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Home My WebLink About05. 16-168APRIL 12, 2016 16-168 RESOLUTION (CARRIED___6-0_____LOST________LAID OVER________WITHDRAWN________) PURPOSE: APPROVAL OF THE WITHDRAWAL FROM THE LOCAL GOVERNMENT PROPERTY INSURANCE FUND AND ACQUISITION OF PROPERTY INSURANCE COVERAGE WITH CHUBB INSURANCE ($184,267.00) INITIATED BY: CITY ADMINISTRATION WHEREAS, the City of Oshkosh has previously contracted with the Local Government Property Insurance Fund for property insurance coverage; and WHEREAS, the City of Oshkosh, with the assistance of their consultant Willis Watson Towers obtained and reviewed quotes for alternate coverage for 2016 property insurance coverage, and determined that the most advantageous proposal for property insurance coverage was from Chubb Insurance; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh that the proper City officials are hereby authorized and directed to take those steps necessary to withdraw from the Local Government Property Insurance Fund and to secure new property insurance coverage with Chubb Insurance, effective May 1, 2016, and to take all necessary actions to implement the same. Money for this purpose is hereby appropriate from: Acct. No. 100-0120-6482-XXXXX General Fund – Insurance Building & Contents � ;�< ofHKOfH ON THE WATER PO Box 1130, 215 Church Ave. Oshkosh WI54902-1130 TO: Mayor and Common Council FROM: Paul Greeninger, Safety & Risk Management Officer CC: Mark Rohloff, City Manager John Fitzpatrick, Assistant City Manager/Director of Administrative Services Pam Resch, Human Resource Manager DATE: April 6, 2016 RE: City of Oshkosh Property Insurance BACKGROUND The Local Government Property Insurance Fund (LGPIF) currently provides property insurance to the City of Oshkosh. The renewal rate for 2016 reflected a 114% increase. The LGPIF explained their reasoning for the increase, in (Exhibit A) and (Exhibit B) which is attached. The City's current non-health insurance consultant, Willis Watson Towers, is also aware of these circumstances, and advised the City that they may be able to assist the City in obtaining more favorable rates. As a result of this situation, they secured quotes from the Municipal Property Insurance Company (MPIC). MPIC is a new alternative to the LGPIF formed by our liability insurance LWMMI, and other local government insurance companies. Quotes were also obtained from Chubb, which is a provider Willis Watson Towers is familiar with, in order to evaluate several options in addition to the LGPIF. ANALYSIS The rate quotes came in as follows: LGPIF - $260,238 Chubb - $184,267 MPIC - $160,055 A complete comparison of the quotes is attached (Exhibit C), with select coverage comparisons highlighted. Key areas of distinction are as follows: • Chubb offers comprehensive flood insurance which, if selected, would result in all City locations securing coverage. A complete listing of locations and coverage is attached (Exhibit D). LGPIF and MPIC provide flood insurance coverage, but not for all City of Oshkosh locations. Some of the facilities excluded from flood coverage by MPIC include the new Public Works Field Operations Facility, both Senior Center buildings, the Water Filtration Plant, The Waste Water Treatment Plant, and the Transit Garage. • In previous years, the LGPIF was able to offer aggregate deductibles. This option allowed smaller claims to be added together to meet the $5000 deductible limit, which somewhat limited our total exposure. As of 10/1/15, this option is no longer available through the LGPIF. • Additional loss control services is something that the City of Oshkosh has not had available to them from the provider specific since switching to LGPIF over two decades ago. Both the LGPIF and MPIC do not offer any provider specific loss control services. The Chubb quote includes those services, which would augment Willis Watson Towers analysis. This would be a welcome resource that would enable the City of Oshkosh to help continue keep costs down through additional inspections and other loss