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HomeMy WebLinkAboutResolution No. 2014-46Suggested by: Administration CITY OF KENAI RESOLUTION NO. 2014 -46 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 (APED TO COMMENCE JULY 1, 2014 AND END JUNE 30, 2015 AND SIGN A LETTER OF COMMITMENT FOR COVERAGE FOR THE PERIOD OF JULY 1, 2014 THROUGH JUNE 30, 2017. 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 in the past has entered into a three year commitment with APEI for insurance coverage commencing July 1, 2011 and ending 2014 and will commit again for the period of July 1, 2014 through June 30, 2017; and, WHEREAS, the three year commitment with APEI entitles the City to a 3% annual discount, $17,917.54 for FY15, 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 FY15 member dividend is $47,526.92 and is based upon the City's longevity with APEI and the City's excellent insurance loss history; and, WHEREAS, in addition to receiving a member dividend the City will also receive a premium credit of $40,559 for its loss control programs; and, WHEREAS, the APEI, 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 2014 renewal is $12,343.55 less than 2013 premiums, a 3.25% decrease, $11,643.79, 3.1 %, of the decrease is related to workers compensation and is likely due to legislative changes to the State's Workers' Compensation Statutes; and, WHEREAS, the remaining decrease of $699.76, 0.04 %, is related to property and liability premiums and is down despite the addition of new facilities like the new City Shop; and, WHEREAS, based upon the high quality coverage, competitive premiums and credits totaling $106,003.46 for FY15 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, the Council authorizes the City Manager to renew its coverage for FY2015 with APEI and enter into a new the three year commitment for coverage which commenced July 1, 2014 and ends June 30, 2017. Resolution 2014 -46 Page 2 of 2 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 26th day of June, 2014. 2�� PAT PORTER, MAYOR ATT `T--,, Sandr digh, City Urk Approved by Finance: LV "Vllaye with a Past, C# with a Future" FINANCE DEPARTMENT 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 - 283 -7535 ext 221 / FAX: 907 - 283 -3014 To: Rick Koch, City Manager 1,,[ From: Terry Eubank, Finance Director Date: June 20, 2014 Re: Resolution No. 2014 -46 Annual Insurance Renewal. Each year the City goes through a process of renewing its insurance coverage's. The City has purchased its coverage for 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. 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 FY15 City credit will be $47,526.92 upon renewal. APEI provides a premium credit for active safety programs of its insured. The credit is for up to a 4.0% 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 FY15 totaling $40,559.00. 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 3% longevity premium credit to members who enter into a three year commitment for coverage with APEI. The FY15 longevity credit offered to the City is $17,917.54. 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. The FY15 total premium decreased 3.25 %, $12,343.55 over FY14 premiums. $11,643.79, 3.10 %, of the decrease is related to workers compensation and is most likely due to legislative changes to State Workers' Compensation statutes in 2014. The remaining decrease of $699.76, 0.04 %, is related to property and liability premiums and is down despite the addition of new facilities like the new City Shop and other new City equipment. Based upon the quality coverage, competitive rates, excellent service, and $106,003.46 in credits offered to the City for renewing it coverage, I recommend renewing coverage with APEI and committing to a new three year term for coverage for the period July 1, 2014 through June 30, 2017. _M CITY Suggested by: Administration OF KENAX A RESOLUTION RESOLUTION NO. NSU OACTIVELY AU THE COUNCIL 20I4- THO CO NCE COVERAGE ZING THE OF THE CITY MMEME JULY WITH CITY MANAGER TO OF XENAI, JUNE 30, 2p 7 FpR 1COVERA ED ER JUNE 30 ENTIT I SURANCE H PLCITY'g 2015 AND W"EREAS, the °mpeta �e rate City has been PERIOD OF JULY S1, 2014 T ROUGH s and quali s a member for Insu an, the City in the ty insurance coveragf Or the City; Judy 1, 2000 recei g again for e Period ofe co men has entered into viri the m d WHERA the d ofJu]y I, 2014 tghrough 1, 2011 1 and ending 2014 ent with AP discount, $17, e three Year coin 30, 2017, and, 4 nd will co EI 54 for Fyl5, on tment with AP Intuit W dERE aseas J long -term renew el Premiumis; and, ties the City to a 3° /° annual tuber vide Pon , me of AP the City's ei rid os $47,526.92 tuber City receives annual xcellent ins 92 and is e ual WHERE urance loss history; p ni the C program The City, renewal Premium credit oddihon to receiving 1Y; and, City s longevity with PEI YI5 d WHEREAS $40,559 for its 10,98 control ber dividend the Year; e t should Athe Citys yeree-year commitm nt gams; and City will also receive a agreem Premium allows the City to increase by more the 10% in WHEREAS terminate the decrease $1 the renewal any single gisla is $12 343. ikely due to le five 3.1 ?