May 1, 2024
Casey Brooksher
Director of Administrative Services
City of Hesperia
RE: Risk Financing Options for Property, Liability, and Workers’ Compensation Dear Casey,
We are pleased to present our Risk Financing Options Study final report pursuant to our engagement with the City of Hesperia (City).
Please let me know if you and your team would like to further discuss the report’s findings, conclusions, and recommendations.
We have enjoyed working with you and the City.
Sincerely,
Catherine Wells, MBA, CPCU, ARM, CRIS Elizabeth Schmitt Principal Consultant Staff Consultant
11230 GOLD EXPRESS DRIVE, #310-220, GOLD RIVER, CA 95670-4484 916.842.5200 WWW.ALBERTRISK.COM Attachment 1
CITY OF HESPERIA
Risk Financing Options for Property, Liability,
and Workers’ Compensation
April 29, 2024
3 Table of Contents
I. Executive Summary ............................................................................................................................... 4 A. Purpose and Structure of This Report ....................................................................................... 4 B. Findings ..................................................................................................................................... 4 C. Conclusions ............................................................................................................................... 5 D. Recommendations .................................................................................................................... 6 II. Background, Interviews, Goals and Objectives, and Risk Profile ........................................................... 7 A. Background ............................................................................................................................... 7 B. Interviews ................................................................................................................................. 7 C. City Goals and Objectives .......................................................................................................... 8 D. City's Risk Profile ....................................................................................................................... 8 III. Overview of the JPA and Insurance Marketplace ................................................................................ 10 A. JPA Governing Code ................................................................................................................ 10 B. JPAs for Cities .......................................................................................................................... 10 C. Recommended JPAs by Geography and Fit .............................................................................. 11 D. Short List JPAs - Basic Elements ............................................................................................... 12 E. Traditional Insurance ............................................................................................................... 13 IV. Financial Analysis................................................................................................................................. 15 A. JPA Financial Strength ............................................................................................................. 15 B. Rate Accepting Risk ................................................................................................................. 16 C. Ability to Withstand Adverse Loss Development ..................................................................... 16 D. Adequate Funding for Current Claims ..................................................................................... 17 E. Conclusions from Financial Analysis ........................................................................................ 18 V. Coverage Comparisons........................................................................................................................ 19 A. Liability Program Structures .................................................................................................... 20 B. Employment Practices Liability Program Structures ................................................................ 21 C. Property Coverage Structures .................................................................................................. 22 D. Workers’ Compensation Structures ......................................................................................... 23 E. Ancillary Insurance Program Structures................................................................................... 24 VI. Services, Support, and Claims ............................................................................................................. 25 A. Support & Services ................................................................................................................. 26 B. Claim Services ......................................................................................................................... 28 C. Summary of Support, Services and Claims Services ................................................................. 29 VII. Conditions and Requirements of Participation ................................................................................... 30 A. Prospective JPA Participation .................................................................................................. 30 B. PERMA Withdrawal ................................................................................................................ 31 C. A Word About Changing JPAs ................................................................................................. 34 VIII. Road Map for Moving Forward .............................................................................................. 35 A. Plan of Action .......................................................................................................................... 35 B. Implementation Timeline........................................................................................................ 37
Appendix A Persons Interviewed ....................................................................................................... 39 Appendix B City of Hesperia Risk Profile ........................................................................................... 41 Appendix C JPA Member Lists .......................................................................................................... 44 Appendix D JPA Coverage Comparisons ............................................................................................ 58
4 I. Executive Summary
The City of Hesperia (City) has participated in the Public Entity Risk Management Authority (PERMA) risk sharing pool since 2010 . PERMA currently has 31 members of which 21 are cities and the balance are transit districts, JPAs, and other local authorities mostly located within the vicinity of the City. The City obtains its liability , property, and workers’ compensation coverages through PERMA. The City ’s retention per workers’ compensation claim is $250,000 and retains deductible obligations of $50,000 for general liability and $10,000 for property insurance.
A. Purpose and Structure of This Report
Albert Risk Management Consultants (ARMC) has been retained by the City to evaluate risk financing alternatives to PERMA, including other JPAs and commercial insurance programs. Our engagement involves reviewing prospective JPA program structures and insurance coverages, risk management services including training and education and risk control services and other key aspects of how each JPA operates . A cost evaluation of risk financing comparisons was not conducted in this Phase 1 study. Rather, this study focuses on overall “fit” between JPA options and renders an opinion of the best risk financing options for the City. If requested by the City, ARMC’s Phase 2 study will explore the financial aspect of alternative JPAs including self-insured retention and deductible options.
Our analysis includes an overview and summary of our interviews with City stakeholders, broad assessments of the marketplace and JPA alternatives, JPA financial strength, services offered, and approach to claims management. This executive summary provides our findings, conclusions, and recommendations from the analysis we conducted. From this final evaluation, the City should have a roadmap to determine whether to engage into Phase 2 to solicit firm quotations from alternate JPAs. Changing JPAs does not relieve the City of any potential special assessments and claim obligations until all coverage years are closed out for years the City participated in PERMA.
B. Findings
• During the course of this study, six (6) goals and objectives were expressed by City staff during the interviews:
1. Conduct basic due diligence of the City’s existing insurance JPA “fit” while exploring alternative risk financing options for property, liability, and workers’ compensation risks;
2. Explore risk pool options that offer a strong similar risk profile as the City, especially an option that includes members in neighboring cities with similar emerging risks;
3. Explore options that would reduce the insurance program administrative burden;
4. Explore options that would improve claims service and ensure accountability while offering an option for the City to retain some control of the claim process;
5. Explore options that offer proactive loss control services to the City, and;
6. Explore options that provide robust training and education opportunities for City staff.
5 • In addition to the City’s current participation in PERMA, 16 alternative JPAs were also analyzed for potential "fit." Many were eliminated due to geographic location while others were too small or didn’t share the same risk profile as the City. Each of these prospective JPAs were compared against the current JPA, PERMA , using various metrics and paired with the City-stated goals and objectives.
From this exercise, three prospective JPAs were identified considering the objectives stated above:
o California Joint Powers Insurance Authority (CJPIA);
o Public Risk Innovation Solutions and Management (PRISM); and o California Intergovernmental Risk Authority (CIRA)
C. Conclusions
Our analysis in performing this study has led to eight (8) conclusions:
1. The short list of risk pools reviewed did not all meet all the City-stated goals and objectives. The following table outlines each goal and objective and whether each risk pool would meet each of the City-stated stated goals including the incumbent, PERMA.
Stated Goal PERMA PRISM CJPIA CIRA
Conduct due
diligence of “fit” and
identify JPA
alternatives for
insurance program
Incumbent;
this potentially
no longer
remains “a fit”
for the City
Potential Yes Yes
Similar risk profile in
neighboring cities
with similar emerging
risks
Yes No
Yes, including
many other
southern
California cities
No, includes
both
northern and
southern
California
cities
Reduce the insurance
administrative
burden
No Potential Potential Potential
Claims accountability
while offering some
City claim control
No Yes Yes Yes
Proactive loss control
services No Potential Yes Yes
Robust training and
education to City
staff
No Potential Yes Yes
2. The best “fit” from our analysis points to CJPIA as this risk pool currently meets most all of the City-stated objectives. Interviews with City staff indicated the need for more robust and proactive risk control services, training and education, and more accountability with claims management for all lines of insurance. With this said, CIRA remains a strong second candidate and should be further vetted should the City engage in Phase 2 of this due diligence.
6 3. PRISM is a partial “fit” for the City as it offers liability, property, and workers’ compensation programs, allows the member to retain control of their claims, and has a robust menu of training and education programs. At this stage of the analysis, it is not a perfect “fit” for the City in that it is very large risk pool with hundreds of members who may or may not be neighboring cities and may not offer the customized services desired by the City.
4. The CJPIA JPA option could be a very strong candidate for the City. Its strong financials, service- oriented approach, coverage options for all lines of insurance , robust proactive loss control approach and extensive training and educational programs seem to best match for many of the City stated objectives.
5. The CIRA option remains a strong potential candidate for the City’s consideration. Other than the City-stated goal of similar geographic location, CIRA does appear to meet most of the City’s goals and objectives, especially as the City seeks more customized services and improved claim management.
6. Commercial insurance is not a viable option for the City for either liability, property, or workers’ compensation as the insurance market is too volatile with limited availability and appetite for public entity risks.
7. Use caution withdrawing from PERMA earlier than the required 6-month notice pursuant to the JPA Agreement provisions. PERMA, as well as most risk pools, will assess early withdrawal fees and assessments which could be an amount at least as the annual premium for each line of coverage. Joining a risk pool in the middle of a policy coverage period is not advisable from a coverage and administrative standpoint.
8. Transitioning to a new JPA can be disruptive, at least in the short term.
D. Recommendations
Our analysis in performing this study has led to one (1) recommendation.
1. Pursue alternatives to PERMA and initiate Phase 2 of the study . The Phase 1 study determined there are enough reasons to seek alternatives to the existing risk pool given many of the City’s goals and objectives are currently not being met.
The Phase 2 study will facilitate the process of obtaining initial quotes from PRISM, CJPIA, and CIRA for the current 2024/2025 coverage period. After this initial financial assessment, the Phase 2 study will facilitate the application process and interview process with the short list JPAs to further refine the “best fit” for the City for the 2025/2026 coverage year. The Phase 2 study will also facilitate obtaining firm pricing and terms in Spring 2025. Keep in mind PERMA’s 6-month requirement for notice to withdrawal is December 31, 2024.
7 II. Background, Interviews, Goals and Objectives, and Risk Profile
A. Background
The City engaged Albert Risk Management Consultants (ARMC) to explore various risk pools as an alternative to PERMA to finance its liability, property, and workers’ compensation risks. The City has been a member of PERMA since 2010. Over the past several years, the City has experienced a variety of service issues involving administration, finance, and claims through PERMA and its appointed vendors. The other motivation for the engagement was to conduct a due diligence review to determine if PERMA remains the best fit for the City’s insurance and risk management needs. The decision was then made to conduct an objective unbiased study of all alternative risk pools as it is a healthy exercise to periodically evaluate options.
The City engaged ARMC for two phases of this study. The first phase analyzes PERMA as an appropriate fit for the City. The first phase also identifies potential JPA options for the City to consider. Potential candidates are then paired down to further analyze potential fit including coverage differences, financial health, services offered, and claims handling matters. At the conclusion of the study, an implementation plan is outlined for the City to follow in moving forward with Phase 2 of the study. Phase 1 does not evaluate the financial feasibility of various risk pools as that analysis should be done following evaluation of the best “fit” for the City.
Phase 2 involves obtaining rate indications and other cost information from the identified short list in the Phase 1 study. In Phase 2, each of the short list JPAs will be approached to obtain pricing indications for membership in the 2025/2026 fiscal year, or earlier if the City elects to withdrawal from PERMA sooner. The City will then go through the application process with each JPA and provide exposure data from which the prospective JPA will provide a pricing indication. Interviews with each prospective JPA will most likely occur, further assisting with the overall “fit” analysis of the prospective pool. A report will be prepared with the results of all pricing indications, other costs, and summary of interviews with each JPA. It is at this stage the City will be in a position to make a reasonable decision whether to exit PERMA or switch to another JPA pool.
B. Interviews
The ARMC team conducted interviews with City's staff and leadership group as well as key individuals a t prospective JPAs. The ARMC team did not contact PERMA nor its current JPA administrator, Alliant Insurance Services, in the course of this Phase 1 study . Risk financing alternatives were discussed with interviewees including alternate risk pools and commercial insurance options. Each interviewee was asked what they needed in a risk pool to better service the City. The interviews also involved questions surrounding the City's risk profile, risk appetite and experiences to date with participation in PERMA.
The results of the interviews were mixed with some indicating dissatisfaction while others did not express concerns. All City interviewees did express a genuine desire to vet the current risk pool and learn about alternatives as a matter of basic due diligence. Specifically, the following are key comments were expressed during the interviews:
• Most interviewees indicated it was important for the City to continue its participation in a risk pool with cities similar in risk profile to the City of Hesperia. Many thought the Phase 1 study would provide the necessary due diligence regarding whether PERMA continues to be the best fit for the City. The study would also explore other services offered and alternative approaches to claims. It was important to several interviewees that the City belong to a risk pool that shared in the same risks and could also assist with emerging risks, such as increased traffic from recent major construction projects in the area.
8 • Regarding matters involving finance and administration with PERMA, several interviewees expressed concern and frustration over the timing of renewal rate indications and the final premiums assessed for each coverage year. PERMA’s process requires the City to make significant adjustments after final rates are set. This has caused delays with audits as questions to PERMA are not being answered quickly. In addition, monthly statements are not being issued which makes the accounting process more difficult.
• The communication from PERMA has been challenging the past several years. • The service provided by PERMA’s third party administrator has been challenging as claims are not being quickly resolved.
• Several interviewees expressed frustration about the City’s lack of input in the TPA selection process. • The general liability and automobile liability claims are administered by Adminisure with challenged communication. Several expressed the need for a dashboard to manage the claims while others indicate claims are not settled quick enough and communication to claimants is not ideal which elevates the value of the claim.
• Several interviewees expressed a desire to have access to alternative training programs as the selection offered by PERMA and its service partners is ineffective. • Several interviewees expressed a desire to have access to proactive and meaningful loss control programs as the City faces new and emerging risks.
C. City Goals and Objectives
During the interviews, the City provided their goals and objectives for this study:
• Conduct basic due diligence of the City’s existing insurance JPA “fit” while exploring alternative risk financing options for property, liability, and workers’ compensation risks; • Explore risk pool options that offer a strong similar risk profile as the City, especially an option that includes members in neighboring cities with similar emerging risks; • Explore options that would reduce the insurance program administrative burden; • Explore options that would improve claims service and ensure accountability while offering an option for the City to retain some control of the claim process; • Explore options that offer proactive loss control services to the City, and; • Explore options that provide robust training and education opportunities for City staff.
Emphasis has been put on these areas in this study. Our opinion of how each of each of these goals and objectives will be met are addressed in the Executive Summary at the beginning of this report.