control measures. FISCAL IMPACT Although the Chubb quote is more costly on the surface, it is a better value because it includes more complete coverage and additional services. The 2016 budgeted amount for Property Insurance is $188,000. RECOMMENDATION Based on the favorable rates and more complete coverage, I recommended that the City of Oshkosh withdraw from the Local Government Property Insurance Fund (Exhibit E) and secure the Property coverage from Chubb, effective May 1, 2016. Respectfully Submitted, X� Paul Greenin Safety & Risk Management Officer Approved: ��----�• J Mark A. Rohloff City Manager EXHIBIT A .:.��... +�.. ity . � t J '. ` State of Wisconsin / OFFICE OF THE COMMISSIONER OF 1NSURANCE � � ` Local Government Property Insurance Fund 125 South Webster Street • P.O. Box 7873 SCOf[ W[IG�CY, Ciovel^nol^ Madison, Wisconsin 53707-7873 Theodore K. Nickel, Commissioner Phone: (608) 264-8118 • Fax: (608) 264-6220 E-Mail: Brynn.Bruijnhansen@wisconsin.gov W7SCOnstn.gov Web Address: oci.wi.gov July 16, 2015 Xx Xx Xx Xx Re: Dissolution of the LGPIF Dear Policyholder, As most of you are aware the 2015-2017 state budget included a provision to discontinue the LGPIF. The Joint Finance Committee affirmed this budget item with a modification to the actual ending date. Prior to the budget going to the Senate for debate, this provision was removed in its entirety. The budget, with the provision removed, was passed by both the Senate and the Assembly and signed by the governor on July 12�, 2015. Thus, the Fund will continue to provide property coverage. Management has discussed the current rate structure in relation to the Fund's financials and has decided to maintain the 85% overall rate increase. These rate increases are to the Fund in its entirety, individual policyholder rate changes will vary. The Fund will continue to honor the suspension of its short term cancellation clause (SECTION VIII-CONDITIONS, B— Termination of Policy) for those insureds that renew from July lst, 2015 to September 30�', 2015. If you have questions about any of the above changes, please contact the Fund Administrator at 877-229-0009, or the undersigned at (608) 264-8118, or email me at Brynn.BruijnHansen@wisconsin.gov. Sincerely, Brynn Bruijn-Hansen Insurance Program Manager Local Government Property Insurance Fund WISCONSIN /S OPEN FOR BUSINESS � EXHIBIT B State of Wisconsin / OFFICE OF THE COMMISSIONER OF INSURANCE Local Government Property Insurance Fund The ASU Group Scott Walker, Governor 2so1 Cross roads Drive, suite 2200 Ted Nickel, Commissioner Madison, Wisconsin 53718-7999 JanUal'y 27, 2016 Phone: (608)210-5673 • Toll Free: (877)229-0009 �SCOnsln.goV Toll Free Fax: (877)832-0122 NOTICE OF ALTERED POLICY TERMS RENEWAL PREMIUMS VALUATION POLICY OCI 41-080 (R01-2012) Policy Holder Contact Address City, W I Zip Policy Number: 1�a Renewal Date: xhc/2016 Dear Insured: Wisconsin Statute 631.36 provides that policyholders be notified of any significant policy or premium alterations at least 60 days prior to any anniversary (i.e., renewal) date if the changes are to become effective on the renewal date. In the event the renewal is sent by first class mail less than 60 days prior to the anniversary date, the policy change becomes effective 60 days after the notice is mailed. As a policyholder, you have the right to cancel coverage without penalty within the prescribed 60 day time period. After 60 days, cancellation may be subject to customary short rate cancellation charges. For policies effective on or after July 1St, 2015, the following changes have been approved and will be implemented. These changes may affect the premium you will pay for your renewal policy: The LGPIF will adopt a Loss Cost Multiplier of 2.288 versus the current 1.413. The rate for Automobile physical damage will increase by 35%. Our actuarial firm, AMI Risk Consultants reviewed the Fund's fiscal condition and recommended rate changes and indicated that the rate increase outlined above are warranted. If you have questions about any of the above changes, please