HomeMy WebLinkAbout1993-01-12; Municipal Water District; 204; Property & Liability Insurance CoverageCARLSBAD FYNICIPAL WATER DISTRICT -
TLE’ COVERAGE - ~ PROPERTY AND LIABILITY INSURANCE
Authorize staff to include CMWD under the liability coverage provided by the California
Municipal Insurance Authority, and acquire property insurance from CMIA in place of
ACWA.
ITEM EXPLANATION
Property and liability insurance coverage has been provided to the CMWD by the Association
of California Water Agencies/Joint Powers Insurance Authority (ACWA/JPIA). However, in
response to the ACWA/JPIA Executive Committee’s concerns about increased liability
resulting from the recent consolidation of CMWD services with the City, the Board of
Directors of ACWA has terminated the relationship between CMWD and ACWA/JPIA
effective January 1, 1993. This decision was made without evidence that CMWD as a
subsidiary district of the City exposes the JPIA to greater risks, and despite the fact that staff
attended the JPIA Liability Subcommittee’s meeting last August to explain CMWD’s
organizational structure and relationship to the City.
Liabilitv - Liability coverage has been assumed by the California Municipal Insurance
Authority (CMIA), the liability insurance pool of which the City is a member. Because the
liability premium is a function of City payroll, and former CMWD employees are now City
employees, this coverage is provided at no charge over what the City would pay if the District
was not listed under the City’s coverage.
Liability coverage provided by CMIA is comparable to that of ACWA/JPIA. The major
difference is that under CMIA the City maintains a self insured retention (SIR) of $500,000,
while under ACWA/JPIA’s coverage, CMWD maintained a deductible of $5,000. However,
CMWD has an excellent history of low level claims/Iosses. As a result, it would be both
appropriate and cost effective for CMWD to operate under this SIR and contribute, as do all
other City departments, to the City’s liability reserve which CMIA requires to be maintained
at a minimum level of three times the SIR.
Provertv - Staff requested three bids for property insurance. CMIA’s proposal is the only
one received. The coverage contained in the CMIA insurance policy is comparable to the
coverage provided in the City’s property insurance policy. Coverage under CMIA was bound
effective January 1, 1993, pending Board action on the proposal.
FISCAL IMPACT
Because the liability premium is a function of City payroll, and former CMWD employees are
now City employees, this coverage is provided at no charge over what the City would pay if
the District was not listed under the City’s coverage. However, because the City must
maintain in its liability reserve account an amount equal to three times the SIR, CMWD will
be charged, as are all other departments, to maintain a-liability reserve of at least $1,500,000.
The recommended property coverage will cost $9,531. Sufficient funds are available in the
Insurance Premium Account.
1. Resolution No. 8 b q
RESOLUTION NO. 82g
PROPERTY AND LIABILITY INSURANCE
COVERAGE FOR THE CARLSBAD MUNICIPAL
WATER DISTRICI-
WHEREAS the.Board of Directors of ACWA has terminated the
relationship between CMWD and AcwA/JpIA; and
WHEREAS liability coverage has been assumed by the California Municipal
Insurance Authority (CMIA); and
WHEREAS CMIA’s proposal to cover CMWD property is the only bid
received; and
WHEREAS there are sufficient funds in the Insurance Premium Account,
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors, as
follows:
1. Staff is authorized to include CMWD under the liability coverage for the
City provided by CM& and
2. Property coverage under CMIA is hereby approved and the Financial
Management Director is authorized to issue a warrant in the amount of $9,531 for the
payment of the premium of said coverage.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the
Board of Directors of the Carlsbad Municipal Water District on the 12th day of
January 1993, by the following vote, to wit:
AYES: Board Members Lewis, Stanton, Kulchin, Nygaard and Finnila
NOES: None
ABSENT: None
Al-rEsT:
LiJLtd!<y
ALETHA L. RAUTENKRANZ, Secre