CA Review CKM
Meeting Date: June 21, 2022
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Ed Garbo, Risk Manager
[email protected], 442-339-2471
Subject:
District:
Purchase of $100 Million of Property Insurance Coverage through Aon for Fiscal Year 2022-23 for an Amount Not to Exceed $490,000
All
Recommended Action
Adopt a resolution authorizing the purchase of $100 million of property insurance through Aon for fiscal year 2022-23 for an amount not to exceed $490,000.
Executive Summary/Discussion
The city is buying its annual property insurance coverage, in the amount of $100 million through Aon for fiscal year 2022-23 in an amount not to exceed $490,000. This purchase must be approved by the City Council because the cost exceeds $100,000 per agreement year, in accordance with Carlsbad Municipal Code Section 3.28.040(D)(1).) Last year, the city moved its property insurance coverage to Aon because it was able to obtain higher limits and broader coverage than previous brokers and programs. The policy period will run from July 1, 2022, to June 30, 2023.
Options
The market for property insurance, including cyber coverage, is exceedingly unstable. If the purchase of excess liability coverage through Aon is rejected, the city will have to attempt to obtain coverage in the open market. This will likely result in more expensive premiums for less coverage than what is being proposed, or a possible lapse in coverage while other alternatives are investigated.
Fiscal Analysis
Fiscal year 2022-23 premiums for Aon property insurance coverage will not exceed $490,000.
The premiums will be paid with funds from the FY 2022-23 Liability Fund. Sufficient funds for this premium have been approved in the FY 2022-23 budget.
Next Steps
With the City Council’s approval, staff will create a purchase order for payment.
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Environmental Evaluation
In keeping with California Public Resources Code Section 21065, this action does not constitute a project within the meaning of the California Environmental Quality Act in that it has no potential to cause either direct physical change to the environment, or a reasonably foreseeable indirect change in the environment, and therefore does not require environmental review.
Public Notification
This item was noticed in accordance with the Ralph M. Brown Act and was available for viewing at least 72 hours prior to the meeting
Exhibits
1.City Council resolution
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RESOLUTION NO. 2022-144
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE PURCHASE OF $100 MILLION OF PROPERTY INSURANCE COVERAGE THROUGH AON FOR FISCAL YEAR 2022-2023 FOR AN AMOUNT NOT TO EXCEED $490,000
EXHIBIT 1
WHEREAS, the City Council of the City of Carlsbad, California desires to renew its annual property insurance through Aon; and
WHEREAS, Aon has negotiated a renewal of $100 million of property coverage for the next fiscal year beginning July 1, 2022 and concluding on June 30, 2023 for an annual premium in an amount not to exceed $490,000.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:
1.That the above recitations are true and correct.
2.That the City Manager or designee is authorized to take all necessary and appropriate actions to purchase $100 million of property coverage through Aon, effective July 1, 2022, to June 30, 2023, in the amount not to exceed $490,000.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 21st day of June, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Hall, Blackburn, Bhat-Patel, Acosta, Norby.
None.
None.
{-rFAVIOLA MEDINA, City Clerk Services Manager
(SEAL)
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