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CI'IO OF SAN BERNARDICO - REQULn FOR COUNCIL ACOoN
:C'IJ!GWDM'H. ~ald W. Solheim, Director Subject:
IS /.Q\lPt-O PM ,t~irgency Servi ces & RISK MANAGEMENT
Date: Nov em be r 20, 1985
Request for approval to have all
City owned structures re-appraised
for insurance coverage.
Synopsis of Previous Council action:
Has had numerous personal briefings concerning the status of
the Liability and Property Insurance market, and has been further
informed by published articles on said subject.
Recommen<.led motion:
That the bid by Marshall And Stevens Incorporated, of $34,000.
for ~-appraisal of all city owned real property be approved as
a sole source due to circumstances, that their offer of October 25,
1985 be accepted, and that the payment be made from the Fire-Prop-
erty & Earthquake Insurance Premium fund, 001-451-53550, with the
Director of Emergency Services & Risk Management named as being the
designated responsible person.
Contact person:
Ron Solheim
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Ron a 1 : ~at%el he i m -
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Phone: 5308
Supf'orting data attached: Yes
FUNDING REQUIREMENTS:
Amount:
$34,000.
Source:
N/A
Property Premium Fund
001-451-53550
# t2.1'~
arren A. Knudson, Dir.
Ward:
Finance:
Council Notes:
75-0262
Agenda Item NO.~
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CIN OF SAN BERNARD~ - REQUWT FOR COUNCIL Ac;tON
STAFF REPORT
In March, 1985, the City of San Bernardino experienced severe
rate increases of approximately 950% in Excess Liability Ins-
urance Premiums, and ~pproximately 900% in Property-Fire & Earth-
quake Insurance Premiums; in both cases for less insurance. To
discuss the status of the Insurance Market further would be re-
dundant, other than to state our City was not unique in severe
rate increases.
The City of San Bernardino is unique however, in that the geo-
graphic location makes it highly susceptable to damage of property
by fire, earthquake, flooding and liquifaction. Each of these is
a factor Insurance Companies consider when providing insurance on
Real Property. Combined, these factors make our City a 'high-risk'
area, for requested insurance. To adequately insure the City for
Fire, Earthquake and Property, from March 30, 1985 to March 30, 1986,
it was necessary to have layers which involve ten (10) companies.
The last appraisal of Real and Personal Property owned by the City
was in 1973, by then Tait Appraisal Company, which was bought out
by and is now a part of Marshall And Stevens, Inc. Because that
Company is in possession of all records from that appraisal, they
have made an offer to consider an appraisal of City Owned Real Prop-
erty as a 're-appraisal,' and are able to perform the complete task
for the quoted $34,000. sum. Compared, figures of up to $120,000.
were received when this project was considered for the 83-84 and
84-85 budget proposals, but had to be removed due to budget con-
straints.
The urgency for the Real Property Appraisal, comes from Robb Tarr,
Vice President of Robert F. Driver Company, who is and has been the
Broker for the City for past years. Mr. Tarr, former Risk Manager
of the City of Palm Springs, advises that without an evaluation and
appraisal of all Real Property, we will most probably not be able
to purchase sufficient insurance for renewal in March 1986, and if
we are able, we will pay maximum premiums, as the Underwriters will
have no choice but to consider all buildings high risk. His opinion
is that we could well save the amount in premiums to cover the app-
raisal. Further, an accurate appraisal may be used by the Finance
Department, in establishing the financial holdings of the City.
Risk Management begins gathering information, compiling figures,
completing forms and other necessary functions, each December. For
the months of December, January and February, one employee spends
almost full time preparing for Liability and Real Property Insurance
renewal, which must be in force on March 30.
75-0264
Approval of the Form Motion is Strongl{ Recommended, in order that ~
the required insurance be made availab e to protect the City. ~).)
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MARSHALL AND S1EIENS
INCORPORATED
1150 South Olive Street
Suite 1000
Los Angeles. CA 90015
(213) 746.6250
October 25, 1985
Mr. Robert Tarr
ROBERT DRIVER COMPANY
4101 Birch Street
Suite 230
Newport Beach, California 92660
Dear Hr. Tarr:
In accordance with your request Marshall and Stevens is pleased
to submit this proposal for a re-appraisal of the structures be-
longing to the City of San Bernardino.
In preparing this insurance report, we will inspect each site
and reprice the components.
Our fee for completion of this project is $34,000. The City
will be billed progressively as work is completed. Additionally,
it is our understanding that this valuation will encompass some
1,701 buildings located at approximately 38 sites.
Additonally, given timely authorization, we can complete this
valuation prior to the second week in December.
I welcome this opportunity to once again be of service to the
City of San Bernardino. Please do not hesitate to call me should
the need arise.
Very truly yours,
t1ARSHALL and STEVENS AUTHO~IZATIJN:
Incorporated
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Qm#~J.-4- DATE:
DONALD B. McDOUGALL
Valuation Consultant
Government Services
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