Title
Resolution to Amend the Fiscal Year 2020 Council Approved Budget and Appropriate $1,315,283 from the Risk Management Fund Unrestricted Net Position to Fund the Cost of Repairs to the James T. Wilson Fishing Pier and House and Observation Pier
Purpose
PURPOSE/BACKGROUND:
A barge, owned by Coastal Design & Construction, Inc., struck the James T. Wilson Fishing Pier and the Buckroe Beach Observation Pier on November 17, 2019, causing considerable damage to the Wilson Fishing Pier and House (“Fishing Pier”) and the loss of one piling to the Observation Pier (“Pier 1”).
In order to expedite the emergency repair process of these two piers, Risk Management accepted the responsibility for funding the emergency repairs from the Risk Management Operating Fund. This is an unplanned expenditure for the Risk Management Fund and will require a transfer of funds from the Risk Management Fund Unrestricted Net Position to the Risk Management Operating Budget. The current estimate of repairs and other related expenses is $1,315,283. Proceeds from settlement of the claim with the barge owner’s insurance company will be used to replenish the Risk Management Fund Unrestricted Net Position.
The considerable damage to the Fishing Pier and Pier 1 pose a serious threat of irreparable harm to persons and/or property if not repaired in an expeditious manner. The anticipated start of the summer swimming season as well as the start of the hurricane season in the coming months create a condition in which the current state of significant disrepair could cause injury to persons and/or property. Furtherance of this project is vital to ensure the health and safety of citizens who frequent the beach area and live within in its proximity.
Discussion:
The Risk Management Fund (the “Fund”) was established to manage and account for various insured and uninsured risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Fund assesses an annual insurance premium to City and School departments to cover the costs of claims and other operating expenses. A component of the Fund, the Unrestricted Net Position, holds funds in reserve for known and unknown past and current fiscal year claims Funds in the Risk Management Fund Unrestricted Net Position can be made available through Council approval for large losses such as those experienced to the Fishing Pier and Pier 1.
Current and expected Costs be paid by Risk Management:
|
Phase I |
|
$ 98,260 |
|
Temporary repairs to Fishing Pier: |
|
$ 98,260 |
|
Repairs to Pier 1 (Observation Pier): |
|
$ 47,000 |
|
Engineering: |
|
$ 167,260 |
|
Phase II |
|
|
|
Engineering |
|
$ 70,000 |
|
Permanent repairs to Fishing Pier |
|
$1,049,076 |
|
Engineering: |
|
$1,119,076 |
|
Expenses for Legal and Surveyor |
|
$ 8,947 |
|
Unanticipated Expenses |
|
$ 20,000 |
|
|
|
$ 28,947 |
|
Total Appropriation: |
|
$1,315,283 |
Impact:
See Purpose/Background and Discussion above.
Recommendation:
Rec
Approve the resolution.
Body
WHEREAS, the Risk Management Fund (the “Fund”) was established to manage and account for various insured and uninsured risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters;
WHEREAS, the Fund assesses an annual insurance premium to City and School departments to cover the costs of claims and other operating expenses;
WHEREAS, a component of the Fund, the Unrestricted Net Position, holds funds in reserve for known and unknown past and current fiscal year claims which are not anticipated to be paid out in the current fiscal year;
WHEREAS, on November 17, 2019, during a Nor’easter, a barge, owned by Coastal Design & Construction, Inc., broke free of its mooring and collided with the James T Wilson Fishing Pier and House (“Fishing Pier”) as well as with the Observation Pier (“Pier 1”) at Buckroe Beach causing significant damage to both; creating an immediate need for repairs to both Piers; and requiring an emergency demand for funding for the repairs;
WHEREAS, the City’s Risk Management Office has taken on the role of funding the said repairs through the Risk Management Fund until an insurance settlement with the barge owner’s insurance company is reached; and
WHEREAS, the repairs to the Piers are expected to total approximately $1,315,283.
NOW, THEREFORE, BE IT RESOLVED that the City Council of Hampton, Virginia hereby amends its Fiscal Year 2020 Council Approved Budget to appropriate $1,315,283 from the Risk Management Fund Unrestricted Net Position to the Risk Management Fund Operating Budget to cover repairs to the Fishing Pier and Pier 1.