2023-05-18 · City Council · Transcript · Special Called Meeting

--- title: Special Called Meeting date: 2023-05-18 source: 2023-05-18_Special_Called_Meeting.wav --- [0:02:41, 0:02:44]: [165.6, 168.9]: Yeah, well I'm there for a minute. [0:02:49, 0:03:00]: Madam Clerk, you you ready? Yes, sir. Okay. All right, ladies and gentlemen. I'm gonna call the special call meeting to order. This is uh Thursday, May 18th, and I have uh six oh two. [0:03:01, 0:03:05]: And uh could you please stand for the invocation, Mr. Blount, please? [0:03:08, 0:03:09]: We have the gracious father who comes to you. [0:03:10, 0:03:30]: This day, Heavenly Father. Just remembering those, Heavenly Father, that have gone, and we just praise God for the families of those that are that are still here. We thank you, God, for this uh elected body that is here, that you will continue to keep us and cover us. Let us make decisions that are pleasing in your sight. Let us continue to move the city forward, Heavenly Father. Allow those that are duty. [0:03:30, 0:03:41]: to do the thing that they need to do. Heavenly Father, allow it to happen. Heavenly Father, we're going to stand by and legislate. And this city, Heavenly Father, we victory for those that are willing to serve. It's in Jesus' name we pray. Amen. [0:03:42, 0:03:54]: Okay, pledge allegiance I pledge allegiance to the flag of the United States of America, to the Republic which stands under nation, under God, indivisible liberty and justice for all. [0:03:55, 0:03:56]: Madam Clerk, roll call, please. [0:04:01, 0:04:09]: Mayor Ford? Present. Mayor Pro Tem Barber. Present. Councilman Alexander. Present. Councilman Blant. Present. Councilwoman Gantt. [0:04:10, 0:04:30]: That the record reflect councilman Gantt is not in attendance. Councilman Thomas. Therefore, do you have a call? Thank you, Madam Clerk. Um Council, I need a motion to amend the agenda to remove item number two. That item will be heard by the city council at the May 30th work session meeting. So move. Mr. Blount, so move. Is there a second? [0:04:31, 0:04:33]: Uh Mr. Thomas Second, all in favor please indicate. [0:04:35, 0:04:42]: Okay, it's unanimous decision. Thank you very much. Now I need a motion to adopt the remaining part of our uh agenda, which would be one item. [0:04:42, 0:04:47]: So move. Mr. Blount, so move. There's a second. Second. Mr. Alexander second. Dad. All in favor, please indicate. [0:04:47, 0:05:00]: Shenancy season, thank you very much. So we're gonna talk new business here, council consideration to approve the two thousand twenty three, two thousand twenty four liability insurance policy for the city. Uh Mr. Gardner, I imagine you have lead on this, sir. [0:05:12, 0:05:13]: How you doing, sir? [0:05:15, 0:05:30]: Connected with the other roof insurance risk monitoring consultant. They're here to present our insurance for 2023-2024. And with that, I mean [0:05:33, 0:05:36]: Mike's not on? Gotcha. There we go. Here we go. Thank you. [0:05:36, 0:05:42]: Thank you. Uh once again, um tonight we have uh Gallica Risk Insurance. Um [0:05:42, 0:05:59]: with us consulting to here to present to you uh risk insurance for twenty twenty three-two twenty four. Um with that I'm gonna call uh Mr. Matt Simmons up um here to give a presentation um and Mr. Daniel Dirkak on uh risk insurance for twenty twenty three-twenty twenty four. [0:06:00, 0:06:01]: Welcome gentlemen. [0:06:03, 0:06:23]: Uh thank you very much, Mr. Gardner. Uh thank you, Mr. Mayor and uh members of the council. Uh my name is Matt Simmons. Um I am the director of Gallagher's public sector practice uh in Georgia. Um with me today is uh uh a partner of mine, Daniel Duhart, with uh Janice Asset Management Strategies Group. I'll let him introduce himself. So good evening, everyone. Appreciate the opportunity to speak with you. [0:06:23, 0:06:28]: you all today. As he said, my name is Daniel Duhart. I'm the head of risk management with Genesis [0:06:28, 0:06:47]: Yes. So uh good evening everyone. I appreciate the opportunity to speak with you all. My name is Daniel Duhart. I am the head of risk management with Genesis Asset Management Strategies Group. We're an insurance brokerage firm that's local here to the Henry County area. As Matt alluded to, we partner with Gallagher to provide insurance and risk management services for the