Fort Smith insuring more assets, spending less through Arkansas Municipal League program

Feb. 17--The Board of Directors last week discussed insurance policies for the upcoming year to cover the city's vehicles, equipment and property.

Fort Smith is a participant in the Arkansas Municipal League insurance program, which is "substantially cheaper" than private insurance policies, Finance Director Jennifer Walker said.

Walker said the program's premiums are based on the size of the fleet and equipment plus the value of insured buildings and their contents.

Premiums for automotive and equipment coverage will remain the same, Walker said. These are covered at $100 per asset for Part 1 coverage. Part 2 coverage for physical damage is the asset value multiplied by $.0055 in addition to the $100. There are 618 vehicles and 369 pieces of equipment insured through the program. It will cost an estimated $373,400, Walker said, to cover these assets.

The premium total is roughly $40,000 more than last year, but the increase comes because of the additional number of vehicles added to the city's fleet, Walker said.

Property premiums have increased by 10 percent from $0.135 to $0.145 per $100 of value for buildings and their contents. There are 469 city-owned properties to be insured, which will cost roughly $602,600. Walker said this increase would've been seen in the private sector, too.

Deductibles will not change, Walker said. Equipment and auto deductibles will be $25,000 per individual, $50,000 for each accident and $25,000 for property damage. Deductibles for property are $5,000 for each occurrence and $100,000 for damage from floods or earthquakes.

The total premiums for property and vehicles will be approximately $976,000. At-large Director Neal Martin asked to verify that the board and Finance Department are comfortable with the cost, noting the increases.

Walker said even with the increases, which her department will watch, the city isn't at the rates it was paying five years ago, despite insuring of a higher total value of property. The city reports roughly $405 million worth of assets.

Walker said she is "100 percent confident" the city is fully insured at the value of the properties, vehicles and equipment. There is still work to be done to determine the full value of building contents, so that may still be undervalued, Walker said, but it will be a focus this year.

"It's a great program. Things are going well. The municipal league is really responsive to us," Walker said. "What they lack in technology and reporting, they definitely make up for in service, which we have really appreciated."

Walker also told Ward 1 Director Keith Lau the department is now able to track all assets, depreciating and non-depreciating, in the city's system for both accounting purposes and general inventory, which wasn't easily available before she was hired.

The item was placed on this week's regular meeting agenda by Lau and Vice Mayor and At-large Director Kevin Settle. It will be voted on at 6 p.m. Tuesday at the Fort Smith Public Schools Service Center, Building B.

___

(c)2019 Times Record (Fort Smith, Ark.)

Visit Times Record (Fort Smith, Ark.) at www.swtimes.com

Distributed by Tribune Content Agency, LLC.