CITY COUNCIL STAFF REPORT
Meeting Date: June 05, 2023
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___-23 AUTHORIZING PARTICIPATION IN
AND APPROVING THE AMENDED AND RESTATED JOINT EXERCISE
OF POWERS AGREEMENT OF THE FIRE RISK MANAGEMENT
SERVICES JOINT POWERS AUTHORITY
SYNOPSIS
The Fire Districts Association of California Employment Benefits Association (FDAC EBA) and Fire Agencies Self Insurance System (FASIS) will consolidate, effective July 1, 2023, to form Fire Risk Management Services (FRMS). FRMS is a multi-line risk pool of eligible fire districts and public agencies that provide emergency services employee benefits coverage and workers’ compensation.
DISCUSSION
Background
The City of Pleasant Hill is a member of the Joint Powers Authority (JPA) known as the Fire Districts Association of California Employment Benefits Authority (FDAC EBA) with the purpose of establishing, operating, managing, and administering health and welfare benefit programs for existing and retired employees, officers, and members of the legislative body of agencies. FDAC EBA is a non-profit public benefit corporation organized to assist and promote the interests of its public agency members.
The City joined the FDAC EBA due to instability and escalating rate increases in the medical benefit market place. The City is now able to provide medical plans to employees that are comprehensive and competitively priced due to the JPA. The medical plans are sponsored by the FDAC EBA JPA and the JPA works in conjunction with Keenan & Associates, an insurance broker, to create comprehensive programs that include medical, dental, vision and life insurance benefits to participating agencies. When the City joined the FDAC EBA it opted to continue providing dental and vision through the Dublin Insure. The dental and vision insurance packages offered by Dublin Insure are less expensive than the FDAC EBA sponsored plans.
The FDAC EBA and FASIS Consolidation Advisory Committee has met regularly over the past twelve months to work toward streamlining the financial and administrative services via a consolidation of the two programs. At the Special Board of Directors Meeting on February 22, 2023, the FASIS and FDAC EBA Boards unanimously approved the FRMS Amended and Restated Joint Powers Agreement (JPA), effective July 1, 2023.
Analysis
The Fire Districts Association of California Employment Benefits Association (FDAC EBA) and Fire Agencies Self Insurance System (FASIS) will consolidate effective July 1, 2023 to form Fire Risk Management Services (FRMS). FRMS is a multi-line risk pool of eligible fire districts and public agencies that provide emergency services employee benefits coverage and worker’s compensation.
The combined leadership determined that a multi-line risk pool would recognize economies of scale, streamline financial and administrative resources, and reduce duplicative programs, thus providing efficient and effective service to an expanded membership. Governed by the Board of Directors, the consolidated pool will expand and enhance member services as a joint body. The consolidation will also provide the most competitive rates available to its members. Members may choose to participate in one or both programs under a single joint powers agreement.
The FDAC EBA joint powers agreement has proven to be a viable and successful alternative to the commercial insurance marketplace for the City. As a member of the FDAC EBA the City receives competitive medical insurance programs. The new agreement requires approval by Council no later than June 20, 2023 and requires a new three-year minimum participation period.
By streamlining and sharing services previously delivered and administered by multiple service providers (program administration, legal counsel, financial and claim auditors, etc.), members of FRMS will recognize a reduction in administrative and overhead costs.
FISCAL IMPACT
There is an anticipated cost savings based on a reduction in administrative and overhead costs.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Authorize the City Manager to sign and execute the amended and restated JPA with Fire Risk Management Services.
ALTERNATIVES TO RECOMMENDED ACTION
End the City’s participation in the FDAC EBA and direct staff to seek alternative medical coverage for its employees.
ATTACHMENT(S):
Proposed Resolution
Exhibit 1 - Amended and Restated Joint Powers Agreement Prepared by: Ericka R. Mitchell, Human Resources & Risk Manager Approved by: June Catalano, City Manager