public entities that we work with. [0:06:48, 0:07:03]: Thank you. Appreciate it. Thank you. Um so uh this evening, um uh I I believe everybody was provided with uh what we refer to as our executive summary, which is meant to be a board ready document, um, to give you a uh simple overview. Um I hope to be uh uh [0:07:04, 0:07:24]: Succinct but efficient in uh in explaining um this evening. Um what I've provided in here is um somewhat as this being our first time meeting, um somewhat of an overview of Gallagher and what um kind of what was talked with uh with Mr. Gardner, Miss Williams uh when they brought us on board as your uh partner um to give you an idea of who we are. [0:07:24, 0:07:32]: are talk about the renewal, talking about some of the stuff we're gonna be doing, um, Azure partner, and um and and and wrap it up with that. So if you can uh [0:07:32, 0:07:34]: Open up um [0:07:34, 0:07:54]: uh to to um I guess really page two but page one just quick overview of Gallagher. Um we are um one of the top uh insurance brokerage firms in the world. Um we have um uh our our local office here is in Atlanta. We're also the largest uh uh broker of governmental risks in the United States. [0:07:54, 0:08:14]: So we work with uh local governments throughout the country. Um if you flip to the uh following page, page two is just a quick overview of um some of our clients to show you that you know this is, you know, we work with a lot of your peers, um, city of Hapeville, um, city of Locust Grove. Uh just [0:08:14, 0:08:28]: just down the road. Um uh uh City of Dublin, Valdasta, Roswell, Canton, um, just to name a few um of the uh clients that we work with. Um and this is just an overview of of who we are. Um [0:08:28, 0:08:48]: The next page, and please feel free to stop me at any point if anybody has any questions. Next page is just an overview of the team. Obviously, myself and uh Mr. Doohart are here um leading for the city of Stockbridge, but to show you that we have an entire support staff um uh to provide for you, um to provide uh support to Ms. Williams, Mr. Gardner. [0:08:48, 0:09:08]: Um the uh uh fourth page is just a quick overview of of why we're here, Gallagher's approach. Um we focus on what we call total cost of risk, and that's not just what your insurance premiums are, but what you're paying out in deductibles, what you have from contractual risk standpoint, and how are you managing cleaners? [0:09:08, 0:09:22]: claims, how are you managing risk? And it's a real methodical approach to uh working with you. So our goal with the city of Stockbridge will be to um elevate risk management and uh provide a lot of great service and uh resource to you. [0:09:23, 0:09:25]: Um [0:09:25, 0:09:45]: Page five is a little more detail about that. Of one of the things that we're going to do over the next year and hopefully several years is work towards improving the risk profile in City Stockbridge. You're already a very well-run city, but there are a lot of things that we can do to help improve experience for you. Page six, and a lot of this I'm [0:09:45, 0:09:52]: I'm not gonna like to not go through it all, is a is kind of a sample plan of what we're gonna do, talk about how we're gonna impact things. [0:09:52, 0:09:59]: Buy what we call cost driver um and provide service and support and resource to the city. [0:10:00, 0:10:15]: You know, some of the things on here just talk about benchmarking against other municipalities, making sure you've got appropriate coverages, making sure your premiums are appropriate, your deductibles, um, identifying opportunities for uh different consulting and um risk management uh strategies. [0:10:16, 0:10:36]: Um if you move to page seven, uh this is where we'll get into the meat of it now. Just a quick overview of the insurance marketplace. There are several things that are impacting renewals these days. Um social inflation, uh climate change is having a massive impact on property risks, um, and cyber is obviously an ever-growing uh issue out there. [0:10:36, 0:10:53]: So what we've seen is we've seen a real driving this year, what's called a hardening market, really driving costs up for a lot of municipalities, um, for local governments. Um everything from property to law enforcement to cyber, we've we've seen been seeing significant increases. Um I can read