HomeMy WebLinkAbout29B - INSURANCE RENEWALS
CITY COUNCIL MEETING DATE:
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REQUEST FOR
COUNCIL ACTION
CLERK OF COUNCIL USE ONLY:
JUNE 20, 2005
TITLE:
INSURANCE RENEWALS
APPROVED
o As Recommended
o As Amended
o Ordinance on 1 sl Reading
o Ordinance on 2nd Reading
o Implementing Resolution
o Set Public Hearing For
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CITY MANA R
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
1. Approve the City's continued membership in the Big Independent Cities
Excess Pool for an additional three years beginning July I, 2005 at
an annual premium cost not to exceed $1,765,000 for the first year.
2. Approve the City's continued participation in the Public Entity
Property Insurance Program from July I, 2005 to July I, 2006 at a
premium cost of $333,803.
DISCUSSION
On September 23, 1988, the Big Independent Cities Excess Pool (BICEP)
Joint Powers Authority was formed with five cities. The current cities
are as follows: Santa Ana, Huntington Beach, San Bernardino, Oxnard, and
West Covina. The purpose of BICEP is to provide insurance coverage for
its members, shielding them from financial debt due to large liability
claims, judgments, and settlements.
BICEP provides insurance stability through its annual requirement of each
city to enroll for a succeeding three-year commitment. Each member city
has a $1 million self-insured liability retention that is similar to a
deductible. The current excess insurance policies will expire on July I,
2005. The total BICEP insurance premium will not exceed $1,765,000; an
estimated $1,265,000 of which covers liability claims from $1 to $25
million per occurrence. The balance of $500,000 purchases $100 million of
excess workers' compensation insurance coverage per occurrence with a
self-insured retention between $500,000 and $1 million. The City Manager
will review the quotations and make the final approval and coverage will
be bound.
The Public Entity Property Insurance Program (PEPIP) was established on
May 15, 1993 with seventeen public agencies that included the City of
Santa Ana. The purpose of PEPIP is to provide public agencies with group
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Insurance Renewals
June 20, 2005
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purchasing strength in a challenging property insurance market. Since
1993, PEPIP has grown to include over 5,000 members in 30 states, which
has allowed the group to purchase adequate property insurance at
affordable premiums. Renewal of the City's participation in PEPIP will
ensure the City's ability to continue purchasing property insurance at
competitive rates.
The $333,803 premium will provide $1 billion dollars of coverage for most
City properties. PEPIP will provide the City with $100 million for boiler
and machinery damage and $82.5 million in flood damage. All PEPIP members
share $100 million of terrorism coverage with a $500 million annual
aggreg~te. However, due to the excessive premium cost$ of earthquake
insurance, the City will not seek this coverage.
Current insurance deductibles are as follows:
Coverage Deductible
Vehicles
Fire Fighting $50,000
Vehicles
All other $25,000
All other occurrences $10,000
Boiler & Machinery $2,500 to $375,000, depending on the
pieces of equipment involved
FISCAL IMPACT
Funds are budgeted in the 2005-06 Liability & Property Insurance account
(account no. 80-180-6521) and Workers' Compensation account (account no.
82-178-6521) .
APPROVED AS TO FUNDS AND ACCOUNTS:
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Francisco Gutierrez
Executive Director
Finance & Management Services Agency
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