The Metropolitan Utilities District board of directors approved a contract Wednesday that will consolidate a multitude of the Omaha gas and water utility’s insurance policies and save nearly $50,000 in annual premiums and fees.
Instead of covering facilities, equipment and its automotive fleet under six separate insurance policies — each with its own terms and deductibles — MUD’s board approved a change that merges all but two into a single policy.
District Vice President of Accounting Joe Schaffart used an example of a piece of equipment breaking down in an MUD facility and causing a damaging fire to explain the upshot of consolidating previously separate policies. Such a situation would require the district to pay two $100,000 deductibles, one for its equipment breakdown policy and another for its property policy.
“The combined approach is just one deductible,” Schaffart said.
Even though the value of insured property increased 4 percent to more than $875 million under the new policies, premium and fee spending will decrease by 9 percent. The new strategy takes MUD’s annual spending on those items down to about $499,000 from about $545,000 previously.
The board unanimously awarded Aon Risk Solutions the one-year contract over Harry A. Koch Co., Hays Cos. and Lockton Cos. Three other firms were eliminated after MUD received bid proposals in late 2016.
In other business, the board approved paying $400,000 to Graham Construction, a contractor that sued the City of Omaha and MUD in a 2014 lawsuit claiming MUD was responsible for delays to a 2012 project at Aksarben Village. Graham sought about $2.1 million in damages due to the delay under the original complaint.
The Omaha City Council in May approved a $400,000 settlement with the construction firm that was contingent on MUD also paying $400,000. MUD’s share of the settlement will be paid from its cash reserves.