Agenda 03/24/2009 Item #10D
Agenda Item No. 10D
March 24, 2009
Page 1 of 3
EXECUTIVE SUMMARY
Recommendation to approve the purchase of property insurance for the period April
1,2009 through March 31, 2010 in the amount of$4,153,980, a reduction of $127,424.
OBJECTIVE: To gain approval from the Board of County Commissioners (Board) to purchase
property insurance for the period April 1, 2009 through March 31, 2010 in the amount of
$4,153,980, a reduction of $127,424.
CONSIDERATIONS: Pursuant to Florida Statutes S 768.28 and Chapter 440, the Risk
Management Department operates two risk management funds (Fund 516 and Fund 518) to
finance its Property, Casualty and Workers' Compensation insurance programs. The purchase of
property insurance is part of this program.
The current property insurance program expires on April 1, 2009. Insurable values are
$929,646,014. The total limits of coverage purchased (a/k1a the Loss Limit) is $125,000,000. The
wind deductible is 5% per builciing and contents per named storm with a minimum named storm
deductible of $250,000. There is a $5,000,000 named storm deductible cap and a $50,000
deductible for all other perils. Primary flood coverage is purchased through the National Flood
Insurance Program (NFIP) on properties in fiood zones to comply with the provisions of the Stafford
Act. The property insurance program provides an additional $50,000,000 in fiood coverage in
excess of the NFIP coverage. The cost of the current program is $4,281,404 per year.
--
The Risk Management staff, through the County's property casualty broker, IRMS, submitted the
program for renewal effective April 1, 2009. Risk Management staff also requested a maximum
probable loss study through Risk Management Solutions, Inc. to evaluate the appropriate loss limit
to purchase.
The commercial property insurance market has remained relatively stable since the 2008 renewal.
This is illustrated below:
Option Description Terms Annual Rate per % Change $ Change
Premium $100
I
NA Current Program 5% Wind Deductible $4,281,404 461 NA NA
at $125,000,000 with $5,000,000 Cap
Loss Limit
Option 1 FY 09 Renewal 5% Wind Deductible $4,403,980 474 +2.8% $122,576
at Same Terms with $5,000,000 Cap
Option 2 FY 09 Renewal 5% Wind Deductible $4,153,980 446 -3.25% ($127,424)
at $100,000,000 with $5,000,000 Cap
Loss Limit
Risk Management Solutions, Inc. prepared a probable maximum loss study which indicated that the
probable maximum loss to County property ranged from $52,000,000 for a 100-year wind event to
$92,000,000 for a 250-year wind event. Based upon this modeling, staff recommends the
purchase of a $100,000,000 loss limit.
,--
Staff is working with the Real Property Department to finalize an appraisal of the county's real
property. It is estimated that the appraisal may reduce the insurable value of the County's buildings
Agenda Item NO.1 00
March 24, 2009
by up to 15%. Once completed, the final appraised value will be submitted to the underWi'1_;a.pjd3
the total annual premium will be adjusted accordingly.
FISCAL IMPACT: Staff recommends the purchase of Option 2. The final premium is subject to the
updated inventory of real property and the appraised value of buildings. Funds have been
budgeted within Fund 516 for this purchase.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this
item.
LEGAL CONSIDERATIONS: This item is not quasi-judicial, and as such ex parte disclosure is not
required. This item requires majority vote only. This item is legally sufficient for Board action. -
CMG
RECOMMENDATION: That the Board approves the purchase of property insurance as outlined in
this Executive Summary and authorizes the Director of Risk Management to complete any
applications or other documents necessary to bind coverage and services effective April 1 , 2009.
PREPARED BY: Jeffrey A. Walker, CPCU, ARM, Director, Risk Management Department
Item Number:
Item Summary:
Meeting Date:
Page I of 1
Agenda Item NO.1 OD
March 24, 2009
Page 3 of 3
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
10D
Recommendation to approve the purchase of property insurance for the period April 1 , 2009
through March 31,2010 in the amount of $4, 153,980, a reduction of $127,424 (Jeff Walker,
Risk Management Director)
3/24/2009 90000 AM
Approved By
Jeffrey A. Walker, CPCU,
ARM
Administrative Services
Risk Management Director
Date
Risk Management
3/9/2009 3:49 PM
Approved By
Len Golden Price
Administrative Services
Administrative Services Administrator
Date
Administrative Services Admin.
3/10/2009 3:53 PM
Approved By
OMB Coordinator
County Manager's Office
OMB Coordinator
Date
Office of Management & Budget
3/11/20091:24 PM
Approved By
Jeff Klatzkow
County Attorney
Assistant County Attorney
Date
County Attorney Office
3/11/20095:16 PM
A pproved By
Laura Davisson
County Manager's Office
Management & Budget Analyst
Date
Office of Management & Budget
3/11/20097:09 PM
Approved By
James V. Mudd
Board of County
Commissioners
County Manager
Date
County Manager's Office
3/16/20094:05 PM