contact the Fund Administrator at 877-229- 0009, or the undersigned at (608) 264-8118, or email me at Brynn.BruiinHansen(c�wisconsin.qov. Sincerely, �i �_��-'-- Brynn Bruijn-Hansen Administrator for Funds and Program Management Office of the Commissioner of Insurance EXHIBIT C 2016 City of Oshkosh Property Insurance Proposal Comparisons LGPIF Chubb 186,191 $350,000,000 Loss Limit Additional $16,576,043 Property In The Open coverage (All properties owned by City of Oshkosh will be listed on the Statement of Values. A catastrophic loss, involving the entire City of Oshkosh, would be necessary for payout of loss limit. All properties are covered at replacement cost, up to values shown on Statement of Values). Jew for 10/01/2015: $5,000 - after 3 losses of more than $5,000 65,000, deductible will decrease to $500 for each >ubsequent occurrence. i/1/2016 - 5/1/2017 Vot Rated �1/2016 - 5/1/2017 .0499 184,267 (1) XV 3oiler & Machinery (Equipment Breakdown) Equipment Breakdown (Currently written with Cincinnati =arthquake Expires 12/5/2016). This policy and the associated costs =1ood ("Surface Water" covered up to $1,500,000, subject will be replaced by Chubb at a reduced cost. 0 other limitations) Pollution MPIC Buildings" "Personal Property" and "Property in the ipen" are subject to an "occurrence" limit of 125% of ie Total Insured Value shown on the Statement of �,000 �1/2016 - 5/1/2017 036 160,055 % ot Rated oiler & Machinery (Equipment Breakdown) arthquake lood ("Surface Water" covered up to $5,000,000, subject � other limitations) ` Vehicles *Vehicles * Vehicles ` Accounts Receivable *Paved Surfaces- roadways/parking lots not automatically * Accounts Receivable ` Money and Securities covered. Can provide this if receive a schedule and values * Money and Securities ` Cost of Excavation, grading or filling Cost of Excavation, grading or filling * Cost of Excavation, grading or filling ` Bridges, roadways, culverts more than 100 feet from Bldg. * Bridges, roadways, culverts more than 100 feet from Bldg. million limit ione included in the �5 million Business Income limit IYes. �5 million limit 000,000 Business Income including Extra Expense �$5,000,000 Business Income �ontingent coverage in first 60 days/no coverage after 60 No Limitation ;onsecutive days for specified perils. All other perils — claim �ayment reduced 15% (A building is considered vacant anless 31 % of total sq footage is rented and used by lessee �r used by owner to conduct operations. ) Personal 'roperty is excluded — V-K �1,000 per item/$10,000 per occurrence within 1,000 feet of All covered as part of building or personal property — � building unless scheduled. Property in the open beyond included in limit of insurance I,000' from buildings are not covered unless that property is Property in the Open Limit- $16,576,043 per schedule isted as separate item on the property in the open list. intingent coverage in first 60 days/no coverage after 60 nsecutive days for specified perils. All other perils — clairr yment reduced 15% (A building is considered vacant less 31 % of total sq footage is rented and used by lessee used by owner to conduct operations. ) Personal operty is excluded — V-K �1,000 per item/$10,000 per occurrence within 1,000 feet of � building unless scheduled. Property in the open beyond I,000' from buildings are not covered unless that property is isted as separate item on the property in the open list. 615,000 each occurrence — not limited when caused by fire $250,000 each occurrence — not limited when caused by $15,000 each occurrence — not limited when caused by fire x lightning fire, lightning, explosion or leakage of fire protection or lightning EXHIBIT C 2016 City of Oshkosh Property Insurance Proposal Comparisons LGPIF Chubb =ull coverage on construction projects $500,000 or less. Definition of Building includes Remodel and Repair �n construction projects more than $500,000, you must therefore this is included in the $1 million limit. eport the project to the Fund within 90 days from the date ;onstruction starts or no coverage