/ of the deer 55 less than changes to ease is related t 2013 WHEREAS the state's orkers Poemiums, a 3.25% liabili t ' the rem e s Workers' Co mpensatio Ing Shop; and, ums and is down despito the additio 0 04% compensation StatutesnC Is is d to Property HEREAS based n of new facilities like Pro rty and totaling $106,003.46 on the high quality new City APEI for for Fy15 it ty p emREAS, infOrder s to needs; and, e City's best in a est to premium, and credits signed m amounts, Insure insur coverag with J vie 26, Year coimnitment comienrarene Jul overage e t eat FY15 budgeted a three Y 1, 2014 July 1, 2014 and at June 30, 2017 on 1 f Resolution 2014 -46 Page 2 of 2 NOW, THEREFOR for ALASKA, he Council Bre IT RESOLVED 2015 troactively authorizes the which co with APEI and e BY THE COUNCIL OF THE CITY mmenced J nter into a new the City Man OF KENAI ]3Y ulY 1, 2014 and ends June 3 20e year only neew its coverage PASSED THE COUNCIL OF nt for coverage 2014. THE CITY OF KENAI, ALASKA, this 2nd day of July, ATTE Sandr odig , Ci Clerk Approved by Finance: PAT p ORTER, MAYOR e r } i r I fl i „ i�aye with a Past, Cc with a Future” FINANCE DEPARTMENT 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 - 283 -7535 ext 221 / FAX: 907 - 283 -3014 ro: Rick Koch, City Manager 7� From: Terry Eubank, Finance Director Date: June 20 2014 Re: Resolution No. 2014 -46 Annual Insurance Renewal. Each year the City goes through a process of renewing it has urance (APEI) since J Purchased its coverage for Alaska Public Entity Insul s insurance coverage's. The Cit always received quality insurance at competitive rates. Y y 1, 2000 and has As an insurance pool, APEI provides insurance coverage to its members. a premium credit program to return excess equity to its members. Excess equity is created when insurance premiums are in excess of actual claims. APEI has d rmined i s retained implemented are in excess of its needs and has instituted a rebate program to its members. rewards members for longevity with APEI and for a positive loss histo rigs available to entities that renew their coverage with APEI. The program $47,526.92 upon renewal. n The credit is only The FY15 City credit will be APEI provides a premium credit for active safety a 4.0% of the City's property insurance Programs of its insured. The credit is for u and 15% of the City's workers compenPremium, 15 premium, f the Cit p to for reinsurance. Reinsurance is coverage prov ded by other insurance ecom of APEI'sepremiums premium excess of APEI self - retention. The City will receive the FY15 totaling $40,559.00. The loss control credit re um for each insurance type in maxim safety committee and provide safety training for its employees. type in quires the City to establish and operate a APEI also provides a 3% longevity premi um commitment for coverage with APEI. The credit to members who enter into a three year $17,917.54. The three -year agreement r FY15 longevity credit offered to the the agreement at any time should the nett elm d to receive the credit allows the Cit to City is one fiscal year to the next. The FY15 total premium decreased increase 3.25% b Y e% from Premiums. Y more than 10% from $11,643.79, 3.10 %, of the decrease is related to workers compensation 1 likely due to legislative changes to State Workers' over FY14 remaining decrease of $699.76, 0.04 %, is related to Compensation statutes in and is most despite the addition of new facilities like the new property and liabilit Premiums 2014. The City Sho Y p ums and is down p and other new City equipment. Based upon the quality coverage, competitive rates, excellent service, and $106,003.46 in credits offered to the City for renewing it coverage, I recommend renewing coverage with APEI and committing to a new three year term for coverage for the period July 1, 2014 through June 30, 2017.