D. City's Risk Profile
The City enjoys a low to moderate risk profile compared to other cities in California. The City is growing in population and appears to be adding to staff count to support the population growth. The City owns a golf course and also owns and operates a fleet of 125 vehicles including large equipment handled by the public works department. Although the City has had workers’ compensation and liability claims, interviewees expressed an opinion that the City enjoys a better than average risk profile and would be an attractive candidate to prospective risk pools. The City contracts out both police and fire which reduces both the workers’ compensation and liability risk profile.
9 Several interviewees discussed concerns over emerging risks such as increased amount of traffic due to large public infrastructure construction projects in the area. Recent large projects let by California Department of Transportation have diverted traffi c to streets not designed to withstand the traffic burden from these diversions. In addition, the City will face even more traffic and road congestion from construction of the Brightline West project, a privately developed high-speed train that will bisect the City and surrounding areas.
These projects are impacting City roads and streets and are expected to impact them as construction progresses. Interviewees indicated that claims involving streets and roads have doubled since the inception of construction. Given these emerging risks, however, we believe the City's general approach to risk will translate to competitive rates and terms in the JPA marketplace.
10 III. Overview of the JPA and Insurance Marketplace
A. JPA Governing Code
California Government Code Sections 990 and 990.4 provide that a local government may self-insure, purchase insurance through an authorized insurer, purchase insurance through a surplus lines broker, or any combination thereof. Code Section 990.8 provides that two or more local public entities, by a joint power agreement, may provide insurance for any authorized purpose by any one or more of the methods specified in Section 990.4. A Joint Powers Authority (JPA) as defined under Code Section 6500 is distinct from its member entities and has its own governing body, usually comprised of delegates from the member agencies that form the JPA.
B. JPAs for Cities
The majority of California cities, counties, special districts, and authorities participate in one or multiple of the approximately 17 JPAs for insurance and risk management services. One of the most common types of JPAs is a risk financing authority that provides either a vehicle for sharing losses arising out of the risks of the members or a means to jointly purchase insurance. Often a JPA combines these two (2) approaches, sharing risks up to a certain level then buying "excess" insurance for losses above that level.
Participation is largely an economic decision in terms of reduced contribution expenses versus securing insurance individually in the open market. The JPAs do vary widely though both in terms of coverage and risk management services.
Of the numerous insurance and risk management JPAs in California, roughly 17 have exclusive or even majority participation by cities. The following are potential JPAs we considered when conducting this report.
BCJPIA (Bay Cities Joint Powers Insurance Authority) GSRMA (Golden State Risk Management Authority) BICEP (Big Independent Cities Excess Pool) ICRMA (Independent Cities Risk Management Authority) CIPA (California Insurance Pool Authority) LAWCX (Local Agency Workers' Compensation Excess JPA) CIRA (California Intergovernmental Risk Authority) MPA (Municipal Pooling Authority of Northern California) CJPIA (California Joint Powers Insurance Authority) NCCSIF (Northern California Cities Self Insurance Fund) CJPRMA (California Joint Powers Risk Management PERMA (Public Entity Risk Management Authority) Authority) PRISM (Public Risk Innovation Solutions and Management) CSJVRMA (Central San Joaquin Valley Risk Management Authority) SCORE (Small Cities Organized Risk Effort) ERMAC (Exclusive Risk Management Authority of California) YCPARMIA (Yolo County Public Agency RM Insurance Authority)
Many on this list are clustered by geography and specific to areas in southern California, the San Francisco Bay Area, and parts of central valley. This list of potential JPAs for the City are highlighted below in Section C. Recommended JPAs by Geography and Fit.
11 C. Recommended JPAs by Geography and Fit
During our interviews, the City expressed an interest in obtaining customized risk management and training for their city, provide ease of administration with billing and premium allocations, and participate in a pool that offers the ability for the City to retain control over its claims. These considerations, along with similar geographic and risk tolerance criteria, resulted in a reduced list of three potential JPAs for the City's review and consideration. These pools are highlighted in green in the chart below.
• California Joint Powers Insurance Authority (CJPIA)
• California Intergovernmental Risk Authority (CIRA)
• Public Risk Innovation, Solutions and Management (PRISM)
Geography City Fit Reason
BCJPIA (Bay Cities Joint Powers Insurance Authority) No No Bay Area pool BICEP (Big Independent Cities Excess Pool) Yes No So CA beach cities CIPA (California Insurance Pool Authority Yes No So CAL pool CIRA (California Intergovernmental Risk Authority) -
formerly PARSAC and REMIF Yes Yes Services, ease of
administration
CJPIA (California Joint Powers Insurance Authority) Yes Yes So Cal focused;
customized services ;
ease of administration
CJPRMA (California Joint Powers Risk Management
Authority) No No Northern Cal pool
CSJVRMA (Central San Joaquin Valley Risk
Management Authority) No No City population size less
than 75,000
ERMAC (Exclusive Risk Management Authority of
California No No Small membership
GSRMA (Golden State Risk Management Authority) No No Small municipalities ICRMA (Independent Cities Risk Management
Authority) Yes No All So Cal cities
LAWCX (Local Agency Workers' Compensation Excess) Yes No Only WC pool MPA (Municipal Pooling Authority of Northern CA) No No SF Bay Area cities NCCSIF (Northern California Cities Self Insurance Fund) No No Small NorCal cities PERMA (Public Entity Risk Management Authority) Yes Yes Current Provider PRISM (Public Risk Innovation, Solutions and
Management) - formerly CSAC-EIA Yes Yes Wide offerings; many services; ease of
administration
SCORE (Small Cities Organized Risk Effort) No No Very small cities YCPARMIA (Yolo County Public Agency Risk
Management Insurance Authority) No No Only Yolo County
municipal risks
In addition to the recommended options outlined in green above, other pools were considered but quickly eliminated after matching up with the City's goals. Specifically, both ICRMA , BICEP, and CIPA were considered as there are many members in Southern California and surrounding communities. These pools were eliminated due to either required higher retentions or not a fit with the City’s risk profile. 12 D. Short List JPAs - Basic Elements
The analysis contained in this section will focus on the identified short list of potential pools, their capabilities, their services and overall "fit" for the City of Hesperia. The table below shows member attributes for the four pools. Full-Service cities are those that do not contract out for police and fire. The average population estimates are from 2022.
Basic JPA Elements PRISM CIRA PERMA CJPIA
Number of Members 354 53 31 117
Number of Cities (#) 136 44 21 92
Number of Cities (%) 38% 83% 68% 79%
Number of Cities in
Southern CA
68 (50%) 12 (25%) 100% Several small cities
in Marin & San
Mateo Counties
Other Types of
Members
Transits Districts;
Counties; Pools;
Superior Courts, etc.
Fire Districts,
Dispatch JPA
Transit Districts,
Emergency
Communication
Authorities, JPA,
Training Agency
Transit Districts;
Other Special
Districts
City Population
(Average)
103,647 22,000 59,363 32,928
Pool Type Primary and Excess Primary Primary / Risk
Sharing
Primary / Risk
Sharing
Founded 1979 July 1, 2021 but
was originally
formed in 1986 as
CA Municipal
Insurance
Authority
1985 1977
Lead Time to Join 3 Months 3 Months 3 Months 3-4-Month
application process
followed by BOD
approval
Length of Commitment 3 Years 5 Years 3 Years 3 Years
Participant
Requirements
Optional
participation.
Requirements if
choose to participate
maintain loss
prevention program,
actuarial study every
3 yrs., annual loss
data submissions,
compliance with
EIA's Claims Admin
Use of Authority
Approved TPA,
Must participate in
at least Workers’
Compensation or
Liability
Must participate in
Liability
Board approval,
May take 3-4
months for
application process
and BOD approval;
must join liability
pool to participate
in rest
Notice to Withdraw 60 Days 1 Year or Shorter,
if approved by
Executive
Committee
6 Months 1 Year
13 Basic JPA Elements PRISM CIRA PERMA CJPIA
TPA Selection Sedgwick George Hills
Company
(Liability)
LWP (WC)
Adminisure
(Liability)
Adminisure, Corvel
and Sedgwick (WC)
Carl Warren & Co.
Reserve Confidence
Level
85% 90% 80% "Expected
probability level"
As is indicated from the chart above, PRISM has the highest number of members in its pool even though only 38% of them are cities. This is followed by CJPIA with 117 members and 79% of the membership being cities.
CIRA has 53 members, of which 44 are cities, 4 towns, and 5 fire districts. While PERMA is the only JPA with 100% of cities located in Southern California, they have the lower member count at 31. PRISM has the most diverse type of members in its pool portfolio with non-member cities being transit agencies, counties, superior courts, and other municipalities. Finaly, the table indicates CJPIA tends to support smaller cities as the average population of their pool participants is 32,928. This is contrasted wi th PRISM's average pool participant population base of 103,647.
There are other distinguishing elements from the above-referenced table. All four JPAs evaluated have existed for quite some time starting back as early as the late 1970’s. While CIRA legally formed in 2021, it was originally created as the California Municipal Insurance Authority (CMIA) in 1986. The CMIA JPA Agreement was revised in 1993 when its name was changed to the Public Agency Risk Sharing Authority of California (PARSAC). In 2021, PARSAC merged with the Redwood Empire Municipal Insurance Fund (REMI F) to form CIRA to strengthen the pool, reduce overhead costs, and spread losses over a larger member base. Still another common characteristic of the prospective pools is all prospective pools require a commitment to participate for a minimum of 3 years. The notice to withdrawal from the JPA ranges vastly with PRISM requiring 60 days and CJPIA requiring one year notice. CIRA may permit a shorter notice to withdraw with approval from their executive committee.
Finally, the confidence levels are important to note between the four JPAs. PRISM has increased its confidence level from 70% in past years to a current level of 85%. CJPIA does not specify a specific percentage confidence level, but rather states the organization sets its reserves and rate levels to "expected probability levels." Should the City move forward with CJPIA, it will need to seek clarification on its rate setting and reserving philosophy.
Reserving to a higher confidence level avoids wide fluctuations in loss reserves and thus less volatility in the rates it charges its member organizations. CIRA reserves to the highest confidence level of 90%.
E. Traditional Insurance
Cities and other large public entities that do not participate in JPAs generally fall into two categories: those large enough to maximize their own buying power (or completely self-insure) and those with complex exposures that cannot be addressed on a group basis. These entities may still elect to participate in JPAs for specific exposures or even move in and out of JPAs as the marketplace changes over time.
Though infrequent, there are instances where cities obtain private insurance for certain exposures. Options for the core lines of insurance such as workers' compensation, property, and liability insurance are very limited with only a handful of insurers consistently providing coverage in the public agency sector. The California public entity workers' compensation market, for example, consists of three to four insurance companies with SIR options starting at $500,000 per claim.
Unfortunately for most cities and counties in California, options for primary liability and workers' 14 compensation coverage are very limited outside of the available JPA programs. For liability there are only two to three insurers providing options, each starting with SIRs at $500,000 or greater given recent hard market conditions. The number of potential insurers increases to three or four for workers' compensation, but they are also focused on providing options at the higher excess level. Property coverage can be obtained without the economies of scale that a pool provides. The current property insurance market is very restrictive with limited capacity, particularly for catastrophic perils such as earth movement and flood. The instability of the commercial insurance market makes it difficult for a municipality to stabilize its risk financing program.
Participating in commercial insurance for one year only to move to a JPA solution the next year is not advisable from a cost and administrative burden, let alone the nature of long-term commitment required of JPA participation.
As part of the study, we spoke to several public entity commercial insurance brokers about the possibility of the City transferring its risks to a commercial insurance product(s). All indicated it was not advisable in the current insurance marketplace due to the limited insurer options and restrictive coverage agreements. If options were available now, they may not be available next year at the same terms, conditions, deductibles or self-insured retentions, and premiums. Further, insurers offering commercial insurance options now may not at the next renewal. JPAs are far more stable risk financing options for municipal risks as they are more isolated from the commercial insurance markets and can have superior coverage agreements over commercial insurance options.
15 IV. Financial Analysis
A. JPA Financial Strength
Four JPAs were evaluated in terms of financial strength, using several ratios for analysis. These measures provide an indication of liquidity and of ability of a JPA to pay losses even under adverse conditions. An insurance pool must always balance the need to be liquid and hold adequate reserves against the members' need to keep as much of their cash as possible for their own operations.
There are guidelines and rules for financial management of JPAs. All four JPAs appear to operate within these guidelines although with different degrees of cautiousness. All reviewed JPAs are within all the recommended ranges of the financial tests. Some JPAs fell outside the recommended ranges in prior years but are all within the recommended ranges for the most recent two years reviewed. Note that financials were not available for both CIRA and CJPIA for fiscal year ending on June 30, 2023.
The financial condition of a prospective pool is one of the most important factors to consider when evaluating prospective membership. Financial weakness can lead to undesirable consequences. At the least, weakness can lead to assessments imposed on the members to make up for past deficits. At the worst, financial weakness can lead to a collapse of a pool and unfunded liabilities placed on the members, ultimately defeating the functionality of a pool.
Pools should operate in a manner similar to an insurance company by setting aside sufficient reserves to cover expected losses. They should have a cushion to cover unforeseen circumstances due to changes in membership or adverse loss development and need substantial liquidity to cover irregularities in cash flow that can occur over a period of time.
We analyzed the annual financial reports for all four JPAs for the past 3-4 consecutive years. For comparison of financial strength, we identified various guidelines within the industry of self-insurance pools that recognize the unique character of these organizations. Several of the measurements came from outside sources.
The financial strength of insurance carriers is assessed by third party companies such as AM Best or S&P Global.
The pools we reviewed are not rated by these third parties. However, California JPAs is reviewed for industry best practices by the California Association of Joint Powers Association (CAJPA - www.cajpa.org). Most pools reviewed have been Accredited with Excellence by CAJPA since 1989. This rating is based on an examination of the pool's finances, management, and operations in relation to JPA standards established by CAJPA's Accreditation Committee. Other pools reviewed have also achieved AGRiP Recognition, a distinction the Association of Governmental Risk Pools (AGRiP) awards to pools exceeding operational standards, as reviewed by a committee of peers.
1 "Evaluating Group Risk Finance Programs," The Risk Report, Volume XXXII, No.4, December 2009, International Risk Management Institute, Dallas, Texas.
