HomeMy WebLinkAbout2022-06-21; City Council; ; Purchase of Excess Liability Coverage Not to Exceed $43 Million Through California Insurance Pool Authority for Fiscal Year 2022-23 for an Amount Not to Exceed $930,000CA Review CKM
Meeting Date: June 21, 2022
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Ed Garbo, Risk Manager
ed.garbo@carlsbadca.gov or 442-339-2471
Subject:
District:
Purchase of Excess Liability Coverage Not to Exceed $43 Million Through
California Insurance Pool Authority for Fiscal Year 2022-23 for an Amount
Not to Exceed $930,000
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 2022-23 for an amount
not to exceed $930,000.
Executive Summary/Discussion
The city is renewing its excess liability protection not to exceed $43 million through California
Insurance Pool Authority for fiscal year 2022-23 in an amount not to exceed $930,000. This
renewal must be approved by the City Council because the cost exceeds $100,000 per
agreement year, in accordance with 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 it was able to obtain higher coverage limits and a more competitive price than
the previous insurance pool program. The policy period will run from July 1, 2022, to
June 30, 2023.
Options
The market for municipal excess insurance is exceedingly unstable. If the purchase of excess
liability coverage through California Insurance Pool Authority is rejected, the city will have to try
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 the city’s standards for seasoned management and financial stability.
Fiscal Analysis
The estimated premium for fiscal year 2022-23 for California Insurance Pool Authority excess
liability coverage is not to exceed $930,000. This premium reflects an overall hardening in the
insurance marketplace, with prices higher and policies harder to obtain. Sufficient funds have
been requested in the fiscal year 2022-23 budget for this premium.
June 21, 2022 Item #2 Page 1 of 3
Next Steps
With the City Council’s approval, staff will obtain a final premium calculation from California
Insurance Pool Authority and create a purchase order for payment.
Environmental Evaluation
In keeping with California Public Resources Code Section 21065, this action does not constitute
a “project” within the meaning of the California Environmental Quality Act in that it has no
potential to cause either 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
This item was noticed in accordance with the Ralph M. Brown Act and was available for public
viewing and review at least 72 hours prior to scheduled meeting date.
Exhibits
1.City Council resolution
June 21, 2022 Item #2 Page 2 of 3
RESOLUTION NO. 2022-145
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE PURCHASE OF EXCESS LIABILITY COVERAGE
NOT TO EXCEED $43 MILLION THROUGH CALIFORNIA INSURANCE POOL
AUTHORITY FOR FISCAL YEAR 2022-2023 FOR AN AMOUNT NOT TO EXCEED
$930,000
EXHIBIT 1
WHEREAS, the City Council of the City of Carlsbad, California desires 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, 2022,
and concluding on June 30, 2023.
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.That the City Manager or designee is authorized to take all necessary and appropriate
actions to purchase up to $43 million of excess liability coverage through California
Insurance Pool Authority, effective July 1, 2022, to June 30, 2023, in an amount not to
exceed $930,000.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 21st day of June, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Hall, Blackburn, Bhat-Patel, Acosta, Norby.
None.
None.
..f,-rFAVIOLA MEDINA, City Clerk Services Manager
(SEAL)
June 21, 2022 Item #2 Page 3 of 3
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