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11. ISO Rating ReportAgenda -February 10, 1997 AGENDA ITEM 11 - ISO RATING REPORT INFORMATION ONLY: No action needed. There have been several questions/comments about our current fire insurance rating. A few months ago, I asked the Fire Department to get information for us to review. The Chief and other officers have made inquires and attended a class specific to this subject. I have enclosed some comparisons to other City ratings, classification details, and improvement statements issued in 1993. { To provide information on the history and the myths surrounding the Insurance Services Office. To provide information on insurance premium calculations, the ISO's affects on individual premiums and the ISO's affects on a jurisdiction's total premiums paid. To provide detailed information on the ISO's Fire Suppression Rating Schedule used to establish a Public Protection Classification (Rating) for a jurisdiction. DISCLAIMER: It is not the intent of ISO or this presentation to provide a guide for life safety or loss prevention purposes. Purchases, manpower and standard operating procedures are a local decision determined by local conditions. Any effort to improve a community's ISO Rating will require a long term effort and planning. The Fire Suppression Rating Schedule should not be used as a guide for day-to-day fire department operations. WHO IS ISO? The Insurance Services Office is an independent organization funded by user fees from the property and causality insurers that use those services. Over 99% of the insurance companies use some or all of the services offered by ISO. An ISO survey focuses on Property Conservation as opposed to the Life Safety focus of a fire service inspector. It's important to remember that ISO has no regulatory authority. ISO simply surveys the property and reports to the insurer who has requested the underwriting information. Clarence Krepps, City Manager Doug Rauthe, Honorable Mayor City Council Members Our figures for I. S. O. Ratings have ben calculated in the following manner. We used $200.00.00 for the average business in the city, and $100,000.00 as the value on the average residence. We also used actual average insurance quotes for the two types of insurance coverage. We realize that it is impossible to give an exact quote on different types of businessHs due to the varying types of exposures, building construction, heating plants, etc. ,- Insurance costs on frame construction buildings are roughly double the cost over masonry construction. CLASS 10 RATIRG $200,000.00'Insurance on: ' Frame Construction - $3,600.00 yearly Masonry Construction - $1,887.00 yearly These are based on average figures. CLASS 5 RATTj , $200,000.00 Insurance on: Frame Construction $2,156.00 yearly Masonry Construction $1,045.00 yearly Average:$1,602.00 -2 $200,000.00 Insurance on: Frame Construction $1,827.00 Masonry Construction $ 958.00 Average: $1,372.00 The insurable value of the city was based on the taxable value of the city taken from county tax records. Insurable value is a debatable figure, due to the fact that there are several methods used to calculate insurable value. We used the most conservative method, to avoid any overstatement of savings, on insurance, and possible errors through the use of average figures. Orland Leland Assistant Fire Chief 9• rk• Class 10 = Less than 10 points Class 9 = 10.00 to 19.99 points Class 8 = 20.00 to 29.99 points Class 7 = 30.00 to 39.99 points Class 6 - 40.00 to 49.99 points Class 5 = 50.00 to 59.99 points Class 4 = 60.00 to 69.99 points Class 3 = 70.00 to 79.99 points Class 2 80.00 to 89.99 points Class 1 = 90.00 or more Receiving and Handling Alarms Fire Department Water Supply Divergence Total Points Possible 3 10 points �* 45 to 65 points 40 points (deduct) 95 to 115 points ISO CLASS AFFECTS ON INSURANCE PREMIUMS (Estimates) If Class 10 pays $1.00 for insurance: -'lass 9 pays .93 7% savings from Class 10 Class 8 pays .72 28& savings from Class 10 Class 7 pays .68 32% savings from Class 10 Class 6 pays .65 35% savings from Class 10 Class 5 pays .63 37% savings from Class 10 Class 4 pays .60 40* savings from Class 10 Class 3 pays .58 42% savings from Class 10 Class 2 pays .55 45% savings from Class 10 Class 1 pays .53 47% savings from Class 10 Most insurance companies offer only very small discounts on residential policies in Class 6 or better cities. Each insurer sets its own rates and most will vary from the above percentages. TYPICAL INSURANCE PREMIUMS BASED ON INSURABLE VALUE. nsurable Value BUSINESS , of your Community: RESTDENTIAL TOTAL $600, 000, Premium 000 . 00 J$1 , 053, 338, 01 0. 