16 B. Rate Accepting Risk
This ratio measures the rate at which the pool is accepting risk in the form of member contributions against the pool's total surplus, or net assets. It is calculated by taking the JPA's net member contributions for the fiscal year and dividing it by the JPA's net assets. The ratio also measures whether the pool has sufficient assets to support contributions from its members. Net member premium contributions represent the annual amount of premium contributions from pool members less reinsurance costs and excess liability insurance. Ratios over 3:1 indicate the pool is accepting risk by collecting premiums at a higher rate than obligations that can be supported by its surplus. This can potentially cause the pool to have liquidity and solvency issues. The exhibit below shows the net member contributions to asset ratio for each of the pools reviewed.
Exhibit 1 - Rate Accepting Risk
JPA 2019/20 2020/21 2021/22 2022/23 Target Ratio
PRISM 1.36 1.37 1.88 1.46
3:1 or Lower
CIRA 0.53 0.58 1.45 N/A
CJPIA 0.81 0.82 0.94 N/A
PERMA 1.72 7.17 1.35 2.75
As the exhibit indicates, all prospective pools are within industry guidelines of $3.00 in member contributions to $1.00 in net assets. All are accepting risk at a rate under $3.00 for every $1.00 in pool surplus. This indicates the JPAs are accepting risks well within a very conservative rate to its surplus level. Although PERMA’s ratio was out of line for the 2020/2021 fiscal year, the relationship to net member contributions to net assets adjusted to a more favorable level in the last two fiscal years reviewed evidencing less risk.
C. Ability to Withstand Adverse Loss Development
The ratio of loss reserves to net assets measures the pool's total loss reserves against its total surplus, or net assets. It is calculated by taking the JPA's current and long-term loss reserves as stated on its balance sheet and dividing that by the JPA's net assets. Loss reserves consist of the pool's total outstanding current and long- term claim liabilities which include claim reserves, incurred but not reported, and unallocated loss adjustment expenses as represented on the pool's balance sheet each year. The ratio measures a pool's ability to withstand adverse loss development in a given year. Ratios approaching or exceeding a 4:1 relationship of claim liabilities to surplus indicate the pool may not have enough surplus to meet its claim liabilities and therefore may be prone to member assessments.
17 Exhibit 2 - Ability to Withstand Adverse Loss Development
JPA 2019/20 2020/21 2021/22 2022/23 Target Ratio
PRISM 3.76 4.16 6.14 3.37
4:1 or Lower
CIRA 0.7 0.68 1.5 N/A
CJPIA 1.55 1.45 1.77 N/A
PERMA 2.86 12.07 1.73 2.74
As the table indicates, all JPAs are within industry guidelines as their claim liabilities are below the 4:1 industry guideline for each of the 3 - 4 years reviewed. PRISM and PERMA’s relationship of claim liabilities to surplus were higher than industry guidelines during some fiscal years reviewed, however, now fall within guidelines for the most recent fiscal year reviewed. Several years ago, PRISM restructured its liabilities by conducting a loss portfolio transfer which strengthened the organization's balance sheet. This strategy will continue to strengthen the liability portfolio's equity position and will continue to improve in the coming years.
D. Adequate Funding for Current Claims
The relationship of net member contributions to current year losses measures whether the pool is obtaining adequate funding for its current claim obligations. The ratio is calculated by taking total net member contributions for the fiscal year and dividing that by the provision for current losses on the JPA's income statement for that fiscal year. A ratio of 100% means the pool is taking in $1.00 in member premiums for every $1.00 it has in current year claim obligations. A ratio above 100% suggests adequate funding for the current year, while a ratio of less than 100% suggests the pool may be drawing from prior year contributions to pay current claim obligations.
18 The following sections present the analysis of this ratio for each of the four JPAs evaluated.
Exhibit 3 - Adequate Funding for Current Claims
JPA 2019/20 2020/21 2021/22 2022/23 Target
Ratio
PRISM 91% 83% 106% 158%
100% or
Greater
CIRA 394% 348% 185% N/A
CJPIA 130% 185% 152% N/A
PERMA 155% 136% 360% 220%
The relationship of net member contributions to provisions for current losses measures whether the pool is accepting risk at a faster rate than the claims for a particular fiscal year. All four pools demonstrate a healthy position and are adequately funded to meet its current claim obligations. CJPIA, CIRA, and PERMA have always maintained a healthy relationship of member contributions to current liabilities.
In several recent fiscal years, PRISM was collecting more member contributions than current year claim obligations. This rate dip below the guideline of $1.00 in two (2) prior fiscal years. This indicates for the fiscal year 2019/2020 and 2020/2021, the JPA may have used prior year member contributions to fund its current liabilities. The extent this ratio digresses lower from $1.00, the more likely the organization is using prior year member contributions to fund current losses. The ratio did increase to $1.58 in the most current fiscal year showing healthier relationship of current member contributions to current claim obligations.
E. Conclusions from Financial Analysis
In summary, all four JPAs show an acceptable level of member contributions relative to their surplus level when considering an industry guideline of 3:1 (net member contributions relative to assets). Annual member contributions for the 3-4 most recent fiscal year data available exceeds current year losses reflecting an adequate funding level.
When reviewing each pool's relationship of total loss reserves to net assets , all four JPAs showed a solid surplus level relative to short and long-term claim obligations. Although PERMA and PRISM produced ratios above the suggested guidelines in some prior fiscal years, those ratios are now at acceptable levels. In both cases, the JPAs experience adverse development from prior years which prompted some restructuring.
Measuring the relationship of member contributions to current claim obligations showed tha t all four (4) JPAs produced strong results. In the case of PRISM, the relationship of member contributions to current claim obligations for the two (2) oldest fiscal years reviewed was some cause for concern as the results were below the benchmark of 1:1. PRISM’s most recent two fiscal years show a positive trend. All in all, for the four (4) pools reviewed, each shows a healthy financial condition which minimizes the potential for financial distress and minimizes the potential for future member assessments. 19 V. Coverage Comparisons
Liability risks are the most critical and difficult to insure for California public entities. The so -called "liability insurance crisis" of the 1970s, repeated in the 1980s, drove the formation of risk sharing pools in the public sector, especially in California. Although many JPAs also pool workers' compensation risks, liability pool participation is often the principal requirement for JPA membership.
By statute, public entity risk sharing pools formed as joint powers authorities are not insurance companies.
The documents the JPAs use spell out the protection s available to members of the pool are not called insurance policies. Names for the coverage documents may vary, using such terms as "memorandum of coverage," "coverage contract," or similar terms.
Public entity liability insurance or group self-insurance documents usually will provide at least the following types of coverage:
• General liability, which would cover claims alleging bodily injury, property damage, personal injury, and advertising injury;
• Public official liability, covering errors and omissions made by public elected officials and member employees; and
• Auto liability covering bodily injury or property damage resulting from negligent operation of a motor vehicle.
JPAs also offer employment practices liability protection either within their form or through a separate coverage agreement through Employment Risk Management Authority (ERMA) JPA.
Sometimes the "line" of coverage may not be spelled out in the coverage document. For example, some of the MOCs do not specifically mention "auto liability" as one of the types of protection provided, but the document will clearly indicate that unlike comm ercial general liability insurance, the MOC has no exclusion for bodily injury or property damage resulting from use or operation of a motor vehicle. Each of the three prospective pools offers a package of liability protection that includes the three basic types of coverage identified above, i.e., general liability, public official liability, and auto liability.
All three (3) alternate JPAs offer a liability package that provides protection for municipal liability exposures and provides a mechanism to pool and share risk with fellow members. The risk sharing is a relatively small portion of the total program limits; however, with excess insurance covering losses above a specific pooled amount. Usually, excess liability insurance covers 70% or more of the total limit.
There are differences among the programs in terms of broadness of definitions, number and kind of exclusions, and approaches to drafting coverage terms. For example, CIRA has some unique exclusions not found with the other JPA’s such as a bounce house exclusion, labor disputes and class action exclusion, firearm by non-peace officers’ exclusion, non-police electroshock weapons exclusion, and vaccination and disease testing exclusion. There are also unique features such as CJPIA's "city manager employment li ability" coverage. No JPA has a clear and distinct advantage over another in terms of coverage. One of the unique characteristics of a JPA is that since it exists for the benefit of and at the pleasure of its members, JPAs tend to be liberal in coverage interpretation and can choose to cover almost anything they wish. Thus, even though a MOC may appear to exclude a type of coverage or may be silent, the JPA may choose to cover a claim where an insurer might deny it.
20 As the table below and Appendix D - JPA General Liability Coverage Comparison indicates, PERMA offers liability limits of $2 5,000,000 with an optional liability program offered to provide limits up to $50,000,000.
CIRA offers liability limits of $40,000,000. PRISM offers $25,000,000 in liability limits but can provide additional liability limit s for an increased premium. CJPIA offers liability limits of $30,000,000 with an optional liability program offered to provide limits up to $50,000,000. The City currently carries $25,000,000 in limits through PERMA.
It is important to note that each of the four (4) pools requires participation in their liability program to be a member of the JPA.
A. Liability Program Structures
The following summarizes PERMA as well a s the three ( 3) prospective JPA's liability structure, retentions, and program limits.
Liability PERMA
(Incumbent) CIRA PRISM CJPIA
Member Retentions $5,000 –
$500,000
$5,000 –
$750,000
$10,000 –
$1 Million
$0 (Primary Program)
$150K – $1
Million (Excess
Program)
Pool Retention $1 Million $1 Million $5 Million $3 Million Program Limits
$25 Million
(Primary)
Up to $50
Million
(Excess)
$40 Million $25 Million
Optional Excess
$30 Million (Primary)
Up to $50 Million
(Excess)
As the table indicates, member liability retentions range from $0 to $1,000,000, depending on the JPA.
The actual pooled retentions for PERMA, CIRA, PRISM, and CJPIA range from $1,000,000 per occurrence to $5,000,000. The JPA arranges for excess layers above the member and pool retention levels. Program limits also range from $25,000,000 to $50,000,000, with PRISM offering limits in excess of $25,000,000 that vary by member. Many JPA member participants purchase excess layers above the pool-provided programs through Alliant Insurance Services, an insurance broker who administers many JPAs and also serves as a commercial insurance broker for insurance products. For a comprehensive comparison of liability coverage and exclusions amongst the four prospective JPAs, refer to Appendix D, JPA Coverage Comparison.
21 B. Employment Practices Liability Program Structures
The following table describes how Employment Practices Liability (EPL) coverage is provided in each of the JPA’s.
Employment Practices
Liability PERMA (Incumbent) CIRA PRISM CJPIA
Covered Program
ERMA Primary & Excess
with ERMA
Part of PRISM
General Liability 1
and 2
Part of CJPIA
Liability Program
Deductible Options
Varies ($25K, $50K,
$100K, $500K)
Varies ($25K, $50K,
$100K, $500K)
Varies ($10K to
$1M)
$0 (Primary
Program)
$150K, $250K,
$500K, $750K, or
$1M (Excess
Program)
Limits
ERMA $1M
Excess Pool up to
$50M
CIRA Primary
$250K
ERMA Up to $1M
PRISM provides
coverage above
ERMA
$25M Primary
with Optional
Excess Liability
Available
$30M Primary
with Optional
Excess Liability
Available
Claims Handline
ERMA Approved
Panel of Defense
Counsel
ERMA Approved
Panel of Defense
Counsel
Qualified defense
counsel
experienced in
liability law shall
handle litigated
claims. Members
are encouraged to
utilize defense
counsel
experienced in the
subject at issue in
the litigation.
CJPIA shall control
selection of
defense counsel.
Services Offered
• Up to $2,500 per
year for employment
practices-related
training
• Attorney hotline
with (1) hour of free
legal advice every
month
• Employee
Protection Line
• Up to $2,500 per
year for
employment
practices-related
training
• Attorney hotline
with (1) hour of
free legal advice
every month
• Employee
Protection Line
• Members may
access Labor Law /
Employment
Practices Program
through Eyres Law
Group at no
additional cost
• Employment
practices manuals,
customizable
forms and
checklists
• Employment
intervention
program to guide
member in
positioning, and is
designed to work
with concurrent
legal efforts
• Anonymous
harassment
reporting system
for member use
22 As shown in the above table, PERMA offers EPL with a separate coverage agreement through Employment Risk Management Authority (ERMA) JPA. ERMA offers up to $1,000,000 in EPL limits and PERMA offers excess pool coverage up to $50,000,000. CIRA offers the first $250,000 of EPL coverage in their coverage form with ERMA providing up to $1,000,000 of coverage beyond CIRA. CIRA members can access the PRISM program for EPL limits above $1,000,000. PRISM and CJPIA both provide EPL as part of their liability program – PRISM provides $25,000,000 of EPL in their l iability form and CJPIA provides $30,000,000. O ptional excess liability limits available, if desired by the member. In terms of claims handling, PERMA, CIRA, and CJPIA require the use of their approved defense council firms. PRISM encourages members to utilize qualified defense council firms. All four JPA’s provide EPL services for members.
C. Property Coverage Structures
PERMA, PRISM, and CJPIA provide their own property program, with CIRA offering PRISM’s property program to their members . For PERMA, this concept involves developing a “manuscript” insurance policy geared towards public entities and then enlisting insurance protection from various insurers. The core program is called the Public Entity Property Insurance Program (PEPIP). The comprehensive offerings through PEPIP include all risk property, equipment breakdown, business income, builder’s risk, and more. Ear thquake coverage may be available on an optional basis. Each property program offered is essentially structured in the same manner, with a few differences among each. For example, PEMRA excludes any property newly acquired, owned, leased, managed, rented, or occupied by the member unless the property is specifically scheduled, while the other JPA’s offer limited coverage for newly acquired property.
Property PERMA (Incumbent) CIRA PRISM CJPIA
“All Risk”
Member
Retentions
$10K or $50K, with
Hesperia’s current
retention at $10K
See PRISM Property
Program
$10K to $125K, but
varies depending on
Program Tower
$2.5K, $10K,
$100K, or 5%
Limit
$100M per member
per occurrence except
for specified perils.
$200M annual
aggregate.
