City Attorney / City Prosecutor / Liability & Claims Division Authorization and Approval to Renew Property and Casualty Insurance for the City of Pasadena for Fiscal Year 2017 Presented by Aarti Kaushal Claims Coordinator June 13, 2016

City Attorney / City Prosecutor / Liability & Claims Division Rationale for Insurance  Renewal of the City’s liability insurance policies will protect the City’s assets in the event of:  Catastrophic loss to life, limb, and/or property  Terrorist threats and/or attacks  Privacy and Network / Cyber Hacking attacks  Theft of City monies and/or securities by employees  Insurance companies providing insurance to the City of Pasadena are Best’s rated carriers. 2

City Attorney / City Prosecutor / Liability & Claims Division Type of Coverages  Crime Protection  Liability and Excess Liability  Pollution Liability  Underground Storage Tanks  Healthcare Professional Liability: Medical Malpractice  Heliport and Aircraft, to include LA Impact aircraft  Property: Power Plant  Property and Equipment Breakdown (for non-power plant property)  Terrorism to include CBRN (Chemical, Biological or Biochemical, Radiological or Nuclear) 3

City Attorney / City Prosecutor / Liability & Claims Division Type of Coverages, continued  Automobile Physical Damage  Paseo Colorado Parking Garage  Cyber Liability  Sparta: Special Events Liability  SLIP (Special Liability Insurance Policies) for:  Pasadena Center Operating Company (PCOC)  Foothill Workforce Investment Board (FWIB)  Old Pasadena Management District (OPMD)  Pasadena Enterprise Center (PEC)  Excess Worker’s Compensation 4

City Attorney / City Prosecutor / Liability & Claims Division Overall Increase of Annual Premiums  Fiscal Year 2017 Total Premium: $3,226,012  Fiscal Year 2016 Total Premium: $2,966,282  Overall 8.75% increase in insurance premiums year over year 5

City Attorney / City Prosecutor / Liability & Claims Division Decreased Annual Premiums  Following premiums decreased compared to last year:  General Liability decreased by 10%  Healthcare Professional Liability decreased by 18%  Automobile Physical Damage decreased by 35%  Boiler & Machinery decreased by 16%  Excess Workers Compensation decreased by 7% 6

City Attorney / City Prosecutor / Liability & Claims Division Increased Annual Premiums  Premiums for the following policies increased when compared to last year:  Crime increased by 6% (in spite of $5,000,000 embezzlement claim)  Power Plant increased by 16%, although total insurable values increased by 54%  A $5,000,000 increase of excess general liability policy limits will increase total premiums by less than 1%, from $3,198,732 to $3,226,012 7

City Attorney / City Prosecutor / Liability & Claims Division Largest Increase of Annual Premium  Annual premium for Paseo Colorado parking garage increased from last year by 57%:  Paseo Colorado was purchased by CAPREF Paseo, LLC  Appraisal of the property was conducted revealing replacement value for parking structure had increased by 48%  CAPREF Paseo LLC is bound by Real Estate Agreement (REA), requiring retail tract owner to purchase general liability coverage with $50,000,000 policy limits  After much discussion with City staff, CAPREF Paseo LLC agreed to comply with the REA  Cost of adding general liability coverage to the master insurance policy was $59,812 8

City Attorney / City Prosecutor / Liability & Claims Division Recommendations  Authorize binding of the City’s property and casualty insurance with the total premium amount not to exceed $3,226,012, effective July 1, 2016 for the coverages outlined in the staff report  Grant an exemption from competitive selection pursuant to City Municipal Code section (B) contracts which the City’s best interest are served. 9