissions, Law Enforcement
Professional Liability
$1,000,000 per occurrence
with $5,000,000 aggregate (Currently the City relies on Sovereign
Immunity limits of $100,000 per person, $200,000 per ocCurrence with
$2,000,000 specified for claims bill, Federal and out of state claims).
$25,000 deductible
Automobile Liability
$1,000,000 per occurrence
$2,000,000 aggregate (Currently the City relies on Sovereign Immunity
limits of $100,000 per person, $200,000 per occurrence with $2,000,000
specified for claims bill, Federal and out of state claims).
Automobile Physical Damage
$1,000 deductible for Comprehensive and Collision (Currently the City has $500
deductible)
97 vehicles
Crime
$50,000 Employee Dishonesty
PREMIUM INDICATION: $145,000 SAVINGS: $6,655 (Currently the City
is paying $151,655 including the coverage differences)
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CITY OF WINTER SPRINGS
Loss Control Services
USF&G will assist the City in setting up a comprehensive safety program. This
will include but not be limited to the following:
USF&G will provide loss control services to every department in the City on an
individual basis, learning what loss control measures are in place and what need
to be implemented.
Emphasis is placed on controlling losses through implementation of sound
policies and procedures in high target areas such as the Police Department and
Human Resources, however, every department will be analyzed.
Training seminars, manual compilation, routine safety meetings, and daily
procedures are loss control items that will be implemented and/or reinforced
within the City.
Resources are provided to the Risk Manager such as publications, speakers at
departmental seminars, updates on legislation.
100 years of experience with public sector accounts enables USF&G to provide
you with exceptional loss control services.
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CITY OF WINTER SPRINGS
WORKERS COMPENSATION INDICATION
Paid Loss Retro
Standard Premium
Maximum Retro Premium %
Maximum Retro Premium
Basic Premium Retro %
Basic Premium
Minimum Retro Premium
Loss Conversion Factor
Normal Premium at 1997 rates
Tax Multiplier
Claims Fund estimate
$231 ,140
145
$335,153
10,50
$ 24,269
$ 26,090
1.20
$204,261
1.76
$ 15,000
Paid Loss Ratio Scale
0%
10%
20%
30%
40%
50%
60% Near normal premium
70%
80%
90%
100%
$ 26,090
$ 54, 114
$ 83,959
$113,803
$143,648
$173,493
$203,378
$233,183
$263,027
$292,872
$335,153 max
Your 6 year average loss ratio is 19%, 9 year average loss ratio is 45.7% (one
very bad year in 89-90 of 109.9% loss ratio), If you have a 19% loss ratio in
1997 you will only pay $80,974 for Workers Compensation.
The above quote is a hypothetical but realistic quotation based on 1997 rates
and your estimated payroll, your year to date 1996-1997 loss experience, and
actual minimum and maximum ratios recently quoted on a similar size account.
Paid losses are the actual loss X Loss Conversion Factor X Tax Multiplier +
Basic Premium.
You would pay one twelfth of the Minimum Premium + the Loss Constant of $140
for the deposit. There would be 11 installments to follow of $2,172. If there are
no losses, you pay nothing more than the $26,090. If you have losses, you
would pay the incurred losses based on the formula above up to the maximum of
$335,135. You retain the investment income on expected but not reported losses
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not the insurance company. A paid loss retro is as close as you can come to
being self insured and having someone handle your claims for you as you can
get without actually being self insured.
There are many options in the Workers' Compensation market today, this is but
one of them. Competition is back in Workers' Comp in Florida. Perhaps you
would want a lower Maximum and would be willing to give up a few points on the
Minimum, perhaps a lower loss conversion factor would be more appealing. By
learning what is important to the City of Winter Springs, we can tailor your
Workers' Compensation program to meet your needs and address your
concerns. You would have input and you could invest your unreported claims
money yourself until such time as a claim is reported.
