AGENDA REPORT
DATE: August 26, 2024
TO: City Commission
FROM: Bill McDaniel, City Manager
SUBJECT: Payment Adjustment to Public Risk Management
EXECUTIVE SUMMARY:
On August 28, 2023, the City Commission approved Public Risk Management (PRM) as the City’s new Property & Casualty insurance provider. A critical component of the transition involved PRM conducting a comprehensive property asset appraisal to ensure an accurate and up-to-date valuation of City assets, which is essential for determining appropriate insurance coverage levels.
The appraisal results indicated a significant undervaluation of the City’s assets under the previous coverage. The newly assessed total property value stands at $253,615,200, representing a substantial 164.07% increase compared to the prior valuation.
Following discussions with City staff, adjustments were made to exclude certain assets based on the City’s deductible. Consequently, the revised property value for insurance purposes is $217,424,250, reflecting a 91.01% increase from the previous values.
This revised valuation necessitates an adjustment to the insurance premium cost. PRM proposed a premium increase of $420,656.03 based on the updated asset values. However, to accommodate the City’s budgetary considerations, PRM agreed to prorate this adjustment from June to October. As a result, the prorated premium due is $141,459.31, yielding a significant cost savings of $279,196.72 for the City.
RECOMMENDATION:
That the City Commission adopt a resolution authorizing a payment of $141,459.31 to cover the prorated premium adjustment for the period from June 1, 2024, through September 30, 2024.
FISCAL IMPACT:
Funds are available in the insurance line items throughout the budget.
Prepared by: Cristi Charlow, Human Resources Director