Okay, we'll call to order the March 13, 2025 budget finance and taxation committee to order. Let's do a roll call, please. There it is. Here. I know it's here. Big Sanders here. Gabber. Here. Ardenne. Okay, we have agenda in front of us. I want to tell you a motion for approval. I'm approval. All in favor. Aye. Any opposed? Motion carries. We have minutes from February 27th, 2025. I'm going to take a motion for approval. Move, move. All in favor? Aye. Any opposed? Motion carries. OK, we're going to jump right into the new business for today. It's our 2025 property insurance renewal. And we're joined by Blaze Missola, our risk manager, Chris Guella, human resources director. And we've got Tony Levine, the executive Vice President, and Director of Sales from Brown and Brown, our insurance broker. And so, Chris, Blaze, I'll turn it over to you guys. All right, well, thank you so much, Chair. Good afternoon, everyone. We already did the introductions. I do just want to point out one of our analysts here, Alex Morozo. Thank you. Sorry about that, Al. One of the unsung heroes of this, too. But you know the other players. We're here today. We want to discuss the new insurance rates beginning April 1. Just the only thing I'll say before I turn it over to Tony for the details is it was better than we expected under all the circumstances so we're pretty happy with this package. We were able to get the three programs again and all in all the rates are pretty good so with that the only other thing I'll mention is at the end what we're seeking is for you to approve the resolution and we have a test here. Move it to Council meeting of the 27th for final approval. Okay. With that, please. Thank you, Mr. Chair. All right. Thank you, Council members. Just as I'll highlight, we have three different programs, your water resources program, which is the water reclamation facilities, Cosme Water Treatment Plant, the pump stations, lift stations, etc. The general property program, which includes Tropicana Fields, and then the highly protected risk program, which is the police department headquarters. And just on a broad strokes, the reason we have three programs, it allows for some diversification. For instance, the water resources program, we go to the energy or technical risk underwriters that have more of an appetite. And it also allows us to maximize coverage. So we'll go ahead and jump in. All right, so we're going to start with water resources. But before we start, I'll give you an overview just of how the sheet reads. So in the chart, we have the current year running left to right. And on the bottom of that, the prior year running left to right, and then with some options and notes below that. So if we look at that top box that's in italics, you can see 4125 is our effective date. Total insurable value is up about 31 million year over year on the water resources program. Moving to the next box, the limit of insurance, $150 million of all perils, named windstorms sub-limit is $100 million, and then flood annual aggregates, all zones, other than V&A, 50 million and zones V&A, 20 million. Those are unchanged year over year. Your major deductibles, again, named windstorm 5% of the total insurable value at the affected location, subject to a million dollars. Flood the exact same 5% of total insurable value at affected locations, subject to a million dollars. And then all other perils of 250,000, those also are unchanged year over year. So there are two layers to this program, the layer that includes the wind and flood and then an excess layer that does not include name storm above that. This year we have seven participants versus last year where we had five. So this is actually a real positive. We were able to get two additional carriers to provide terms. They came in very competitive from a price and coverage standpoint. So we didn't kick anybody out of the program, but we did shrink some of the participation percentages to include these two carriers. So those two carriers are CNA and Liberty that are joining the program this year. They're in a small percentage, but we felt it was very positive to add them and ultimately led to an overall cost benefit for the city. So if you look year over year at cost, this year total premium, 2.793 million, that's actually from a rate perspective down, which is about 3 tens of a percentage point year over year. So 5,000 4,539 rate per million on TIB versus last year of 4,553. So the additional pieces of this, you have your terrorism, 6085, the engineering fee, 17,750, and the National Flood Insurance Program flood on a couple of buildings that's 28,331. If you go down below the box, you'll see that staff is recommending the base option, which is that box we just reviewed in italics. We do have options to increase deductibles like we've shown in the past. So seven and a half percent deductible in versus five percent would result in a $288,507 premium reduction. A 10% deductible would result in $425,931 premium reduction. This does include boiler and machinery and the state fees. And then there's the underwriting issues, obviously coastal wind and flood. That's the issue for everything that we have in the city of St. Petersburg. And you can see the values that are in 269 million of that 615 million that are in zones V&A. Overall, that total and sure will value increase 5.3% or as I said earlier, just under $31 million. So total cost on this program with the value increase and the rate decrease just under 142,000 year over year. Are there any questions on the water resources program? Are committee members any questions on water resources? Okay. Moving on to the general property program. Slide reads the exact same as before. So coming across, you can see total insurable value in this program, 1,166,423,763, just under a $30 million increase year over year or 2.6%. The limit of insurance this year is 450,000,000 versus 441 last year. That goes off the value of the truck, which came in just under just under $449 million. This year, we just used 