through it all, but if you need to uh [0:10:53, 0:10:57]: Yeah, help going to sleep tonight. It's great reading for you. Um [0:10:58, 0:11:18]: Page eight is a snapshot from our Gallagher Drive uh benchmarking platform. This shows renewal rate trends. We show this to help um uh provide color to the renewal you receive each year of you know, how are you stacking up against the marketplace? When we're seeing that, you know, last quarter the average rating. [0:11:18, 0:11:28]: increase was around fourteen point four percent. Um so that kind of gives you an idea and if you look through it you can see that we've just been seeing increases every quarter for the past two years. [0:11:29, 0:11:34]: You have a question? Yes, sir. Yes, sir. Please please interrupt me. I know I'm kinda rolling through. Yes, sir. [0:11:35, 0:11:50]: This has been going over with with the city manager and our finance department. Yes. Already. Yes. So you're just giving us what you believe. Oh no y yes, sir. Yes, sir. My my purpose was to introduce us and make sure that you you y I was giving you all the information. Would you like for me to jump straight to it? [0:11:51, 0:12:11]: No, I'm just No, no. Remember, I I I only interrupted to say that uh I mean with the circumstances at hand, uh I just wanna make sure that we're just being an overview of what they already should be. Oh absolutely, yes sir. No, I I I I wanted to uh uh offer the respect of letting you know who's the new guy who are the new guys standing in front of you. [0:12:11, 0:12:15]: Um so that you feel comfortable with us i in this partnership. Right. [0:12:15, 0:12:20]: So continue on with your presentation. Yes, sir. Um page nine is really where we talk about. [0:12:20, 0:12:40]: Um page nine is uh is the renewal for um uh for the uh city of stockbridge this year. What I show here is um a breakdown, a comparison breakdown with some analytics built in. Um our recommendation this year is uh that you renew with um travelers um and Beasley as your cyber insurance. [0:12:40, 0:13:00]: Carrier. We also approached the Georgia Municipal Association for the Gurma program. There's information on that on the following page. But actually, in discussions with um with Gurma, their costs were significantly higher. I won't go into the story about reinsurance costs, but we identified that the best course of action this year is reinsurance. [0:13:00, 0:13:20]: Renew with travelers. Um, there are two options on here for your consideration: um, terrorism sabotage and active shooter coverage. Um, these are additional coverages that we uh recommend to our public entities to provide um additional coverage in the event of um such such a uh um uh such an event. [0:13:20, 0:13:20]: Yeah. [0:13:22, 0:13:42]: Um but uh when we boil it all down, um we actually got a really good renewal um from travelers this year for you. Um I showed you on the previous page the average last quarter was about fourteen, fourteen and a half percent. Um we see way down kind of at the bottom over to the right, you're looking at a net rate increase of about eleven point three percent. Um one [0:13:42, 0:14:02]: One of the things driving your increase this year is the addition of the police department uh that you had uh mid year last year. Um so all of those law enforcement officers are now being rated in. They weren't previously, so they're now rated in here. So that's where you're seeing really kind of a significant increase um and you'll see that by line item of the premium. [0:14:02, 0:14:10]: Um adding in the police department, but now ensuring that we have that, you know, proper coverage and everything in there in place for them. Um [0:14:11, 0:14:31]: The I have a question. I I have a question. Yes, sir, Ms. Mayor. I should know the answer to this, but let me the terrorists and cyber security and active shooter coverage now that you're proposing now, it wasn't active previously in the business. No sir. So what you've been buying previously is something called the Terrorism Risk Insurance Act of 2002, TRIA, um obviously passed after nine eleven. [0:14:31, 0:14:51]: Um it requires a lot of um several uh triggers to come into play um that narrows the scope and the uh narrows the scope of when it actually will prov um can provide coverage, takes uh federal certification as a certified act of