HomeMy WebLinkAbout1992-11-10; Municipal Water District; 198; Workers Compensation Insurance for CMWDCARL~BAD F-NICIPAL WATER DISTRICT . -AGENDA BILL bJL7J
AB#’ I?% TITLE: WORKERS COMPENSATION INSURANCE MTG. iI -10 -7 2 FOR THE CARLSBAD MUNICIPAL WATER
DEPT. RM DISTRICT
RECOMMENDED ACTION:
Adopt Resolution No. 82 3 authorizing the Carlsbad Municipal Water District (CMWD)
to cancel the contract with State Compensation Insurance Fund for workers’ compensation
insurance coverage, effective September 28, 1992.
ITEM EXPLANATION:
Workers’ compensation insurance coverage for employees at the CMWD has been provided
by contract with State Compensation Insurance Fund as part of the District’s insurance
coverage under the Association of California Water Agencies/Joint Powers Insurance
Authority (ACWA/JPIA). Staff is recommending that this contract be canceled for the
reasons listed below.
1.
2.
3 . .
Termination of Relationshin with ACWA/JPIA - In response to the ACWA/JPIA
Liability Program Subcommittee’s concerns about increased liability resulting from the
recent consolidation of CMWD services with the City, the Executive Committee of
ACWA has voted to recommend to the Board of Directors that the relationship
between CMWD and ACWA/JPIA be terminated, effective January 1, 1993. As a
result, employees at CMWD will be covered under the City’s workers’ compensation
self-insurance program, as are all other City employees. In addition, since ACWA also
provides the District’s liability insurance., that coverage will be assumed by California
Municipal Insurance Authority (C.M.I.A.), the liability insurance pool of which the
City is a member.
High Cost - Historically, there have been very few workers’ compensation claims
from CMWD employees and the premiums have been disproportionate relative to the
cost of the claims. The current premium is $55,000 which far exceeds the actual cost
to administer the claims and pay medical costs.
Inadequate Level of Service - The service received from State Compensation
Insurance Fund has not been satisfactory.’ Claims are not monitored adequately and
there is a lack of communication and close coordination with City/District staff on
claims management. Recently, it was necessary to have the City’s third party
administrator, Hertz Claim Management, intercede to ensure that a case was properly
handled.
Staff recommends cancellation of the State Compensation Insurance Fund contract effective
September 28, 1992, the date the last quarterly payment was made and the date authorized by
the State Compensation Insurance Fund San Diego District Office.
FISCAL IMPACT:
CMWD will realize a savings of approximately $45,000 per year. Administration of the claims
will be absorbed by the City’s third party administrator, HCM Claim Management. For FY
92-93, CMWD will pay $7,100 to the City’s workers’ compensation internal service fund versus
premiums of $55,000 for State Compensation Insurance Fund coverage.
EXHIBITS
1. Resolution No. 8 2 3
I RESOLUTION NO. $23
WORKERS COMPENSATION INSURANCE FOR
THE CARLSBAD MUNICIPAL WATER DISTRICT
WHEREAS the service received from State Compensation Insurance Fund
has not been satisfactory; and
WHEREAS the premiums have been disproportionate relative to the cost of
the claims; and
WHEREAS the Executive Committee of ACWA has voted to recommend
to the ACWA Board of Directors that the relationship between CMWD and ACWA/JPIA
be terminated.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE
CARLSBAD MUNICIPAL WATER DISTRICT HEREBY RESOLVES THAT The
contract with State Compensation Insurance Fund for workers’ compensation insurance
coverage is canceled, effective September 28, 1992.
PASSED, APPROVED AND ADOPTED at a regular meeting of the
Carlsbad Municipal Water District held on the 10th day of NOVEMBER 1992, by the
following vote, to wit:
AYES: .,Board Members Lewis, Kulchin, Larson, Stanton, Nygaard
NOES: None
ABSENT: None
ATTEST:
ALETHA L. RAUTENKRANZ, Secretary