450. Sublimates, we have 100 million combined maximum for name wind storm and flood. Other than at TROP, Canada Field, or last year, it was elected for 25 million combined maximum for name wind storm and flood. We wanted to give you a little context and a little history at this point during the presentation and explain how we got to there. Historically, we had $100 million on the Tropicana field included in the rest of the program. Last year was the first year we took a look at, well, we've always taken a look at the options every year as we analyze things. But this year, that last year was key in that they offered a premium savings that was palatable and the modeling and everything held up as far as the valuations. So we took a look at it, brought it to BFT and brought it to council and it was approved to reduce it to $25 million. And that was based on a series of us taking a look and making a very educated estimation is what the potential loss would be. At this time, sitting here now, the damage assessment along with the potential quotes that have come in are holding true for our numbers from last year. So we are in a good place as far as that goes. So the $25 million limit is holding up, as we sit here today. We wanted to also mention how it would work going forward, because obviously we do not have a fabric on the trap going into hurricane season. And how it would work is essentially if council approves the roof repair, the roof contractor would hold what's called builders risk which acts much like an insurance property insurance program policy on the roof element. So they would have insurance, we would have our insurance as well on the structure that we're not ensuring the drop during the hurricane season. And then post the roof being on, we would also then have what's called replacement costs on the roof. The distinction there is in years past because the roof's age we were able to get actual cash value on the roof. Now that we'll have a new roof, we're rolling into a replacement cost, which is definitely a benefit for us. Once that roof is substantially complete, we're looking at late November, late December for a potential deadline. So we will be out of hurricane season to the likelihood of a name-wind storm of this nature that to cause that to exceed the deductibles incredibly low. We will be looking in the future, April of 2026 to enhance that to $50 million or a different amount depending on the modeling. So we will certainly take a look at that in the future. But this year based on the multiple layers of coverage that we might have between the contractor and the city, we believe the $25 million limit is still appropriate going into this year. Thanks. I'll sit. So coming over major deductibles, these are unchanged year over year, 5% of the total insurable value at the affected location, subject to a million dollar minimum for both name, wind, storm and flood and all other perils would be 100,000. There are still four layers of this program, 24 participants versus 26 last year. And the reality there was the carriers ended up offering more to be on more of the program. So what we did in our kind of excess of $50 million layer was the highest cost participants. We gave them the option to come down or leave. And ultimately we had two players that would not come down so they're no longer a participant in the program. If you come over to the cost so we have outlined what it would cost because the city is a participant in the program in that primary 50 million. If you were to replace that this year it would be half a million dollars. So the total cost of the program 6551-072 would be if you did not continue to participate in the program. $6,051,072 is the total cost of what the carriers are providing. That's $5,616 rate per million and a 1.1% rate increase over 2024. The other policies that are not included in that number are the boiler and machinery, 23,166 National Flood Insurance Program, 17,682, Fine Arts, which has already been approved by the commission, 18,744, Crime, 25,932, Cyber, 73,000, O55, and Terrorism, 33,013. Coming down below the box, staff is recommending that base option in a talix. We do have four options. Two of those, those first two options would be to increase the name, windstorm sublimit available at Tropicana Field to 50 or 100 million. And you can see additional premiums that come with that of 425 and 550 respectively respectively Option 3 and option 4 similar to water resources. We have our deductible options Increasing to 7.5 or 10% with premium reductions of 175,000 or 325,000 This includes all state fees terrorism coverages at tropical and field Albert Whitted Cityeadquarters, Allang, and the Pier. And then again, you can see our underwriting issues. Coastal wind and flood, obviously we have $284 million of that $1.16 billion that are in zones V and A. And then we have an extraordinarily high single structure value, which increases the probable maximum loss on this program, which is tropical field. And the very last note, which we've already said, about just under $30 million, total and durable value increase, or 2.6%, which is largely just due to trending. I'll stop there, and if there are any questions. But sure, Hamilton. Thank you, Chair, and thank you all for the presentation, and for the one the one on one. This is a subject obviously that we have discussed a lot because we used insurance proceeds because of a hurricane. So, Blaze, you know, I've gotten a lot of questions. I know a lot of council members have gotten a lot of questions on this and I appreciate how you kind of started talking about little differences between last year and how you made the determinations and this year and how you're making the determinations in terms of coverage. But can we go down a little bit more in depth and just kind of cover? You said the modeling held up and with the damage assessment with the quotes coming in the 25 million is holding up This is for average person out there who is in an expert on insurance and may not understand all the things