Supporting Document (f0f39eba...)

Item 12
CITY COUNCIl
REPORT
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Meeting Date: 
June 23, 2026
General Plan Element: 
Provide for the orderly administration of city affairs
General Plan Goal: 
Provide Property/Casualty Insurance for the 26-27 Fiscal Year
ACTION
Adopt Resolution No. 13719 to authorize purchase of Property-Casualty Insurance for 
the Period of July 1, 2026 to June 30, 2027
Adopt Resolution No. 13719 authorizing and directing the purchase of Property - Casualty 
Insurance, including General Liability, Law Enforcement Liability, Vehicle Liability, Public 
Officials Errors and Omissions, Property, Workers' Compensation, Cyber Liability, Aviation 
Drone, and Airport Liability insurance for Fiscal Year 2026/27.
BACKGROUND
Scottsdale Revised Code, Section 2-173, calls for the purchase of excess Property and Casualty 
insurance above the self-insured retention as recommended by the Safety & Risk Management 
Director and as approved by the City Council. The purpose of purchasing excess insurance is to 
insulate the City against the financial impacts of large and catastrophic claims, or a series of 
claims by transferring the risk to commercial insurers in exchange for a fixed cost premium 
amount. The City maintains reasonable per occurrence and annual aggregate property and 
casualty limits to safeguard against rising and often unpredictable claim values and court awards. 
The Safety & Risk Management Division consults with a certified actuary to best inform decisions 
regarding reserves and loss forecasting.
ANALYSIS & ASSESSIVIENT
In consultation with the City's insurance broker, the Safety & Risk Management Director 
undertakes a thorough review of the various loss exposures presented to and within the City, 
each coverage area and structure to optimize the cost-benefit assembly of self-retention and 
excess catastrophic insurance given the City's goal to mitigate and control the financial impacts 
of unpredictable losses and claims. Departmental budget parameters and international 
insurance market conditions factor heavily in the overall calculus regarding coverage and limits 
amongst the commercial insurers selected. The insurance program structure within the City 
includes a substantial self-insured retention per accident or per person, and excess catastrophic 
insurance purchased through additional commercial insurers for a fixed premium charge and is
Action Taken _