See PRISM Property
Program
Tower I to VIII: $300M
except for specified
perils, $100M boiler
and machinery, plus
excess coverage
$25M per
occurrence except
for specified perils
Earthquake Shock
Coverage
Sublimit
Optional Program See PRISM Property
Program
Tower I to VI: $100M
Tower I to VI: $365M
Shared Excess Roof
Top
Tower VII: $25M with
no Excess Roof Top
Tower VIII: No
Coverage
If purchased $25M
shared by covered
members per
occurrence and in the
annual aggregate
As further evaluated in Appendix D - JPA Coverage Comparison indicates, all four JPA’s offer “All Risk” member retentions at the City’s current retention of $10,000 per occurrence. CJPIA offers the lowest program limit at $25,000,000 per occurrence, with PERMA at $100,000,000 per occurrence, and PRISM at $300,000,000. The PRISM program is set up to provide eight (8) different towers, or sub-programs. Each tower has its own limits specified.
23 D. Workers’ Compensation Structures
As part of this engagement, the City also requested ARMC to evaluate risk financing options for its workers ’ compensation risks. Currently the City is self-insured for each workers’ compensation claim up to its $250,000 self-insured retention.
The following are options to finance the City’s statutory workers’ compensation liabilities:
• Purchase primary commercial insurance;
• Obtain primary or excess coverage through a Joint Powers Authority, or • Remain self-insured and purchase excess workers ’ compensation insurance through an alternate JPA or can excess workers’ compensation commercial insurance product.
The following are key aspects of alternative JPA workers’ compensation programs:
Workers’
Compensation PRISM CIRA CJPIA PERMA
Member Minimum
Retentions /
Deductibles
Primary program –
first dollar coverage
up to $125,000
Primary program –
first dollar coverage,
SIR up to $350,000
Primary (first dollar)
and excess programs
available
Primary program
– first dollar
coverage, SIR up
to $500,000
Pooled Retention $10,000 $500,000 $1,000,000 $500,000
Confidence Level 80% 75% 70% - 80% 80%
Cost Containment
Programs provided by
the JPA
- Risk control
- Medical provider
network
- Managed care
- Crisis incident
counseling
- Training and
education
“Zero Litigation
Policy” to ensure
employees receive
quality care and
timely benefits.
Pharmacy benefit
program.
Return-to-work
program.
- Telephonic nurse
triage
- Early return to work
programs
- Medical provider
network
- Nurse case
management
Utilization review
- Bill review
- Return-to-Work
Program
Template
- Wellness
Program Tools
- Job Analysis
Library and
Template
- Infectious
Disease Outbreak
Response Plan
Claims Management
For primary program,
select one of four
TPAs from PRISM’s
contracted TPAs:
AdminSure, Intercare,
LWP, or Sedgwick
LWP
Must use CJPIA-
provided TPA (Athens
Administrators). Must
use CJPIA provided
panel attorneys (list of
8)
Current TPAs
include
AdminSure,
Corvel, and
Sedgwick.
As the table indicates, the City does have a few more options when it comes to workers’ compensation coverage with other risk pools.
A word about CJPIA’s workers’ compensation program. CJPIA offers both primary and excess workers’ compensation programs. Participation in this pool requires the use of their contracted TPA, Athens Administrators. It is unclear how involved the City could be in claims administration and settlement under CJPIA’s arrangement. If the City is interested in exploring this option, thoroughly vetting the claims management arrangement will be an important item to explore as it may significantly differ from the wa y workers’ compensation claims are handled under a $250,000 retention currently controlled by the City. Note this option requires the City to join CJPIA’s liability program.
24 E. Ancillary Insurance Program Structures
Each of the JPAs also offer the following programs:
• Cyber liability;
• Special event coverage;
• Deadly weapons liability coverage;
• Pollution;
• Course of construction coverage, and
• Crime and fidelity bonds.
In addition, other coverages that may be unique to a particular entity are available in any of these programs, most often through a commercial insurance broker. The cost of these programs is generally not high, and we therefore have not made direct comparisons between the JPAs of their commonality and low cost .
In our opinion, the City could likely obtain any of the programs for comparable cost.
25 VI. Services, Support, and Claims
PRISM, CIRA, PERMA, and CJPIA are all considered primary pools. This means that they provide the primary layer of protection to their members. The pools' respective risk management services are designed to support this first layer of defense and many services are mandatory for pool participation, such as site inspections. The types of services available can be broadly categorized as:
• Loss Prevention, Risk Control, Safety;
• Education and Training;
• Claims and Litigation Management/Oversight; and
• General Consulting and Contractual Risk Transfer.
For each JPA these services have been developed to support the broad membership base. This is a critical consideration that leads to selecting potential JPAs with city specific membership and corresponding services. In terms of customization, it is our opinion after the JPA interview process that all prospective pools are positioned to provide customization as requested by the City. This type of narrative discussion is by no means a guarantee of delivering tailored programs, but each alternate JPA was able to cite specific, credible, representative examples of personalized service.
JPA Services and Support Matrix
The following matrix highlights various noteworthy services offered by PERMA and the three prospective JPAs:
PERMA CIRA PRISM CJPIA
Risk Control
Reimbursements
Members may be reimbursed
for the actual expenses which
they incur for workplace
safety and/or risk control
related expenses, to a
maximum of $3,000 per fiscal
year
(July 1 – June 30).
Grant Program available
– amount varies
depending on potential
impact of member’s risk
management objectives
and limited to $3,500
per fiscal year.
An annual Risk
Management Subsidy of
$1,000 per coverage can
be used to cover any
risk management or loss
prevention related
expenses and is
available to members of
the Workers’
Compensation, Property
and Liability programs.
Also have a $2,000
actuarial study subsidy.
Not aware of any
grants or risk
control related
reimbursements.
Training Visit the training/risk
management page. If you
have special training needs,
please contact Bill Taylor,
[email protected] or
(916) 204-0030.
Members have access
to Target Solutions‘
suite of safety courses
at no cost to the
members.
PRISM partners with
Vector Solutions to
deliver an online
training and safety/risk
management platform
of services. Other online
streaming trainings
include (1) iTrainStation
(library or videos) and
(2) PRISMtv (24/7 access
to on-demand
webcasts).
CJPIA's E-Learning
library has over
225 training
videos accessible
at any time. View
the catalog here –
https://cjpia.org/t
raining/e-
learning/
26 PERMA CIRA PRISM CJPIA
Risk
Management
Services
Contracts with Sedgwick for
risk control services, all
members have access to
technology-based resources
through the Sedgwick
risk services
website. Additional details can
be found at Risk Control
Services – PERMA
(permarisk.gov)
Annual academy-a full
day workshop of risk
management training,
legal updates, claims
lessons learned.
Customized, regional,
onsite, and individual
training courses.
Heenan
Communications
provides strategic and
crisis communications.
Similar services are
provided by field staff
and partnerships with
other 3rd party vendors.
See their 2021 Risk
Control Services
Brochure –
Services - PRISM
(prismrisk.gov)
Similar services are
provided by CJPIA's
seven regional risk
managers, training
academies, Loss
Control Action Plan
program and their
E-Learning
platform. You can
view the training
catalog and other
information here –
https://cjpia.org/tr
aining.
A. Support & Services
In terms of risk control reimbursements, PERMA offers $3,000 per program year for general liability training, while PRISM provides an annual Risk Management Subsidy of $1,000 per coverage, which can be used for any risk management or loss prevention expenses. CIRA offers a grant program with awards based on their potential impact on the member’s risk management objectives. For example, attendance for more than one employee at a risk management conference can be reimbursed with grant funds, limited to $3,500 per fiscal year. CJPIA, unfortunately, does not mention any specific grants or reimbursements in their offerings.
Regarding training, all the JPA’s offer online and virtual training programs accessible on the web. PERMA offers training in a variety of formats (e.g. on -demand, webinar, live). Members also have access to a learning management system to track employee training. CIRA offers courses such as Risk Management 101 (a two-day intensive session), implementing a return -to-work program, ADA interactive process, claims handling for city staff, conducting investigations, safety management, city council orientation, and new board member orientation. PRISIM has several unique training programs, such as cyber security training and safety management certification. CJPIA members can access an extensive online library of resources and unique one -day offerings, such as risk management roundtables, workers’ compensation symposium, and webinars.
In terms of risk management services, PERMA offers a range of services through Sedgwick, including on- site training, on -site consultation, program development, customized webinar development, and phone consultation. CIRA has experienced staff in specialty areas such as litigation management, proactive incident and claim resolution, representation at mediation, legislative and regulatory compliance, and contractual risk transfer. PRISM provides similar services through their field staff and partnerships with third-party vendors, as detailed in their Risk Control Services Brochure. CJPIA offers comparable services through their seven regional risk managers, training academies, Loss Control Action Plan program, and their own E-Learning platform.
Overall, while there are certainly strengths and weaknesses in the specific offerings, all of the considered organizations aim to provide support and services related to risk control, training, and risk management.
The City should carefully evaluate these offerings to determine which best aligns with their specific needs and preferences.
27 JPA Claims Services Matrix
Equally important from risk control and training support services are claims services. The following matrix summarizes the claims services offered for property and liability claims from PERMA and the three prospective JPA pools:
CLAIMS
MANAGEMENT
PERMA CIRA PRISM CJPIA
Can select liability TPA? Adminisure Yes, but the services for George Hills are already
included in the
premium and are not
credited.
Sedgwick No (Carl Warren & Co.)
Can self-administer
liability?
No All claims must be
reported to George Hills
to administer/
manage. We do have
some members that did
self-administer small
claims, such as potholes
or snowplow related
claims.
Yes No (Carl Warren & Co.)
Member can select
defense counsel?
Utilize PERMA defense
counsel
No - With respect to
any potentially covered
Claim or Suit, the
Authority shall select
and assign counsel to
defend the Covered
Party(s). The Authority
will consider the wishes
of a Covered Party with
respect to the
assignment of counsel,
but the Authority
retains the sole right to
make the assignment of
counsel. If the Covered
Party refuses to be
defended by the
counsel assigned by the
Authority, then this
Memorandum shall not
provide any defense or
indemnity to such
Covered Party
Yes - "Members are
encouraged to utilize
defense counsel
experienced in the
subject at issue in the
litigation". MOC
prescribes following
Claims Admin
Guidelines
Members choose from
the Authority's pre-
approved defense
panel, which has a
variety of legal
specializations tailored
to municipal risks,
defense panel complies
with Authority-
established reporting
requirements pre-trial
budgets and negotiated
panel rates (non-panel
counsel is permitted
with prior approval).
Additions to the panel
are considered upon
request.
Claims Disagreements
settled by:
An executive committee
appointed by the Board
of Directors. Such a
decision could be
appealed to the Board
of Directors. The results
of such appeal shall be
final and binding and
shall not be the subject
of any further appeal,
Member retains the
right to appeal to the
Board of Directors,
whose decision shall be
final. If either the
Covered Party or the
party identified in the
Covered Contract
refuses to have such
party(s) be defended by
the counsel assigned by
the Authority, then the
Letter, Committee
Appeal, Executive
Committee Appeal,
Arbitration (binding
optional), Litigation (see
article 31 of agreement)
Letter to Chief Executive
Officer, appeal to
Appeals Committee,
Binding Arbitration
Process (detailed in
Memoranda of
Coverage) - see pg. 26
of Primary Liability
Program's MOC
28 CLAIMS
MANAGEMENT
PERMA CIRA PRISM CJPIA
arbitration, or court
action.
obligation of the
Authority to contribute
to Defense Costs arising
from such Claim or Suit
shall be limited to such
amounts as would be
incurred if counsel
selected from the Panel
Counsel list were
assigned the defense of
such Claim or Suit.
B. Claim Services
When comparing the claims management services offered by the JPA’s, PERMA, PRISM, and CJPIA require the use of their liability third-party administrator (TPA), while CIRA does not. Currently, PERMA offers the choice of 1 third party administrator – Adminisure. All pool members are required to utilize PERMA’s provided third-party administrator without the ability to select their own.
CIRA permits members to select their own liability TPA, but the services for George Hill s are already included in the premium and are not credited. All of CIRA’s current members are using George Hills. CIRA does not allow their members to select defense counsel, and will consider the wishes of the member, but retains the sole right to make counsel assignments. Claim disagreements and other disputes with CIRA are reviewed by the Board of Directors.
In contrast, PRISM does not allow the selection of a liability TPA but offers self -administration of liability.
Members can choose defense counsel with expertise in the relevant litigation subject. PRISM has claims committees for each coverage area, and di sagreements can progress through a series of steps, including letters, committee appeals, executive committee appeals, arbitration (binding optional), and ultimately litigation.
For CJPIA, liability TPA selection is not allowed as Carl Warren & Co. serves as the designated TPA. Members cannot self-administer liability and must rely on Carl Warren & Co. for administration. Defense counsel is selected from the Authority's pre-approved panel, which includes various legal specializations tailored to municipal risks. CJPIA has a claims committee composed of other members, and disputes follow a process involving letters to the Chief Executive Officer, appeals to the Appeals Committee, and ultimately a binding arbitration process outlined in the Memoranda of Coverage.
These variations in claims management services highlight the different approaches taken by PERMA, CIRA, PRISM, and CJPIA. The City should carefully consider these factors when choosing a JPA that provides the most suitable claims management services for their needs.
29 C. Summary of Support, Services and Claims Services
When selecting a JPA to participate in, it is crucial to consider the factors listed above as they can greatly impact the City’s risk management and overall success. The importance of choosing good risk control, training, support services, and claims services cannot be overstated.
Effective risk control measures are essential for minimizing potential liabilities and ensuring the safety of your operations. A reliable JPA should offer robust risk control programs tailored to the specific needs of its members. These programs may includ e risk assessments, safety training, loss prevention strategies, and proactive measures to identify and mitigate potential risks. By selecting a JPA with strong risk control practices, you can enhance the overall safety culture of your organization and red uce the likelihood of accidents, injuries, or property damage.
Comprehensive training services are also vital in equipping your organization with the knowledge and skills necessary to handle potential risks and respond appropriately in critical situations. Look for a JPA that provides ongoing training programs, workshops, and educational resources to empower your team members and foster a culture of preparedness. By investing in training, you enhance your organization's ability to manage risks effectively and minimize the potential for costly incidents or errors.
Support services also play a significant role in assisting JPA members in navigating the complexities of insurance coverage and risk management. A reliable JPA should offer dedicated support personnel who can provide guidance, answer questions, and offer e xpert advice on various insurance -related matters.
This level of support ensures that your organization receives timely and accurate information, helping you make informed decisions and optimizing your risk management strategies.