that go into what goes into this decision. If you can just kind of cover that a little bit more. Sure, so obviously we didn't take it lightly. It's a big decision when we take a look at this sort of thing. The way we looked at it is from last year with the modeling. It was determined that a loss would probably not exceed somewhere in the, let's see, $39 to $33 to $39 million range. And that, that number felt made us feel really good because that number did not take into consideration the replacement cost value of the roof. But when we said, okay, well, we have actual cash value on the roof. We know that's going to be diminished and basically, money's be taken off of that. What is the likelihood of the loss? Historically, we've never had a loss on the truck. It did happen this year. Of course, it was the year after that we made the decision, but it did happened. We took a look at that value and said, okay, well, what's the savings on this? In years past, it was negligible. We took a look at that value and said, okay, well, what's the savings on this? In years past, it was negligible, it wasn't even worth really talking about. Some carries were not interested in it. But last year was a $275,000 savings. That's a large amount of savings when we're talking the scale of the program. And we felt at the time that it would be beneficial to do it. Now, as we sit here right now, the dollar amount would have to exceed for all of the repairs after actual cash value, roughly $47 million. So if our numbers in the mid-50s are true, and you diminish the roof by a certain percentage, the valuation, the value still holds up. Now, as Tony said earlier, we are a participant in that primary layer, so we do have to take out our participation elements. So the most that we would be able to get back from the TROP proceeds, if it was to exceed the limitation of the insurance is $22.5 million. So right now, based on early roof estimates, the early rest of the location estimates, we are sitting in a really good position as far as not exceeding that $47 million in some change after actual cashflow. Okay. Hopefully that. Okay. And Tony, you have anything to add to that in terms of your position? No, I think what Blaze said is accurate as we looked at that. So actual cash value takes replacement costs and depreciates the asset. So now they're talking about depreciating a 40-year-old roof. So as we looked at that, we're not going to get anywhere near the full replacement cost when you depreciate something by 40 years, and then they're estimating what the useful life is that's left on it. So when we looked at that, plus the two widely used models that we have access to, we made and then created the option of what the savings would be. It felt like a worthwhile conversation to have with you all last year. And then the fact that where the claim is sitting right now that it will settle inside of what we chose, I feel very confident in the decision that was made by Council last year. Okay, okay, that's good to know. In terms of, and so now it takes us to enhancing it to 50 million, because now it's a different scenario, so it's a good way to kind of explain the difference between the near roof when you have that's be depreciated. Yes, so now we take the full value of the roof into our consideration, and we say, we are closer to that modeling amount, so. Now I would say this year is gonna be in the anomaly, because we don't have the roof on it through hurricane season. Host hurricane season, we're outside of the, you know, we're outside of hurricanes season and the roof will be on at that point. But the $50 million in the modeling makes a lot more sense. Or next year we'll look at additional modeling and say, okay, well, maybe it's 57 or 50 and try to, you know, maybe it's 60 we should for it. right now sitting here 50 million in this current situation would be fine if we had a roof going on into hurricane season. And I know that obviously you're not the engineer that is working on the roof, but in terms of the roof that's being put on there and the requirements, just tell us a little bit about what you know. A new roof. I'm certain that our room is. We're having this conversation. I am certain that Raul could say it better than me, but I would say the roof is being built to current Florida standards and it will be a very structurally sound roof and it will be able to resist wind up to. I want to, I don't want to quote myself on saying it wrong, but I think it's 130 mile an hour at three second gusts, but I could be wrong on that, but it will be a very good asset to ensure. And I think Tony could speak to this a little bit more, but once we do this and the roof's on and going into next year's renewal, we will be pushing it hard as over the years you've said the main problem is the roof. The stadium we all know is not a state-of-the-art stadium, but it certainly doesn't have a lot of other exposures. You're looking at the roof as the primary. If the roof comes off, you have a problem. So, if we have this great roof, and it's a different, and we look at it as a different aspect at that point. Yeah, absolutely. I mean, the major concern was always the age. I mean, they had to, you know, we would show them every year the engineering reports and the work that had been done so that they could get comfortable with it. It's obviously a unique structure, but the age was the biggest concern. We won't have that conversation as we go into it. And frankly, even going into this year, that was part of the conversation around the renewal, was next year you're getting a brand new roof on the single largest asset in the schedule. Okay. Okay. Well, thank you. That's all my questions here. Thank you. Blades, I'm sorry. I should have looked it up after our conversation this past week. But what was the premium reduction last year when we lowered the limit 275,000? OK. So I mean, the way I'm very thankful for vice shares, questions I'm always a fan of, I'll use my word, kindergartenering it. But the way I look at this is, we