applies. See Section I I. M. and N. on page 3 of the policy form. MPIC ull coverage on construction projects $500,000 or less. n construction projects more than $500,000, you must �port the project to the Fund within 90 days from the date �nstruction starts or no coverage applies. See Section I M. and N. on page 3 of the policy form. (es, (NOTE: $10,000 per item maximum on contractor's Personal Property -$250,000 Yes, (NOTE: $10,000 per item maximum on contractor's �quipment unless endorsed on the policy) Contractors Equipment — No $10,000 limitation $500,000 equipment unless endorsed on the policy) limit per item =ull coverage on construction projects $500,000 or less Blanket $1,000,000 per occurrence; =ull coverage on renovation projects that do not expand >quare footage of building Jo new construction projects are covered Jot Covered 246 Limit �overage for Flood, up to $1,500,000 Does NOT apply to See "Exhibit D" (2) (3) �ny property located in any flood plain or "All Zone A" or vater which exerts pressure on or flows, seeps or leaks hrough sidwalks, driveways, foundations, walls basements, x through doors, windows or any other openings. Sump �ump backup, sewer or septic systems are covered. ulobile Equipment $8,069,585 Blanket Leased, Rented or Borrowed - $500,000 In Transit - $500,000 Rental Reimbursement -$50,000 Aggregate/$1,000 a day Waterbourne (per schedule on file with the company) - i45, 000 ull coverage on construction projects $500,000 or less ull coverage on renovation projects that do not expand �uare footage of building o new construction projects are covered Covered iverage for Flood, up to $5,000,000 Does NOT apply to y property located in any flood plain or "All Zone A" or iter which exerts pressure on or flows, seeps or leaks ough sidwalks, driveways, foundations, walls basements, through doors, windows or any other openings. Sump mp backup, sewer or septic systems are covered. Mobile Equipment Deductibles �'es -$1,000 applies unless the Mobile Equipment is over Yes ` Scheduled contractors equipment covered $100,000 * Scheduled contractors equipment covered ` Unscheduled equipment covered up to $10,000 -$2,500 applies to Mobile Equipment over $100,000 * Unscheduled equipment covered up to $10,000 -$500 applies to Unscheduled Mobile Radio Equipment -$100 applies to Unscheduled Mobile Radio Equipment (Officers equipment while located inside police cars) 00,000 Unscheduled Mobile Equipment (Maximum Any e item -$15,000, $2,500 deductible — Replacement Cost Juation) in add flood and quake perils for additional premium EXHIBIT C 2016 City of Oshkosh Property Insurance Proposal Comparisons LGPIF Chubb MPIC �33,000 Limit -$500 Deductible $33,000 Limit -$1,000 Deductible Lessor of $25,000 Per Police Dog or the total expenses related to the replacement of the dog plus expenses for the care or treatment of the policy dog. Subject to a$1,000 Jone 1) Premium =$178,267 if (2) below is removed 2) Premium savings to remove all "AE" zone properties =$6,000 3) Standalone Flood Coverage placed for another municipality equalled $26,OOO+annual premium (4locations only) EXHIBIT D Surface Water/Flood Covera�e The following tables illustrate the various properties/buildings that are owned by the City of Oshkosh, broken down by Flood Zones, as defined by the Federal Emergency Management Agency (FEMA). Flood zones are geographic areas that FEMA has defined according to varying levels of flood risk and type of flooding. The coverage sublimit is for damage due to water inundation, back-up and mudflow. Properties that would be covered by LGPIF, MPIC and Chubb (FEMA Flood Zone $5,000,000 sublimit, $50,000 Property Damage Deductible ($1,500,000 coverage for I • City Hall, 215 Church Ave • Oshkosh Library, 106 Washington Ave. • Fire Station #16, 711 S. Washburn St. • Fire Station #14, 2050 Knapp St. • Fire Station #18, 811 E. Murdock Ave. • Fire Station #19, 1000 W. Snell Road • Police Dept, 420 Jackson St. • Menominee Park Maintenance, 729 Siewart Trail • South Park Large Shelter, 1290 Georgia St. • South Park Small