Lastly, the quality of claims services is paramount when evaluating a JPA. In the unfortunate event of a claim, a responsive and efficient claims process can make a significant difference in minimizing disruptions and ensuring a swift resolution. A proven track record of handling claims effectively, offering timely communication, fair assessment, and expedited settlements cannot be overlooked. Effective claims services not only provide financial protection but also demonstrate the commitment of the JPA in supporting its members during challenging times.
In summary, when selecting a JPA, prioritizing good risk control, training, support services, and claims services is essential. These elements form the foundation of a strong risk management framework and can significantly contribute to the long -term success and stability of the City. Partnering with a trusted JPA and having the ability to select your own TPA provides the City with the peace of mind knowing your interests are being considered and protected.
30 30
VII. Conditions and Requirements of Participation
A. Prospective JPA Participation
All JPAs have conditions and requirements for participation in the pools they manage. These conditions and requirements may be expressed in several document forms including a Joint Powers Agreement, By - laws, a Memorandum of Understanding, or some similar document. Such documents define the purpose of the JPA, its governance and powers delegated, the relationship of the members, accounting for expenses, and rules and requirements for participation in the JPA. The controlling document, whatever the form, also defines responsibilities of membership and terms of participation.
Most JPA participation agreements have several common requirements, such as:
• A minimum participation period, usually three years;
• A withdrawal notice requirement ranging from 60 days to 1 year;
• Defined financial responsibilities for periods of participation, including an obligation to pay future assessments for prior years of participation even after withdrawal from the JPA;
• Terms for disposition of equities or fund balances remaining with the pool after departure, ranging from payout schedules to forfeiture of any balances remaining; and
• Terms for removing a member from a JPA or one of its programs.
In addition to the Joint Powers Agreements and Memoranda of Understanding, JPAs often have unwritten requirements for participation, withdrawal, and compliance with standards. Such requirements may be the result of governing board actions or rules and procedures adopted by the JPA. Some of the pertinent requirements for each of the prospective JPAs are shown below.
PERMA, CJPIA, PRISM, and CIRA as authorized by its joint-powers agreement, operates as a membership organization. Public agencies with good loss experience and risk management efforts are welcome to apply for membership. CJPIA and CIRA staff will visit the City to explain the programs and procedures. To process the membership application, a fee between $3,000 - $5,000 is required. The fee is refundable if the City is not admitted to membership. If admitted, the fee is applied toward the initial primary deposit.
Both follow a five-step underwriting process for prospective members:
1. Submittal of application through website;
2. Five to ten years of loss data and five years of payroll;
3. Underwriting questionnaire and on-site risk management evaluation;
4. Underwriting Committee review and recommendation to Executive Committee; and
5. Executive Committee final membership determination.
31 31
Participation in PRISM's programs involve less steps and much less time. Given PERMA’s notice of withdraw requirement is 6 months, the City should have ample time to evaluate prospective pool’s indications and decide whether to leave PERMA and join another JPA. Note if the City is going to move forward with obtaining indications in the Fall of 2024, those indications are rates based on the 2024/2025 coverage year and not for 2025/2026 year. Rates for the 2025/2026 coverage year will be developed in the early Spring 2025 before the new coverage term effective 7/1/2025.
B. PERMA Withdrawal
Because the City participates in PERMA and is evaluating withdrawing from participation, it is important to review the withdrawal provisions in the JPA Agreement. According to PERMA’s JPA Agreement, adopted on 3/4/2013 , the following outlines the withdrawal and effect of withdraw provisions:
*************************************************************************************** ARTICLE 19
CANCELLATION OR WITHDRAWAL
(a) A member organization may withdraw as a party to this Agreement upon thirty (30) days’ advance written notice to the Authority if it has never become a participant in any insurance program pursuant to Article 14, or if it has withdrawn from all insurance programs in which it was a participant, pursuant to (c) below.
(b) The Board of Directors may:
(1) Cancel, for reasonable cause, any member organization from this Agreement and membership in the Authority, on a vote of two-thirds of the quorum of the Board members. Such action shall have the effect of canceling the member organization's participation in all insurance programs of the Authority as of the date that membership is canceled, subject to the notice provisions below.
(2) Cancel any member organization's participation in an insurance program of the Authority, without canceling the member organization's membership in the Authority or participation in other programs, on a vote of two-thirds of the quorum of the Board members, plus a vote of two-thirds of the quorum of the members who represent member organizations participating in the program, subject to the notice provisions below.
The Board shall give ninety (90) days’ advance written notice of the effective date of any cancellation under the foregoing provisions. Upon such effective date, the member organization shall be treated the same as if it had voluntarily withdrawn from this Agreement, or from the program, as the case may be.
(c) Any member having completed three (3) years as a party to this Agreement may withdraw from its status as a participant in a program only at the end of a policy year for the program, and only if it gives the Authority at least six (6) months advance written notice of such action.
The Authority may assess an early-withdrawal charge for any such member that withdraws from a program without providing six (6) months advance written notice. The early-withdrawal charge is to be determined in the discretion of the Executive Committee based upon all costs and damages 32 32
resulting to the Authority because of the member’s withdrawal on short notice. The early-withdrawal charge shall not exceed the withdrawing member’s annual premium for the program from which it is withdrawing.
(d) A member organization which withdraws from all insurance programs of the Authority in which it was a participant and does not enter any program for a period of six (6) months thereafter shall be considered to have withdrawn as a party to this Agreement at the end of such period, and its membership in the Authority shall be automatically canceled as of that time, without action of the Board of Directors.
ARTICLE 20
EFFECT OF CANCELLATION OR WITHDRAWAL
(a) If a member organization withdraws from participation in an insurance program of the Authority or such participation is canceled, with or without cancellation of membership in the Authority, and such cancellation is effective before the end of the policy year for that program, the Authority shall promptly determine and return to the member organization the amount of any unearned premium payment from the member organization for the policy year, such amount to be computed on a pro rata basis from the effective date of cancellation. In addition, the Board of Directors may in its sole and absolute discretion determine and return to the member organization such fees, charges and pro rata share of assets as it may determine are due and owing to such member organization.
(b) Except as provided in (a) above, a member organization which withdraws or is canceled from this Agreement and membership in the Authority, or from any program of the Authority, shall not be entitled to the return of any premium or other payment to the Authority, or of any property contributed to the Authority. However, in the event of termination of this Agreement, such member organization may share in the distribution of assets of the Authority to the extent provided in Article
21. (c) Notwithstanding withdrawal or cancellation from any insurance program of the Authority, a member organization shall pay any premium charges which the Board of Directors determines are due from the member organization for losses and costs during the period in which the member organization was a participant in such program. Such charges may include any deficiency in a premium previously paid by the member organization, any premium surcharge assessed to the member organization and any additional amount of premium which the Board determines to be due from the member organization upon final disposition of all known or future claims arising from known or potential losses under the program during the organization's period of participation.
Any such premium charges shall be payable by the organization within thirty (30) days of billing by the Authority. The liability of the Authority for incurred, but not reported, claims shall be governed by the particular insurance program provisions.
***********************************************************************************
There are a couple of noteworthy provisions in PERMA’s withdrawal and effect of withdrawal provisions for the City to consider:
• The City may withdraw from membership from PERMA by providing a 6-month notice which would be no later than December 31, 2024;
• If the City provides less than 6 months’ notice of withdrawal, PERMA may assess an early withdrawal fee. The amount of fee is at the discretion of the Executive Committee but shall not exceed a 33 33
member’s premium for that insurance program from which they are withdrawing; • If the City does not rejoin PERMA within a 6-month timeframe following withdrawal, the membership is automatically cancelled;
• If the withdrawal date is effective before the new policy year, the City may be entitled to a pro rata return premium; and
• Even if the City provides timely notice of withdraw, they are still responsible for costs for all policy years participated which might include retroactive assessments for the current policy year and prior year assessments until all claims have been resolved.
34 34
C. A Word About Changing JPAs
Changing pools does not change obligations for prior claims and contributions to PERMA. Nor would it change future claims and losses. Only a risk management program designed to control risk and implemented within the City, can positively impact claims. Nevertheless, there are financial considerations associated with the basic underwriting approach used by a JPA. The City might or might not reduce its total cost of risk (JPA contributions, premiums, claims under retention, risk management services) by changing JPAs.
Changing JPA programs, and the underlying services and infrastructure attached to each program, could be disruptive internally in the short-term. The City's ability to navigate this transition without negative impacts on other operations may depend on allocation of resources within the City. Transitioning to another JPA could entail directly assuming some additional risks or result in higher self-insured retentions or deductibles.
With the City's prior loss history, this level of retention combined with the contribution estimates for the insurance programs , could result in savings after a thorough comparison is performed. Adverse loss experience could result in higher costs, while improved loss experience could increase the savings.
"Fit" is equally important as financing and services when selecting a pool. Ultimately an entity pays its own losses plus a premium for smoothing losses over time. Therefore, there are other factors that must be considered when choosing a JPA, including service, personal attention to the needs of the member, financial strength, and a sense of partnership. These can only be determined by spending some time with the prospective JPA.
A new JPA will have to seek its BOD's approval to accept the City. Applying to a JPA does not guarantee acceptance. In addition to a more thorough underwriting review than required to provide the indications we have used in this report, the prospective JPA will probably want to visit the City, inspect its facilities, and meet with its management. Even if a favorable report goes back to the JPA governing body, the members may not wish to accept the City and could overrule the field report recommendation.
Our initial review of City's loss history, exposures, ability to transfer risk, and basic information (i.e., payroll, property values) indicates that the City of Hesperia will surely be viewed as a valuable new member to any prospective JPA.
35 35
VIII. Road Map for Moving Forward
A. Plan of Action
From interviews with each JPA, the following information was gathered about the membership process and length of time to underwrite the City, obtain indications, and to obtain final liability quotes for the 2025/2026 coverage year.
JPA Suggested Month to Initiate Applications and Process for Membership Length of Time to Obtain Firm Terms
PRISM
November 2024
• Complete application
December 2024
• Request desired SIR ranges by December 1, 2024
February 2025
• February 2025 final request for desired SIR prior
to March 2025 board meeting
• Whole process takes 2- 3 months
• Indication – In 3 to 4 weeks
• Quote process - after March 2025 board meeting
• Final quote – by May 2024
• SIRs above $100,000 require underwriting
committee approval
CJPIA
September - November 2024
• Complete underwriting submission to include
application, 10-year exposure data; currently
valued 10-year loss history, claim notes on large
liability losses, CAFRs, and actuarial studies
• After review of data, will release indication at
various SIRs
• Required on site risk management evaluation
followed by report to underwriting committee
• Underwriting committee recommends to
executive committee
February – April 2025
• Final quotes not released until updated loss runs
in Spring 2025 to check on loss development
• Whole process takes 4 – 5 months
• Will release initial rate indications at various SIR
levels in 2-3 weeks following complete underwriting
submission
• Required on site risk management evaluation in
January or February 2025 if like indications
• Risk management report goes to board in March
2025
• Underwriting assesses loss development from
November 2024 to April 2025 then finalizes rates in
April 2025 for the coming policy year.
CIRA
September - November 2024
• Complete underwriting submission to include
application, 5-year exposure data (10-years
preferred for excess providers); currently valued
5-year loss history (10-years preferred for excess
providers), claim notes on large liability losses,
CAFRs, and actuarial studies
• After review of data, actuarial team will
calculate the ex-mod and rates
• Once data is provided back, it will be provided to
the City and CIRA with both parties determining
if it would be a fit.
• Up to 6 Months, depending on when Board of
Directors meets
• Once data received, will release quote within 5
business days
• If quote is accepted, an application and on-site visit are scheduled – the visit takes about 2-3 business
days
• Final steps are underwriting committee approval,
executive committee approval, and Board approval.
The executive committee meets quarterly and the
Board semi-annually.
36 36
• If both parties agree to move forward, an
application will need to be completed.
• An underwriting visit will be scheduled to
conduct a risk assessment
January -April 2025
• The underwriting committee (UC) meeting will
be scheduled and the application, risk
assessment, loss data, and financial information
will be reviewed.
• If UC recommends approval, it will go to the
Executive Committee (EC) for their approval
• Upon EC’s recommendation to approve, it goes
to the Board of Directors for final approval
37 37
B. Implementation Timeline
Unless the City wants to invoke its right to withdrawal early from PERMA, the following timeline assumes new JPA membership for the 2025/2026 policy year. The process for obtaining quotes for the 202 5/2026 coverage year will be much more simplified and shorter with PRISM . The process for JPA membership for CJPIA and CIRA will be much more involved and require more lead time due to the underwriting process required for new membership. And although the City may obtain approval to join certain JPAs by March or April 2025, final rates may not be known until April – May 2025. This could present a timing issue given the 6-month notice requirement of withdraw from PERMA. Many JPAs may know the costs of participating in the pooled layer, however, may not have firmed up reinsurance costs for the excess liability layers until May 2025.
The following are suggested tasks and implementation timelines to allow enough time for prospective JPAs to underwrite the City, vet the options, and decide about liability coverage for the 202 5/2026 coverage year.
Timeline
Task
April 2024
• Presentation of Phase 1 report to the City’s designed staff • Vet report conclusions and recommendations
• Finalize prospective JPA short list
• Assess amount of effort needed to approach JPAs for indications, underwriting, and final quotes / terms
July – August 2024
• Begin Phase 2 study
• Gather exposure data history, updated 10 -year loss runs, download JPA applications
• Complete prospective JPA applications
• Submit applications, exposure history, loss runs, loss history, CAFRS, and actuarial studies to JPA short list
September –
December 2024
• Prospective JPA site visits, information gathering and interviews • Obtain initial indications from prospective risk pools based on 202 4/25 rates • Deadline for notice of intent to withdrawal from PERMA is 12/31/2024
January 2025 –
February 2025 *
• Participate in underwriting processes with prospective JPAs for 2025/2026 policy year
• Continual exchange of requested information and meetings with prospective JPAs
March 2025
• JPAs conduct board meetings and discuss prospective membership • Receive and analyze quotes and SIR options from prospective JPAs following March JPA board meetings
April 2025
• More JPA board meetings
• Receive and analyze quotes and SIR options from prospective JPAs • Make preliminary JPA selection
38 38
May 2025
• Make final JPA selection and SIR level after rates are finalized • Board resolution to change JPAs
June 2025
• Meetings with new JPA
• Vet and update City procedures to reflect changes in JPA, TPA, claims handling instructions, and any other new procedures with City’s internal risk management staff and city attorneys.
