CA Review JRT
Meeting Date: June 18, 2024
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Ed Garbo, Risk Manager
[email protected] or 442-339-2471
Subject: Purchase of Excess Liability Insurance Coverage Districts: All
Recommended Action
Adopt a resolution approving the purchase of a maximum of $43 million of excess liability insurance coverage through California Insurance Pool Authority for fiscal year 2024-2025 for an amount not to exceed $1,258,000.
Executive Summary
The city is renewing its excess liability coverage of up to $43 million through California Insurance Pool Authority for fiscal year 2024-25 in an amount not to exceed $1,258,000.
The city moved its excess liability insurance program to California Insurance Pool Authority in fiscal year 2019-20 because it was able to obtain higher coverage limits and a more competitive price than the previous insurance pool program.1
The policy period will run July 1, 2024, to June 30, 2025.
This purchase must be approved by the City Council under Carlsbad Municipal Code Section
3.28.040 (D)(1) because the cost exceeds $100,000 per agreement year.
Fiscal Analysis
The estimated premium for fiscal year 2024-25 for California Insurance Pool Authority excess liability coverage is not to exceed $1,258,000, which represents a $185,315, or approximately
19.5%, increase over last year’s premium. While the market is showing continued signs of stabilization, this increase is due to an overall hardening in the insurance marketplace, with prices higher and policies harder to obtain. Sufficient funds have been included in the fiscal year 2024-25 Budget for this premium.
Next Steps
Staff will obtain a final premium calculation from California Insurance Pool Authority and create a purchase order for payment.
1 The California Insurance Pool Authority is a joint powers authority composed of fourteen member cities.
June 18, 2024 Item #4 Page 1 of 3
Environmental Evaluation
This action does not require environmental review because it 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 or a reasonably foreseeable indirect physical change in the environment.
Exhibits
1. City Council resolution
June 18, 2024 Item #4 Page 2 of 3
RESOLUTION NO. 2024-134
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 2024-2025 FOR AN AMOUNT NOT TO EXCEED $1,258,000
WHEREAS, the City Council of the City of Carlsbad, California has determined that it desires to purchase excess liability insurance coverage through the California Insurance Pool Authority; and WHEREAS, Aon has negotiated the purchase of a maximum of $43 million of excess liability insurance coverage through the California Insurance Pool Authority for the next fiscal year beginning on July 1, 2024, and concluding on June 30, 2025.
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 purchase of $43 million of excess liability coverage through the California Insurance Pool Authority effective July 1, 2024, to June 30, 2025, is hereby approved and the City Manager or designee is authorized to direct the Deputy City Manager of Administrative Services to issue a warrant in an amount not to exceed $1,258,000 for payment of the premium to the California Insurance Pool Authority.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 18th day of June, 2024, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
ABSTAIN:
BLACKBURN, BHAT-PATEL, ACOSTA, BURKHOLDER, LUNA.
NONE.
NONE.
NONE.
SHERRY F
(SEAL)
Exhibit 1
June 18, 2024 Item #4 Page 3 of 3