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Home My WebLink AboutOrdinance No. 3071-2019CITY OF KENAI ORDINANCE NO. 3071-2019 Sponsored by: Administration AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE GENERAL, PERSONAL USE FISHERY SPECIAL REVENUE, AND SENIOR CITIZEN SPECIAL REVENUE FUNDS; AUTHORIZING THE BINDING OF INSURANCE COVERAGE FOR THE CITY FOR THE PERIOD OF JULY 1, 2019 THROUGH JUNE 30,2020; AND AUTHORIZING EXECUTION OF A THREE-YEAR AGREEMENT FOR INSURANCE COVERAGE. WHEREAS, with the assistance of its broker, the City solicited quotes for General Liability & Automobile, Property & Mobile Equipment, Airport Liability and Workers' Compensation from the two public entity risk pools operating in Alaska; and, WHEREAS, Alaska Public Entity Insurance provided the lowest total quote for General Liability & Automobile, Property & Mobile Equipment, Airport Liability, and Workers' Compensation; and, WHEREAS, after a coverage comparison, the City's broker has recommended binding of insurance with Alaska Public Entity Insurance for the policy year beginning July, 1, 2019 through June 30, 2020 and executing a three-year agreement for coverage to commence on July 1, 2019 and ending June 30, 2022; and, WHEREAS, execution of a three-year agreement for coverage entitles the City to a discount of $29,629 and allows the City to terminate the agreement at any time should the annual premium for coverage increase by more than 10% year over year, excluding changes in declared values; and, WHEREAS, sufficient funds were not included in the FY2020 budget for the General, Airport Special Revenue, Personal Use Fishery Special Revenue, and Senior Citizen Special Revenue Funds to bind coverage requiring supplemental funding, and; WHEREAS, pursuant to KMC 1.15.70(d) the City may introduce and finally pass on the same day, an ordinance making, repealing, transferring or otherwise changing an appropriation; and, WHEREAS, maintaining quality and sufficient amounts of insurance coverage is in the best interest of the City and its residents. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. That the estimated revenues and appropriations be increased as follows: Ordinance No. 3071-2019 Page 2 of 3 General Fund: Increase Estimated Revenues - Appropriation of Fund Balance $14.498 Increase Appropriations — Non -Departmental - Insurance $13,807 Non -Departmental - Transfer to Other Funds 691 $14.498 Personal Use Fishery Special Revenue Fund: Increase Estimated Revenues - Appropriation of Fund Balance $542 Increase Appropriations — Public Safety - Insurance $95 Streets — Insurance 55 Parks, Recreation & Beautification - Insurance 274 Boating Facility - Insurance 118 $`542 Senior Citizen Special Revenue Fund: Increase Estimated Revenues - Transfer from General Fund $691 Increase Appropriations — Senior Citizen Access - Insurance $159 Congregate Meals — Insurance 166 Home Meals - Insurance 124 Transportation — Insurance 69 Choice Waiver - Insurance 173 i, . Section 2. That the City Manager is authorized bind the City's insurance coverages for the policy period of July 1, 2019 through June 30, 2020 with Alaska Public Entity Insurance. Section 3. That the City Manager is authorized to execute a three-year agreement for insurance with Alaska Public Entity Insurance to for the period July 1, 2019 through June 30, 2022. Section 4. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 5. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect immediately upon enactment. New Text Underlined; [DELETED TEXT BRACKETED] Ordinance No. 3071-2019 Page 2 of 3 ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 19t1 day of June, 2019. Z___ �� i BRIAN GABRIEL SR., MAYOR ATTEST: yCENq�� mi Heinz, CMC, City Clerk U(4z� Approved by Finance:Introduced: June 19, 2019 Enacted: June 19, 2019 Effective: July 1, 2019 New Text Underlined; [DELETED TEXT BRACKETED] M IJil:1tri� � I nk Tltfeaz< e alid a Past, CA; wid a F twee „ 210 Fidalgo Ave, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 1 Fax: (907) 283-3014 www.kenai.city TO: Mayor Brian Gabriel and Kenai City Council FROM: Paul Ostrander, City Manager DATE: June 11, 2019 SUBJECT: Ordinance 