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2005.10.07_FAB_Minutes_SpecialFINANCIAL ADVISORY BOARD SPECIAL MEETING MINUTES Friday, October 7. 2005 3.00 P.M. Chairman Algn Teller called the meeting to order at 9:30 A.M. in Commission Chambers. In attendance were Chair Alan Teller, Vice Chair Max Angel, David Stern and Dan Hinchliffe. John Hamerski was absent. Also present were Town Manager Dale Sugerman, Finance Director Stan Novak and members of the general public. NEW BUSINESS Insurance Issues - Raising Limits on Deductibles and Coverage Board discussed the report and recommendations from the Waters Risk Management Group. A series of recommendation were reviewed (attached hereto and made a part of these minutes) with the following MOTION being made by MR. ANGEL/MR. STERN to recommend to the Town Commission adoption of the Insurance Program as discussed. MOTION carried unanimously. ADJOURNMENT • With no her business to come before the Board, MOTION to Adjourn was made by MR. NG L/MR. Hinchliffe at 5:00 p.m. Alqn Teller, Ch. David Stern HinAliffe Max Ange, V. Ch. q4a dasZnVa hn Hamerski Attest: • Town of Highland Beach Financial Advisory Board October 7.2005 • MEMORANDUM Insurance Renewal policy effective October 1. 2005/06 At renewal of the Town's insurance program a number of coverage and deductible options was offered, all effecting premiums. Our conclusions on limits and deductibles were driven largely by the opinions given in the recent professional review by Waters Risk Management, (insurance consultant), in their June 2005 report. Our conclusions also took into account coverage amounts, premiums, deductibles and the actual claim and loss experience from 10/01/2002 thru 8/31/2005. Over this 3 year period the Town had some 18 incidents reported to our insurance carrier. These resulted in $224,882.98 in claims paid, including expenses, legal fees and deductibles. The FAB reviewed these options as well as the Town's 3 year loss history and makes the following recommendations to the Commission: 0 The Commission should establish a $350,000.00 special fund to be used to fund deductibles and other uninsured exposures. The consultant's report recommends that this fund be increased to $500,000.00 over time. PROPERTY/EQUIPMENT BREAKDOWN $16,479,315. Premium: $66,717.00 $25,000. Deductible The proposed renewal with a $5000. Deductible had a premium of $79,849.00. Increasing the deductible by $20000. results in a premium savings of $13,132.00. 0 CRIME/EMPLOYEE DISHONESTY 100,000.00 limit Premium: $1000.00 This coverage is increased from the expiring 50,000. limit. Additional premium $500.00 GENERAL LIABILITY $5,000,000.00/10,000,000.00 LIMIT Premium: $37,478.00 no deductible Options offered were a 10,000. deductible and a 25,000 deductible with small premium savings. (3000./5000.) Our past loss experience shows that most claims fall under this coverage. The deductibles are used up by defense costs even if a case is closed with no or little payment. A 10,000,000./10,000,000. option was offered at a premium of $46,848.00. In view of our Sovereign Immunity and other considerations as well as opinions of the insurance consultants the 5M/10M with no deductible was chosen. LAW ENFORCEMENT LIABILITY $5,000,000.00 Limit $5000.00 Deductible Premium $15,756.00 There were frequent claims under this coverage. Since defense costs constitute most of the exposure, the $5000. deductible was chosen. A $10,000. deductible option resulted in a premium savings of $420.00. A $25,000. deductible would save $1200.00. A $10,000,000. limit would cost $20,390.00 with a $5000. deductible. AUTOMOBILE LIABILITY $5,000.000.00 Limit Premium $27,439.00 $1000.00 Deductible Eliminating medical payments and uninsured motorists coverage affected a savings • of $2535.00. LJ PUBLIC OFFICIALS/EMPLOYMENT PRACTICES LIABILITY $5,000,000.00 Limit $5000. Deductible Premium $16012.00 Since the deductible applies to defense costs, the lowest amount