00 $1, 10: 65%38,, 10 .00 4 community @ Class on your $_2,743,000:00 $ 5,772,084.00 $ 8.515.084.00 Premium on your community at Class 5: $ 1.,602,000.00 $ 3,6861,550.00 $_5,288.550.00 Premium on your community at Class 4: $11,392,000.00 ,$ 3,454,824.00 $ 41,846,824.00 Savings to your community{where we are now),$ 3,226,,35 4,00 Fire Department Budget ??? $ 864.018.00 Savings from Class 10 to Class 5 J$ 24743.000.00- avings from Class 5 to Class 4 _,$ 441,726.00� Savings from Class 10 to class 4 ,$ 30668.260.00 Apri125, 1996 Rating Service: Great Falls ISO Commercial Risk Sevices 1355 So. Colorado Blvd. Suite 306 Denver, CO 80222 1-900-759-3512 Cities and their protection class Protection Class 2 Protection Class 3 Billings Libby Protection Class 4 Bozeman Lewistown Livingston Missoula Sidney Protection Class 5 Baker Big Timber Butte Bridger Coram Columbia Falls Cut Bank Evergreen Ft. Smith Glascow Glendive Hamilton Harrison Helena Havre Joliet Kalispell Miles City Malstrom Polson Red Lodge Round UP Scoby Shelby Sheridan Whitefish Wolf Point ISO Commercial Risk Services, Inc. • 1355 S. Colorado Blvd. • Suite 306 Denver, CO 80222 • (303) 759-3511 • (800) 759-3512 • FAX: (303) 759-0742 Bruce Williams, City Manager City of Kalispell 312 1st Avenue East Kalispell► Montana 59901 Dear Mr. Williams: August 25, 1993 RE: Public Fire Protection Kalispell, Montana We wish to thank you, and others for the cooperation given to our representative during our recent survey. We have completed our review of the fire insurance classification for your city and advise that Class 6 is now appropriate. The new classification is a retrogression from former Class 5. The principal reasons for this retrogression are noted on the attached Improvement Statements. We are not implementing the class change at this time. If this poorer fire insurance classification were placed in effect, there would be changes for sprinklered properties, residential occupancies insured under Homeowners or Dwelling type policies and some other special schedule surveyed property. The change will affect typical mercantile properties to a degree depending upon the type of building construction, occupancy and other property insurance premium calculation factors. The overall effect is usually about +11% for wood frame, non-combustible, masonry and fire resistive buildings. However, variations in construction, occupancy and private protection can result in increases or decreases from this average. The above estimates apply only for insurance companies using -ISO property insurance premium calculations. However, numerous insurance companies use other than ISO property insurance premium calculations so that the effect of the change in class may be different for their policy holders. A subsidiary of Insurance Services Office. Inc. Bruce Williams -2- August 25, 1993 The city classification applies to properties with a needed fire flow of 3,500 gpm or less. The private and public protection at properties with larger needed fire flows are individually evaluatedr and may vary from the city classification. Before we re-classify buildings to reflect this increase, we would like to know if the city desires to develop a program to regain Class 5. It is important that you acknowledge this letter within about one month and advise us when this matter will be reviewed. After review, if it is your decision to begin an improvement program to regain Class 5, we would appreciate receiving, within about 3 months, a list of the changes you intend to make. Additionally, we would appreciate your estimate of the amount of time which will be needed to complete each item. No re-classifying action will be taken if changes are implemented, or well under way, to regain the current insurance classification within approximately one year. To assist you in studying the grading results, we are attaching a copy of our Grading Sheet, the results of the hydrant flow tests witnessed during our survey, Classification Details and Improvement Statements. Extra copies of this letter and attachments are enclosed so that you may distribute them to other interested parties, if you desire to do so. The purpose of our visit was to gather information needed to determine a fire insurance classification which may be used in the calculation of property insurance premiums. This survey was not conducted for property loss prevention or life safety purposes, and no life safety or property loss prevention recommendations will be made. If you desire additional information, we will be available for a conference, upon your request, to discuss with you and your staff the details of the new classification. Such a conference could be held at a mutually convenient time and location. Yours very truly, (1 C c¢'L9 R. D. Reple r Manager - Operations rdk:lt Att. Grading Sheet Kalispellr Montana Public Protection Class: 6 Surveyed: Juner 1993 Credit Maximum Feature SO-ed Credit Receiving and Handling Fire Alarms... 