HomeMy WebLinkAboutAnnual Fine Art Insurance Premium - C29860Contract No. C29860
CITY OF PALM DESERT
CITY MANAGER'S OFFICE
STAFF REPORT
REQUEST: APPROVAL TO FUND THE ANNUAL FINE ART INSURANCE
PREMIUM, IN THE AMOUNT OF $8,250, 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: January 23, 2014
Recommendation
By Minute Motion,
1. Approve $8,250 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 $8,250 from the Unobligated General Fund for fine art annual
insurance premium costs and transfer to Account No. 110-4800-454-
3885.
Background
The lease agreement between the Palm Springs Art Museum and City of Palm Desert
obligates the City to obtain insurance for the nine sculptures currently installed in the non-
exclusive use area (Eric Johnson Memorial Garden and/or Multi -Sensory Garden). As many of
these sculptures are on temporary donation with the Museum, it is recommended that the City
reimburse the Museum directly and have the artwork insured via their fine art broker.
Staff from the Califomia Joint Powers Insurance Authority reviewed last year's policy and
raised no objections and the policy terms have not changed. 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 $8,250 annual premium.
Contract No. C29860
Staff Report: Fine Art Insurance Premium
January 23, 2014
Page 2 of 2
Fiscal Analysis
The nine sculptures currently installed in the Eric Johnson Memorial Garden (Sculpture
Garden) are valued at $1.9 million (see below) and will require an annual insurance premium
of $8,250. The current policy is set to expire on February 9, 2014. Please note there is no
increase in the annual premium of $8,250, subject to no material changes and no claims or
losses between now and renewal date. The premium will have to be adjusted later this year
with the inclusion of the four new sculptures in the non-exclusive use area. However, this
additional premium cost is currently unknown.
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 annual cost of $1,900. 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.
ARTIST
Fletcher Benton
Felipe Castaneda
Betty Gold
Donald Judd
Dave McGary
Jesus Bautista Moroles
Dan Namingha
Peter Reginato
Yehiel Shemi
TOTAL APPRAISED VALUE
Submitted By;
1
TITLE
Steel Watercolor with Balls
Seated Woman Thinking
MA /V
Untitled
Walk Among the Stars
Lapstrake
Vertical Passage
Midnight & Morning Rain
Morning
Stephen Y. Aryan, Riskanager
RevigBy:
APPRAISED VALUE
$275,000
$45,000
$55,000
$1,000,000
$130,000
$90,000
$125,000
$60,000
$120,000
$1,900,000
CITY COUNCILA57ITON
APPROVED DENTED
RECEIVED OTHER
MEETING DATE 0/ - � a6Yc
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NOES? A //JQ �/
ABSENT: Age
ABSTAIN: /�//(�yl
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Paul S. Gibson, Director of Finance/City Treasure�ERIFIED BY. /f �'
Original on File with City C r 's Office
Approved By:
M. Wohlmuth, City Manager