City of Oak Creek

Common Council Report

Meeting Date: 12/21/04

Item No.:         7

Recommendation: That the Common Council award the City's insurance renewals for 1/1/2005- 1/1/2006 to the following:

For:      Employment Practices Liability

To:      LEXINGTON INSURANCE (THROUGH CVMIC)

For: Property:  Buildings, Contents & Property in the Open, Contractors Equipment, Monies/Securities, and Special Use Animal Coverage

To:      *LOCAL GOVERNMENT PROPERTY INSURANCE FUND (LGPIF)

For: Boiler & Machinery

To:      TRAVELERS (THROUGH CVMIC)

For:      Blanket Bond:  Employee Dishonesty, Forgery & Alteration, and Computer Theft

To:      CRUM & FORSTER GROUP (THROUGH CHRIS SCHROEDER AGENCY)

For:      Automobile Physical Damage

To:      **LOCAL GOVERNMENT PROPERTY INSURANCE FUND (LGPIF)

For:      Workers' Compensation

To:      CVMIC

(Note:  Renewal coverages under CVMIC for  Automobile Liability, General Liability, Law Enforcement Liability, Public Officials Liability, Tail Coverage  and  Excess Liability were processed as part of a three-year renewal, for 2004-2006, and were authorized by the Council on 09/16/03.

Background:  Since becoming a member of Cities and Villages Mutual Insurance Company (CVMIC), the list of coverages that need to be renewed on an annual basis has been shortened considerably, primarily due to the Council approving a 3-year renewal for the liability coverages as listed in the note above.   Membership in CVMIC has resulted in stable premium costs for major coverage elements during the three years of the renewal period (2004-2006).  This renewal period, for the year 2005, is the second year of the three-year guaranteed pricing structure.

Action on this agenda item will approve coverages that are not part of the 3-year liability package.  Coverages being renewed will still be provided by CVMIC, except for the Property and Auto-Physical damage Insurance elements.

NOTES:

*           At the time of preparing this report, the Local Government Property Insurance Fund appears to be the best value available for property-related coverages, and is again being recommended for renewal.  We recommend renewing with the same deductibles of $15,000 for the Property insurance elements with a two-limit aggregate applicable.  Deductibles for the Contractors’ Equipment and Monies & Securities coverage would remain at $500.  

**         Also, at the time of preparing this report, we are recommending continuing our Auto-Physical Damage coverage through the Local Government Property Insurance Fund.  LGPIF has rates that would provide replacement cost regardless of age or type of vehicle, while keeping the premium at similar levels to the current cost.  We would continue our deductible for incidents under this coverage to $5,000 per event.  We are still awaiting confirmation of premiums, and final information related to a bid offered by the League of Wisconsin Municipalities Insurance Program, which proposes to save the City approximately $11,000, and from CVMIC, so a final recommendation will not be given until the meeting.

The Boiler & Machinery coverage is again being secured through Travelers Insurance through CVMIC at an increase of approximately 3.0%.

The Blanket Bond- Employee Dishonesty coverage renewal is a formality to confirm coverage that was also bound for a three-year period with stable premiums.

Workers Compensation coverage is dictated by the State of Wisconsin and rates are determined by the workforce makeup.  CVMIC would remain the carrier.

Complete descriptive record pages for each type of insurance are available in the Clerk’s office.

Fiscal Impact:  Where exact premium figures are not yet available, we have provided the best-guess estimates:

Proposed 2004 2005

Employment Practices Liability                                                                      10,472                              9,475

Property:

             LGPIF Buildings, Contents & Property in the Open              38,388                            39,200

            Contractors Equipment                                                            4,164                              4,290

            Special Use-Animal Coverage                                                     122                                 125

            Money & Securities                                                                   1,168                              1,205

Boiler & Machinery:                                                                               3,779                              3,900

Crime:             Employee Dishonesty, Forgery & Alteration,

            Computer Theft                                                                         3,600                              3,600

Auto-Physical Damage:                                                                                  38,937 38,950

                                                                        Subtotal:                   100,630                         $100,745

Workers Compensation:                                                                              399,100 $398,349

                                                                        TOTAL                                  499,730                         $499,094

The difference from 2004 to 2005 will be approximately 1.0%.  Previously approved costs for liability coverages for 2005 through CVMIC are $114,483.  Sufficient funding for all insurance coverages has been provided in the 2005 budget.  The Water & Sewer Utility will pay a share of approximately $88,000.

Prepared by and fiscal review by: Beverly A. Buretta, CMC City Clerk/Comptroller

Respectfully submitted, Barbara S. Blumenfield, PhD. City Administrator