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Committee approves $705,000 standby letter of credit tied to city's workers' compensation policy
Summary
The Finance Committee adopted Resolution 25-26 authorizing a standby letter of credit with WesBanco to collateralize the city's large-deductible workers' compensation policy; the letter amount is $705,000 and fees total $3,925.
The City of Charleston Finance Committee on March 17 approved Resolution 25-26, authorizing the mayor and city manager to enter a standby letter of credit with WesBanco to collateralize potential workers’ compensation claims under the city’s large-deductible policy.
Mister Machado, a city staff member, said the city would obtain a standby letter of credit in the amount of $705,000 for the benefit of Encova, the city’s insurer. "We would be entering into a letter of credit with WesBanco, standby letter of credit with WesBanco for the benefit of Encova in the amount of $705,000. That's the amount of the letter of credit that a very unusual situation where we don't actually need to draw on that, but it's a requirement because of a large deductible policy that we have," Machado said.
Machado told the committee the cost to the city would be one-half of 1 percent of the credited amount plus a $400 document fee; the staff-calculated fee for this letter came to $3,925. A committee member asked whether other banks were solicited; Machado said the treasurer’s office sought multiple quotes several years ago and the city has used WesBanco for a number of years.
Committee Chair called for a motion, and the committee adopted the resolution by voice vote; counts were not recorded. The motion on the record was "Move for approval of resolution." The transcript does not name a mover or seconder and does not record a roll-call tally.
