8.A.
City Council Meeting - FINAL
- Meeting Date:
- 09/02/2025
- From:
- Aaron Kaminski, Risk Manager
TITLE:
Ratification of FY26 Insurance Renewal Premiums
STAFF RECOMMENDED ACTION:
Ratify the insurance renewal premiums for FY26 submitted by: 1) Arizona Municipal Risk Retentional Pool (AMRRP) for General Liability, Errors and Omission (E&O), Sexual Abuse and Molestation (SAM), Property, Auto, Marine, Crime, Cyber, Excess, and Workers’ Compensation coverage; 2) Aon Risk Insurance Services West (Aon) for Airport Liability; 3) Aon for International Travel; and 4) Industrial Commission of Arizona (ICA) to fund the Firefighters Presumptive Cancer Claims.
Executive Summary:
Upon renewal, the new estimated insurance premiums will total $2,827,060. This total will not be offset by a dividend, since a dividend was not declared by AMRRP for this fiscal year.
Breakdown of the individual costs by carrier are as follows:
1.a. $1,325,899 Liability coverage (AMRRP):
1.b. $215,363 Excess coverage (AMRRP):
1.c. $1,075,026 Workers’ Compensation coverage (AMRRP):
2. $16,972 Aviation (Aon):
3. $2,500 Foreign travel (Aon):
4. $191,300 Firefighters Presumptive Cancer Reimbursement Fund (ICA):
Dividend ($0.00) AMRRP did not declare a dividend for this fiscal year
Total: $2,827,060
Staff recommends ratification of the premium renewals offered by the current carriers.
Breakdown of the individual costs by carrier are as follows:
1.a. $1,325,899 Liability coverage (AMRRP):
1.b. $215,363 Excess coverage (AMRRP):
1.c. $1,075,026 Workers’ Compensation coverage (AMRRP):
2. $16,972 Aviation (Aon):
3. $2,500 Foreign travel (Aon):
4. $191,300 Firefighters Presumptive Cancer Reimbursement Fund (ICA):
Dividend ($0.00) AMRRP did not declare a dividend for this fiscal year
Total: $2,827,060
Staff recommends ratification of the premium renewals offered by the current carriers.
Financial Impact:
The premium payments in the amount of $2,827,060 will be funded by the following accounts as authorized in the FY26 budget:
Vendor: Arizona Municipal Risk Retention Pool
Cost: $1,541,262.00, an increase of 13.5% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4253
Grant Funded: No
Funding Source: All funds
Vendor: Arizona Municipal Risk Retention Pool (Workers’ Compensation)
Cost: $1,075,026.00, an increase of 16% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4160
Grant Funded: No
Funding Source: All funds
Vendor: Aon Risk Insurance Services West
Cost: $19,472.00
Account Number Budgeted: 600-09-406-1520-1-4253
FY26 Budgeted Amount: $25,000.00, a decrease of 26% from last year’s premium
Grant Funded: No
Funding Source: All funds
Vendor: Firefighters Presumptive Cancer Reimbursement Fund
Cost: $191,300.43, a decrease of 1% from last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4290
Grant Funded: No
Funding Source: General Fund, Airport Fund, and Water Resource Infrastructure Protection Fund
Vendor: Arizona Municipal Risk Retention Pool
Cost: $1,541,262.00, an increase of 13.5% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4253
Grant Funded: No
Funding Source: All funds
Vendor: Arizona Municipal Risk Retention Pool (Workers’ Compensation)
Cost: $1,075,026.00, an increase of 16% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4160
Grant Funded: No
Funding Source: All funds
Vendor: Aon Risk Insurance Services West
Cost: $19,472.00
Account Number Budgeted: 600-09-406-1520-1-4253
FY26 Budgeted Amount: $25,000.00, a decrease of 26% from last year’s premium
Grant Funded: No
Funding Source: All funds
Vendor: Firefighters Presumptive Cancer Reimbursement Fund
Cost: $191,300.43, a decrease of 1% from last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4290
Grant Funded: No
Funding Source: General Fund, Airport Fund, and Water Resource Infrastructure Protection Fund
Policy Impact:
None.
Previous Council Decision or Community Discussion:
Council has previously approved insurance coverage as outlined by the current carriers in prior fiscal years.
Options and Alternatives to Recommended Action:
No alternative options are recommended at this time
Background and History:
In 2020, the City of Flagstaff made the decision to explore the feasibility of being a self-insured/self-administered entity rather than being a member of an insurance pool. All primary lines of coverage were marketed, and it was determined that it was financially beneficial for the City of Flagstaff to become a member of AMRRP.
Connection to PBB Priorities and Objectives:
High Performing Governance – Maintain the organization’s fiscal stability through strong financial policies and best practices.
Connection to Regional Plan:
None.
Connection to Carbon Neutrality Plan:
None.
Connection to 10-Year Housing Plan:
None.
Connection to Division Specific Plan:
None.