HomeMy WebLinkAbout2021-07-13; City Council; ; Purchase of Excess Workers’ Compensation Coverage through Safety National Casualty Corporation for Fiscal Year 2021-2022 in the Amount of $259,270Meeting Date: July 13, 2021
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Sarah Reiswig, Management Analyst
sarah.reiswig@carlsbadca.gov, 760-500-9335
Judy von Kalinowski, Human Resources Director
judy.vonkalinowski@carlsbadca.gov, 760-473-4670
Subject: Purchase of Excess Workers’ Compensation Coverage through Safety
National Casualty Corporation for Fiscal Year 2021-2022 in the Amount of
$259,270
District: All
Recommended Action
Adopt a resolution authorizing the purchase of excess workers’ compensation coverage through
Safety National Casualty Corporation for fiscal year 2021-22 in the amount of $259,270.
Executive Summary / Discussion
The city is renewing annual excess workers’ compensation insurance through Safety National
Casualty Corporation for fiscal year 2021-22 in the amount of $259,270. 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).)
Safety National Casualty Corporation provided two premium estimates for fiscal year 2021-22,
giving the city the option of maintaining the current self-insured retention level of $1.25 million
or increasing the self-insured retention level to $1.5 million.
Policy renewal at the current self-insured retention level, $1.25 million for all safety and non-
safety employees per claim, would result in a 22% rate increase ($294,479). Renewal with an
increased self-insured retention level of $1.5 million for all safety and non-safety employees
would result in a rate increase of 7.3% ($259,270).
Safety National Casualty Corporation has been the incumbent insurance carrier since fiscal year
2007-08. Based on the city’s successful history with this carrier and the acceptable quote, staff
recommends renewing its policy with an increased self-insured retention level. The policy
period will run from August 1, 2021, to July 31, 2022, and the annual premium will not exceed
$259,270.
July 13, 2021 Item #2 Page 1 of 4
Options
Staff worked with two insurance brokers, Hub International and Alliant, to solicit bids for excess
insurance. Hub International obtained a bid from Safety National Casualty Corporation which
included two estimates:
1) Maintain current self-retention level, $1.25 million for all safety and non-safety
employees for an annual premium not to exceed $294,479, a 22% increase)
2) Increase self-retention level to $1.5 million for all safety and non-safety employees for
an annual premium not to exceed $259,270, a 7.3% increase)
Hub International submitted additional requests for estimates, but no other vendors
responded.
Aliant obtained a bid from Public Risk Innovation, Solutions, and Management, or PRISM, a
member-directed insurance risk sharing pool. PRISM’s bid also included two estimates:
1) $2 million self-insured retention level for all safety and non-safety employees for an
annual premium of $272,000-$275,000
2) $1 million self-insured retention level for all safety and non-safety employees for an
annual premium of $494,000-$499,000
Fiscal Analysis
The fiscal year 2020-21 rate was $0.302 per $100 payroll. The fiscal year 2021-22 rate, with an
increased self-insured retention level, is $0.324 per $100 payroll. The overall rate increase is
7.3%. Sufficient funds have been requested in the fiscal year 2021-22 budget for this premium.
While there is no current impact of the self-insured retention level increase of $250,000, the
city is exposed to additional financial risk, although the likelihood of a claim breaching this self-
insured retention level is very low.
Next Steps
With the City Council’s approval, staff will complete all necessary administrative actions
necessary to renew the insurance.
Environmental Evaluation (CEQA)
This action does not constitute a “project” within the meaning of the California Environmental
Quality Act under California Public Resources Code Section 21065 in that it has no potential to
cause either a direct physical change in the environment or a reasonably foreseeable indirect
physical change in the environment. Therefore, it does not require environmental review.
Public Notification and Outreach
Public notice of this item was posted in keeping with the Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1. City Council resolution
July 13, 2021 Item #2 Page 2 of 4
RESOLUTION NO. 2021-159
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE PURCHASE OF EXCESS WORKERS'
COMPENSATION COVERAGE THROUGH SAFETY NATIONAL CASUALTY
CORPORATION FOR FISCAL YEAR 2021-2022 IN AN AMOUNT NOT TO
EXCEED $259,270
WHEREAS, the City Council of the City of Carlsbad, California has determined that it has a desire
to purchase excess workers' compensation coverage through Safety National Casualty Corporation;
and
WHEREAS, HUB International has negotiated the purchase of excess workers' compensation
coverage through Safety National Casualty Corporation for the period beginning on August 1, 2021 and
concluding on July 31, 2022.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
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1. That the above recitations are true and correct.
2. That the purchase of excess workers' compensation coverage through Safety National
Casualty Corporation effective August 1, 2021 to July 31, 2022, is approved and the
Deputy City Manager, Administrative Services is authorized to issue a warrant in an
amount not to exceed $259,270 for payment of the premium to Safety National Casualty
Corporation.
3. That the City Manager or a designee is authorized to execute any documents necessary
to implement the purchase.
July 13, 2021 Item #2 Page 3 of 4