Title: PURCHASE FLOOD INSURANCE

Description:

·      The District currently insures 22 locations with 209 buildings valued at approximately $231.4 million dollars located in the applicable Flood Zones.  The new West Boca High School should now be added to the program increasing the total schools covered to 23 and the number of buildings covered to 212 valued at approximately 275.9 million. 

·      Without this flood coverage, in the event of a federally declared flood disaster, the School District would not meet all Federal Emergency Management Agency (FEMA) requirements for federal reimbursement.  Based upon current Stafford Act regulations, all locations in Flood Zones A or V are required to purchase coverage from the National Flood Insurance Program (NFIP).  Without NFIP, FEMA will apply the maximum amount that could have been purchased (up to $500,000 per building and $500,000 contents) as a deductible prior to any FEMA reimbursement.

·      NFIP requires the District to purchase one policy per building, for all 212 buildings housed at these 23 locations.  The total insurance coverage is $76.4 million with individual policy deductibles of $50,000 for the building and another $50,000 for the contents.  The District would be eligible for FEMA reimbursements of almost $187.2 million (the difference between actual values and flood coverage less deductibles) in the event of a major disaster.

·      NFIP had some small premium rate changes this year and with the addition of the new high school the total premium increased $12,288 (.062%) to $208,951.

·      Last year FEMA allowed increased deductibles (retentions) from $5,000 to $50,000 with a corresponding reduced premium of $167,779.  We again recommend the $50,000 deductibles with an annual savings of $151,690. 

Recommendation:

I recommend that the School Board approve the purchase of flood insurance effective December 31, 2004 to December 31, 2005 at a cost of $208,951 from The Travelers Insurance Company through our broker, The Beacon Group, Inc.

Financial Impact:
The financial impact to the District is $208,951.  The source of funds is the General Funds Budget.

For Additional Information, contact:

    JoJJoseph M. Moore (moorej@palmbeach.k12.fl.us)/ D. Howard