terrorism. Um we recommend a a broad form terrorism policy on the property. [0:14:51, 0:15:06]: Casualty is is fine, but on your property, so that you don't have to have anything rise to the level of certification by the Secretary of State, Secretary of Defense, Secretary of Homeland, excuse me, Secretary of State, Attorney General, Secretary of Homeland Security to certify for a certified act of terrorism. [0:15:07, 0:15:09]: disallows that um [0:15:10, 0:15:30]: In the event that somebody comes um to City Hall, to the police department, to a uh municipal building um with a uh with intent to uh influence um or uh create fear for a government of the United States um that this can respond for your property coverage because it's not [0:15:30, 0:15:50]: It's actually terrorism is actually excluded in property. It all this all came after 9-11. Um so it's actually excluded in your property. It's carved back with the TRIA program, but we have not seen that respond um in the past. So we recommend, and this is part of our expertise at Gallagher, we recommend [0:15:50, 0:16:10]: A broader opportunity, broader coverage, so that in the event you were to have an active threat of violence that impacted the property, that we're able to provide coverage for the property on that. The active shooter is more vague. [0:16:09, 0:16:29]: Uh we refer to it as a soft cost coverage. It's includes crisis management coverage, um uh uh counseling uh coverage, so that if there were a uh an act of workplace violence, there's an opportunity. If there's counseling needed for uh employees, um there's coverage uh in place for that. Things that are not in your current program. Okay. Um [0:16:29, 0:16:49]: So this is kind of part of I think why we were brought in is identifying these areas of either gaps or uninsured exposures. Okay. Appreciate it. Thank you. Yes, sir. But as I mentioned, what you'll see, you know, your bit your largest area of increase is really from that uh law enforcement. Um everything else, there's a lot of as you'll see. [0:16:49, 0:16:56]: See, you know, the way I break it down on the in the yellow columns is you have your exposure increase, your premium increase, and then your net rate. [0:16:57, 0:17:17]: Your exposures, you have more vehicles this year, so it costs more. So we try to show give you a a a better explanation of hey, why is our insurance up? Well, we have more employees, we have more officers, we have more uh vehicles, um, we have more buildings. But that way we can break it down and show you kind of from a net perspective how that increase is impacted. So [0:17:17, 0:17:20]: You've actually received a very strong renewal this year from travelers. [0:17:21, 0:17:21]: Okay. [0:17:21, 0:17:22]: Um [0:17:23, 0:17:24]: Yes ma'am. Yeah go ahead, Ms. Barber. [0:17:24, 0:17:30]: I had a question in regards to um the reduction in the net rate change. [0:17:30, 0:17:32]: For the general liability. [0:17:33, 0:17:33]: Um [0:17:34, 0:17:35]: What is this? The umbrella. [0:17:36, 0:17:39]: I'm looking at all the ones that have the negative. [0:17:39, 0:17:40]: Including the [0:17:41, 0:17:42]: Crime. [0:17:43, 0:17:48]: All the ones with the negative or reduction in the net rate change. Can you explain that? [0:17:48, 0:18:08]: No, absolutely. So again, when we look at that exposure increase, um, you know, your budget increased um you know, you were looking at um about a 20% increase on the budget. So it kind of outweighed the premium increase. That's could what the way this breaks out is you look at we subtract um the premium. [0:18:08, 0:18:28]: Premium in we subtract the exposure increase from the premium increase to get to that net rate number. So sometimes, you know, your rate went up, but not as much as the exposure went up, if that makes sense. Um the umbrella has it actually has a very specific story to it. So on the general liability, it's just that your rates did not increase at the same level at which [0:18:28, 0:18:34]: which the budget did, the exposure increased. So that's how you end up with a negative rate change on that. [0:18:34, 0:18:37]: Um, does that answer on the general liability? [0:18:38, 0:18:58]: I understand the general liability. All right. So on the on the umbrella. Um, the reason you're seeing the reduction on the umbrella is actually we made a change to that. We