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Exhibit 1 - Agenda Information SheetCity of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement ACM: Cassey Ogden DATE: November 14, 2023 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager to execute an agreement for National Flood Insurance Program excess flood coverage for the City of Denton through the City’s broker of record, Lockton Companies, LLC; and providing an effective date (File 8408 – awarded to The Hartford of Pittsburgh, PA, in the three (3) year not-to-exceed amount of $176,954.00). STRATEGIC ALIGNMENT This action supports Key Focus Area: Pursue Organizational Excellence and Collaborative and Respectful Leadership. INFORMATION/BACKGROUND The City of Denton purchases NFIP policies, which provide excess flood coverage of up to $500,000 for City-owned properties that lie within a flood zone. The City’s primary property insurance covers flood damage however, under the primary policy, each loss carries a deductible of $500,000. The NFIP policies provide excess coverage that would cover up to $500,000 per loss, which buys down the primary deductible from $500,000 to $1,250. 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 without going through the Request for Proposal (RFP) process. The annual renewal premium quoted from the City’s incumbent NFIP flood insurance carrier, THE HARTFORD, was $30,062 for the 12/16/2023-2024 renewal. Despite four (4) additional city properties being identified in the flood zone, the new premium represents only a 27% increase over the expiring policy, which is below the current property market trend of 15%-25%. The coverage terms and conditions for the renewal remain the same as in the expiring policy and include the addition of four (4) newly identified city buildings within flood zones. Policy Term (Renews 12/31) Estimated Premium and Estimated 3-year Expenditure Policy Term 2023/2024 $41,430 Policy Term 2024/2025 $52,616 City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com Policy Term 2025/2026 $66,822 Contingency (10% of Total) $16,086 Total $176,954 Due to the uncertainty of changes in flood zone realignments, potential flood losses, and other trends in the flood insurance market, a conservative increase of 27% 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 National Flood Insurance Program excess flood coverage (NFIP) for the City of Denton through the City’s broker of record, Lockton Companies, LLC, in a three (3) year not-to-exceed amount of $176,954. 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 #162501 has been entered into the Purchasing software system in the amount of $41,370. The budgeted amount for this item is $176,954. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Pricing 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: Tiffany Harris, 940-349-7822. Legal point of contact: Marcella Lunn at 940-349-8333.