City Council Report | Purchase Property - Casualty Insurance for July 1, 2026 to June 30, 2027
determined by the City's insurance brokerage and the Safety & Risk Management Director to be 
title most cost-effective and comprehensive prudent insurance structure for the City, given its size 
and risk profile.
RESOURCE IMPACTS 
Available funding
The cost of insurance is fully covered along with estimated future claim expenses within the 
Safety & Risk Management Division FY 2026/27 budget. In the unlikely event costs and insurance 
premiums exceed budgeted amounts during the 2026/27 fiscal year, a request to transfer 
contingency funds from the Loss Trust [Safety & Risk Management) Fund will be submitted to 
City Council for approval.
Staffing, Workload Impact
In a strong effort to control and mitigate the financial impacts of property - casualty losses, the 
City has a proactive safety and loss prevention program geared to address loss exposures. The 
Safety & Risk Management Division and the Civil Division of the City Attorney's Office work in 
tandem to mitigate liability exposures in the respective work areas. Lessons learned from 
previous claims brought against, or derived from within, the City are reviewed with appropriate 
City staff to prevent and mitigate future similar or related happenings. The Safety & Risk 
Management Division employs a state licensed Property Casualty Claims Adjuster and three state 
licensed Workers Compensation Claims Adjusters who, under go direction of the Safety & Risk 
Management Director, administer, adjudicate and manage all claims presented against the Loss 
Trust [Safety & Risk Management) Fund. In addition, the City Attorney's Office handles most 
litigation defense for the Loss Trust [Safety & Risk Management) Fund. These programs are 
already in place and require no additional staff at this time.
Cost Recovery Options
The cost of insurance is fully covered within the Safety & Risk Management FY 2026/27 Budget. 
Each year the entire cost of the insurance and the estimated costs for property losses, workers 
compensation claims, all liability claims as well as automobile related claims costs are allocated 
across City Division budgets on a monthly basis. The allocations are based 45 percent upon an 
average of two years of pa5n’oll expense, 45 percent on a five-year average of claims or loss 
history, and 10 percent on the utilization of adjuster or staff, resources.
OPTIONS & STAFF RECOMMENDATION 
Recommended Approach
The Safety & Risk Management Director requests authorization to purchase comprehensive 
excess property & casualty insurance on behalf of the City. The purchase of the Property & 
Casualty coverages referenced below are expected to range from $6,000,000 to 
$6,750,000.
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City Council Report | Purchase Property - Casualty Insurance for July 1, 2026 to June 30, 2027
Authorize purchase of General Liability, Auto Liability, Public Officials Errors and Omissions, 
Emplo5nnent Practices Liability insurance. Active Assailant, and Law Enforcement Legal Liability 
Insurance with protection of $10,000,000 liability limits per occurrence and annual aggregate 
coverage. Additionally, authorize the purchase of following form excess coverage in the amount 
of $30,000,000. The combination of these liability programs will address claims in excess of the 
City's self-insured retention amount of $2,000,000 per occurrence.
Authorize purchase of excess Workers' Compensation insurance, which will sit atop the City's 
self-insured retention amount of $1,000,000.
Authorize purchase of Special Form Property, Boiler & Machinery, Earthquake and Flood 
Insurance on approximately $1,315,734,065 of buildings, contents, equipment replacement 
values and vehicles.
Authorize purchase of Drone Liability insurance with $50,000,000 limits and Aviation Liability 
Insurance with limits of $200,000,000.
Authorize purchase of Storage TankLiability Insurance with limits of $1,000,000 per occurrence.
Authorize purchase of Fine Arts Insurance with an exposure of $45,864,704.
Authorize purchase of NFIP Flood Insurance for pertinent buildings on the water campus.
Authorize purchase of Network Security and Privacy Liability Insurance of $10,000,000 
Aggregate Limit that includes coverage for event management, regulatory, action, cyber 
extortion, data restoration, systems failure, and business interruption insurance.
Authorize purchase of comprehensive coverage for vehicles and trolleys while parked with 
$20,000,000 limits.
Authorize the proposed purchase of Fiduciary Liability with $10,000,000 in limits. This insurance 
is to address liability exposures due to increased responsibilities associated with the 457- 
retirement sayings plan.
Collectively the insurance policies and coverages referenced above represent the recommended 
insurance program profile for the City as determined by the Safety & Risk Management Director, 
in consultation with the City's insurance broker and the City Attorney.
Description of Option B
Authorize no purchase of Property - Casualty Insurance, including General Liability, Law 
Enforcement Liability, Emplo5mient Practices Liability, Storage Tank Liability, Vehicle Liability, 
Public Officials Errors and Omissions, Property, Workers' Compensation, Airport Liability, 
Aviation Drone Liability, Cyber Liability, and Fiduciary Liability insurance for Fiscal Year
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City Council Report | Purchase Property - Casualty Insurance for July 1, 2026 to June 30, 2027
2026/2027- and elect to completely self-insure for all losses. Not electing to purchase any 
excess- insurance could place a financial strain on City resources and cash flows if the City had 
to pay monies on a severe or a catastrophic claim, or series of claims.
Proposed Next Steps
Upon Council approval, coverage will be bound for the period July 1, 2026 to June 30, 2027.
RESPONSIBLE DEPARTMENT(S)
City Attorney's Office
STAFF CONTACT
George Woods, Jr., Safety & Risk Management Director
APPROVED BY
George Wood^Jr., Safety & Risk Management Director
480-312-7^1^, GWoods@scottsdaleaz.gov
Sonia Arare
480-312-236
Treasurer
revys@scottsdaleaz.gov
Luis Santaella, City Attorney 
480-312-7771, SScntt@scottsdaleaz.gov 
I Sc*0 V
ATTACHMENT 
1. Resolution No. 13719
Date
Date
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Date
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RESOLUTION NO. 13719
A RESOLUTION OF THE COUNCIL OF THE CITY OF SCOTTSDALE, 
MARICOPA COUNTY. ARIZONA AUTHORIZING THE PURCHASE OF 
PROPERTY AND CASUALTY INSURANCE FOR FISCAL YEAR 2026/2027.
WHEREAS, the purchase of general liability, auto liability, public entity management 
liability, employment practices liability, law enforcement liability, cyber liability, storage tank 
liability, fiduciary liability, public officials errors and omissions insurance is of benefit to the City; 
and
WHEREAS, the City is also served by the purchase of property insurance, workers’ 
compensation, aviation/drone liability and airport liability and hangar keepers’ legal liability 
insurance;
NOW. THEREFORE. BE IT RESOLVED by the City Council of the City of Scottsdale. 
Maricopa County, Arizona, as follows:
Section 1. The Safety & Risk Management Director or designee is authorized to 
purchase, on behalf of the City of Scottsdale, the property and casualty insurance policies for 
Fiscal Year 2026/2027 in the amounts as follows:
A. 
Excess Workers' Compensation insurance which will sit atop the City's self- 
insured retention amount of $1,000,000 per injury.
B. 
General Liability, Auto Liability, Public Entity Management Liability, Public 
Officials Errors and Omissions, Employment Practices Liability insurance. Active Assailant, and 
Law Enforcement Legal Liability Insurance with protection of $10,000,OOO liability limits per 
occurrence and annual aggregate coverage; and additional following form excess coverage in 
the amount of $30,000,000.
C. 
Special Form Property, Boiler & Machinery, Earthquake and Flood Insurance on 
approximately $1,315,734,065 of buildings, contents, equipment replacement values and 
vehicles.
D. 
Drone Liability Insurance with $50,000,000 limits and Aviation Liability Insurance 
with limits of $200,000,000.
E. 
Storage Tank Liability Insurance with limits of $1,000,000 per occurrence.
F. 
Fine Arts Insurance with coverage for $45,864,704.
G. 
NFIP Flood Insurance for pertinent buildings on the water campus.
ATTACHMENT 1
i'

Resolution No. 13719
H. Network Security and Privacy Liability Insurance of $10,000,000 Aggregate Limit 
that includes coverage for event management, regulatory action, cyber extortion, data 
restoration, systems failure, and business interruption Insurance.
I. 
Comprehensive coverage for vehicles and trolleys while parked with an 
aggregate limit of $20,000,000.
J. 
Fiduciary Liability with $10,000,000 in limits. This insurance is to address liability 
exposures due to increased responsibilities associated with the 457-retirement savings plan.
Section 2. The Safety & Risk Management Director, or designee, is authorized to 
execute such documents and to take all other actions and sign all other documents necessary 
and proper to purchase the policies authorized by this Resolution for Fiscal Year 2026/2027.
PASSED AND ADOPTED by the City Council of the City of Scottsdale this_____day of
2026.
CITY OF SCOTTSDALE, an Arizona 
municipal corporation
ATTEST;
Ben Lane, City Clerk
Lisa Borowsky, Mayor
APPR9y^AS
ORM;
ws^nt^ttaTCity Afforney 
ByMLori S. Davis, Chief Deputy City Attorney
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