Title
An Ordinance authorizing the City to purchase insurance coverage for property, casualty and liability insurance programs for FY26 beginning July 1, 2025, where the total expenditure is equal to or less than $1,500,000, and authorizing the City Manager to execute any documents necessary for the City to purchase such insurance. (F&BC 6/2/25)
Body
Key Issues:
This ordinance delegates to the City Manager the authority to purchase property casualty and liability insurance for the City so long as the total premium paid is are less than the FY26 draft budget recommended amount of 1,500,000. The delegation of authority will enable the City to respond quickly to offers of coverage. The City Manager may consider and accept any proposals for coverage that arrive after the last meeting of the City Council on June 17, 2025. The City Managers decision will be informed and advised by Lockton Insurance our brokers who are currently marketing the city as a client to interested carriers.
Proposed Committee Motion:
I move to recommend to the City Council for approval An Ordinance authorizing the City to purchase insurance coverage for property, casualty and liability insurance programs for FY26 beginning July 1, 2025, where the total expenditure is equal to or less than $1,500,000, and authorizing the City Manager to execute any documents necessary for the City to purchase such insurance.
Proposed City Council Motion:
First Motion: I move for second reading of An Ordinance authorizing the City to purchase insurance coverage for property, casualty and liability insurance programs for FY26 beginning July 1, 2025, where the total expenditure is equal to or less than $1,500,000, and authorizing the City Manager to execute any documents necessary for the City to purchase such insurance.
Second Motion: I move for adoption of An Ordinance authorizing the City to purchase insurance coverage for property, casualty and liability insurance programs for FY26 beginning July 1, 2025, where the total expenditure is equal to or less than $1,500,000, and authorizing the City Manager to execute any documents necessary for the City to purchase such insurance.
Background:
During FY24 and FY25 the city's property, casualty and liability insurance program was approved by emergency ordinance at the end of June. This ordinance seeks to avoid the last minute emergency and allow the city manager to make such a purchase after consultation with our insurance broker Lockton, considering all offers some of which may be expected at the end of the month.
Since 2012, the City of Lee’s Summit has used a risk management program for property and liability claims. The program is managed by the Law Department, and uses a broker relationship for the procurement of insurance products for the City. In addition, the City has a self-insured retention program in lieu of a traditional deductible insurance program. This has resulted in both significant cost savings to the City as well as increased internal control of the City’s risk and loss program, enabling broad internal handling and management of claims and claims processes, resulting in additional cost savings. This self-insurance program allows us to proactively mitigate risks by learning from and relying on other members of the pool. The City retains more control over litigation that may result in an insurance payout, such as selected legal counsel and determining whether to settle, than it does with a lower deductible program. This control has steadily increased as the Law Department has provided more litigation services internally.
Presenter
Edward Rucker, Chief Counsel of Management and Operations
Recommendation
Staff recommends approval.