July 2025
• Begin coverage with new JPA
* Only complete steps starting in January 2025 and thereafter if notice of intent to withdrawal is submitted to PERMA on 12/31/2024.
39 39
Appendix A
Persons Interviewed
40 40
• Casey Brooksher, Director of Administrative Services, City of Hesperia • Anne Duke, Finance, City of Hesperia
• Keith Cheong, Finance, City of Hesperia
• Rachel Molina, City Manager, City of Hesperia
• Pam Lee, City Attorney, City of Hesperia
• Mark Faherty, Public Works, City of Hesperia
• Brian Blackwell, Public Works, City of Hesperia
• Jeremy McDonald, Public Works, City of Hesperia
• Rita Perez, Human Resources, City of Hesperia
• Amanda Rose, Human Resources, City of Hesperia
• Erike Young, Deputy General Manager, CIRA
• Olga Berdial, Communications Director, CJPIA
• Sarah Bishop, Underwriting Manager, PRISM
41 41
Appendix B
City of Hesperia Risk Profile
42 City of Hesperia
Risk Profile
City Population
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
City service population 100,956 (estimate) 102,164 (estimate) 102,503 (estimate) Service area 74.77 Miles 74.77 Miles 74.77 Miles
Employee Count (#)
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
Elected Officials 5 5 5
Appointed Officials 5 5 5
Volunteers 5 8 8
Full Time 166 181 182.46
Part time 6.9 11.85 12.74
Payroll ($)
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
Actual Payroll $20,676,611.15 $22,000,315.76 $7,204,026.08 – First Quarter Budgeted Payroll $20,430,571.00 $24,043,555.00 $25,944,396.00
Classification of Payroll ($)
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
Police Contract with county Contract with county Contract with county Fire Contract with county Contract with county Contract with county All City Employees See above totals See above totals See above totals
43 Operating Expenditures ($)
FY 2021/2022 Actual FY 2022/2023 Budget Projected FY 2023/2024 Total Budget $81,298,524 $133,605,549 $136,996,564
Less Capital Improvements $17,450,453 $62,347,052 $59,567,008 Net Operating Expenditures $63,848,070 $71,258,497 $77,429,556
Special Exposures (if any)
Aquatic center(s) None
Acreage for City Parks City owns the park behind City Hall (7.259 acres) however it is maintained by the Hesperia Parks & Rec District
City-sponsored special events Clean Up Day,
Landfill and / or Recycling center(s) None owned by the City Water and sewage Sewer – 138.3 miles of sewer main , 3.3 miles are pressurized; Water – 592 miles of water main; Recycled Water – 20.35 miles of recycled water main.
Miles of City Roads 500 miles
# Sworn Police Officers Contracted with County of San Bernardino # Firefighters Contracted with County of San Bernardino Vehicles (Police) None - Contracted with County of San Bernardino Vehicles (Fire) None - Contracted with County of San Bernardino Commercial Vehicles 112 City Vehicles, 17 drivable equipment such as forklifts, scissor lifts, backhoes; 9 trailered equipment such as Ditch Witch, asphalt zipper, roller Other: City Owned Golf Course – 211 acres
Notes:
44 44
Appendix C
JPA Member Lists
45 45
PRISM Members
County Members
County Name Member Since
Alameda County 6/1/1988
Alpine County 7/1/1986
Amador County 11/1/1979
Butte County 11/1/1979
Calaveras County 11/1/1979
Colusa County 7/1/1986
Contra Costa County 10/1/1994
Del Norte County 7/1/1980
El Dorado County 5/1/1992
Fresno County 11/1/1979
Glenn County 7/1/1986
Humboldt County 11/1/1979
Imperial County 7/1/1986
Inyo County 11/1/1979
Kern County 5/31/1989
Kings County 7/1/1980
Lake County 11/1/1979
Lassen County 7/1/1980
Madera County 4/1/1980
Marin County 7/1/1992
Mariposa County 7/1/1986
Mendocino County 11/1/1979
Merced County 7/1/1986
Modoc County 7/1/1985
Mono County 1/23/1993
Monterey County 7/1/1992
Napa County 7/1/1988
Nevada County 11/1/1979
Orange County 3/31/2009
Placer County 7/1/1980
Plumas County 7/1/1984
Riverside County 7/1/1984
Sacramento County 4/1/1992
San Benito County 3/18/1993
San Bernardino
County
3/31/2014
San Diego County 6/15/1993
San Joaquin County 7/1/1995
46 46
County Name Member Since
San Luis Obispo
County
11/1/1979
Santa Barbara County 11/1/1979
Santa Clara County 6/30/1984
Santa Cruz County 11/1/1979
Shasta County 11/1/1979
Sierra County 7/1/1986
Siskiyou County 10/8/1985
Solano County 7/1/1981
Sonoma County 11/1/1979
Stanislaus County 1/1/1986
Sutter County 7/1/1986
Tehama County 11/1/1979
Trinity County 7/1/1980
Tulare County 6/30/1988
Tuolumne County 10/1/1980
Ventura County 9/21/2004
Yolo County 7/1/1999
Yuba County 7/1/1981
City Members
City Name Member Since
City of Alameda 1/1/2010
City of Albany 7/1/2003
City of American Canyon 1/1/2017
City of Atwater 4/1/2010
City of Bakersfield 7/1/2007
City of Baldwin Park 7/1/2019
City of Beaumont 7/1/2015
City of Bell 7/1/2006
City of Belmont 12/1/2004
City of Berkeley 12/31/2011
City of Buena Park 11/1/2010
City of Burlingame 10/1/2003
City of Calabasas 1/1/2010
City of Calexico 1/1/2016
City of Capitola 1/1/2014
City of Carmel by the Sea 7/1/2006
City of Carson 8/31/2017
City of Chico 8/1/2010
City of Chula Vista 10/1/2003
47 47
City Name Member Since
City of Citrus Heights 7/1/2006
City of Clovis 1/1/2017
City of Compton 7/1/2021
City of Concord 7/1/2003
City of Corona 7/30/2003
City of Coronado 3/31/2016
City of Costa Mesa 1/1/2011
City of Covina 1/1/2004
City of Cupertino 1/1/2004
City of Cypress 1/1/2011
City of Daly City 2/1/2003
City of Del Mar 11/1/2003
City of Dixon 7/1/2003
City of Downey 7/1/2006
City of El Cajon 7/1/2002
City of El Centro 2/1/2010
City of El Monte 7/1/2006
City of Elk Grove 7/1/2008
City of Encinitas 3/31/2016
City of Escalon 8/1/2010
City of Escondido 10/1/2003
City of Fairfield 7/1/2003
City of Fontana 5/1/2005
City of Foster City 1/1/2014
City of Fountain Valley 7/1/2018
City of Fremont 7/1/2006
City of Galt 1/1/2014
City of Garden Grove 7/1/2005
City of Gardena 7/1/2018
City of Glendale 7/1/2004
City of Goleta 1/1/2010
City of Hanford 7/1/2012
City of Hawthorne 7/1/2003
City of Hayward 7/1/2012
City of Hesperia 7/1/2002
City of Huntington Beach 1/1/2010
City of Imperial Beach 7/1/2003
City of Ione 9/1/2010
City of Irvine 1/1/2008
City of Lake Forest 1/1/2024
City of Lancaster 8/1/2003
City of Lemon Grove 1/1/2004
48 48
City Name Member Since
City of Lindsay 7/1/2003
City of Live Oak 8/1/2010
City of Livermore 1/1/2011
City of Loma Linda 1/1/2022
City of Lompoc 7/1/2003
City of Los Alamitos 7/1/2016
City of Los Altos 7/1/2010
City of Madera 7/1/2003
City of Manhattan Beach 3/1/2017
City of Maywood 1/1/2010
City of Menlo Park 1/1/2015
City of Merced 10/1/2005
City of Mill Valley 8/1/2010
City of Millbrae 7/1/2005
City of Mission Viejo 3/1/2010
City of Modesto 7/1/2017
City of Montebello 7/1/2006
City of Monterey Park 7/1/2003
City of Moreno Valley 7/1/2003
City of Murrieta 6/1/2011
City of Napa 7/1/2002
City of National City 10/1/2003
City of Needles 1/1/2010
City of Norco 7/1/2003
City of Oakland 7/1/2002
City of Oceanside 10/1/2003
City of Oroville 10/1/2010
City of Oxnard 7/1/2002
City of Pacifica 1/1/2014
City of Palmdale 7/1/2013
City of Palo Alto 7/1/2003
City of Pasadena 7/1/2020
City of Paso Robles 1/1/2011
City of Perris 10/1/2010
City of Petaluma 7/1/2021
City of Pico Rivera 7/1/2017
City of Pittsburg 9/25/2017
City of Pleasanton 7/1/2011
City of Pomona 7/1/2008
City of Port Hueneme 1/1/2012
City of Rancho Cordova 7/1/2003
City of Rancho Mirage 7/1/2013
49 49
City Name Member Since
City of Rancho Santa Margarita 6/1/2010
City of Redding 5/1/2007
City of Redlands 7/1/2017
City of Redondo Beach 7/1/2017
City of Redwood City 7/1/2005
City of Rialto 7/1/2003
City of Richmond 4/18/2009
City of Ridgecrest 7/1/2006
City of Roseville 1/1/2016
City of Sacramento 7/1/2005
City of San Bernardino 1/1/2011
City of San Bruno 7/1/2013
City of San Buenaventura (Ventura) 7/17/2002
City of San Clemente 7/1/2005
City of San Diego 7/1/2003
City of San Jacinto 9/1/2010
City of San Leandro 1/1/2014
City of San Mateo 8/12/2019
City of San Ramon 1/1/2016
City of Santa Clara 7/1/2004
City of Santa Rosa 1/1/2005
City of Santee 3/31/2016
City of Shafter 1/1/2018
City of Simi Valley 7/1/2003
City of Solana Beach 10/1/2003
City of South Pasadena 7/1/2014
City of South San Francisco 1/1/2004
City of Stanton 9/1/2010
City of Stockton 7/1/2003
City of Sunnyvale 7/1/2004
City of Thousand Oaks 7/1/2021
City of Torrance 7/1/2002
City of Vacaville 10/1/2010
City of Vallejo 7/1/2018
City of Visalia 1/1/2005
City of Vista 3/31/2016
City of Walnut Creek 1/1/2010
City of Watsonville 7/1/2013
City of West Covina 1/1/2017
City of West Sacramento 1/1/2011
City of Westminster 7/1/2018
City of Whittier 7/1/2006
50 50
City Name Member Since
City of Yuba City 1/1/2008
Town of Apple Valley 1/1/2024
Town of Colma 8/21/2004
Town of Yountville 1/1/2011
County Ops Members
County Ops Name Member Since
Alameda Health System 7/1/2002
Bay Area Housing Authority RMA (BAHARMA) 5/1/2005
Los Angeles County Development Authority (LACDA) 7/1/2003 Sonoma County Employees' Retirement Association (SCERA) 7/1/2004
Educational Members
Educational Name Member Since
Berkeley Unified School District 1/1/2004
Butte Schools Self-Funded Programs 5/1/2023
California Schools JPA (CSRM) 7/1/2002
California State University Risk Management Authority (CSURMA) 1/1/2015 Campbell Union School District 7/1/2008
Central Region School Insurance Group (CRSIG) 7/1/2014
College of the Law, San Francisco 7/1/2004
Evergreen Elementary School District 7/1/2006
Huntington Beach Union High School District 7/1/2008
Lake Elsinore Unified School District 7/1/2003
Los Angeles County Office of Education (LACOE) 1/1/2012 Los Angeles Unified School District Risk Management Authority (LAUSD RMA) 7/1/2016 Oakland Unified School District 7/1/2018
Pasadena USD 7/1/2010
Redondo Beach Unified School District 7/1/2013
San Diego Unified School District 7/1/2004
San Jose Unified School District 12/1/2002
San Mateo County Schools Insurance Group (SMCSIG) 7/1/2006 Santa Clara County Office of Education (SCCOE) 7/1/2013 Schools Excess Liability Fund (SELF) 1/1/2012
Self Insured Risk Management Authority (SIRMA) 10/1/2002 South Bay Area Schools Insurance Authority (SBASIA) 7/1/2010 Torrance Unified School District 7/1/2002
Tri-County Schools Insurance Group (TCSIG) 7/1/2023
Upland Unified School District 7/1/2014
West San Gabriel Liability and Property JPA 7/1/2002
West San Gabriel WC JPA 7/1/2003
51 51
IHSS Members
IHSS Name Member Since
Contra Costa County IHSS Public Authority 10/29/2003
Del Norte IHSS Public Authority 1/8/2003
Imperial County IHSS Public Authority 6/4/2003
Kern County In Home Supportive Services Public Authority 1/1/2003 Riverside County IHSS Public Authority 11/1/2002
San Benito County IHSS Public Authority 11/12/2003
San Bernardino IHSS Public Authority 1/7/2003
San Diego County IHSS Public Authority 11/4/2003
Shasta IHSS Public Authority 1/11/2003
Sutter IHSS Public Authority 1/8/2003
Sutter IHSS Public Authority 1/8/2003
Special Districts Members
Special Districts Name Member Since
ACCEL 7/1/2002
Amador Transit 7/1/2004
Bay Area Air Quality Management District 8/1/2012
California Fair Services Authority 7/1/2003
California Intergovernmental Risk Authority (CIRA) 7/1/2021 California Mental Health Services Authority (CalMHSA) 7/1/2011 California State Senate 10/1/2012
Capitol Area Development Authority (CADA) 7/1/2003
CAPRI 7/1/2002
Casitas Municipal Water District 8/1/2002
Catalina Island Medical Center 1/1/2012
CenCal Health 1/1/2021
Central Contra Costa Sanitary District 7/1/2016
Central County Fire Department 6/21/2010
Central Sierra Child Support Agency 11/14/2002
Coachella Valley Association of Governments (CVAG) 9/1/2010 Council of San Benito County Governments 12/20/2002
Dublin San Ramon Services District 1/1/2012
East Bay Regional Park District 6/1/2001
Exclusive Risk Management Authority of California (ERMAC) 7/1/2005 Fairfield-Suisun Sewer District 1/1/2019
Gold Coast Transit District 4/1/2004
Golden Empire Transit District 7/1/2005
Golden State Risk Management Authority (GSRMA) 7/1/2001 Great Basin Unified Air Pollution Control District 6/1/2010 52 52
Special Districts Name Member Since
Housing Authority of the County of Riverside 10/29/2003 Humboldt Transit Authority (HTA) 4/1/2014
Inland Empire Health Plan 1/1/2011
Inland Empire Utilities Agency 1/1/2015
Irvine Ranch Water District (IRWD) 9/1/2002
Kern County Hospital Authority 7/1/2016
Kings County Area Public Transit Agency 7/1/2005
Kings Waste & Recycling Authority 7/1/2003
