Judges: Charlie Crist, Attorney General
Filed Date: 8/30/2006
Status: Precedential
Modified Date: 7/5/2016
Dear Mr. Stewart:
At the request of the City Commission of the City of Fort Lauderdale, you have asked for my opinion on substantially the following question:
What is a "project" within the meaning of section
Section
"A state agency, political subdivision, state university, community college, airport authority, or other public agency in this state, or any instrumentality thereof, may only purchase an owner-controlled insurance program in connection with a public construction project if it is determined necessary and in the best interest of the public agency and if all of the following conditions are met:
(a) The estimated total cost of the project is:
1. Seventy-five million dollars or more;
2. Thirty million dollars or more, if the project is for the construction or renovation of two or more public schools during a fiscal year; or
3. Ten million dollars or more, if the project is for the construction or renovation of one public school, regardless of whether the project's duration extends beyond a fiscal year.
(b) The program maintains completed operations insurance coverage for a term during which the coverage is reasonably commercially available, as determined by the public agency, but for no less than 5 years.
(c) The bid or proposal specifications for the project clearly specify, for all bidders or proposers, the insurance coverage provided under the program and the minimum safety requirements that must be met.
(d) The program does not prohibit a contractor or subcontractor from purchasing any additional insurance coverage that the contractor or subcontractor believes is necessary for protection against any liability arising out of the contract. The cost of the additional insurance must be disclosed to the public agency.
(e) The program does not include surety insurance.
(f) The public agency may only purchase an owner-controlled insurance policy that has a deductible or self-insured retention if the deductible or self-insured retention does not exceed $1 million per occurrence.
(g) The public agency is responsible for payment of the applicable deductibles of all claims."
Thus, the statute imposes a number of requirements that must be met before a governmental entity may utilize an owner-controlled insurance program. In addition, certain projects are excluded from the scope of the act: specifically identified projects of the Department of Transportation; an existing project or projects of a public agency that are covered by an ongoing, owner-controlled insurance program issued before October 1, 2004; or any project of a public agency for which receipt of bids or proposals was advertised before October 1, 2004.1
Section
The City of Fort Lauderdale Water and Wastewater Capital Improvements Program, "WaterWorks 2011," may involve a number of projects that satisfy the requirements of section
By not specifically defining the term "project" as used in the statute, the Legislature appears to have afforded local governments some flexibility in determining what may constitute a project to effectuate the purposes of the act, that is, saving taxpayer funds while protecting public agencies from liability claims and simplifying insurance coverage for large public construction projects.6
In sum, from a reading of the terms of the statute, it appears that a "project" may be any related or interrelated public construction undertakings by a state agency, political subdivision, state university, community college, airport authority, or other public agency or instrumentality thereof that satisfy the conditions of section
Sincerely,
Charlie Crist Attorney General
CC/tgh