HomeMy WebLinkAboutAnnual Fine Art Insurance Premium - Eric Johnson Memorial GardenCITY OF PALM DESERT
CONTRACT NO. C29860
CITY MANAGER'S OFFICE
STAFF REPORT
REQUEST: APPROVAL TO FUND THE ANNUAL FINE ART INSURANCE PREMIUM,
IN THE AMOUNT OF $11,200, FOR ART SCULPTURES LOCATED
WITHIN THE ERIC JOHNSON MEMORIAL GARDEN PER THE LEASE
AGREEMENT WITH THE PALM SPRINGS ART MUSEUM.
SUBMITTED BY: Stephen Y. Aryan, Risk Manager
DATE: March 10, 2016
Recommendation
By Minute Motion,
1. Approve $11,200 in funding for the annual fine art insurance premium for art
sculptures to be placed in the Eric Johnson Memorial Garden, per conditions of
the lease agreement with the Palm Springs Art Museum.
2. Appropriate $11,200 from the Unobligated General Fund for fine art annual
insurance premium costs and transfer to Account No. 110-4800-4388500.
Background
The lease agreement between the Palm Springs Art Museum and City of Palm Desert
obligates the City to obtain insurance for the 12 sculptures currently installed in the non-
exclusive use area (Eric Johnson Memorial Garden and/or Multi -Sensory Garden) at the Palm
Springs Art Museum -Palm Desert. As many of these sculptures are on temporary donation
with the Museum, it is recommended that the City have the artwork insured via their fine art
broker.
The California Joint Powers Insurance Authority has previously raised no objections on this
arrangement. The insurance will be provided by Lloyd's of London and there is no deductible for
covered losses, with the exception for those as a result of an earthquake. Any earthquake related
loss is subject to a $25,000 deductible per loss.
Please note there are some policy exclusions including terrorism, wear and tear, inherent vice,
nuclear radiation, war, damage due to retouching or conservation processes, insects and vermin,
governmental seizure and/or destruction. Staff recommends approval of the aforementioned
insurance policy and $11,200 annual premium.
Fiscal Analvsis
There are 12 sculptures currently installed in the Eric Johnson Memorial Garden (Sculpture
Garden), as the recently installed Plensa piece consists of two sculptures. They have a combined
value of approximately $2.8 million (see attachment) and will require an annual insurance premium
of $11,200.
Staff Report: Fine Art Insurance Premium
March 10, 2016
Page 2 of 2
The current policy was extended by the carrier to March 10, 2016, as it expired in February. Please
note that while there is a deductible for earthquake losses ($25,000 p/loss), all other covered
losses are not subject to a deductible. There was the option to purchase Terrorism coverage
(TRIPRA) at an additional cost. However, the Risk Manager does not recommend purchasing this
additional coverage, given the unlikelihood of such a loss. Council approval of staff's
recommendation will result in a transfer from the City's Unobligated General Fund in the amount
indicated.
Submitted By:
Stephen Y. ry, 4ska ger
Reviewed By:
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Paul S. Gibson, Director of Finance/City Treasurer
Approved By:
, nj M. Wohlmuth, City Manager
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