HomeMy WebLinkAbout~Master - FY 2023/24 Property Insurance Renewal RESOLUTION NO. 23-385
RESOLUTION APPROVING THE RENEWAL FOR THE PROPERTY INSURANCE
PROGRAM COVERAGE FOR FY 2023/24
FOR THE CITY OF AMES,IOWA
WHEREAS, the City contracts with Willis of Greater Kansas, Inc. to provide property
insurance brokerage services for the City's property insurance program. Willis has obtained quotes
for property insurance coverage for FY 2023/24; and,
WHEREAS, the City's property insurance program is split into two main components: 1)
The "Municipal" component, which covers City Property excluding the Resource Recovery and
Power facilities described below. This component has been underwritten by Chubb Insurance
Group since 2012. 2)The "Power" component,which covers Resource Recovery,the Power Plant,
and assets related to the electrical infrastructure. In FY 2018/19 this coverage was moved to Starr
Tech for underwriting the policy; and,
WHEREAS, splitting the City's insurance coverage into two major components allows for
an optimization of terms and pricing to fit each insurer's specialty, rather than placing all City
property under a one-size-fits-all program. In addition,the broker arranges for flood insurance for
properties susceptible to flood damage; and,
WHEREAS, the number of natural disasters in the past few years has caused the
commercial insurance market to harden, meaning it is becoming increasingly difficult to find
reasonably priced coverage. Additionally, fewer companies are willing to participate in the
reinsurance market which drives up the cost further. In the month of May 2023, Willis saw an
average rate change of more than 22% across their entire book of business; and,
WHEREAS, the combined Power and Municipal premiums result in an overall property
insurance program cost increase of $294,322 for FY 2023/24 over the prior year. This is a
combined 32% increase compared to the total FY 2022/23 premium; and,
WHEREAS,there are few, if any, alternative underwriters for the unique property the City
must insure. This limited pool of underwriters subjects the City to substantial increases in
premiums as the underwriters attempt to recover from major losses elsewhere in their portfolios in
recent years; and,
WHEREAS, at the time the FY 2023/24 City Budget was prepared, staff had anticipated a
property insurance premium increase of up to 20%. Therefore, the adopted FY 2023/24 budget
includes $1,119,955, which is allocated to the affected City budget programs. The difference
between the budgeted funding and the quoted premiums is a shortfall of$104,209. This shortfall
will be spread to each of the affected budget programs as part of the adjusted FY 2023/24 budget
process. At that time the affected programs will have to be amended to reflect savings to offset
these increased costs.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa,
that the renewal for the property insurance program coverage at the combined quoted premium of
$1,224,164 for FY 2023/24 is hereby approved.
ADOPTED THIS 27th day of June, 2023.
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Renee kall, City Clerk John A. Haila, Mayor
Introduced by: Gartin
Seconded by: Betcher
Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin, Junck, Rollins
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 271h day of June, 2023.