The URL can be used to link to this page

Home My Public Portal AboutResolution No. 23-008 - Resolution authorizing renewal insurance agreement with Florida League of CitiesSponsored by: City Manager RESOLUTION NO. 23-008 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA, AUTHORIZING THE CITY MANAGER TO EXECUTE A RENEWAL INSURANCE AGREEMENT WITH THE FLORIDA LEAGUE OF CITIES, INC. (ADMINISTRATOR OF THE FLORIDA MUNICIPAL INSURANCE TRUST) FOR PROPERTY, LIABILITY AND WORKERS COMPENSATION INSURANCE FOR FISCAL YEAR 2022-2023; ACCEPTING AND IMPLEMENTING THE REQUIRED CONDITIONS AT A COST OF THREE MILLION, FOUR HUNDRED TWENTY-NINE THOUSAND, SIX HUNDRED FORTY-SIX DOLLARS ($3,429,646.00), TO BE PAID IN INSTALLMENT PAYMENTS BY THE CITY; AUTHORIZING THE EXECUTION OF ALL NECESSARY DOCUMENTS BY THE PROPER CITY OFFICIALS; PROVIDING FOR AN EFFECTIVE DATE WHEREAS, there is a continual need for municipal insurance coverage to include general liability, automobile, property, and workers' compensation for the City of Opa-Locka ("City"); and WHEREAS, since 2006 Florida Municipal Insurance Trust ("FMIT") has been providing the City with full insurance coverage (General Liability, Auto, Workers Compensation, Property and, new this year, Cyber Security). FMIT is an extremely proactive organization with a wide range of free services designed to assist their clients in implementing programs designed to improve safety and reduce losses. Customer service is responsive to the needs of the City; and WHEREAS, the City desires to renew its current FMIT policy, administered by the Florida League of Cities, Incorporated; and WHEREAS, coverage is based on employee compensation and the City's past history in experiencing Workers Compensation incidents; and WHEREAS, the 2022-2023 annual renewal proposal from the Florida League of Cities for general liability, automobile, property, and workers' compensation coverage is Three Million, Four Hundred Twenty -Nine Thousand, Six Hundred Forty - Six Dollars ($3,429,646.00) for the City; and WHEREAS, the Interim City Manager recommends the City pay the Florida Municipal Insurance Trust premium of Three Million, Four Hundred Twenty -Nine Thousand, Six Hundred Forty -Six Dollars ($3,429,646.00) in installment payments, to Resolution No. 23-008 provide the City with full insurance coverage for Fiscal Year 2022-2023; and WHEREAS, the City Commission finds that execution of a renewal insurance agreement with the Florida League of Cities, Incorporated and payment of the premium in installment payments is overall in the best interests of the residents of the City. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA, AS FOLLOWS: Section 1. Adoption of Representations. The foregoing "Whereas" clauses are hereby ratified and confirmed as being true and the same are hereby made a specific part of this Resolution. Section 2. Renewal of Insurance Agreement. The City Commission of the City of Opa-Locka, Florida hereby approves the execution of a Renewal Agreement between the City of Opa-Locka and the Florida League of Cities, Incorporated. Section 3. Authorization of the Interim City Manager and Proper City Officials. The Interim City Manager and other proper City Officials are hereby authorized to execute any required documentation in order to implement the intent of this Resolution; the Interim City Manager is further authorized to pay the Florida Municipal Insurance Trust premium of Three Million, Four Hundred Twenty -Nine Thousand, Six Hundred Forty -Six Dollars ($3,429,646.00) in installment payments. Section 4. Scrivener's Errors. Sections of this Resolution may be renumbered or re - lettered and corrections of typographical errors, which do not affect the intent of this Resolution may be authorized by the Interim City Manager, following review by the City Attorney, without need of public hearing, by filing a corrected copy of same with the City Clerk. Section 5. Effective Date. This Resolution shall take effect upon the adoption and is subject to the approval of the Governor or Governor's Designee. PASSED and ADOPTED this 11th day of Janu , 2023. John T y r, Myor 2 Resolution No. 23-008 ATTEST: 34,„ Joai ; a Flores, City Clerk APPROVED AS TO FORM AND LEGAL SUFFICIENCY: uxrnadette I rris-Weeks, P.A. Moved by: Commissioner Kelley Seconded by: Vice Mayor Ervin VOTE: 5-0 Commissioner Bass YES Commissioner Kelley YES Commissioner Williams YES Vice Mayor Ervin YES Mayor Taylor YES 3 City of Opa-locka Agenda Cover Memo p Director ent Bob Anathan Department Director Signature: City Manager: Darvin Williams CM Signature: 4.0 z„,(4,L.,.. Commission Meeting Item Type: Resolution Ordinance Other J Date: Jan 11, 2023 (EnterXin box) X Fiscal Impact: Yes Ordinance Reading: 1St Reading 2nd Reading (EnterXin box) No (EnterXin box) X Public Hearing: Yes No Yes No (EnterXin box) X X Funding (Enter Fund & Dept.) Ex: Advertising Requirement: Yes No Source: kccount# : See Financial Impact Section (EnterXin box) X Contract/P.O. Yes No RFP/RFQ/Bid#: Required: (EnterXin box) X