HomeMy WebLinkAbout1988-10-24 88-441 ORDERAUG
Mer do/24/88 emn Item No. 88-441
hem/Subjects Authorizing Contract with AME Risk Retention Croup
Responsible Department: Finance
Commanury:
See Attached
Managers Comments:'
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88-441
Aesip:ed to Cowed« Tilley, October 24, 1988
CITY OF BANGOR
(TITLES Mri¢C Anthorizing Contract with WE Risk Retention Group, Inc.
By the OUR Couiwii of Qi/ of Du s -
ORDERED,
TMT the city Manager is hereby authorized to sign the participation
agreement vith the WE Risk Retention Group, Inc;
and be it$urther Ordered,
THAT the City Reneger is hereby authorized to expend from the Airport
hand the sum of $53,260 in payment of our Reserve Premium Contribution.
Statement of Fact: The WE Risk Retention
Group has been formed to
provide
n alternative to
buying croareveial
insurance for Airports.
The City
will save $47,200
in the first year
by joining the group.
In City §;ouncll onto her 24,1988
Ftssed I
kj `- /
88-441
ORDER
Title,
Authorizing Contract with AO risk
......................................
reteutlon Group The.
......................................
T4Comcilman
Bangor, the center of Mone — the Gateway to Maine's North Woods and Seashore Resorts
88-441
me,"o.new ("nVe7ean
CHU of Pmts", Paine
October 12, 1988
For: Edward Barred
From: Ted delliaov
Subject: Airport Liability Insurance Program
de, we have discussed previously, the American Association of Airport
Executives (APAE) has formed a risk retention group for the purpose of pro-
viding an alternative to purchasing commercial Insurance for America's
airports. -
Me commercial markets have been and remain quite unstable with the
difficulty of predicting premiums from year to year. The AAAB risk retention
group was formed to try and stabilize and make more predictable the annual
rates.
We have been working with the group since its inception and recently
received a quote for out February, 22, 1989 renewal date. Presently, we
re paying .$1)0,000 for a $100 Million policy with a $25,000 deductible.
The quote for the same
coverage free the aAAR group is $122,800 or avings
Go one year of $42,200.In addition, we could increase our deductible
from $25,000 to $50,000 and savean additional $12,280 annually.
Because this is an entirely new self-insured group, there Is a require-
ment for an up front capital contribution equal to one-half of the first
year premium. For us, this would amount to $55,260 less a deposit of $2,000
already paid assuming an increase to a $50,$00 deductible. The up front -
'capital is returnable in the event of a break-up of the group. In any event,
the savings in premium will cover the contribution in just about one year
and than the savings continue annually.
It is our recommendation the City of Bangor join the PARR Risk Retention
Group and send our capital contribution immediately to bind 1989 premium.
We also recommend the increase in deductible from $25,000 to $50,000 since
virtually all previous claims have been Order $25,000.
TC1/lil
cc: City Council
Peter D'Errico