HomeMy WebLinkAboutD-4 Staff Report - Insurance Services with CJPIACONSENT ITEM
D-4
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
FROM: AMELIA AYALA, DIRECTOR OF HUMAN RESOURCES & RISK MANAGEMENT
DATE: APRIL 4, 2016
SUBJECT: AUTHORIZATION TO SUBMIT APPLICATION WITH CALIFORNIA JOINT
POWERS INSURANCE AUTHORITY (CJPIA) FOR INSURANCE SERVICES
EFFECTIVE JULY 1, 2016
SUMMARY:
On November 16, 2015, the City Council adopted Resolution No. 2015-C61 authorizing the City
Manager to provide written notice of intent to withdraw membership with the Independent Cities Risk
Management Authority (ICRMA). In order to select a new provider of insurance services, Staff formed
an Evaluation Committee to interview several Insurance Authorities and an insurance brokerage firm.
Based on the interviews and the information provided by each firm, the Evaluation Committee is
recommending that the City submit an application to become a member of the California Joint Powers
Authority (CJPIA). This action authorizes a submittal of an application with CJPIA for insurance
services.
RECOMMENDATION:
Staff recommends that the City Council take the following action:
1) Authorize Staff to submit an application with California Joint Powers Insurance Authority
(CJPIA) for Insurance Services effective July 1, 2016.
DISCUSSION:
On November 16, 2015, the City Council adopted Resolution No. 2015-C61 authorizing the City
Manager to provide written notice of intent to withdraw membership with the Independent Cities Risk
Management Authority (ICRMA). As a result, Staff formed an Evaluation Committee to begin the
process of selecting a new provider of insurance services.
The Evaluation Committee, which was comprised of the City Manager, Chief of Police, Director of
Human Resources and Risk Management and Director of Finance, interviewed and requested
insurance quotes from the following insurance providers: California Joint Powers Insurance Authority,
APPROVED
COUNCIL MEETING
04/04/2016
Application With California Joint Powers Insurance Authority (CJPIA) For Insurance Services
April 4, 2016
Page 2
Keenan & Associates and Public Agency Risk Sharing Authority of California. Based on the
interviews and the information provided by each firm, the Committee is recommending that the City
submit an application to become a member of the California Joint Powers Authority (CJPIA).
The California Joint Powers Insurance Authority (CJPIA) is a Joint Powers Insurance Authority
located in La Palma, California. Established in 1978, the CJPIA currently provides self-insurance,
excess insurance, and commercial insurance services to 117 Member Agencies (93
Municipalities, 18 Joint Powers Authorities, and six Special Districts). In addition to insurance
services, the CJPIA provides additional services to its member agencies including employee training
and assistance in risk management organization, loss control, operational audits, and general
insurance advice. Other services offered by the CJPIA include: an Employment Intervention Program;
Sidewalk Inspection Program; Americans with Disabilities Act (ADA) Assistance Program; and the
Lexipol Program. The Lexipol Program is recognized with police agencies and highly regarded within
the City’s Police Department. It offers a consistent, integrated program of risk management designed
by law enforcement professionals and researched by attorneys specializing in law enforcement
litigation. The added training and services offered through the CJPIA are included at no additional cost
to the City. Currently, the City spends approximately $15,000 a year for these services (e.g. Lexipol
and employee training).
CJPIA acknowledges that public agencies are constantly confronted with a broad range of risk
management exposures. Councilmembers/Board Members, City Managers/Chief Executives, Finance
Officers, and Risk Managers all take an active role in determining the programs and services that are
provided by the Authority. CJPIA’s philosophy is rooted in its mission to provide innovative risk
management solutions, and it is demonstrated through its many different programs and services.
FISCAL IMPACT:
The City paid ICRMA $1,186,247 for general liability, property, cyber and crime coverages with a
self-insured retention (SIR) of $500,000 in fiscal year 2015-16. Additionally, the City paid ICRMA
$278,371 in fiscal year 2015-16 for Workers Compensation Insurance with a $500,000 SIR. By
comparison, the CJPIA is proposing the same insurance coverages for a premium of $996,500 with a
$250,000 SIR and $769,900 for Workers Compensation Insurance with a $250,000 SIR. Although the
CJPIA’s cost for Workers Compensation Insurance is higher than what the City paid ICRMA in the
past it includes pooled coverage up to $2 Million with a lower SIR. If the City’s application is
accepted by the CJPIA, the cost of insurance will be included in the 2016-2017 Proposed Budget.
Prepared by: Reviewed and Approved:
Amelia Ayala Louie F. Lacasella
Director of Human Resources & Risk Management Management Analyst
Reviewed and Approved:
Troy L. Butzlaff, ICMA-CM
City Manager