HomeMy WebLinkAboutResolution No. 2017-30CITY OF KENAI
RESOLUTION NO. 2017 -30
Sponsored by: Administration
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING THE
CITY MANAGER TO RENEW THE CITY'S INSURANCE COVERAGE WITH ALASKA PUBLIC
ENTITY INSURANCE (APEI) FOR JULY 1, 2017 THROUGH JUNE 30, 2018.
WHEREAS, the City has been a member of APEI since July 1, 2000 receiving competitive rates
and quality insurance coverage for the City; and,
WHEREAS, the City has entered into a three year commitment with APEI for insurance coverage
for the period of July 1, 2016 through June 30, 2019; and,
WHEREAS, the three -year commitment allows the City to terminate the agreement should the
City's net premium increase by more than 10% in any single year; and,
WHEREAS, the FY18 increase in insurance premiums is $34,356.36 or 7.01 %; and,
WHEREAS, the three year commitment with APEI entitles the City to a 5% annual discount,
$27,594 for FY18, on renewal premiums; and,
WHEREAS, as a long -term member of APEI the City receives annual premium renewal credits
based upon APEI's prescribed member dividend program. The City's FY18 member dividend is
$33,731.07 and is based upon the City's longevity with APEI and the City's insurance loss history;
and,
WHEREAS, in addition to receiving a member dividend the City will also receive a premium credit
of $52,146.56 for its loss control programs; and,
WHEREAS, coverage for FY2018 will include flood and insurance coverage for City facilities at a
cost of $22,185.00. Earthquake and flood coverage was added in FY16 and was declined prior
to that; and,
WHEREAS, based upon the high quality coverage, competitive premiums and credits totaling
$113,471.63 for FY18 it is in the City's best interest to retain coverage with APEI for the City's
insurance needs.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. The Council authorizes the City Manager to renew its coverage for FY2018 with
APEI.
Resolution No. 2017 -30
Page 2 of 2
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 7th day of June, 2017.
Approved by Finance
0 / 1
•�
passage of Ordinance 2961 -2017)
711114P wld a Past, elY p ivld a f twer,
210 Fidalgo Ave, Kenai, Alaska 99611 -7794
Telephone: (907) 283 -7535 1 Fax: (907) 283 -3014
the u! of/ www.kenai.city
KENAI, ALASKA
NV
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
THROUGH: Paul Ostrander, City Managerr�o
FROM: Terry Eubank, Finance Director /,�
DATE: May 30, 2017
SUBJECT: Resolution No. 2017 -30 Annual Property, Liability, Workers'
Compensation, Airport, and Marine Insurance Renewal.
Each year the City goes through a process of renewing its insurance coverages. The City has
purchased its coverage from Alaska Public Entity Insurance (APEI) since July 1, 2000 and has
always received quality insurance at competitive rates.
As an insurance pool, APEI provides insurance coverage to its members. APEI has implemented
a premium credit program to return excess equity to its members. Excess equity is created when
insurance premiums are in excess of actual claims and reinsurance costs. APEI has determined
its retained earnings are in excess of its needs and has instituted a rebate program to its
members. The program rewards members for longevity with APEI and for a positive loss history.
The credit is only available to entities that renew their coverage with APEI. The FY18 City credit
will be $33,731.07 upon renewal.
APEI provides a premium credit for active safety programs of its insured. The credit is for up to
a 4% of the City's property insurance premium, 15% of the City's liability insurance premium, and
15% of the City's workers compensation premium, all credits are net of APEI's premiums for
reinsurance. Reinsurance is coverage provided by other insurance companies for liability in
excess of APEI self- retention. The City will receive the maximum for each insurance type in FY18
totaling $52,146.56. The loss control credit requires the City to establish and operate a safety
committee and provide safety training for its employees.
APEI also provides a 5% longevity premium credit to members who enter into a three year
commitment for coverage with APEI. The FY18 longevity credit offered to the City is $22,185.00.
The three -year agreement required to receive the credit allows the City to terminate the
agreement at any time should the net premium for coverage increase by more than 10% from one
fiscal year to the next. Exclusion to this limit are increases in declared property values, vehicle
counts or covered payroll. The FY18 premium increase is 7.01 %.
Vii
Page 2 of 2
Based upon the quality coverage, competitive rates, excellent service, and $113,471.63 in credits
offered to the City for renewing it coverage, I recommend renewing coverage with APEI.
i