Exhibit 1 - Agenda Information SheetCity of Denton
_____________________________________________________________________________________
AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Cassey Ogden
DATE: October 24, 2023
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
ratifying the expenditure of funds by the City Manager for emergency aviation liability insurance coverage
for the City of Denton through the City’s broker of record, Lockton Companies, LLC; and providing an
effective date (File 8342 – awarded to National Union Fire Insurance Company of Pittsburgh, PA (AIG),
in the three (3) year not-to-exceed amount of $53.270.00).
STRATEGIC ALIGNMENT
This action supports Key Focus Area: Pursue Organizational Excellence and Collaborative and Respectful
Leadership.
INFORMATION/BACKGROUND
The City of Denton purchases aviation liability, which covers the ground operations at the Denton
Municipal Airport.
Given the complexities of this insurance product solicitation and given that Chapter 252.024 of the Texas
Local Government Code allows the City to utilize the services of our insurance broker of record, Lockton
Companies, LLC (Lockton), to assist with competitively procuring this coverage.
State of the Aviation Insurance Market:
Insurers continue to take a measured wait-and-see approach to the impact of Russia’s confiscation of
Western aircraft, the impacts of which are not expected to manifest fully until some time in 2024 or 2025.
For the aviation liability insurance industry, this has potentially created one of the largest claims in the
history of aviation insurance and could have significant ramifications on future pricing of premiums.
Aircraft and passenger traffic continues to rebound in a post-COVID era, driving increased on-site
exposure.
The annual renewal premium quoted from the City’s incumbent aviation insurance carrier, AIG, was
$12,702.00 for the 10/1/2023-2024 renewal. Despite a 30% increase in take-offs and landings at Denton
Enterprise Airport, the new premium represents only a 10% increase over the expiring policy, which is
below the current aviation market trend of 15%-25%. The coverage terms and conditions for the renewal
remain the same as in the expiring policy.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Policy Term
(Renews 10/1)
Estimated Premium and Estimated 3-year
Expenditure
Policy Term 2023/2024 $12,702.00
Policy Term 2024/2025 $15,878.00
Policy Term 2025/2026 $19,847.00
Contingency (10% of Total) $4,843.00
Total $53,270.00
Due to the uncertainty of the future effects of the war in Ukraine, a potential increase in operations at the
airport, and other trends in the airport operations liability insurance market, a conservative increase of 25%
year over year was used in the above calculations to ensure the City has adequate spending authority
approved for future policy renewals for the 2024/25 and 2025/26 policy years.
RECOMMENDATION
Approve the purchase of aviation liability insurance coverage for the City of Denton, in a (3) year not-to-
exceed amount of $53,270.
PRINCIPAL PLACE OF BUSINESS
Lockton Companies, LLC
Kansas City, MO
ESTIMATED SCHEDULE OF PROJECT
This is a three (3) year contract.
FISCAL INFORMATION
This policy is budgeted and funded from the Risk Retention Fund account 860002.6708. Requisition
#161969 has been entered into the Purchasing software system in the amount of $12,702. The budgeted
amount for this item is $53,270.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Insurance Quote
Exhibit 3: Comparison
Exhibit 4: Recommendation Letter
Exhibit 5: Ordinance
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Sarah Kuechler, 940-349-8356.
Legal point of contact: Marcella Lunn at 940-349-8333.