paid for just over half of our participation with savings. I mean, that's really, and that seems worthwhile to me. And so I'm glad we walked through that very appreciative. Thank you for the explanation, and I'll save the rest of my comments for at the end. All right, let's keep moving. So our last program that we're gonna review is the highly protected risk, which is just the police headquarters. So chart reads the exact same. You can see total insurable value is up to 88.5 million, which is an increase of 2.1%. Limit of insurance on this program is the total insurable value. Flood annual aggregate sub-limit is $5 million. Name windstorm sub-limit is $50 million. Those are unchanged. Major deductibles unchanged year over year. You have 5% of total insurable value for named wind. $500,000 for for flood, 100,000 for all other perils. It's one layer, it's one in sure or cost this year, up about 24,432,346. That rate is up 3.83% to 4,883 per million. We have options again, staff is recommending base option, which is in italics in the box. Option one would be again to change the deductible to seven and a half percent. That would reduce the premium by 15,441. Change the deductible to 10% would reduce the premium by $36,000. This includes boiler and machinery. That number above includes terrorism for $4,870 and it includes state fees. Again, same underwriting issues, large single value location and a single risk and coastal obviously wind and flood. And I would add to this why do this and put it in this program as Tony said, it diversifies us, but also in this particular program, we are still enjoying a rate less than if we were to put this in the general property program and reaping the benefits of additional limits on it. So in that regard, we're getting more for less if you will. Any questions? By sure. Thank you. Well, this is one of those where it interesting and we discussed this in the one-on-one. It's a unique program and yet there is an increase in the rate whereas in water resources we saw a decrease. Of course there's only one ensure that offers this. Maybe more in church should go in there and offer this and then it brings you know some competition and then we can see some rate decreases but just for the average person out there you know we did this because it's cheaper to put this resource in this program versus put in general property and why is that? Tell us a little bit about what it is about the police at quarter so that allows it to be part of a good type of... Yeah, largely it's the quality of construction. Okay. So the challenge of kind of to go back to your competition question around this, there would be more insurers interested if you had more values of this type of construction, say $250 or $300 million, where we could say it's brand new, it's over-engineered, it's never going anywhere. So there were some carriers that have an issue with it being police headquarters because of civil unrest. So they don't want to offer. Other carriers that would offer terms are not going to be anywhere near the cost of what the current carriers is offering. So again, go back to why this makes sense and has made sense for years to pull out of the general property program is because of the quality of construction. So if we had more assets, at least more insured value in this program than there may be a possibility of finding other insurance. And we look at that every year. It's something that plays and I talk about is there things that we could pull out. Is there something new that's higher quality construction that would move the needle? Most of the newer assets that have come online are smaller and so they don't change the profile enough to pull them out to to maneuver around. But in years past we had multiple assets in this program and it just made sense to continue with the police headquarters. We had the Sun Dial parking garage on it for a while and that's a nice risk from them because it's a parking garage, it's concrete, there's not a lot there. And we did somehow they were agreeable to putting MSC in it for years and that worked out well. But when the garage came off, they would no longer hear of MSC being involved in it. So that's why and we do take a look every year but you know it also is an element of pulling good properties from the other programs. We want to round that out. It's a balance. We don't want the adverse selection and the other program. Right and then hit the other program. Yep. So it's we're always looking at it but it's where it makes sense. Okay. Yes. Can you address sanitation? I know we looked at the new building. And you building it? We did. As Tony was saying, it was just a little light as far as a dollar to make a difference or a dent in it. So it wasn't really going to benefit us as far as that goes. But I mean, as we, if we took all of the newer buildings, some of the rec centers, some of those and then we pull them out of the other area. Again, it changes the profile. But every time something comes on, we take a look at, is it where do we- We took all of the newer buildings, some of the rec centers, some of those, and then we pull them out of the other area. Again, it changes the profile, but every time something comes on, we take a look at, is it where do we put it? Unless it's water resources, then it goes into water resources, obviously. That's a good explanation. That's a good question. Thank you. Thank you, Chair. Any other committee members? Okay, let's keep going. All right. So we put a couple extra slides in here. I'm gonna say this we're gonna call this the Montenegro slide He liked this one when he was here Okay, let's keep going. All right. So we put a couple extra slides in here. I'm going to say this, we're going to call this the Montenegro slide. He liked this one when he was here. He continued on the tradition. All right. So this is a slide that shows the insurance premiums over the years. We go back to 2006. I know that's a lot of years, but that's kind of the year everything changed with Katrina. change the property