Members of the Public Risk Manal!ement
of Florida
City of Avon Park
Town of Belleair
City of Belle Glade
City of Cape Coral
City of Clewiston
City of Crystal River
City of Eustis
City of Fort Meade
City of Gulfport
Town of Kenneth City
City of LaBelle
City of Lake Mary
City of Lake Wales
City of Lake Placid
City of Longwood
Town of Longboat Key
City of Moore Haven
City of New Port Richey
City of North Port
Ciiy of Pahokee
City of Port Richey
City of Punta Gorda
City of Safety Harbor
City of Sebring
City of South Pasadena
South Florida Conservancy
City of Tavares
City of Wauchula
City of Winter Garden
City of Zephyrhills
DeSoto County Board of Commissioner
Glades County Board of Commissioners
Hardee County Board of Commissioners
Hendry County Board of Commissioners
HigWands County Board of Commissioners
Okeechobee County Board of Commissioners
Lee County Airport Authority
Sarasota-Manatee Airport Authority
Florida Countv Board of Commissioners
Alachua County Board of Commissioners
Brevard County Board of Commissioners
Charlotte County Board of Commissioners
Citrus County Board of Commissioners
Collier County Board of Commissioners
Escambia County Board of Commissioners
Indian River County Board of Commissioners
Lake County Board of Commissioners
Lee County Board of Commissioners
Manatee County Board of Commissioners
Martin County Board of Commissioners
PARTIAL LIST OF FLORIDA PUBLIC ENTITY CLIENTS
Metro Dade County Board of Commissioners
Monroe County Board of Commissioners
Palm Beach County Board Commissioners
Pasco County Board of Commissioners
Putnam County Board of Commissioners
Seminole County Board of Commissioners
Volusia County Board of Commissioners
Cities. Towns and Villal!es
City of Clearwater
City of Conconut Creek
City of Coral Gables
City of Coral Springs
City of Daytonya Beach
City of Dunedin
City of Fort Lauderdale
City of Gainsevillc
City of Hallandale
City of Hialeah
City of Key West
City of Lauderhill
City of Lauderhill
City of Margate
City of Miami Springs
City of Melbourne
City of Miramar
City of Naples
City of North Lauderdale
City of North Miami
City of Oakland Pines
City of Palm Bay
City of Pembroke Pines
City of Riviera Beach
City of Sunrise
City of Tamarac
City o(Winter Haven
CIS>'-
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Members of the Florida Housin!! Authoritv
Risk Manal!ement Pool
Avon Park Housing Authority
Bradenton Housing Authority
. Brevard County Housing Authority
Cocoa Housing Authority
Daytona Beach Housing Authority
Melbourne Housing Authority
New Smyrna Beach Housing Authority
Ocala Housing Authority
Palatka Housing Authority
Plant City Housing Authority
Sanford Housing Authority
Suwanee Housing Authority
Tallahassee Housing Authority
Tarpon Springs Housing Authority
TItusville Housing Authority
Other Authorities. Districts
Broward County Housing Authority
Escambia Utilities Authority
Florida Keys Adqueduct
Metro Dade Transit Authority
North Brevard Cty Hosp Dist
South Florida Water Management
Individual Florida School Systems
Broward County School Board
Clay County School Board
Collier County School Board
Dade County School Board
Duval County School Board
Escambia County School Board
Fl. Jr. College at Jacksonville
Hillsborough County School Board
Leon County School Board
Monroe County School Board
Okaloosa County School Board
Pasco County School Board
Santa Rosa County School Board
Seminole County School Board
Members of the Northeast Florida
Educational Consortium
Baker County School Board
Bradford County School Board
Columbia County School Board
Dixie County School Board
Flagler County School Board
Gilchrist County School Board
Hernando County School Board
Levy County School Board
Nassau County School Board
Putnam County School Board
Union County School Board
PARTIAL LIST OF FLORIDA EDUCATIONAL CLIENTS
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Members of the Panhandle Area
Educational CooDerative
Calhoun County School Board
Franklin County School Board
Gulf County School Board
Hamilton County School Board
Holmes County School Board
Jackson County School Board
JetTerson County School Board
Liberty County School Board
Madison County School Board
Wakulla County School Board
Walton County School Board
Washingtoll County School Bo;,rd
Catholic School Systems
Archdiocese of Miami Schools
Diocese of Orlando Schools
Diocese of Palm Beach Schools
Diocese of Pensacola-Tallahassee
Schools
Diocese of St. Augustine Schools
Diocese of Venice Schools
St. Thomas University
Members of the Florida Community
Collel!e Risk Manal!ement Consortium
Polk County School Board
Brevard Community College
Broward Community College
Central Florida Community College
Chipola Junior College
Daytona Beach Conununity College
Edison Community College
Florida Keys Conununity College
Gulf Coast Community College
HilIsborough Community College
Indian River Community College
Lake City Community College
Lake-Sumter Community College
Manatee Junior College
Miami-Dade Community College
North Florida Junior College
Okaloosa-Walton Junior College
Palm Beach Community College
Pasco-Hernando Community College
Pensacola Junior College
Polk Community College
St. Johns River Conununity College
St. Petersburg Community College
Santa Fe Community College
Seminole Conununity College
South Florida Junior College
Tallahassee Conununity College
Valencia Conununity College
Members of the Florida School Board
Association Insurance Trust
Alachua County School Board
Citrus County School Board
Lafayette County School Board
Lake County School Board
Okeechobee County School Board
Santa Rosa School Board
Suwannee County School Board
Taylor County School Board
State of Florida University Systems
Florida A & M University
Florida Atlantic University
Florida International University
Florida State University
University of Central Florida
University of Florida
University of North Florida
University of West Florida
Jul-16-97 14:07 RMA-CENTRAL FLORIDA
407 331 4800
P.OZ
RMA
Risk Mamll!l.:11lI;nt. Associales. 111<':,
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May 23, 1997
VIA FACSIMILE: .127-6912
Mr, John Kcttcringham
General Services Director
City or Winter Springs
D~ar IVIr. Kctteringham:
As the exclusive agenl fi)r the Florida Citit;:s and Special Di~tricts In5uralu,:~ Program, Risk
Management Associates insures over 75 public t3C1lities in Florida. This program is not a
self insured pool, rather a fully insured propel1y and casualty insurance probTfam
underwritten by Coregis Insurance Company. In order to besl illustrate the benetits and
advantages of this program. we would like to submit a proposal for l:omparison with your
existing insurance policies, The tollowing in('ormation is all that is required to prepare a
ttlll proposal.