3071-2019 — Recommendation to bind coverage with Alaska Public Entity Insurance. The purpose of the memo is to recommend binding of General Liability & Automobile, Property & Mobile Equipment, Airport Liability and Workers' Compensation insurance with Alaska Public Entity Insurance (APEI) for the period July 1, 2019 through June 30, 2020 and to authorize the execution of a three-year agreement with APEI for these coverages. Execution of a three-year agreement entitles the City to a discount of $29,629. The City may terminate this agreement at any time should the annual premium for coverage increase by more than 10% year over year, excluding changes in declared values. APEI is the City's current insurer, has provided the lowest renewal quote, and after review of the quotes and policies is being recommended by our broker. See attached broker analysis and recommendation. Your support for Ordinance 3071-2019 is respectfully requested. attachment PC Wid a Past, Citi Wid a Ftp 210 Fidalgo Ave, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 1 Fax: (907) 283-3014 the city of www. kenai. city M TO: Mayor Brian Gabriel and Kenai City Council THRU: Paul Ostrander, City Manager FROM: Terry Eubank, Finance Director DATE: June 11, 2019 SUBJECT: Ordinance 3071-2019 The purpose of the memo is to recommend introduction and adoption of Ordinance 3071-2019 at the June 19, 2019 meeting of the Kenai City Council and to request the below amendments prior to adoption. Introduction and Adoption in a Single Meetina. Generally, Ordinances are introduced at one meeting and voted on at the subsequent meeting to provide public notice of the action at two separate meetings. KMC 1.15.070(d) as cited below, provides for introduction and passage of appropriating ordinances in a single meeting. KMC 1.15.070(d) No ordinance, except an emergency ordinance or an ordinance making, repealing, transferring, or otherwise changing appropriations, may be finally passed on the same day that it is introduced. By unanimous consent of all Council Members present, such ordinances may be read a second time and then, by the required vote, be passed, on the same day on which they are introduced. All persons present shall be given an opportunity to be heard before the vote on final passage. In an effort to assure greater public notice this provision is rarely utilized, in fact has not been used during my 11 -year tenure as your finance director. As a result of insurance costs for the upcoming fiscal year exceeding budget estimates and the timing of which quotes were received, I respectfully request utilization of the provision is KMC 1.15.070(d) for introduction and passage of Ordinance 3071-2019 at the June 19, 2019 meeting of the Kenai City Council to provide sufficient funds for binding of insurance coverages for FY2020. Requested Amendments After the deadline for packet item titles had passed, I received a revised quote from Alaska Public Entity Insurance (APEI), the airport liability quote form the Alaska Municipal League Joint Insurance Arrangement (AMLJIA), and the City's broker policy comparison and recommendation. Using these final quoted amounts a supplemental appropriation is no longer required for the Page 2 of 2 Ordinance 3071-2019 Memo Airport Special Revenue Fund. As such, the following amendments are respectfully requested prior to adoption: 1. Within the Ordinance title delete AIRPORT SPECIAL REVENUE, 2. Within Section 1 delete: Airport Special Revenue Fund: Increase Estimated Revenues - Appropriation of Fund Balance $1 026 Increase Appropriations — Airfield - Insurance $1,136 Airport Terminal — Insurance (762) Airport Administration - Insurance 652 $1 026 =6/12/2019 City of Kenai 210 Fidalgo Ave #200 Kenai, AK 99611 RE: 2019/2020 Renewal Dear Terry: HUB International Limited 35681 Kenai Spur Highway Soldoina, AK 99669 P: (907) 262-4425 F: (907) 262-6373 www.hubinternational.com The following information provided is our submission time line, a coverage comparison between Alaska Public Entity and Alaska Municipal League Joint Insurance Association and our recommendation. AML Submission Time Line 5/7/19 — Submitted completed APE] renewal apps & schedule to Paul at AML 5/14/19 — Sent Follow up to Paul at AML requesting quote status No response 5/20/19 — Sent follow up to Paul at AML requesting quote status Paul responded requesting expiring premiums 5/29/19 — Sent follow up to Paul at AML requesting quote status Paul responded stating "next week" 6/4/19 — Phone call with Paul at AML stating he would try to get quotes to us by the end of the week 6/7/19 — Sent Paul at AML additional info on airport liability 6/10/19 —AML Program Quote Received 6/11/19 —AML Airport Liability Quote Received APEI Submission Time Line 4/22/19 — Received completed renewal applications from Terry 4/29/19 — Uploaded renewal applications to APE] website 4/29/19 — Sent request to Terry for additional information 5/3/19 — Received additional information from Terry & sent to APEI 519119 — Received APEI Program Renewal Quote 5/29119 — Received Airport Liability Quote • Coverage Comparison General Liability Both Plans are very similar in coverage. APEI Limit of Liability - $15,500,000 Volunteer Medical Coverage - $50,000 Employment Related Practices - $15,500,000 Deductible - $10,000 Defense Cost Share — 50% AML -.IIA Limit of Liability - $15,000,000 Volunteer Medical Coverage - $25,000 Employment Related Practices - $10,000,000 Deductible - $10,000 Defense Cost Share — 50%<, APEI Police Professional Liability Premium is included in General Liability Premium $10,000 Deductible AML- IIA Separate charge for coverage $0 Deductible Workers Compensation Both Plans are very similar in coverage. APEI Limit of Liability - $3,000,000 AMLAIA Limit of Liability - $2,500,000 HUB International Limited 35681 Kenai Spur Highway Soldotna. AK 99669 P: (907) 262-4425 F: (907) 262-6373 www.hubinlema0onal.com Auto HUB International Limited 35681 Kenai Spur Highway Soldoina. AK 99669 P: (907) 262-4425 F: (907) 262-6373 www.hubinternationa l.com Deductibles are for comprehensive & collision coverage. Neither program has a deductible for Liability APEI Limit of Liability - $15,500,000 Mid-term changes are made AML -IIA Limit of Liability - $15,000,000 Does not do mid-term endorsements — The City is only charged for autos on the schedule at renewal. Coverage still extends to any auto acquired during the year. Basic Property Coverage is the same APEI Property Program limit for Earthquake & Flood is $75,000,000 $100,000 Flat Deductible for Earthquake & Flood AML -.IIA Program limit for Earthquake is $50,000,000 & Flood is $175,000,000 2% Deductible with a minimum of $100,000 for Earthquake & $250,000 for Flood Fine Arts not quoted per request Mobile Equipment No Substantial Differences Crime APEI $1,000,000 Limit $2,500 Deductible AML -.11A $100,000 Limit $1,000 Deductible **Can get coverage limit up to $1,000,000 by going to another market. This could cost upwards of $2,500 to $10,000. p HUB APEI HUB International Limited 35681 Kenai Spur Highway Saidorna, AK 99669 P: (907) 262-4425 F: (907) 262-6373 www.hubinternalional.com Cyber Liability $2,000,000 Limit per Member for each of the following: Media & Website Publishing Liability Security Breach Liability Programming Errors & Omissions Liability Replacement or Restoration of Electronic Data Extortion Threats Business Income & Extra Expense Public Relations Expense Security Breach Expense $2,500 Deductible Retroactive Date— 1/1/2014 $10,000,000 Program Aggregate AML -IIA $2,000,000 Limit per Member for each of the following: Security & Privacy Liability Penalties for Regulatory Defense Website Media Content Liability Cyber Extortion Loss Data Protection Loss & Business Interruption Loss $500,000 Limit for Privacy Notification Costs $50,000 Retention $25,000,000 Program Aggregate TOTAL PREMIUM APEI AML-JIA Municipality Program $562,951.97 $575,949.00 Airport Liability $37,558.00 $25,716.00 TOTAL $600,509.97 $601,665.00 In previous years, City of Kenai has received approximately $385,000 in dividends and longevity credits in addition to $18,000 in safety grants through APEI's program. It is our recommendation is that City of Kenai move forward with renewing coverage through Alaska Public Entity due to the long history and relationships made. Sincerely, Doug Brown