was chosen. A $10,000,000. limit was offered with a $25000. deductible at a premium of $104,311.00. (An $88,300. increase in premium with five times the deductible). WORKERS COMPENSATION Premium $136,667.00 Premium is estimated subject to payroll audit. DISHONESTY BONDS $100,000.00 Limit Premium $1500.00 Code requires that the Town Manager and Finance Director be bonded. Our consultant suggested the amounts be increased from the current $10,000. and $1000.00. REMARKS: It is important that all third party (liability) claims be reported to the insurance company as soon as possible. No claim of this type is to be handled by the Town Attorney or any other attorney without the written consent of the insurance carrier on each case. This practice has not been adhered to in the past and can result in "NO COVERAGE" under our insurance program. 0 . SM PRIA111 INSURANCE, PUBLIC RISK INSURANCE AGENCY TOWN OF HIGHLAND BEACH PREMIUM RECAPITULATION Annual Premium Check Option Property / Inland Marine / Equipment Breakdown Yes No Option 1 - $5,000 Deductible $ 79,849 Y ❑ Option 2 - $25,000 Deductible and 3% of TIV subject to Minimum of $50,000 Named Wind Storm Deductible $ 66,717 ❑ ❑ Crime / Employee Dishonesty Option 1 - $50,000 Limit $ 500 ❑ Option 2 - $100,000 Limit $ 1,000 ❑ ❑ Option 3 - $250,000 Limit $ 1,500 ❑ ❑ General Liability $5,000,000/10,000,000 Limit • Option 1 - $0 Deductible $ 37,478j ❑ Option 2 - $10,000 Deductible $ 34,355 ❑ ❑ Option 3 - $25,000 Deductible $ 32,793 ❑ ❑ $10,000,000/10,000,000 Limit Option 4 - $0 Deductible $ 46,848 ❑ ❑ Option 5 - $10,000 Deductible $ 43,724 ❑ ❑ Option 6 - $25,000 Deductible $ 42,163 ❑ ❑ Law Enforcement Liability $5,000,000 Limit Option 1 - $5,000 Deductible $ 15,756 `� ❑ Option 2 - $10,000 Deductible $ 15,330 ❑ 0 Option 3 - $25,000 Deductible $ 14,478 ❑ ❑ $10,000,000 Limit Option 4 - $5,000 Deductible $ 20,390 ❑ ❑ Option 5 - $10,000 Deductible $ 19,839 ❑ ❑ Option 6 - $25,000 Deductible $ 18,737 ❑ ❑ 0 Page 29 of 33 i C. M SM PRIA PUBLIC RISK INSURANCz9v Automobile Liability $5,000,000 Limit Option 1 - $1,000 Deductible Option 2 - $10,000 Deductible Option 3 - $25,000 Deductible $10,000,000 Limit Option 4 - $1,000 Deductible Option 5 - $10,000 Deductible Option 6 - $25,000 Deductible Uninsured Motorist Medical Payments Automobile Physical Damage Public Officials / Employment Practices Liability $5,000,000 Limit Option 1 - $5,000 Deductible Option 2 - $10,000 Deductible Option 3 - $25,000 Deductible $10,000,000 Limit Option 4 - $25,000 Deductible Workers' Compensation AD&D Without WAI Annual Premium 3 Year Policy with Annual Installments 3 Year Policy Prepaid With WAI Annual Premium 3 Year Policy with Annual Installments 3 Year Policy Prepaid Page 30 of 33 $ 27,439 >p ❑ $ 24,160 ❑ O $ 22,212 ❑ ❑ $ 34,317 ❑ ❑ $ 31,038 ❑ ❑ $ 29,090 ❑ ❑ $ 1,303 ❑ $ 1,232 ❑ $ 3,948 X ❑ $ 16,012 ❑ $ 15,170 ❑ ❑ $ 14,311 ❑ ❑ $104,311 ❑ ❑ $136,667 V ❑ $ 619 ❑ ❑ $ 589 ❑ ❑ $ 1,734 ❑ ❑ $ 753l ❑ $ 717 0 O $ 2,110 ❑ ❑ • 0 • ffSM PRIAIKOM. INSURANC- ,PUBLIC RISK INSURANCE AGENCY Bond — Stanley M. Novak Option 1 - $10,000 Bond Limit Option 2 - $100,000 Bond Limit Option 3 - $25Qp00 Bond Limit Bond — Post Office $ 1000 $ 750 0 $ 1,500 v 0 $ 300 tw 0 I authorize PRIA to request the underwriters to bind coverage on the items indicated above. (Name) (Title) (Date) Page 31 of 33 TOWN OF HIGHLAND BEACH ANNUAL PREMIUM COMPARISON FISCAL YEARS 2005-2006 AND 2004-2005 • DESCRIPTION PREMIUM 10/1/2005 PREMIUM 10/1/2004 PREMIUM DIFFERENCE INCREASE(DECREASE Property / Inland Marine / Equipment Breakdown $79,849 $61,957 $17,892 Crime / Employee Dishonesty 500 500 0 General Liability 37,478 38,768 -1,290 Law Enforcement Liability 15,756 15,750 6 Automobile Liability & Physical Damage 31,387 34,713 -3,326 Public Officials / Employment Practices Liability 16,012 15,000 1,012 Workers' Compensation 136,667 144,159 -7,492 AD&D 753 615 138 Bond — Stanley M. Novak 100 100 0 Bond —Post Office 300 300 0 $318,802 $311,862 $6,940 9