PROPERTY UARILlTY:
Property Schedule
Auto Schedule
Equipment Schedule
Loss History Reports (3 - 5 years)
Most Recent Financial Report
Curnpletion of a shurt five question Public Officials Liability Application
WORKERS COMPI'.NSATlON:
Payroll by Classilication Code
Loss History Reporls (3 - 5 years)
After tht: receipt ofthcse uO(,;lIments, a proposal will be prepared and dclivelC::u lo you in
two to three weeks, 1 will tollow lip with you via tdephonc to determine the most
convenient method to collect this data,
Sincerely,
--~
W, Paul Dawson
Account Executive
<.'ollll11cITial (nSI1I"alH.:c . Bonds. Risk l\(anagcllll'nl Sl'nil'cs . Prf.l;":I'~lIl1 f>t-sign and Administratioll
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'CITY OF WINTER SPRINGS, FLORIDA
Risk Management
1126 EAST STATE ROAD 434
WINTER SPRINGS. FLORIDA 32708.2799
Telephone (407) 327-1800
Fax (407) 327-6288
June 25, 1997
Ms. Sarah Callehan
Arthur J. Callagher & Co.
201 South Orange Ave Suite 476
Orlando, Fl. 32801
RE: Fax Dated June 24, 1997 to Mr. J. Ketteringham
Dear Ms. Callehan:
Thank your for your interest in handling our Property /Causality /W orkers'
Compensation Insurance.
Based upon the Florida League of Cities agreement to extend the annual
policy for another year without an increase, even though your proposal
looks promising, it is impossible at this late hour for us to go through a
R.F.P. process. Therefore, the City of Winter Springs will stay with the
Florida League of Cities, for the fiscal year 1997/1998
You may submit a proposal with a firm cost for our Property/ Causality/
Workers Compensation Insurance (to my attention) after the first of the
year, and no later than March 1, 1998.
Between the first of the year and March 1, 1998, the city will do a
comparison of all submitted proposals and if warranted, go out for R.F.P.
for the above mentioned insurance.
dnce~/___,/ /~
C ~~f
Risk Manager
cc: General Services RECEIVED
JUN 3 0 1997
City of Wintar Spring.-
c:.ENERAL SERVICe:--
/
CITY OF WINTER SPRINGS, FLORIDA
Risk Management
1'126 EAST STATE ROAD 434
WINTER SPRINGS. FLORIDA 32708-2799
Telephone (407) 327-1800
Fax (407) 327-6288
June 30, 1997
Mr. W. Paul Dawson
598 South Northlake Blvd
Suite 1040
Altamonte Springs, Fl. 32701 .
Dear Mr. Dawson:
Thank your for your interest in handling our Property /Causality /W orkers'
Compensation Insurance.
Based upon the Florida League of Cities agreement to extend the annual
policy for another year without an increase, even though your proposal
looks promising, it is impossible at this late hour for us to go through a
R.F.P. process. Therefore, the City of Winter Springs will stay with the
Florida League of Cities, for the fiscal year 1997/1998
You may submit a proposal with a firm cost for our Property/ Causality/
Workers Compensation Insurance (to my attention) after the first of the
year, and no later than March 1, 1998.
Between the first of the year and March 1, 1998, the city will do a
comparison of all submitted proposals and if warranted, go out for R.F.P.
for the above mentioned insurance.
cc: General Services
RECEIVED
JUN 3 0 1997
City of Wjnt... Spr;ngr-
--::ENERAL SERVlr....