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 4 estimates indicate that liabilities exceed available fund balances. However, the City's target reserve levels—set at 80% of actuarially determined liabilities, as determined biennially—are $35.8 million for Workers' Compensation and $14.9 million for General Liability. To address this target reserve shortfall, staff has gradually increased overhead charges during the annual budget process, with the goal of restoring fund balances to target levels over time. Workers' Compensation General Liability Actuarial valuation as of June 30, 2026 $44,757,982 $18,646,692 Present Value Target Reserve 80% of liability) $35,806,386 $14,917,354 Estimated ending fund balance as of June $19,801,925 $13,170,324 30, 2026 Estimated Target Reserve Shortfall $ 16,004,461 $ 1,747,030 After appropriation adjustment, the following table summarizes the funds budgeted and available for estimated premium and administrative costs. Fiscal Accounting Unit Accounting Unit Account Description Amount Year -Account Description 2025-26 08209054-64010 Workers Workers Compensation, $ 1,300,000 Compensation Insurance Payment Liability & Liability & Property $ 10,876,290 2025-26 08009051-64010 Property Insurance, Insurance Insurance Payment APPROPRIATION ADJUSTMENT 2025-26 08009051-64010 Liability & Liability & Property $ 1,345,359 Property Insurance, Insurance Insurance -Payment Total: $ 13,521,649 EXHIBIT(S) 1. Agreement with Arthur J. Gallagher Insurance Brokers of California, Inc. For Insurance Broker Services, Client Service Agreement 2. ICRMA Member Contribution Invoice - Santa Ana Submitted By: Lori Schnaider, Executive Director of Human Resources Approved By: Alvaro Nunez, City Manager