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HomeMy WebLinkAboutResolution No. 2018-27Sponsored by : Administration CITY OF KENAI RESOLUTION NO. 2018-27 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI , ALASKA , AUTHORIZING RENEWAL OF THE CITY 'S INSURANCE COVERAGE WITH ALASKA PUBLIC ENTITY INSURANCE FOR JULY 1, 2018 THROUGH JUNE 30, 2019. WHEREAS , the City has been a member of Alaska Public Entity Insurance (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 FY19 increase in insurance premiums is $802 or 0.2%; and, WHEREAS, the three year commitment with APEi entitles the City to a 5% annual discount, $25,861 .31 for FY19 , on renewal premiums; and, WHEREAS, as a long -term member of APEi the City receives annual premium renewal credits based upon APEl's prescribed member dividend program. The City's FY19 member dividend is $39,840.88 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 and three-year commitment discount, the City will also receive a premium credit of $53,466.06 for its loss control programs; and , WHEREAS , coverage for FY2019 will include flood and insurance coverage for City facilities at a cost of $20,411 .45 . 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 $119 , 168.25 for FY19 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 the City's insurance coverage for FY2019 with APEi. Section 2. That this resolution takes effect immediately upon passage. Resolution No. 2018-27 Page 2 of 2 PASSED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, this Glh day of June, 2018. BRIAN GABRiEtSRJMAYOR 'tftfl'~ «1/t li a Paif~ Ct~ «1/t/i a f"u.tal"e 11 210 F id a lgo Av e , Ken a i, Alaska 99611-77 94 Telephone : (9 07 ) 283-753 5 I Fax: (907) 283 -3014 w w w . kenai . city MEMORANDUM TO: THROUGH: FROM : DATE: SUBJECT: Mayor Brian Gabriel and Kenai City Council Paul Ostrander, City Manager Terry Eubank, Finance Director May 22, 2018 Resolution No. 2018-27 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 longevity 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 FY19 City credit will be $39,840.88 upon renewal. APEi provides a premium credit for active safety programs of its insured . The credit is for up to 2% of the City's property insurance premium, 10% of the City's liability insurance premium, and 15% of the City's workers compensation premium. The City will receive the maximum for each insurance type in FY19 totaling $53,466.06 . 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% premium credit to members who enter into a three-year commitment for coverage with APEi. The FY19 credit offered to the City is $25,861.31 . 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. After consideration of the longevity credit and the three-year discount, the FY19 premium increase is 0 .2%. Considering increased exposure in FY19 over FY18 there is actually a 1.1% premium decrease in FY19. Based upon the quality coverage, competitive rates, excellent service, and $ 119, 168.25 in credits offered to the C ity for renewing it coverage , I recommend renewing coverage with APEi .