City Council discusses insurance proposal with Ohio Public Entities Pool

Athens City Council met with Ohio Public Entities Pool (PEP) administrators Monday night to discuss a new insurance proposal. 

Deputy Service Safety Director Andrew Chiki said John Miller, the local agent of Mathews Insurance, suggested that the mayor’s office take a second look at the city’s insurance coverage because he said there might be opportunities to improve coverage, to reduce liabilities and to save money in the process, such as through the PEP proposal. 

“Our proposal is for $250,021, which will be a 7% reduction in cost,” Welsh said. 

PEP will only require one annual contribution payment to the insurance pool.

According to Thomas Welsh, a PEP administrator, a few coverage highlights of joining PEP include no aggregate limit on any lines of liability coverage, meaning there will be a $5 million per occurrence limit, the maximum amount Mathews Insurance would pay for a single claim, with no max per year on any line of coverage. 

Any legal defense costs are paid in addition to the insurance policy settlement payment limits. 

“We do include the cyber coverage, which is a very hot topic, and we have $5 million in cyber coverage versus the $1 million that you guys have now. We were also able to get an indication of what it would cost to add faith and performance coverage to the insurance program if you guys were to decide to do away with your bonds and get all the exposure covered,” Welsh said. 

City Auditor Kathy Hecht said that the auditor’s office, which is the caretaker of the bonds for the Athens Police Department, is completely in favor of the faith and performance coverage being added to the insurance program. 

“We have two insurance companies that do our bonds. In the end, it may be worth it to add this into the policy. I am not sure if we should switch it right away given the Council would then have to change our city code,” Hecht said.  

Councilmember Arian Smedley asked the administrators if there are any drawbacks that have not been talked about if the Council were to move forward with joining this pool. 

“We have not yet identified any cons for switching over to this insurance pool. The benefits seem to completely outweigh the cons, if there are any,” Mayor Steve Patterson said. 

Councilmember Beth Clodfelter asked when coverage would begin if the Council were to agree to this insurance.

Chiki said the city’s current insurance ends on March 31, so they would begin coverage by April 1.They would also have to move quickly with ordinances and suspend the usual rules of the council.

Councilmember Jeffrey Risner shared concerns with the proposal coming soon. 

“I am a bit concerned about rushing this through. I realize there is a deadline, but we’re talking insurance, money and competition. It feels that this is being rushed through Council,” Risner said. 

Patterson said that while it is a longer process, the cost savings outweigh anything on the expense side. 

“We’re saving the taxpayers dollars on a different route,” said Patterson. 

In other businesses, the Energy and Public Works Department is requesting $13,000 to come from the water plant professional service fund. 

Councilmember Sarah Grace also mentioned the Kimes Booster Station, a city project currently underway that plans on turning a premanufactured building into a booster station.