5.16% 10.00% Fire Department ...................... 15.55 ' 50.00 Water Supply ......................... 35.35 40.00 *Divergence ........................... . 11.46.. Total Credit 44.60% 100.00% The Public Protection Class is based on the total percentage credit as follows: Sly I 1 90.00 or more 2 80.00 to 89.99 3 70.00 to 79.99 4 60.00 to 69.99 5 50.00 to 59.99 6 40.00 to 49.99 7 30.00 to 39.99 8- 20.00 to 29.99 9 10.00 to 19.99 10 0 to 9.99 *Divergence is a reduction in credit to reflect a difference in the relative credits for Fire Department and Water Supply. The above classification has been developed for fire insurance rating and/or loss cost purposes only. A subsidiary of Insurance Services Office. 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Dieu ["00 6's . -A_ 4_s_Y This section of the Fire Suppression Rating Schedule reviews the faclities provided for the general public to report fires, and for the operator on duty at the communication center to dispatch fire department companies to the fires. Credit Actual Maximum 1. (Item 414) Credit for Telephone Service f` This item reviews the facilities provided for the public to report fires, including the listing of fire and business numbers in the telephone directory. 2.00 2. (Item 422) Credit for operators This item reviews the number of operators on -duty at the communication communication center to handle fire calls. 3. (Item 432) Credit for Dispatch Circuits This item reviews the dispatch circuit facilities used to transmit alarms to fire department members. 4. (Item 440) Total Credit for Receiving and Handling Fire Alarms 2.16 (A) s5?eft Wo Kalispell, Montana Population Est. 11,801 Date Surveyed- June, 1993 Total Credit-44.60 Classification-6 FIRE DEPARTMENT This section of the Fire Suppression Rating Schedule reviews the engine and ladder -service companies, equipment carried, response to fires, training and available fire fighters. 1. (Item 513) Credit for Engine Companies This item reviews the number of engine companies and the hose and equipment carried. 2. (Item 523) Credit for Reserve Pumpers This item reviews the number of reserve pumpers and the equipment carried on each. 3. (Item 532) Credit for Pump Capacity This item reviews the total available pump capacity. 4. (Item 549) Credit for Ladder Service This item reviews the number of ladder and service companies and the equip- ment carried. Credit Actual Maximum )d xv apse J 1.54 y 10.00 0.25 '` 1.00 -,00 5.00 5.00 1 *�a r-S cf{d. (B) %, 6' p;cKCd - 0)' FIRE DEPARTMENT (Continued) Actual x,aximum 5. (Item 553) Credit for Reserve Ladder Service This item reviews the number of reserve ladder and service trucks, and the equipment carried. 0.71 1.00 6. (Item 56 1) Credit for Distribution This item reviews the percent of the built -upon area of the city which has a first -due engine company within 1 1/2 miles and a ladder -service company within 2 1/2 miles. C 2.08 4.OQ 7. (Item 57 1) Credit for Company Personnel This item reviews the average number of equivalent fire fighters and company officers on duty with existing companies. 3.65 15.00+ B. (Item 581) Credit for Training This item reviews the training facilities and their use. 1.71` 9.00 9. (Item 590) Total Credit for Fire Department 15.55 50.00+ +This indicates that credit for manning is open-endedr with no maximum credit for this time. (C) Kalispell, Montana Population Est. 11,801 Date Surveyed- June, 1993 Total Credit-44.60 Classification-6 This section of the Fire Suppression Rating Schedule reviews the water supply system that is available for fire suppression in the city. !Credit Actual Maximum 1. (Item 616) Credit for the Water System This item reviews the supply works, the main capacity and hydrant distribution. 32.06 35.00 2. (Item 621) Credit for Hydrants This item reviews the type of hydrants, and method of installation. l.so 2.00 3. (Item 631) Credit for Inspection and Condition of Hydrants This item reviews the.:frequency of inspections of hydrants and their condition. 