insurance market. And as you can see over the last few years, we have been on an uptick. But I think the next slide is even more telling in the sense that we've added a lot of value over the years. In 2006, we had under a billion dollars, now we're sitting at $8.7 billion. That's a combination of just the fact that things obviously cost more. It's also that we've added a lot of things and improved upon a lot of things increasing the valuation of it. So when we start saying, okay, our premiums back when, we're ex, it's really challenging to compare them against current, so that's why we include the rates in there for you to show what we are paying for a million dollars per million. And that really rounds out our presentation, so thank you for. Thank you. Committee members, by share. Well, that's like the mountain area slide that you mentioned. I mean, 10 years in a decade, you've gone in 2015. We were about a little bit over 4 million. And here we are in 2025 at 9.6 million. That's a huge difference. It is. It is. In terms of cost. And I mean, it doesn't even come close in terms of what it was the decade before in terms of increases. It was actually decreasing for many years. We did. The market was very soft for several years and we enjoyed that during that period of time. And yeah, and then also at the same point, if we go to the next at around the same point we did start adding you know the valuation starts going up over the years at that point too so we added the peer we've improved upon so I mean it's kind of a a rate in a double whammy type of situation where we're adding values and we're getting hit on the other side. So the big question is in the future years, what does it look like? Is it looking like it's going higher? Well, at risk of actually saying, and I think a big part of the portion of it is the drop in the unknown there. Right. Going forward, if we continue to ensure the drop that's on here, you know, if we remove, if at some point the drop is removed for whichever reason that changes the program entirely So I would say and Tony can comment the rate I think is you know that that can fluctuate But we won't have will be taking out if we took out 400 and what is it 49? 49 49 that makes a huge step in one location certainly even even with it being a better asset with the roof and everything like that It's it's just a lot of money in one one area. So I think At that point, we would see a change. If indefinitely we kept the drop on, we could see increases over the years. And hopefully we hit another soft market like we did back when. But for now, I mean, we really need some quiet storm seasons, I would say, it would be a big driver of it all. Yeah, I think if you're trying to look at the crystal ball of what the year, you know, if we continue to trend values up, if you look from 15 to 25, it's $700 million of value increase. It's roughly 65% of what it was increase. So obviously, you know, you're going to continue to pay more as your values increase, unless the value increase matches a rate decrease, and and then you might stay the same. Ultimately, I think part of what you're seeing here and the overall rate increase on the program is probably under 2% year over year is because we are in a softer market than we have been in some of those years. If you look back, we had a 10 year period until Irma came in 2017, where we really didn't have storm activity, major storm activity, post-Catrina through Irma. If you look at 17 through now, we've had major events on the West Coast of Florida pretty consistently. So obviously the market really shifted post-E-N. We've made some legislative changes that hopefully will help. Last year is going to be the test of those because nothing happened really. I mean, we had some storms at the big bend area, but nothing, you know, so Milton and Helene are going to test whether or not we did enough to curb some of the lawsuits and litigation that stem out of natural disaster. But kind of post that, what you've seen over the last three years where really costs are remaining relatively flat. Outside of some valuation increases is because the market has started to stabilize and shift. And here, if we had suffered no losses, I think we'd be having a conversation about how you were paying the same or less than you were in the prior year. Well, thank you for that. And thank you so much for the presentation, your work. Thank you, Chair. Committee? Yes, sir. Okay. So, I'm just always appreciative. The whole team, Tony, Blaze, Chris, Tom. You know, when you're talking about a 4% increase, I think just testament to the work, dedication that we're doing. And I know we have this conversation every year. I feel like a bit of a parrot, because I feel like I'm saying thank you every year, but it just really is incredible what you guys are continuing to be able to put together for us. And it makes conversation significantly easier. We want to be very thankful. OK, at this point, I'll entertain a motion to move this to council. No, no, no. On favor? Aye. Any opposed? Motion carries. Thank you so much, everybody. Thank you. All right. We've got upcoming meetings of March 27th, where we'll discuss the 2024 external audit presentation and then April 10th, a discussion on adding the Woodlawn Park Courts redesign to the Wiki Watchi project list. But if there's nothing else for the good of the order, oh yeah. I just forecast something that we might want to add to that paper old 10th meeting. I think I've had the opportunity to chat with each of you individually about another disaster loan that we might be seeking and we're working through that right now So we are likely to target the 10th for that discussion as well. Okay And we're we're tightening up what the amount would be Currently, so we'll have that in in the next couple of weeks prior to the 10th and we'll be able to share that with the committee. Okay, great. All right. Thanks for the update. There's nothing else. Enjoy your spring break, everybody. The FNC is adjourned. Thank you, everybody.