HomeMy WebLinkAbout2021-07-13; City Council; ; Purchase of Excess Liability Coverage Not to Exceed $43 Million Through California Insurance Pool Authority for Fiscal Year 2021-2022 in an Amount not to Exceed $753,424Meeting Date: July 13, 2021
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Ed Garbo, Risk Manager
ed.garbo@carlsbadca.gov, 760-602-2471
Subject:
District:
Purchase of Excess Liability Coverage Not to Exceed $43 Million Through
California Insurance Pool Authority for Fiscal Year 2021-2022 in an
Amount not to Exceed $753,424
All
Recommended Action
Adopt a resolution authorizing the purchase of excess liability coverage not to exceed $43
million through California Insurance Pool Authority for fiscal year 2021-22 in an amount not to
exceed $753,424.
Executive Summary/Discussion
The city is renewing its excess liability protection for FY 2021-22. This renewal must be
approved by the City Council because the cost exceeds $100,000 for the agreement year as
outlined in Carlsbad Municipal Code Section 3.28.040(D)(1).
The city moved its excess liability insurance program to California Insurance Pool Authority in FY
2019-20 because the city was able to obtain higher coverage limits and a more competitive
price than the previous insurance pool program. The policy period will run July 1, 2021, to
June 30, 2022.
Options
The market for municipal excess insurance is exceedingly unstable. If the purchase through
California Insurance Pool Authority is rejected, the city will have to attempt to obtain coverage
in the open market. This will likely result in more expensive premiums for less coverage than
what is being proposed. Additionally, other insurance pool programs may not meet our
standards for seasoned management and financial stability.
July 13, 2021 Item #3 Page 1 of 4
Fiscal Analysis
The estimated premium for FY 2021-22 for California Insurance Pool Authority excess liability
coverage is not to exceed $753,424, which represents a $155,761, or approximately 26%,
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 for this premium
have been approved in the FY 2021-22 budget.
Next Steps
Obtain a final premium calculation from California Insurance Pool Authority 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 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 and therefore does not require environmental review.
Public Notification
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.
date.
Exhibits
1. City Council resolution
July 13, 2021 Item #3 Page 2 of 4
RESOLUTION NO. 2021-160
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE PURCHASE OF A MAXIMUM OF $43 MILLION
OF EXCESS LIABILITY COVERAGE THROUGH CALIFORNIA INSURANCE POOL
AUTHORITY FOR FISCAL YEAR 2021-2022 IN AN AMOUNT NOT TO EXCEED
$753,424
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; and
WHEREAS, AON has negotiated the purchase of a maximum of $43 million of excess liability
coverage through California Insurance Pool Authority for the next fiscal year beginning on July 1, 2021
and concluding on June 30, 2022 in an amount not to exceed $753,424 (Attachment A).
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows that:
1.The above recitations are true and correct.
2.The purchase of $43 million of excess liability coverage through California Insurance Pool
Authority effective July 1, 2021 toJune 30, 2022, is approved in an amount not to exceed
$753,424.
3.The City Manager or a designee is authorized to take any further action necessary and
appropriate to carry out the purpose of this resolution.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 13th day of July, 2021, by the following vote, to wit:
AYES: Hall, Blackburn, Acosta, Bhat-Patel.
NAYS: None.
ABSENT: None.
MATT HALL, Mayor
PvIc:RS10- XI/1ov -f-'7)‘r
BARBARA ENGLESON, City Clerk
(SEAL)
July 13, 2021 Item #3 Page 3 of 4
California Insurance Pool Authority
Serving the Cities of Arcadia, Brea, Buena Park, Carlsbad, Cypress, Irvine, Laguna Beach, La Habra, Montclair, Orange, Tustin, Whittier, Yorba Linda
June 23, 2021
Ed Garbo Risk Manager
City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008
RE: California Insurance Pool Authority 2021/22 Liability Program Renewal
Dear Ed:
This will confirm that the City of Carlsbad’s 2021/22 liability program contributions to California Insurance Pool Authority will not exceed $753,424.
Sincerely,
Janet Kiser, General Manager
Attachment A
July 13, 2021 Item #3 Page 4 of 4