Local Agency WC Excess JPA (LAWCX) 7/1/2003
Lompoc Valley Medical Center 1/1/2020
Los Angeles County Law Library 7/1/2019
Marin County Transit District 12/6/2002
Merced Irrigation District 1/1/2022
Midpeninsula Regional Open Space District 7/1/2002
Monterey Bay Area Self Insurance Authority (MBASIA) 7/1/2010 Monterey County Housing Authority 5/1/2018
Monterey County Water Resource Agency (MCWRA) 7/31/2018 Monterey Salinas Transit 11/1/2004
Morongo Basin Transit Authority dba Basin Transit 7/1/2004 Mountain Communities Healthcare District 10/1/2007
Municipal Pooling Authority (MPA) 7/1/2003
Napa Sanitation District 1/1/2011
Northern CA Cities Self Insurance Fund (NCCSIF) 7/1/2003 Northern California Power Agency (NCPA) 10/1/2018
Northern California Special Districts Insurance Authority (NCSDIA) 7/1/2001 OC Sanitation District 7/1/2003
Omnitrans 9/14/2006
Orange County Fire Authority 3/1/2007
Orange County Transportation Authority 1/1/2012
Palo Verde Valley Health Care District Hospital 1/23/2013 Placer County Water Agency 1/1/2016
Pleasant Hill Recreation and Park District 1/1/2011
Port of Oakland 3/1/2013
PRISM 10/1/1979
Public Agencies Self Insurance System (PASIS) - San Diego 7/1/2002 Public Entity Risk Management Authority (PERMA) 7/1/2008 Public Entity Risk Management Authority (PERMA) Administration 7/1/2008 Regional Council of Rural Counties 1/1/2010
Riverside Transit Agency 10/1/2006
Sacramento Area Flood Control Agency (SAFCA) 6/1/2005
Sacramento Regional Transit District (SACRT) 7/1/2021
Sacramento-Yolo Mosquito and Vector Control District 1/1/2015 53 53
Special Districts Name Member Since
San Bernardino Municipal Water Department 1/1/2015
San Diego County Water Authority 1/1/2017
San Diego Housing Commission 6/15/1993
San Diego Metropolitan Transit System 3/31/2008
San Mateo Consolidated Fire Department 1/13/2019
Santa Barbara Metropolitan Transit District 1/1/2005
Santa Clara County Central Fire Protection District 10/7/1999 Santa Clara County Housing Authority 7/1/2017
Santa Clara County Library District JPA 1/29/2015
Santa Clara County Vector Control District 11/30/2006
Santa Clara Valley Water District 4/1/2023
Santa Cruz County Fire Agencies Insurance Group 7/1/2002 Santa Cruz Metro Transit District 10/24/2003
SLORTA JPA 1/1/2021
Solano Transportation Authority 12/29/2007
Sonoma Marin Area Rail Transit 1/1/2017
South Coast Air Quality Management District 9/1/2008
Special District Risk Management Authority (SDRMA) 6/1/2003 Tahoe Transportation District 7/1/2016
Transportation Corridor Agencies 1/1/2010
Trindel Insurance Fund 7/1/2001
Turlock Irrigation District 7/1/2008
Union Sanitary District 1/1/2020
Yolo County Public Agency Risk Management Insurance Authority (YCPARMIA)
12/31/2003
54 54
CIRA Members
CIRA Member Name CIRA Member Name, Continued
City of Amador City City of South Lake Tahoe
City of Arcata City of St. Helena
City of Avalon City of Tehama
City of Belvedere City of Trinidad
City of Blue Lake Town of Truckee
City of Calimesa City of Twentynine Palms
City of Calistoga City of Ukiah
City of Citrus Heights City of Watsonville
City of Clearlake City of Wheatland
City of Cloverdale Wheatland Fire
City of Coalinga City of Willits
Confire Regional Emergency Communication City of Wilodmar City of Cotati Town of Windsor
City of Eureka Town of Yountville
City of Ferndale City of Yucaipa
City of Foresthill Fire Town of Yucca Valley
City of Fort Bragg
City of Fortuna
City of Grass Valley
City of Healdsburg
City of Highland
City of Lakeport
City of Menifee
City of Mosquito Fire
City of Nevada City
City of Placentia
City of Placerville
City of Plymouth
City of Point Arena
City of Rancho Cucamonga
Rancho Cucamonga Fire Protection District
City of Rancho Santa Margarita
City of Rohnert Park
City of San Juan Bautista
City of Sebastopol
City of Sierra Madre
City of Sonoma
55 55
PERMA Members
Member Year Joined
City of Barstow 1985-86
City of Perris 1985-86
City of Westmorland 1985-86
City of Banning 1986-87
City of Blythe 1986-87
City of Cathedral City 1986-87
City of Coachella 1986-87
City of Desert Hot Springs 1986-87
City of Holtville 1986-87
City of Norco 1986-87
City of Rancho Mirage 1986-87
City of San Jacinto 1986-87
SunLine Transit Agency 1986-87
City of Murrieta 1991-92
March Joint Powers Authority 1996-97
MD&MIWMA 1996-97
Victor Valley EDA 1996-97
Victor Valley Transit Authority 1996-97
Palo Verde Valley Transit Agency 1997-98
City of Victorville 1997-98
IVECA 2002-03
City of La Mesa 2002-03
Palm Springs Aerial Tramway 2005-06
City of Moreno Valley 2009-10
City of Hesperia 2010-11
ICTC 2010-11
City of Eastvale 2010-11
City of Canyon Lake 2011-12
City of Jurupa Valley 2011-12
SCIT&DC Gov’t Training Agency 2013-14
City of Colton 2021-22
56 56
CJPIA Members
CJPIA Member Name CJPIA Member Name, Continued
Agoura Hills Eastern Sierra
Alhambra Transit Authority
Aliso Viejo El Centro
Apple Valley Fountain Valley
Area E Disaster Management Fillmore
Arroyo Grande Gateway Cities
Artesia Council of Governments
Atascadero Goleta
Azusa Grand Terrace
Bell Gardens Grover Beach
Bellflower Guadalupe
Big Bear City Community Services District Hawaiian Gardens Big Bear Fire Authority Hemet
Big Bear Lake Hermosa Beach
Bishop Hidden Hills
Black Gold Imperial
Cooperative Library System Indian Wells
Bradbury Indio
Brawley Irwindale
Buellton La Cañada Flintridge
Calabasas La Habra Heights
Agoura Hills/Calabasas Community Center LA IMPACT
Camarillo La Mirada
Carpinteria La Palma
Cerritos La Puente
Chino Hills La Quinta
Claremont La Verne
Coachella Valley Laguna Hills
Association of Governments Laguna Niguel
Coachella Valley Laguna Woods
Conservation Commission Lake Elsinore
Coastal Animal Services Authority Lake Forest
Commerce Lakewood
Dana Point LA-RICS
Desert Recreation District Lawndale
Diamond Bar Lemon Grove
Duarte Loma Linda
57 57
CJPIA Member Name, Continued CJPIA Member Name, Continued Lomita San Gabriel
Malibu San Juan Capistrano
Mammoth Lakes San Luis Obispo
Midpeninsula Regional San Marcos
Open Space District San Marino
Mission Viejo Santa Clarita
Monrovia Santa Fe Springs
Monterey Peninsula Santa Paula
Regional Park District Seal Beach
Moorpark Seaside
Morro Bay Seaside County Sanitation District
Mountain Area Signal Hill
Regional Transit Authority Solvang
Needles South El Monte
Norwalk Southeast Area
Ojai Animal Control Authority
Orange County Southern California
Council of Governments Association of Governments
Pacific Grove Stanton
Palm Desert Temple City
Palos Verdes Estates Ventura Port District
Palos Verdes Peninsula Villa Park
Transit Authority Vista
Paramount Walnut
Paso Robles West Cities Police Comm. Center
Pismo Beach West Covina
Pomona Valley West Hollywood
Transportation Authority Westlake Village
Port Hueneme
Poway
Rancho Palos Verdes
Rolling Hills
Rolling Hills Estates
Rosemead
Rossmoor Community Services District
San Clemente
San Dimas
Appendix D
JPA Coverage Comparisons
59 Liability
Liability PERMA CIRA PRISM CJPIA
Limit $25M
$4M (Pool Layer)
$5M xs $5M (Starstone)
$9M xs $10M (various
quota share insurers)
$6M xs $19M (various
quota share insurers)
(optional Excess Liability
program above $25M to
$50M)
$10M xs $25M (Allied
World)
$5M xs $35M (Great
American)
$10M xs $40M (Munich Re)
$40M
$1M (Pool Layer)
$25M
$5M (Pool Layer)
$5M xs $5M (Various
quota share)
$9M xs $10M (Various
quota share)
$6M xs $19M (Various
quota share)
(optional Excess Liability
program above $25M)
$30M (Primary Program)
$3M (Pool Layer)
$3M xs 3M (Various quota
share)
$4M xs $6M (Various quota
share)
$10M xs $10M (Various
quota share)
$10M xs $20M (Various
quota share)
$50 M (Excess Program)
$15M xs $30M (Various
quota share)
$5M xs $45M (Various quota
share)
Pool Retention $1M $1M $5M $3M
Member Retentions $5K to $500K, with Hesperia’s
current retention at $50K
$5K to $750K $10K to $1M
(Primary, GL1 and GL2)
$0 (Primary Program)
$150K, $250K, $500K, $750K,
or $1M (Excess Program)
Coverage Programs Liability includes:
Bodily Injury
Property Damage
Personal Injury
Public Officials E&O
Ancillary Coverages:
Crime
Special Events
Vendors/Contractors
Liability
Workers’ Compensation
General Liability
Workers’ Compensation
Property through PRISM
Special Events
Ancillary Coverages:
Crime
Employee Benefits
Volunteer Coverage
Vendors/Contractors
Liability
Primary Liability
Excess Liability
Primary Workers'
Compensation
Excess Workers'
Compensation
Property
Miscellaneous
Aviation/Airport
Cyber
Equipment
Maintenance
Legal obligations to pay as
damages by reason of tort
liability imposed by law
because of one or more of
these defined damages:
Bodily Injury
Property Damage
Personal Injury
Public Officials Errors and
Omissions
Broadcast/Publication Injury
Employment Practices Injury
60 Liability PERMA CIRA PRISM CJPIA
Crime
Fiduciary
Pollution
Special Events
Special Property and
Liability
Watercraft
Catastrophic Inmate
Medical
Master Rolling Owner’s
Protective Professional
Indemnity
Master Course of
Construction
Vendor/Contractor
Program
Employee Benefits Admin.
Liability
Employment Practices
Liability (EPLI)
$1M (optional Employment
Practices program above $1M
to $50M)
$250K (optional Employment
Practices program up to $1M
with ERMA and excess
coverage available above
ERMA)
Available in GL1 and GL2 Primary and Excess liability
programs
Group Purchase
Programs
Auto Physical Damage, Cyber,
Property, Boiler and
Machinery, Pollution, Deadly
Weapons
Crime, Employee Benefits,
Volunteer Coverage
Vendors/Contractor’s Liability
21 Miscellaneous, ancillary
group purchase options
Property, Earthquake, Flood,
Mechanical Breakdown,
Pollution Legal Liability, Crime
Coverage, Special Events
Subsidence / Earth
Movement
Claims arising out of or in
connection with an earthquake
or series of related
earthquakes shall be deemed
to arise out of one Occurrence.
Not specifically outlined in
MOC.
Excluded - "To property
damage arising out of
subsidence"
Excluded - "Any Claim of
property damage directly or
indirectly arising out of, caused
by, resulting from, contributed
to or aggravated by the
settling, sinking, slipping,
falling away, caving in, shifting,
eroding, mud flow, rising,
tilting, or any other subsidence
or movement of land."
61 Liability PERMA CIRA PRISM CJPIA
Settlement Authority The Authority shall have no
duty to assume the control of
investigation or defense of any
claim unless the Retained Limit
is zero. However, the Authority
shall have the right to assume
the control of the negotiation,
investigation, defense, appeal
or settlement of any claim
which the Authority
determines, in its own
discretion, to have a
reasonable probability of
resulting in an Ultimate Net
Loss exceeding the Retained
Limit. The Covered Party shall
fully cooperate in any matters
pertaining to such claim or
proceeding.
For any Claim that creates the
potential for the recovery of
Damages to which this
Memorandum applies, the
Authority shall have the duty
to pay Defense Costs upon
satisfaction of the Retained
Limit. The Authority shall have
the right to defend any such
Claim or Suit against a Covered
Party if the final judgment or
settlement is likely to result in
an Ultimate Net Loss in excess
of the Retained Limit. The
Authority shall have no
obligation to defend or
contribute to the defense of
uncovered Claims, including
uncovered Claims contained in
a suit that contains covered
Claims.
The Authority has no duty
to defend under the
Memorandum. The
Authority; however, shall
have the right, but not the
duty, to associate itself, at
its own cost, with the
covered party, in the
control, investigation,
defense or appeal of any
claim or suit which, in the
opinion of the Authority, is
or may be covered by the
Memorandum. The
covered party shall fully
cooperate in all matters
pertaining to such claim or
suit.
Primary Program - Although
claims are managed through a
collaborative process, the
Authority retains ultimate
settlement authority.
Excess Program - Members
retain settlement authority
over claims within their layer,
except for certain defined
claim types that have
catastrophic potential.
Members retain the right to
select defense counsel from
the Authority's pre-approved
panel.
Defense Costs If the Authority assumes
control of the handling of a
claim, the Covered Parties shall
pay at the direction of the
Authority all Defense Costs
incurred by the Authority and
any sum necessary for the
settlement of a claim, or to
satisfy liability imposed by law,
up to the applicable Retained
Limit.