Strategic Yes No Strategic Plan Priority Area: Strategic Plan Obj./Strategy: Plan Related (EnterXin box) X Enhance Organizational • Bus. & Economic Dev 0 Public Safety 0 Quality of Education 0 Qual. of Life & City Image 0 Communication 0 (list the specific objective/strategythis item will address) Sponsor Name City Manager Department: City Manager Short Title: Florida Municipal Insurance Trust FY 23 Premiums Staff Summary: Issue J Recommendation: Staff recommends that the City Commission authorize payment of the Florida Municipal Insurance Trust (FMIT) premiums for full insurance coverage for FY 23. Background / History: Since 2006 FMIT has been providing the City with full insurance coverage (General Liability, Auto, Workers Compensation, Property and, new this year, Cyber Security). FMIT is an extremely proactive organization with a wide range of free services designed to assist their clients in implementing programs designed to improve safety and reduce losses. Their customer service is excellent and is immediately responsive to whenever the City is in need of information, guidance or assistance. Current Activity: The City has received the renewal quote for FY 23. It was originally approximately $100,000 higher, but after extensive discussions, has been reduced to $3,429,646 as reflected in the below table where it is compared to both the FY 22 premiums and the FY 23 Budget. Category FY 22 Premium Incr FY 23 Budget Incr FY 23 Premium General Liability 1,449,810 72,487 1,522,297 246,219 1,768,516 Cyber Security - - - 2,391 2,391 Auto 115,140 1,151 116,291 8,300 124,591 Workers Comp 921,028 46,051 967,079 332,849 1,299,928 Property Insurance 167,115 8,357 175,472 58,748 234,220 Total Premium 2,653,093 128,046 2,781,139 648,507 3,429,646 By Fund General Fund 550,948 Water -Sewer Fund 85,167 Stormwater Fund 12,392 Total Premium 648,507 As indicated, the FY 23 premiums exceed the FY 23 Budget by $648,507 with the majority (85%) impacting the General Fund. These additional premiums are primarily attributable to two categories of coverage: General Liability and Workers Compensation. General Liability - Staff has now learned that it is industry practice that one of the primary influencers of the General Liability premium is compensation rather than the number of employees who might create liability issues. The FY 23 Budget compensation reflects the AFSCME and PBA union settlements which substantially improved union member compensation from levels governed from contracts that expired in 2008 and 2014 respectively. Consequently, even though headcount growth in the FY 23 budget was 10%, the General Liability premium grew 22%. Workers Compensation - This coverage is based on employee compensation and the City's past history in experiencing Workers Compensation incidents. Although it was known that compensation would be increasing, as noted in the previous section, the City had had several years of bad Workers Compensation experience. In preparing the FY 23 Budget, staff was informed by FMIT that one of the years of bad experience was dropping out of the rolling experience history and it was anticipated that a much better experience factor should offset much of the impact of increasing compensation. This improved experience factor failed to materialize. The growth was further exacerbated by subsequent research that indicated the compensation used in establishing the FY 22 Workers Compensation was significantly understated in comparison to the budgeted compensation. This resulted in the FY 22 Workers Compensation premium being lower than it should have been, increasing the relative growth to the FY 23 premium. As noted previously, FMIT offers a wide range of services to assist cities in identifying and correcting issues which cause higher premiums, and the City will be taking advantage of these programs to reduce premium growth. Financial Impact: These increased insurance premium expense versus the budget will be addressed in a forthcoming budget amendment. Proposed Action: Staff recommends the City Commission authorize the Interim City Manager to pay the Florida Municipal Insurance Trust $3,429,646 in installment payments to provide the City with full insurance coverage for this fiscal year. Attachment: 1. Renewal Quote =7P FLORIDA IN;i.RANCF Communities Cc : Home RENEWAL QUOTE FOR 2022-2023 City of Opa-Locka FMIT 0435 Coverage Deductible Limit Premium General/Professional Liability $25,000 $1,000,000 $1,768,516 Cyber Liability $25,000 $1,000,000 $2,391 Automobile Liability $25,000 $1,000,000 $75,029 Automobile Physical Damage Per Schedule $49,562 Property $2,500 $33,179,323 $234,220 Workers' Compensation $0 Total Payroll Experience Modification 1.86 10/1/22 $10,990,884 $1,299,928 TOTAL NET PREMIUM *Includes: Drug Free Credit: Yes Safety Credit: Yes $3,429,646 Note: Coverage summaries provided herein are intended as an outline of coverage only and are necessarily brief. In the event of loss, all terms, conditions, and exclusions of actual Agreement and/or Policies will apply.