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CIT4tOF SAN BERNARDI. - REQU.T FOR COUNCIL Aee.ON
From:
Ronald W. Solheim, Director
Subject:
Discussion and direction for
Real Property, Fire & Earth-
quake Insurance for March 30,
1986 to March 30, 1987.
Dept:
Emergency Services & RISK MANAGEMENT
Da~: February 27, 1986
Synopsis of Previous Councit ection:
URGENCY CLAUSE:
An evaluation of city owned real property, was recently completed
by a professional appraisal company, at the direction of the Mayor
and Common Council. Further, Risk Management Staff have completed
the required lengthy, complex questionnaire, for insurance renewal.
Robert F. Driver Company, our Property, Fire and Earthquake Broker
since 1981, is request guidance as to coverage, due to the uncertain
condition of the market, and legal issues of bond covenants.
Recommended motion:
Form Motion No.1:
That $65,000,000. Real Property and Fire Insurance be placed, with
$20,000,000. Earthquake Coverage, at a premium of approximately
$800,000.
Form Motion No.2:
That $65,000,000. Real Property and Fire Insurance be placed, with
$15,000,000. Earthquake Coverage, at a premium of approximately
$600,000.
Form Motion No.3:
That $65,000,000. Real Property and Fire Insurance be placed, with
$10,000,000. Earthquake Coverage. at a premium of approximately
$400,000.
NOTE: Current budget contains
approximately $150,000. for
r mi m
Contact person:
Ron Solheim
Phone:
5308
Supporting data attached:
Yes
Ward:
N/A
FUNDING REQUIREMENTS:
Amount: As determined Source: As determined
Finance: /tJ t::1o-. C /~
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75-0262
Agenda Item No.
s-4
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ctT4tOF SAN BERNARDI. - REQUeT FOR COUNCIL A~ON
STAFF REPORT
The Director of Risk Management has requested policy guidance
in securing next year's property/fire/earthquake insurance
due March ~O, 1986. The present budget contains approximate-
ly $150,000. The city currently has $60,000,000 in Real
Property and Fire Insurance with $30,000,000 Earthquake
coverage. Last year's premium cost was $ 204,000.
Recently, the City had a real property inventory (enclosed)
which indicates that it is worth $56,000,000. The city's
Insurance Broker since 1981, Mr. Robert Tarr, vice President
of Robert F. Driver Company requested that the City make one
of three choices for the renewal:
1. $65,000,000 in Real Property and Fire Insurance
with $20,000,000 Earthquake coverage, for a premium
of just under $800,000.
2. $65,000,000 in Real Property and Fire Insurance
with $15,000,000 Earthquake coverage, for a premium,
cost of just under $600,000.
or
3. $65,000,000 Real Property & Fire Insurance with
$10,000,000 Earthquake coverage, for a premium cost
of just under $400,000.
The city is required to have Earthquake coverage on the total
bonds outstanding estimated at $36million. A legal opinion has
been requested to determine the consequences of securing less
insurance than required.
Ron Solheim and the insurance agent will be available to
thoroughly discuss this item.
Repro. Cost New:
Insurable Repro. Value: Depreciated Repro.
Depreciated Insure.
$64,689,499.
$60,413,927. $45,981,649.
$42,702,911.
75.0264