HomeMy WebLinkAbout2020-06-23; City Council; ; Purchase of $43 Million of Excess Liability Coverage through California Insurance Pool Authority for Fiscal Year 2020-2021 in an Amount Not to Exceed $609,000CA Review CKM
Meeting Date: June 23, 2020
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Ed Garbo, Risk Manager
ed.garbo@carlsbadca.gov, 760‐602‐2471
Subject: Purchase of $43 Million of Excess Liability Coverage through California
Insurance Pool Authority for Fiscal Year 2020‐2021 in an Amount Not to
Exceed $609,000
Recommended Action
Adopt a resolution authorizing the purchase of $43 million of excess liability coverage through
California Insurance Pool Authority for fiscal year 2020‐21 in an amount not to exceed
$609,000.
Executive Summary
The city is renewing annual excess liability protection in the amount of $43 million through the
California Insurance Pool Authority, or CIPA, for fiscal year 2020‐21 in an amount not to exceed
$609,000. This renewal must be approved by the City Council because the cost exceeds
$100,000 per agreement year. (See Carlsbad Municipal Code Section 3.28.040 (D)(1).)
Discussion
The city moved its excess liability insurance program from the California State Association of
Counties Excess Insurance Authority to the California Insurance Pool Authority last year to
obtain higher coverage limits and a more competitive price. CIPA, a joint powers authority
composed of thirteen member cities, requires a two‐year commitment by the city and this will
be the city’s second year with the pool. The policy period will run from July 1, 2020, to June 30,
2021, and the estimated annual premium will not exceed $609,000.
Fiscal Analysis
The estimated premium for excess liability coverage from CIPA is not to exceed $609,000 in
fiscal year 2020‐21. This is an $81,191, or approximately 15 percent, increase over last year’s
premium. This increase is due to an overall hardening in the insurance marketplace, with prices
higher and policies harder to obtain. Sufficient funds have been requested in the fiscal year
2020‐21 budget for this premium.
June 23, 2020 Item #2 Page 1 of 4
CA Review CKM
Next Steps
With the City Council’s approval, staff will obtain a final premium calculation from CIPA and
create a purchase order for payment.
Environmental Evaluation (CEQA)
This action does not constitute a “project” within the meaning of the California Environmental
Quality Act under Public Resources Code Section 21065 in that it has no potential to cause
either direct physical change to the environment, or a reasonably foreseeable indirect change
in the environment, and does not require environmental review.
Public Notification and Outreach
Public notice of this item was posted in accordance with the Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours prior to scheduled meeting date.
Exhibits
1. City Council resolution
June 23, 2020 Item #2 Page 2 of 4
RESOLUTION NO. 2020-119
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE PURCHASE OF $43 MILLION OF EXCESS
LIABILITY COVERAGE THROUGH CALIFORNIA INSURANCE POOL AUTHORITY
(CIPA) FOR FISCAL YEAR 2020-2021 IN AN AMOUNT NOT TO EXCEED
$609,000.
EXHIBIT 1
WHEREAS, the City Council of the City of Carlsbad, California has determined that it has a desire
to purchase excess liability coverage through California Insurance Pool Authority (CIPA); and
WHEREAS, AON has negotiated the purchase of $43 million of excess liability coverage through
CIPA for the next fiscal year beginning on July 1, 2020 and concluding on June 30, 2021.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That the purchase of $43 million of excess liability coverage through CIPA effective
July 1, 2020 to June 30, 2021, is approved and the Deputy City Manager, Administrative
Services is authorized to issue a warrant in an amount not to exceed $609,000 for
payment of the premium to CIPA (Attachment A).
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 23rd day of June, 2020, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Hall, Blackburn, Bhat-Patel, Schumacher.
None.
None.
MATT HALL, Mayor
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