Resolution No. 2011-108RESOLUTION NO. 2011-108
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE PURCHASE OF
PROPERTY, AND BOILER & MACHINERY POLICIES FROM
TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA
THROUGH ARTHUR J. GALLAGHER & CO.
WHEREAS, the City's current Property, and Boiler & Machinery
Insurance Policies ("Property Policies") with Travelers Property
Casualty Company of America ("Travelers") for utilities and non -
utilities (including flood and equipment breakdown), expires on June
30, 2011; and
WHEREAS, the City used the services of Arthur J. Gallagher &
Co. Insurance Brokers of California, Inc. ("Arthur J. Gallagher") to
act as the City's broker to structure and obtain the appropriate
insurance coverages; and
WHEREAS, by memo dated June 13, 2011, the Risk Manager has
recommended that the Property Policies be purchased from Travelers
through Arthur J. Gallagher based on the quotes from Travelers in the
amount of $436,875,00 for property insurance, and $76,901.00 for
boiler and machinery insurance, for a total quoted cost of
$513,776,00, exclusive of surplus lines taxes and fees; and
WHEREAS, the City desires to renew the Property Policies
with Travelers to protect the City; and
WHEREAS, the City Council of the City of Vernon has
determined that, pursuant to the provisions of subsection (b)(1) of
Section 2.27 of the Vernon City Code, it is in the public interest and
necessity to approve the purchase of the Property Policies through
Arthur J. Gallagher.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the purchase of the Property Policies through Arthur J.
Gallagher.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to execute any and
all documents necessary for the purpose of securing the Property
Policies on behalf of the City of Vernon and to take whatever actions
are deemed necessary or desirable for the purpose of implementing.and
carrying out the purposes of this Resolution and the transactions
herein approved or authorized.
SECTION 4: The City Council of the City of Vernon hereby
approves the payment of the annual premium for each of the Property
Policies at the quoted cost herein itemized, for an estimated total
amount of $513,776.00 plus surplus lines taxes and fees, if
applicable.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or the City Clerk's designee, to send a copy of
this Resolution to:
Arthur J. Gallagher & Co.
Insurance Brokers of California, Inc.
Attn. Nasreen Kopecky, Account Manager
15 Enterprise, Suite 200
Aliso Viejo, CA 92656
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SECTION 6: The City Clerk of the City of Vernon shall
certify to the passage, approval and adoption of this resolution, and
the City Clerk of the City of Vernon shall cause this resolution and
the City Clerk's certification to be entered in the File of
Resolutions of the Council of this City.
APPROVED AND ADOPTED this 215t day of June, 2011.
Name: Hilario Gonzales
Title: Mayor /
_3_
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2011-108, was duly passed, approved and adopted.by the City Council
of the City of Vernon at a regular meeting of the City Council duly
held on Tuesday, June 21, 2011, and thereafter was duly signed by the
Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this >3 day of June, 2011, at Vernon, California.
(SEAL)
Willard Y guc City Clerk
4
OFFICE OF THE CITY CLERK
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
June 23, 2011
Arthur J. Gallagher & Co.
Insurance Brokers of California, Inc.
ATTN: Nasreen Kopecky, Account Manager
15 Enterprise, Suite 200
Aliso Viejo, CA 92656
Re: Property, and Boiler & Machinery Policies from Travelers Property Casualty Company of
America
Dear Ms. Ko`
Transmitted herewith is a copy of Resolution No. 2011-108 that was approved by City Council
on June 21, 2011.
If you have any questions regarding this matter, please call Mr. Willard Yamaguchi at (323) 583-
8811 ext. 175.
Very t ly yours,
c
WILLARD G. AM G CHI
City Clerk/Interim C Attorney
WGY:dj
Enclosure
c: Michelle Mermis
Resolution No. 2011-108
Exclusively Industrial
RECEIVED
JUN 0 9 2011
CITY CLERK'S OFFICE STAFF REPORT
Risk Management
DA: June 13, 2011
TO: Mark Whitworth, City Administrator
FR: Willard G. Yamaguchi, Risk Manager
RE: Insurance Policy Renewal for 2011-12
Property
RECEIVED
JUN 13 2011
CITY ADMINISTRATION
The City has a property insurance policy for utilities and non -utilities for the direct physical loss
or damage to property, including flood and equipment breakdown. Travelers Property Casualty
Company is the underwriter. For 2010-11, the cost of the premium for property insurance was
$312,490, and $72,001 for boiler and machinery. The policies will expire on June 30, 2011.
For 2011-12, Risk Management obtained a quote from Travelers Property Casualty Company
("Travelers") for property insurance, including boiler and machinery for $513,776. This
represents a 33% increase in premium cost. The increased cost is attributed to the increased
value of contents, such as furniture and equipment and newly acquired buildings. To date,
Chartis Energy has expressed interest, but has not provided a quote. Chubb and Argonaut
Insurance declined to quote. We recommend Travelers Property Casualty Company for property
insurance coverage.
Excess Liability
The City is self insured for the first $2 million of a liability claim. The City carries an excess
policy in the amount of $20 million. Starr Indemnity & Liability Company is the current insurer.
For 2010-11, the cost of the premium for liability insurance was $132,000. The City's excess
liability policy will expire on June 30, 2011.
For 2011-12, Risk Management obtained quotes from Starr Indemnity & Liability Company
("Starr"), and Lexington Insurance ("Lexington"). Ironshore Insurance declined to quote.
Starr Indemnity & Liability Company's quote came in at $135,000. This represents a 2.27%
increase over the 2010-11 rate. Lexington's quote was $175,000. We recommend Star
Indemnity & Liability for excess liability insurance.
Workers Compensation
The City is insured for $50 million, with a $1 million self -retention for workers' comp cases.
Currently, coverage is provided by New York Marine and General Insurance Company ("New
York"). The cost of the premium was $118,391. The City's excess workers compensation
policy will expire on June 30, 2011.
For 2011-12, Risk Management only received one quote from the current carrier, New York, at
$112,780. This represents a 4.73% decrease from 2010-11. We recommend New York for
workers' comp insurance.
Cri m e
The City has a crime policy for coverage of employee dishonesty, forgery and fraud. The
coverage is for $1 million with a $25,000 deductible. The cost of the premium was $3,804 and
will expire on July 1, 2011.
For 2011-12, Risk Management obtained quotes from National Union Fire Insurance Company
of Pittsburgh, Pennsylvania, ("National Union") and Hiscox Insurance Company. Great
American Insurance, Co. declined to quote.
National Union's quote came in at $3,696 and Hiscox's quote was $3,718. We recommend
National Union for the employee crime policy.
Recommendation
Risk Management recommends the purchase of the following insurance policies:
• Property- Travelers at $513,776
• Excess Liability- Starr at $135,000
• Workers Compensation- New York Marine at $112,780
• Crime -National Union at $3,696
All bids are exclusive of surplus lines taxes and fees.
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