97-9809 Insurance Proceeds Fund(First published in the Salina Journal onj,',,,,2 j 1997)
ORDINANCE NUMBER 97-9809
AN ORDINANCE AMENDING CHAPTER 8, ARTICLE XVI OF THE SALINA CODE
PERTAINING TO THE INSURANCE PROCEEDS FUND, AND REPEALING THE
EXISTING ARTICLE.
BE IT ORDAINED by the Governing Body of the City of Salina,
Kansas
Section 1. That Chapter 8, ARTICLE XVI is hereby amended to
read as follows:
"ARTICLE XVI. STRUCTURES DAMAGED BY FIRE,
EXPLOSION, OR WINDSTORM.
Section 8-500. Authorization.
The city is hereby authorized to utilize the
procedures established by K.S.A. 40-3901 et seq.,
whereby no insurance company shall pay a claim of a
named insured for loss or damage to any building or
other structure located within the city, arising out of
any fire, explosion, or windstorm, where the amount
recoverable for the loss or damage to the building or
other structure under all policies is in excess of
seventy-five (75) percent of the face value of the
policy covering such building or other insured
structure, unless there is compliance with the
procedures set out in this article.
Section 8-501. Procedure.
(a) When final settlement on a covered claim has
been agreed to or arrived at between the named
insured and the company and final settlement exceeds
seventy-five (75) percent of the face value of the
policy covering any building or other insured
structure, and when all amounts due to the holder of a
first real estate mortgage against the building or
other structure, pursuant to the terms of the policy
and endorsements thereto, shall have been paid, the
insurance company shall execute a draft payable to the
Director of Finance in an amount equal to the sum of
fifteen (15) percent of the covered claim payment
unless the Building Official of the city has issued a
certificate to the insurance company that the insured
has removed the damaged building or other structure,
as well as all associated debris, or replaced, rebuilt,
or otherwise made the premises safe and secure.
(b) Such transfer of funds shall be on a pro
rata basis by all companies insuring the building or
other structure. Policy proceeds remaining after the
transfer to the city shall be disbursed in accordance
with the policy terms.
(c) Upon the transfer of funds as required by
subsection (a) of this section, the insurance company
shall provide the city with the name and address of
the named insured, the total insurance coverage
applicable to said building or other structure, and the
amount of the final settlement agreed to or arrived at
between the insurance company and the insured
whereupon the Building Official shall contact the named
insured by registered mail, notifying them that the
insurance proceeds have been received by the city and
apprise them of the procedures to be followed under
this article.
Section 8-502. Fund created; deposit of moneys.
The Director of Finance is hereby directed to
create a fund to be known as the "Insurance Proceeds
Fund. " All moneys received by the Director of
Finance as provided for by this article shall be placed
in that fund and deposited in an interest-bearing
account.
Section 8-503. Building Inspector; investigation,
removal of structure.
(a) Upon receipt of moneys as provided for by
this article, the Director of Finance shall immediately
notify the Building Official of the receipt, and
transmit all documentation received from the insurance
company to the Building Official.
(b) Within twenty (20) days of the receipt of the
moneys, the Building Official shall determine, after
prior investigation, whether the city shall instigate
proceedings under the provisions of K.S.A. 12-1750 et
seq., as amended.
(c) Prior to the expiration of the twenty (20)
days established by subsection (b) of this section, the
Building Official shall notify the Director of Finance
whether he or she intends to initiate proceedings
under K.S.A. 12-1750 et seq., as amended.
(d) If the Building Official has determined that
proceedings under K.S.A. 12-1750 et seq., as
amended, shall be initiated, he or she will do so
immediately but no longer than thirty (30) days after
receipt of the moneys by the Director of Finance.
(e) Upon notification to the Director of Finance
by the Building Official that no proceedings shall be
initiated under K.S.A. 12-1750 et seq., as amended,
the Director of Finance shall pay all such moneys
received, plus interest, to the insured as identified
in the communication from the insurance company.
Section 8-504. Removal of structure.
If the Building Official determines that it is
necessary to act under K.S.A. 12-1750 et seq., as
amended, with regard to a building or other structure
damaged by fire, explosion, or windstorm, any
proceeds received by the Director of Finance under
the authority of Section 8-501(a) relating to that
building or other structure shall be used to reimburse
the city for any expenses incurred by the city in
repairing or removing the building or other
structure. All moneys in excess of that which is
ultimately necessary to comply with the provisions for
the repair of the building or other structure, less
salvage value, if any, shall be paid to the insured.
Should the expenses incurred by the city exceed the
insurance proceeds paid to the Director of Finance
under Section 8-501(a) the excess expenses incurred
shall be assessed against the property and paid and
collected in the manner provided by K.S.A. 12-1755 ,
as amended.
Section 8-505. Relation to insurance policies.
This article shall not make the city a part to any
insurance contract, nor is the insurer liable to any
party for any amount in excess of the proceeds
otherwise payable under its insurance policy.
Section 8-506. Insurers; liability.
Insurers complying with this article or attempting
in good faith to comply with this article shall be
immune from civil or criminal liability and such action
shall not be deemed in violation of K.S.A. 40-2404 and
any amendments thereto, including withholding payment
of any insurance proceeds pursuant to this article, or
C-W.W.S.h.
releasing or disclosing any information pursuant to
this article.
Section 8-507. Regulations authorized.
The City Manager is hereby authorized to
promulgate any further regulations necessary to
implement the provisions of this article."
Section 2. That the existing Article XVI of Chapter 8 of the Salina
Code is hereby repealed.
Section 3. That this ordinance shall be in full force and effect on
July 1, 1997 after its adoption and publication once in the official city
newspaper.
Introduced: June 16, 1997
Passed: June 23, 1997
{SEAL}
ATTEST: yKistin M. S�tonMayor
2udy D. L CMC, Cit;Clerk