1.39 3.00 4. (Item 640) Total Credit for Water Supply 35.35 40.00 (D) Kalispell, Montana Population Est. 11,801 Date Surveyed- June, 1993 Total Credit-44.60 Classification-6 Actual Maximum Receiving and Handling Fire Alarms 5.16 10.00 Fire Department 15.55 50.00 Water Supply 35.35 40.00 *Divergence -11.46 Total 44.60 100.00 *Divergence is a reduction in credit to reflect a difference in the relative credits for Fire Department and Water Supply. (E) -2- Credit For Dispatch Circuits (Item 432). For maximum credit in the Schedule, there should be two alarm dispatch circuits to the fire station in accordance with National Fire Protection Association Standard, 1221. For maximum credit in the Schedule, one of the two alarm dispatch circuits should be electrically supervised. FIRE DEPARTMENT Credit For Engine Companies (Item 513). For maximum credit in the Schedule, three engine companies are needed in your city. These are calculated as follows: Three for the Basic Fire Flow of 3,500 gpm. You have one engine company in service. This is calculated as►"` follows: 5'Y G'd ens 3e 92% for Engine 1 because of insufficient equipment. For maximum credit in the Schedule, at least two engine. companies should respond to all firsta fo n buil in a cre i for engine companies has been reduced by 0%_due to lack of adequate response to part of the city. Credit For Reserve Pumpers (Item 523). For maximum credit in the Schedule, one fully -equipped reserve pumper is needed. You have one reserve pumper. This is calculated as 75% for Pumper 2 because of insufficient" -3- For Credit For Ladder Service. (Item 549). For maximum credit in the Schedule, one ladder company is needed in your city. This is calculated as follows: one ladder company due to the size of the area served. You have one ladder company. This is calculated as follows: 12% for Engine Ladder 1 because of insufficient equipment, lack of separate apparatus and Ladder 1 not in service on lst alarms. Credit For Reserve Ladder Service (Item 553). For maximum credit in the Schedule, one fully -equipped reserve ladder truck is needed. You have one reserve ladder truck. This is calculated as follows: 664 for" Truck 1 becau11 se] of insufficient iquipment "end aerial ladder'tests. _ Credit For Distribution (Item 561). For maximum credit in the Schedule, all sections of the city with hydrant protection should be within 1 3l2 miles of an adequately -equipped engine company and 2 1/2'miles of an adequately -equipped ladder, service, engine -ladder, or engine -service company. The distance to be measured along all-weather roads. Credit For Company Personnel (Item 571). An -increase in the response of fire department members by one person will increase the fire department 1.25%. -4- Credit For Training (Item 581). 0 �VA*� g a g s ,..f ® tie, ef ye �� des use 6f o1y For maximum credit in the Schedule, complete facilities should be provided and the training program should be improved. You received 19% credit for the current training program and the use of facilities. For maximum credit in the Schedule, pre -fire planning inspections of each commercial, industrial institutional and other similar -type building should be made twice a year.by company members. Records of the inspections should include -complete and up-to-date notes and sketches. For maximum credit in the Schedule, records should be kept of all training. WATER SUPPLY Credit For The Water System (Item 616). For maximum credit in the Schedule, the needed fire flows should be available at each location in the city. Needed fire flows of 2,500 gpm and less should be available for 2 hours, 3,000 and 3,500 gpm for 3.hours and all others for 4 hours. See the attached table for an evaluation of fire flow tests made at representative locations in your city. All AWWA standard hydrants within 1,000 feet of a building, measured as hose can be laid by apparatus, are credited; 1,000 gpm for hydrants within 300 feet; 670 gpm for 301 to 600 feet; and 250 gpm for 601 to 1,000 feet. Credit is reduced when hydrants lack a pumper outlet., and is further reduced when they only have only a single 2 1/2-inch outlet. a -5- Credit For Hydrants (Item 621). For maximum credit in the Schedule, all hydrants should have a pumper outlet, 6-inch or larger branch connection, uniform size operating nut and should operate in a uniform direction. Credit For Inspection And Condition Of Hydrants (Item 631). For maximum credit in the Schedule, all hydrants should be inspected twice a year, the inspection should include operation and,a test at domestic pressure. Records should be kept of the inspections. Hydrants should be conspicuous, well located for use by a pumper, and in good condition. FIRE FLOW TESTS Kalispell, Montana Tests Made On 06-15-93 Needed Limited Limited Limited Fire By By By Test Flow* Supply Distribution Hydrants NO, (;pm Works Mains Spacing- 1 4,500 X 5 3,000 X 6 3,000 X X 7 5,000 X 8 3.500 X X 9 3,500 X 77-3 4,500 X X 77-5 5 400 X *Needed fire flows exceeding 3,500 gpm are not considered in determining the classification of the municipality.