Item 15 - Renew Citywide Insurance Program and Policies Procured through Independent Cities Risk Management Authority and Arthur J. Gallagher

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Renew Citywide Insurance Program and Policies Procured through Independent Cities Risk Management Authority and Arthur J. Gallagher August 5, 2025 Page 2 4. Approve an Appropriation Adjustment of$1,345,359 in Liability and Property Insurance Revenue to utilize the fund balance through the Prior Year Carryforward revenue account (No. 08009002-50001) and appropriate spending of the original adopted budget in the same amount from the Liability & Property insurance account (No. 08009051-64010). (Requires five affirmative votes) GOVERNMENT CODE 484308 APPLIES: No DISCUSSION Staff is recommending renewal with ICRMA, a joint powers authority formed in 1980 in accordance with California Government Code Section 6500. ICRMA's purpose is to provide: 1) excess and re-insurance to protect member cities from extensive financial debt due to large claims, settlements, and judgments; 2) group insurance purchasing power that can offer broader coverage at a lower cost; 3) rate stability; and 4) protect individual member cities through pooling of losses and self-insurance. ICRMA also offers to its members actuarial services, appraisal services, loss control assessments and recommendations, safety trainings, claims audits, contract risk transfer consultation, and other services and resources. Currently comprised of 14 California cities, Santa Ana joined ICRMA in July 2019. For this renewal period: • The City's Workers' Compensation coverage experienced a decrease of approximately one-half percent (-0.5%). • The City's Liability and Property premiums increased approximately twelve percent (12%). • The City's Property & Equipment Program premium increased approximately one percent (1%). • Overall, the City's insurance coverages remain the same with the exception of an increase in earthquake insurance coverage from $25,000,000 to $40,000,000. The increase to the cost of insurance is primarily due to the following ongoing reasons: 1. An insurance market with continually decreasing excess carriers willing to quote municipal government entities in California, especially those with Police departments; 2. High dollar jury awards of litigated matters against public entities; 3. High dollar settlements of litigated and non-litigated matters; 4. Rising cost of repairs and replacement of damaged vehicles, property, and equipment; 5. Increased number of claims filed against the City resulting from aging infrastructure including sidewalks and streets; and 6. Increased number of claims filed against the City resulting from damage caused by City owned trees.