HomeMy WebLinkAbout29A - INSURANCE RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JULY 7, 2015
TITLE:
INSURANCE RENEWALS
(STRATEGIC PLAN NO. 4, 1)
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
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As Recommended
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As Amended
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Ordinance on I" Reading
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Ordinance on 2ntl Reading
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Implementing Resolution
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Set Public Hearing For
CONTINUED TO
FILE NUMBER
1. Approve the City's continued membership in the Big Independent Cities Excess Pool from
July 1, 2015 to July 1, 2016 at an estimated premium cost not to exceed $1,530,000.
2. Approve the City's continued participation in the Public Entity Property Insurance Program
from July 1, 2015 to July 1, 2016 at an estimated premium cost not to exceed $320,000.
3. Approve the City's continued participation in the California State Association of Counties —
Excess Insurance Authority's Crime Bond Program from July 1, 2015 to July 1, 2016 at an
estimated premium cost not to exceed $11,400.
4. Approve the City's continued participation in the California State Association of Counties —
Excess Insurance Authority's Pollution Insurance Program from July 1, 2015 to July 1, 2018
for an estimated three -year premium not to exceed $15,000.
DISCUSSION
The City is a member of Big Independent Cities Excess Pool ( BICEP) Joint Powers Authority which
was formed in September 1988. The current cities include Santa Ana, Huntington Beach, San
Bernardino, Oxnard, West Covina, and Ventura. 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. Additionally, participation in a pool provides rate stability and can offer
broader coverage.
The current excess liability and workers' compensation insurance policies expired on July 1, 2015.
The total BICEP insurance premium for the July 1, 2015 to July 1, 2016 period will not exceed
$1,530,000; an estimated $1,250,000 of which covers liability claims from $1,000,000 to
$27,000,000 per occurrence with a $1,000,000 self insured retention (SIR) which functions like a
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Insurance Renewals
July 7, 2015
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deductible. An estimated $280,000 purchases statutory excess workers' compensation insurance
coverage with a $1,000,000 SIR.
The Public Entity Property Insurance Program ( PEPIP) was established in May 1993 with
seventeen public agencies including the City of Santa Ana. The purpose of PEPIP is to provide
public agencies with group purchasing strength. Since 1993, PEPIP has grown to include over
6,400 members in 45 states, which has allowed the group to purchase property insurance at
affordable premiums. The estimated $320,000 premium will provide $1,000,000,000 of coverage
for insured City properties. PEPIP will provide the City with $100,000,000 for boiler and machinery
damage and $82,500,000 in coverage for flood damage (coverage is in limited to $50,000,000 in
Flood Zone A.) Due to the excessive premium cost of earthquake insurance, the City is not
seeking this coverage at this time. Staff will continue to monitor the earthquake market.
The City joined the California State Association of Counties — Excess Insurance Authority
(CSAC -EIA) Crime Bond Program on April 1, 2004. The estimated renewal premium from July 1,
2015 to July 1, 2016 is $11,400.
The City joined the California State Association of Counties — Excess Insurance Authority's
Pollution Insurance Program in July 2007. The estimated three -year renewal premium from July
1, 2015 to July 1, 2018 is $15,000.
STRATEGIC PLAN ALIGNMENT
Approval of this item allows the City to meet Goal #4 City Financial Stability, Objective 1
(Maintain a stable, efficient and transparent financial environment).
FISCAL IMPACT
Funds are budgeted in the proposed 2015 -16 Liability & Property Insurance account (account no.
08009051 - 64010) for an estimated premium cost not to exceed $1,596,400 and Workers'
Compensation account (account no. 08209054 - 64010) for an estimated premium cost not to
exceed $280,000.
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Executive Direct r
Personnel Services
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APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director
Finance & Management Services Agency
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