pulled your auto liability out of the umbrella. The reason for that is that um there are strong immunities in the state of Georgia, um, strong sovereign immunities for state torts, auto liability. [0:18:58, 0:19:09]: is has has strong state court tort caps at 500 and 750. Um when you im when you purchase insurance and and I'll try not to get too granular on this. [0:19:10, 0:19:15]: Immunity is in place for local governments in the state of Georgia, or i for all local governments. [0:19:16, 0:19:20]: You waive immunity up to the level which insurance is purchased. [0:19:20, 0:19:22]: Um so [0:19:22, 0:19:42]: What you had previously is$5 million worth of coverage in your auto liability. But there is immunity tort caps in place for you. But by purchasing the higher limits, you actually have the ability for a claim to increase into those lay in that excess layer. We really focus on placing them. [0:19:42, 0:20:02]: Umbrella coverage in there for federal torts, things that are not covered by immunity, civil rights violations, employment practices. These are areas where that they're actually federal, federal tort level, so that there is no immunity for it. So the focus here is one of the things that Mr. [0:20:02, 0:20:20]: Gardner, when we sat down um in our initial meeting and I asked, you know, what do we, you know, what you know, what is your goal? Um one of his uh responses was to make sure we're buying the right insurance, but not buying too much insurance. And this is one of those areas where to protect the budget. [0:20:20, 0:20:24]: And to protect your experience, we move that piece out. [0:20:24, 0:20:27]: Релай на і ви коло іммуні презерваш. [0:20:28, 0:20:47]: So we l rely on the immunity preservation of the state tort caps for you. And so by taking that exposure out out of that, travelers gives you a reduction because they no longer are concerned about having to pay up to that level. So that's that's why you have it there. Um and um [0:20:47, 0:20:58]: Does that answer the umbrella for you, ma'am? Yes, thank you. Um and on the crime, again, yeah, you got you increased employees. You just your rate did not exceed the the increase in exposure. [0:20:58, 0:20:59]: Um [0:21:00, 0:21:03]: It does. Thank you. Okay, yes, ma'am. [0:21:03, 0:21:23]: Um so when we come down, as I mentioned, we see a really strong renewal um based on what we're seeing in the marketplace, especially with local governments, at an 11.3% net rate increase. Um, again, with a couple of tweaks in there. Um, and uh, we think this is a is a very strong option for you. Um [0:21:23, 0:21:28]: Um along with recommended coverages. Um any other questions uh about that? [0:21:31, 0:21:32]: No other questions thus far. [0:21:32, 0:21:52]: Okay. Um everything else in here, um, I did provide because we did approach um the uh the municipal association for an option. The next page is is just a comparison of travelers over over uh over Gurma, over the Georgia Internal Risk Management Agency. Um as I mentioned when I when working with uh the GMA, we kind of came [0:21:52, 0:22:09]: to the conclusion that based on some of the costs that they're that that were being incurred that to get to the appropriate limits that you're purchasing that it could be it it would not be cost competitive for you. But that was just I want to provide this as a as an example as an overview of that for you. [0:22:09, 0:22:29]: And then the rest of the presentation um in front of you is just again um an overview of some of the things that we have available uh to the city stock bridge. We have access to a lot of um risk control trainings and resources for you, um site uh uh safety assessments, um gap analyses that are available to you in addition. [0:22:29, 0:22:49]: to um an online training platform and um uh some efforts that we do for uh contractual risk um consulting to ensure that when you are contracting with vendors you have proper insurance requirements in place to protect the city, but also to make sure that risk transfers are properly leveraging your immunities, but also indemnifying you where applicable. [0:22:49, 0:22:54]: Okay. Yes sir. [0:22:55, 0:23:15]: Uh for me and I don't know about my colleagues because uh if they've all gone over this and the recommendation is travelers. Yes, sir. And at at this point is either we're gonna I I