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<br /> <br />City of Sunny Isles Beach <br />18070 Collins Avenue <br />Sunny Isles Beach, Florida 33160 <br /> <br />(305) 947-0606 City Hall <br />(305) 949-3113 Fax <br />(305) 947-2150 Building Department <br />(305) 947-5107 Fax <br /> <br />City Commission <br />Norman S. Edelcup, Mayor <br />Lewis J. Thaler, Vice Mayor <br />Roslyn Brezin, Commissioner <br />Gerry Goodman, Commissioner <br />George "Bud" Scholl, Commissioner <br /> <br />A. John Szerlag, City Manager <br />Hans Ottinot, City AI/orney <br />Jane A. Hines, City Clerk <br /> <br />MEMORANDUM <br /> <br />TO: The Honorable City Commission <br /> <br />VIA: A. John Szerlag, City Manager <br /> <br />FROM: Douglas Haag, Assistant City Manager-Finance <br /> <br />DATE: September 18, 2008 <br /> <br />RE: Renewal of Workers Compensation Insurance Policies <br /> <br />RECOMMENDA TION: <br />Approve the attached resolution to renew the City's Workers Compensation insurance with the Florida <br />Municipal Insurance Trust (FMIT) for the policy period of October I, 2008 - September 30, 2009 in the <br />amount of$136,555 <br /> <br />BACKGROUND: <br />The City recently renewed its property, casualty and auto insurance with Preferred Governmental <br />Insurance Trust (PGIT) effective July I, 2008 to take advantage of a decrease in property insurance <br />premiums. This leaves the workers compensation insurance to renew standalone effective October I, <br />2008. The renewal premium for workers compensation of $136,555 is $142,810 lower than last years <br />renewal premium of $279,365. The reasons for the significant reduction in premium are largely due to <br />the city's excellent claims history and an overall rate decrease of 16.8% for the upcoming year. I <br /> <br />We also received a proposal from the Preferred Governmental Insurance Trust (PGIT) - the only other <br />licensed municipal insurance pool in the state. The total cost of a comparable 12 month policy from PGIT <br />is $173,670, a difference of $37,115. <br /> <br />1 Premiums are based on several factors. Since benefits are based on an employee's earnings, the total payroll of the City <br />is taken into consideration. The payroll is then broken down by classifications and a rate is applied to each classification, <br />based on the amount of risk of someone in that classification getting injured while on the job. For example, a police <br />officer is considered a higher risk for a job related illness or injury than an accountant. This brings us to the next factor <br />- the rate. A rate is applied to the payroll earnings for each classification. The rate for police officers is considerably <br />higher than that of an accountant - $3.77 vs. $.37 (rates are per $100 of earning/employee) After rates are applied to all <br />of the classifications and summed up, an experience modification (aka 'mod') is applied to that total. The experience <br />mod factor is based on the claims history of the City. The higher the claims, the higher the mod factor and the higher <br />the premium. An experience mod of over 1.0 is considered high while a mod of 1.0 or lower means our claims <br />experience has been good - few injuries and illnesses. Lastly, there are discount factors that are only available from <br />trusts such as PGIT and FMIT for a drug free workplace, safety credit, etc. <br /> <br /> <br />O"Vv\\~ <br /> <br /> <br />To be com feted bv City Clerk's Oflice <br /> <br />Funding available: <br /> <br />l\gmda Item No.: <br /> <br />\0 <br />q-(~-C~ <br /> <br />Finance Department <br /> <br />Commission Meeting Date: <br />