If the Authority advances
Defense Costs within the
Retained Limit, the Covered
Party shall promptly reimburse
the Authority upon request.
Inside.
"The Authority's liability
for excess defense costs is
subject to, and not in
addition to, the Authority's
limit of liability" (MOC pg.
1)
Inside.
Limit is "inclusive of Defense
Costs" (MOC)
62 Liability PERMA CIRA PRISM CJPIA
Participation
Requirements
Mandatory participation Mandatory participation Optional participation.
Requirements if choose to
participate include:
maintain loss prevention
program, actuarial study
every 3 yrs., annual loss
data submissions,
compliance with EIA's
Claims Admin standards.
Mandatory participation
Dispute Resolution The decision to assume control
of a claim shall be made by an
executive committee
appointed by the Board of
Directors. Such decision may
be appealed to the Board of
Directors. The results of such
appeal shall be final and
binding, and shall not be the
subject of any further appeal,
arbitration or court action.
In the event of a disagreement
regarding the assignment of
counsel, the Covered Party
retains the right to appeal to
the Board of Directors, whose
decision shall be final. If either
the Covered Party or the party
identified in the Covered
Contract refuses to have such
party(s) be defended by the
counsel assigned by the
Authority, then the obligation
of the Authority to contribute
to Defense Costs arising from
such Claim or Suit shall be
limited to such amounts as
would be incurred if counsel
selected from the Panel
Counsel list were assigned the
defense of such Claim or Suit.
(1) Written request; (2)
Committee appeal; (3)
Executive Committee
appeal; (4) Arbitration; (5)
Litigation
(source: bylaws)
(1) Written notice to EC; (2)
Appeals Committee; (3)
Potential to reopen with
certain circumstances; (4)
Arbitration
(source: MOC pg. 25)
63 Liability PERMA CIRA PRISM CJPIA
Notable Exclusions Aircraft and Airport
Radon and Asbestos
Failure to Perform/Breach of
Contractual Obligation
besides Covered Contract
Indemnity Obligation
Dam Failure
Claims by Employees,
Employment Related Claims
Fiduciary Liability
Workers’ Compensation
ERISA
Bid Specifications/Cost
Overruns
Failure to Supply Utilities
Punitive, Exemplary, Multiple
Damages
Criminal Acts
Land Use Regulation and/or
Planning
Eminent Domain,
Condemnation Proceedings,
Inverse Condemnation
Hospital, Health Care, Medical
Clinic Facility, Except
Emergency Services
Nuclear Material
Pollutants
Taxes, Fees, Fines, Leins,
Assessments Disputes
Automobile, Motorcycle,
Watercraft Racing
Additional Covered Party’s
Sole Negligence
Aircraft or Airport Operations,
Except Drones
Antitrust or Restraint of Trade
Bounce House
Breach of Contract
Contractual Liability
Dam Failure
Disability Accommodation
Expenses
Employee Benefit Plans
Employee Injury
Estimates, Plans, Contract
Awards
Failure to Supply Utilities
Fiduciary Liability
Fines, Penalties, Punitive
Damages
Impairment or Loss of
Property
Knowingly False Statements
Labor Disputes and Class
Actions
Land Use and Other Regulation
Medical and Health Care
Operations with Limited
Coverage
Motorized Racing Contest
Nuclear
Pollution (limited)
Property in Covered Party’s
Control
Refund of Taxes, Fees,
Aircraft or Airport
Operations and
Watercraft
Workers’ Compensation
Property in the Covered
Party’s Control
Condemnation and Land-
Use Regulation
Pollution (limited)
Failure to Supply Utilities
Dam Failure
Fiduciary Liability
Fines, Penalties and
Punitive Damages
Antitrust or Restraint of
Trade
Contractual Liability
Estimates, Plans and
Contract Awards
EPLI
Medical Care Activities
with Limited Coverage
ERISA
Aircraft or Airport Operations
and Watercraft
Workers’ Compensation
Property in the Covered Party’s
Control
Condemnation and Land-Use
Regulation
Pollution with Limited
Exceptions
Failure to Supply Utilities
Dam Failure
Fiduciary Liability
Fines, Penalties and Punitive
Damages
Antitrust or Restraint of Trade
Contractual Liability
Estimates, Plans and Contract
Awards
EPLI
Public Officials E&O
Landfill
Criminal Acts
64 Liability PERMA CIRA PRISM CJPIA
Assessment
Watercraft
Wage and Hour
Workers’ Compensation
Unwanted Electronic
Communications
Use of a Firearm by Non-Peace
Officers
Electroshock Weapons with
Exception for Policy
Department Employees
Vaccination and Disease
Testing
65 Property
Property PERMA CIRA PRISM CJPIA
“All Risk” Member
Retentions
$10K or $50K, with
Hesperia’s current retention
at $10K
See PRISM Property
Program
$10K to $125K, but varies
depending on Program
Tower
$2.5K, $10K, $100K, or 5%
Limit $100M per member per
occurrence except for
specified perils. $200M
annual aggregate.
See PRISM Property
Program
Tower I to VIII: $300M
except for specified perils,
$100M boiler and
machinery, plus excess
coverage
$25M per occurrence except
for specified perils
“All Risk” Deductible $100M per occurrence
except for specified perils.
$500K Unscheduled
infrastructure including but
not limited to tunnels,
bridges, roadways, and all
similar property unless a
specific value has been
declared. Unscheduled
infrastructure coverage is
excluded for the peril of
Earthquake and excluded
for FEMA and/or OES
declared disasters, providing
said declaration provides
funding for repairs.
See PRISM Property
Program
Specified by member. $10K per occurrence, all perils
and property including fire and
ambulance vehicles and
vehicles on the premises and
boats, except as indicated by
peril or type of property below:
$250K per occurrence,
unscheduled tunnels, bridges,
dams, catwalks (except those
not for public use), roadways,
highways, streets, sidewalks,
culverts, street lights and
traffic signals
$100K per occurrence,
unscheduled property, unless
Vacant and Unoccupied in
which case there is no
coverage
$500K per occurrence for
Vacant and Unoccupied
scheduled buildings
66 Property PERMA CIRA PRISM CJPIA
Earthquake Shock Coverage
Sublimit
Optional program See PRISM Property
Program
Tower I to VI: $100M
Tower I to VI: $365M
Shared Excess Roof Top
Tower VII: $25M with no
Excess Roof Top
Tower VIII: No Coverage
If purchased $25M shared by
covered members per
occurrence and in the annual
aggregate
Earthquake Shock
Deductible
Varies based on optional
program.
See PRISM Property
Program
5% per unit of coverage
with minimum deductible
$100K per occurrence and
maximum of $50M. All
members share in a
proportional basis
deductibles that exceed
$50M.
5% per unit of coverage with
minimum deductible $100K per
occurrence. Applies separately
to each member and each
occurrence.
Flood Coverage Sublimit $2.5M per occurrence and
in the annual aggregate for
members that purchase
coverage
No coverage for Flood Zones
A & V
See PRISM Property
Program
Tower I to VIII: $200M If Earthquake Shock purchased
$25M shared by covered
members per occurrence and
in the annual aggregate
If Earthquake Shock not
purchased $10M shared by
covered members per
occurrence and in the annual
aggregate
Flood Deductible $100K all flood zones per
occurrence excluding Flood
Zones A & V
No coverage for Flood Zones
A & V
See PRISM Property
Program
Greater of $25K per
occurrence or All Risk
deductible, outside Flood
Zones A & V.
Greater of $100K per
occurrence or All Risk
deductible, within Flood
Zones A & V.
$100K per occurrence except
$250K per occurrence per
member within SFHA. For
unscheduled property,
whether Vacant and
Unoccupied or not, the Flood
deductible shall be the greater
of the Flood deductible or the
applicable “All Risk” deductible.
$500K per occurrence, per pier
67 Property PERMA CIRA PRISM CJPIA
Earthquake Sprinkler
Leakage Sublimit
Covered outside of the
“Earthquake Shock”
definition and subject to the
basic peril deductible
See PRISM Property
Program
Included as “All Risk” peril $25M
Ordinance or Law Sublimit $50M except $2.5M for
vacant properties.
See PRISM Property
Program
$50M Increased Cost of
Construction
$25M for Earthquake Shock
and Flood only, per occurrence
and in the Annual Aggregate
Course of Construction
Sublimit
$25M for projects with
completed values not
exceeding the sub-limit
shown. Projects valued
greater than $15,000,000
require underwriting
approval and a premium
charge.
See PRISM Property
Program
$100M for projects at new
or existing sites with a final
contract value of
$100,000,000 or less
$25M Final Contract Value in
respect of Real Property,
including new projects at new
locations. Includes Earthquake
Shock and Flood for existing
Covered Members reported
within 60 days. Excludes
Earthquake Shock and Flood
for new Covered Members.
Newly Acquired Property
Sublimit
Any property newly
acquired, owned, leased,
managed, rented or
occupied is excluded.
See PRISM Property
Program
Automatically extended to
cover.
$25M per building or structure
for existing Covered Members.
Includes Earthquake Shock for
existing Covered Members that
already purchase earthquake
shock, when the new location
is reported within 60 days.
$25M per building or structure
for new Covered Members
reported within 60 days.
Excludes Earthquake Shock for
new Covered Members.
Newly Acquired Piers,
Docks, Wharves, Dams
Sublimit
Any property newly
acquired, owned, leased,
managed, rented or
occupied is excluded.
See PRISM Property
Program
Piers, wharves, and dams
are excluded unless
specifically declared.
$5M per member reported
within 60 days. Includes
Earthquake Shock and Flood
for existing Covered Members
that already purchase
earthquake shock, when the
68 Property PERMA CIRA PRISM CJPIA
new location is reported within
60 days. Excludes Earthquake
Shock and Flood for new
Covered Members.
Off Premises Services
Business Interruption
including Extra Expense
Sublimit
$25M resulting from a
covered peril at non-
owned/operated locations.
See PRISM Property
Program
Included in boiler and
machinery extension.
$2M per occurrence
Unscheduled or Temporary
Locations Sublimit
See PRISM Property
Program
$3M Unscheduled
Infrastructure each
occurrence subject to a
$500,000 deductible each
occurrence (All Risk and
Flood only)
$5M
Scheduled Vacant and
Unoccupied Property
Sublimit
$2.5M See PRISM Property
Program
No Sublimit $2.5M
Errors and Omissions
Sublimit
$50M See PRISM Property
Program
$50M $10M
Unscheduled Tunnels,
Bridges, Dams, etc. Sublimit
$750K unless a specific
value has been declared.
See PRISM Property
Program
$3M unless a specific value
has been declared
$1M per occurrence for
unscheduled tunnels, bridges,
dams, catwalks (except those
not for public use), roadways,
highways, streets, sidewalks,
(and related appurtenances to
these) culverts, street lights
and traffic signals.
Tax Revenue Interruption
Protection Sublimit
$3M except $1M per
occurrence if specific values
not reported.
See PRISM Property
Program
Not Specified if Included $25M per occurrence
Animals Sublimit $2.5M unscheduled animals,
$50K per animal, per
occurrence.
See PRISM Property
Program
S1M, specially trained
animals subject to a
stipulated value of $50,000
per animal each occurrence
$500K
69 Workers’ Compensation and Employers’ Liability
WC/EL PERMA CIRA PRISM CJPIA
Member Retentions $50K to $500K, with
Hesperia’s current retention
at $250K
Up to $350K Up to $125K Varies by member
State(s) Covered California California California California Volunteer Coverage Excluded, unless the
Member has assumed
liability pursuant to
California Labor Code
sections 3363.5, et seq., by
resolution before the date of
the injury.
Included provided that, prior
to the occurrence, the
governing Board of the
Member has adopted a
resolution as provided in
Division 4, Part 1, Chapter 2,
Article 2 of the California
Labor Code, declaring such
volunteer workers to be
Employees of the Member
for purposes of the Workers’
Compensation Act; or
provided that such volunteer
workers are statutorily
deemed by the Workers’
Compensation Act to be
Employees for the purposes
of workers’ compensation.
Included provided that, prior
to the occurrence, the
Governing Board of the
Covered Party has adopted a
resolution as provided in
Division 4, Part 1, Chapter 2,
Article 2, of the California
Labor Code, declaring such
volunteer workers to be
employees of the Covered
Party for purposes of the
Workers’ Compensation Act;
or provided that such
volunteer workers are
statutorily deemed by the
Workers’ Compensation Act
to be employees for the
purposes of workers’
compensation.
Volunteers are considered
Employees under this
Memorandum only if the
Member has a resolution in
effect, and passed prior to
the date of injury or illness
at issue, providing workers’
compensation coverage to
volunteers under Labor Code
Section 3363.5, and while
performing specific functions
in the course and scope of
authorized activities for the
Member.
Recovery from Others (WC) PERMA may enforce the
Member's rights, and the
rights of persons entitled to
the benefits of this coverage,
to recover PERMA's
payments from anyone
liable for the injury. The
Member will do everything
necessary to protect those
On behalf of the Program,
the Authority may, but is not
required to, enforce on
behalf of Participating
Member the Participating
Member’s rights under
Chapter V of the Workers’
Compensation Division of
the Labor Code,
In the event of any loss
payment for which you have
waived the right of recovery
in a written contract entered
into prior to the loss, we
agree to waive our right of
recovery with respect to
such loss.
The Authority shall be
subrogated to the extent of
any payment hereunder to
all the Member’s rights of
recovery thereof. This
section applies to all
recoveries from third parties
or governmental agencies.
The Member shall do
70 WC/EL PERMA CIRA PRISM CJPIA
rights for PERMA and to help
PERMA enforce them, and
will take no action to
prejudice the rights of
PERMA to seek such
recoveries.
commencing with Labor
Code 3850 et seq., including
but not limited to the
Participating Member’s
rights to subrogation to
recover the Program’s
payments from anyone
legally liable for the injury to
Participating Member’s
employee. The Participating
Member will do everything
necessary to protect those
rights and to help enforce
them.
nothing after Loss to
prejudice such rights and
shall do everything
necessary to secure such
rights. The Authority shall
have standing to seek
subrogation recovery in its
own name or in the name of
the Member, and the
Member shall cooperate
with and assist the Authority
in pursuing such recovery,
including assigning its right
to recover subrogated
amounts, and if necessary,
executing a written
agreement to effect such
assignment.