City Council Meeting - FINAL


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  7.A.       
Meeting Date: 06/01/2021  

Information
TITLE:
Consideration and Approval of 21/22 Insurance Program Renewal
STAFF RECOMMENDED ACTION:
Accept the renewal premiums submitted by the Arizona Municipal Risk Retention Pool, and the Airport liability, flood and foreign travel carriers in the estimated amount of $1,863,585.
Executive Summary:
The City of Flagstaff today expends an estimated $1,783,629 to insure all of the City's insurance exposures with The Arizona Municipal Risk Retention Pool and AIG for airport coverage. This premium, if renewed, will have an estimated increase of $80,000 to a total premium of $1,863,585. This increase is offset in its entirety by a dividend that was declared by the Arizona Municipal Risk Retention pool. Staff recommends approval of the renewal offered by the current carriers.
 
Financial Impact:
No Increased Fiscal Impact
Policy Impact:
None
Connection to PBB Key Community Priorities/Objectives & Regional Plan:
Priority Based Budget Key Community Priorities and Objectives

Effective Governance
Has There Been Previous Council Decision on This:
No
Background/History:
The City of Flagstaff marketed all lines of primary insurance coverage last year and moved all insurance except the Airport liability, flood and foreign travel policies to the Arizona Municipal Risk Retention Pool, (AMRRP). The premiums for last year's policy are estimated at:
  1. Workers’ Compensation is estimated at audit to be $724,990
  2. Other lines of coverage with increases in property and automobile exposures was $892,687
  3. The 15-million-dollars in coverage excess policy was $140,891
  4. Airport, flood and foreign travel coverages at $25,061
All lines of coverage for fiscal 20/21 are estimated, at audit, to be $1,783,629

One of the advantages of insuring with the Arizona Municipal Risk Retention Pool is that most years dividends are issued based upon net financial performance of the pool. The pool issued a dividend of $86,749 to the City of Flagstaff, which the City has elected to take as a check payable in July of this year.

The Arizona Municipal Risk Retention Pool has had modest increases in some lines of coverage for fiscal year 21/22. The estimated premium for the upcoming fiscal period is estimated at:
  1. Workers’ Compensation is estimated at $756,530. The increase is primarily driven by an increase in estimated payroll and not an increase in rates.
  2. Other lines of coverage are estimated at $938,285
  3. The 15-million-dollars in coverage excess policy is $143,709
  4. Airport, flood and foreign travel coverages at $25,061
All lines of coverage for fiscal 21/22 are estimated, at audit, to be $1,863,585

This represents a total anticipated premium increase of approximately $80,000 which is 100% off set by the $86,749 dividend declared by the Arizona Municipal Risk Retention Pool board.
 

    

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