would like to make the motion if you if if my colleagues are okay with it because at this point there's everything has been solidified through staff that has already [0:23:15, 0:23:17]: looked over. So I'd like to make a motion to approve it. [0:23:17, 0:23:23]: Sir. Okay, is there a second in the motion? Um let me do this. Let me just ask one question of our good [0:23:23, 0:23:36]: Then certainly I'll be willing to move on. Talk about our level claim level and where we are, how that impacted what we're doing and how we're are we looking in terms of those um [0:23:36, 0:23:45]: You actually have a fantastic loss experience thus far. Um looking at the five-year loss history. Um, like I I think I mentioned at the beginning, it's a very well-run city. [0:23:45, 0:24:05]: Um uh you guys are you know, your your your staff is doing a wonderful job. Um you have uh very good uh lost experience. Your uh everything on your increase, a lot of times we have lost experience is what drives the renewal up. Um everything for you is either exposure or insurance market driven. Like I mentioned, there are some [0:24:05, 0:24:23]: certain things law enforcement liability is one of those areas that we're seeing significant increases in rates because of the exposures, because of I mean you turn on the TV we can see um that that line of business is increasing significantly. Um within your general liability um that's where um [0:24:23, 0:24:24]: Um [0:24:24, 0:24:44]: you know, some of the uh um, you know, abuse areas are that again we're s you you you've seen increases in. Property goes uh is going up because, you know, greater convective storms, um, there's more rain. Um, it's having an impact in the property in the property market. I mean, the hurricanes coming, you know, through the coast, it's just they're [0:24:44, 0:25:02]: there there are external factors that are impacting your risks. And cyber is up because cyber exposure is up everywhere. Um so that's what we're seeing there. But your loss experience is is thus far fantastic. Um I mean there are losses, but when I benchmark you against other municipalities, this is a this is a very well run city. [0:25:02, 0:25:22]: Okay. Thank you so much. That really answers my question that the city is uh the risk are being managed pretty well uh by the city and that has not increased our exposure on the at all. Yes, sir, no absolutely. And and one of the reasons again why I wanted to present as much as I did um for y'all is that it [0:25:22, 0:25:42]: It is the reason why they brought us in to assist in continuing that trend and providing more resources. And then again you mentioned the the additional coverage because of the police services and then those federal issues that may not be uh indemnified will be a reason for the extra coverage because of the other. [0:25:42, 0:25:55]: Um I'm not gonna use the full terminology, but uh Georgia has overtaken um as the number one uh judicial um [0:25:56, 0:25:56]: Uh [0:25:57, 0:26:17]: Nightmare, I'm gonna use the term. Um I can use the standard term um in public form like this. Um so we we are seeing increases in um what we call nuclear verdicts. Um there are higher jury awards going out, and so our goal is to, as I mentioned up front, um, with our core three sixty approach is to focus on total cost of risk. [0:26:17, 0:26:37]: Make sure that we have you properly insured, not overinsured, not underinsured, but properly insured based on what we see in leveraging with Gallagher being, you know, having data on, I think the numbers around 10,000 public entities throughout the country, being able to really benchmark you against others and make sure you're buying the appropriate coverage based on based on that, based on the [0:26:37, 0:26:57]: Real data analytics. Okay. Ms. Up motion made by Mr. Blount, second by Mr. Alexander. There's no further discussion. All in favor, please indicate unanimous decision. Thank you very much, gentlemen. Appreciate it. Thank you very much. Thanks for having us and thank you for the partnership. Okay, great. And on that note, ladies and gentlemen, there's uh I know of no executive session item. So [0:26:57, 0:27:03]: I ask for a motion to adjourn. Okay. Okay. From uh Blount to Alexander, all in favor, please indicate. [0:27:04, 0:27:06]: Unice decision. Good night, everybody. God bless you.