Shelter, 1210 Georgia St. • South Park Small Shelter #3, 1215 Ohio St. • South Park Comfort Station, 1200 Georgia St. • Quarry Park, 1601 Knapp St. • Westhaven Circle Park, 1625 S. Westhaven Dr. • Teichmiller Park, 2300 Crane St. • Park & Forestry Building, 805 Witzel Ave. • Murdock Lift Station, 1802 Bowen St. • Snell Lift Station, 1728 W. Snell Rd. • Hi�h Pressure Pump Station, 2051 S. Washburn St. Properties that would be covered by LGPIF, MPIC and Chubb (FEMA Flood Zone B $2,500,000 sublimit, $50,000 Property Damage Deductible ($1,500,000 coverage for LG • Fire Station #15, 101 Court St. • Fire Station #17, 1813 Algoma Blvd. • Police Department Storage, 640 W. 3rd Ave. • Grand Opera House, 101 High Ave. • Parks Storage Building 815 Dempsey Trail. • Stormwater Pump Station, 950 Siewert Trail • Leach Amphitheater Stage Area, 303 Ceape Ave. • Broad Street Lift Station, 11 Broad St. • Main Street Lift Station, 1670 S. Main St. • 28th Avenue Lift Station, 117 W. 28th Ave. • Water Filtration Plant, 425 Lakeshore Dr. • Riverside Cemetary, 1901 Algoma Blvd. • Museum, 1331 Algoma Blvd. • Museum — Carriage House, 1242 High Ave. • Water Distribution Center, 757 W. 3rd Ave. • Sawver Street Stora�e_ 221 N. Sawver St. EXHIBIT D Surface Water/Flood Covera�e (cont.� °s that would be covered by Chubb ONLY (FEMA Flood Zone $1,000,000 sublimit, $250,000 Propertv Dama�e Deductible • Menominee Park, Hazel St. • Menominee Park Kiwanis Park Shelter #1, 576 Pratt Trail • Menominee Park Train Station Concessions, 580 Pratt Trail • Menominee Park Zoo Maintenance Building, 595 Pratt Trail • Menominee Park Zoo Utility Storage • Menominee Park- Reetz Comfort — Concessions, 801 Siewert Trail • Menominee Park Bath House, 1390 Merritt Ave. • Menominee Park Comfort Station Kiwanis, 583 Pratt Trail • Rainbow Park, 1650 Rainbow Dr. • Spanbauer Ballpark, 713 S. Sawyer St. • Red Arrow Park, 850 N. Westfield St. • Public Works Field Ops Facility, 639 Witzel Ave. • ElectricalBus Garage, 926 Dempsey Trail • Leach Amphitheater - S. W. Concessions, 285 Ceape Ave. • Leach Amphitheater — N. E. Concessions, 355 Ceape Ave. • Leach Amphitheater — N. E. Restroom, 375 Ceape Ave. • Leach Amphitheater — S. W. Restroom, 275 Ceape Ave. • Leach Amphitheater — Cold Storage Building, 55 Broad St. • Waste Water Treatment, 233 N. Campbell Rd. • Waste Water Treatment -Sludge Storage, 6400 County Trunk K • Lakeview Lift Station, 1601 Menominee Dr. • Bowen Street Lift Station, 2350 Bowen St. • Northside Lift Station, 3155 Bowen St. • Hickory Lane Lift Station, 2069 Hickory Lane • Water Chemical Feed Station, 570 Pratt Trail • Oshkosh Center & Walkway, 2 N. Main St. • 24th Street Boat Launch, 2404 S. Main St. • Fugelberg Boat Launch, 1942 S. main St. • Transit Center, 110 Pearl Ave. • Rochlin Park, 1300 N. Sawyer St. • Senior Center South, 200 N. Campbell Rd. • Senior Center North, 234 N. Campbell Rd. • Golf Course, 1775 Punhoqua St. • Golf Course Clubhouse, 2175 Punhoqua St. • Golf Course Storage Building, 1876 Rath Lane • Aquatic Center, 1550 Taft Ave. • Aquatic Center Equipment Bldg, 1560 Taft Ave. • Water Filtration Plant Pumphouse, 1380 Washington Ave. • Stevens Park, 54 Frankfort St. EXHIBIT E LOCAL GOVERNMENT PROPERTY INSURANCE FUND 2801 Crossroads Drive, Suite 2200 Madison, WI 53718 PHONE: 877-229-0009 FAX: 877-832-0122 WITHDRAWAL FROM THE LOCAL GOVERNMENT PROPERTY INSURANCE FUND INSTRUCTIONS: Pursuant to the requirements of s.605.21(3) Wisconsin Statutes, provide certified notice to the Local Government Property Insurance Fund that by a majority vote, your Board or Council elected to withdraw from the Fund. Withdrawal date cannot be prior to the date action was taken. Send completed notice to above address. Policyholder Name Cancel Effective Date Policy # As Clerk, I certify that by a majority vote, the above-named local governmental unit's Board/Council voted to withdraw from the Local Government Property Insurance Fund. This action was taken at the / / meeting. Month Day Year Name of Clerk (Type or Print) Signature of Clerk Date OCI 41-003 (R 04/2015)