TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Teresia Zadroga-Haase, Human Resources Director
Gregory S. Borboa, Risk Manager
SUBJECT:Title
Resolution Approving an Agreement with the Independent Cities Risk Management Authority for Amortized Payment of Pooled General Liability Program Assessments (Human Resources Director Zadroga-Haase).
ADOPT RESOLUTION NO. 17-0066
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Recommended Action
RECOMMENDATION:
It is recommended that the City Council adopt Resolution Number 17-0066 approving the amortized assessment payment agreement (Attachment 1) with the Independent Cities Risk Management Authority (ICRMA) and authorizing the City Manager to execute the agreement.
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FISCAL IMPLICATIONS:
The assessment of $146,278.00 for Fiscal Year 2017-18 has been included in the two-year budget approved in June of 2016.
BACKGROUND:
The City is a founding member of the ICRMA, a public entity risk sharing pool created by authority of the Joint Powers Act (Government Code 6500 et seq.). The City has maintained membership since 1980. In 2014 the Governing Board of the pool began to address significant claim experience erosion in the pool's excess general liability program. In 2016 the Board announced a $12.5 million assessment to the membership to cover reserve shortfalls in four prior years. The assessment was to be amortized and was to begin in FY 2016-17. The assessment applied to all current and prior pool members that had claims experience in the problem claims years. Along with the assessment a proposal was made to recapitalize $12.5 million beginning in FY 2017-18, also in an amortized fashion. The recapitalization would only be charged to members in the program in any future fiscal year.
As part of the renewal for Fiscal Year 2017-18 some program restructuring was done that lowered the pool's retained exposure per claim from $5 million to $3 million, w...
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