HomeMy WebLinkAboutReso 52-1978 RESOLUTION NO. 52-78
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION AUTHORIZING PARTICIPATION
IN A RISK MANAGEMENT. STUDY
BE IT RESOLVED by the City Council of the City of South San Francisco
that the Oouncil having received and considered the staff report dated
May 3, 1978, Subject' Risk Management Services/Liability Program Feasibility
Study, a copy of which is attached hereto as Exhibit "A", does therefore
order that:
1. The City Manager be and he is hereby authorized to engage the
services of the 1976 Risk Management Group, Inc., in conjunction with
other San Mateo County cities, for the purpose of determining the feasibility
of creating a joint powers authority for risk management services.
2. The City Manager is authorized to execute an agreement therefor
for and on behalf of the City, and the City Clerk is authorized to attest
his signature thereto.
I hereby certify that the foregoing Resolution was regularly intro-
duced and adopted by the City Council of the City of South San Francisco at
adjourned
an r~.~,,7~r meeting held on the lothday of Maq , 1978, by the following
vote'
AYES'
Councilmen Ronald .G. Acosta, William A. Borba, Emanuele N. Damonte
and Terr~/ J. Mirri, Councilwoman Roberta Cerri Teglia
NOES' None
ABSENT: None
City Clerk
EXHIBIT "A" TO RESOLUTION NO..52-78.
ADOPTED ~ay lo, 1978
Ray 3, 1978
To°
The Honorable City Council
ACTION- Resolution
Subject: RISK MANAGEMENT SERVICES/LIABILITY PROGRA~ FEASIBILITY STUDY
RECO~EN DAT I ON:
.
It is reco~ende~ that the City Manager be authorized to enga~ the services of
the 1976 Risk ,anagement G~up, Inc. in co,junction with other San Mateo County
Cities for the purpose of dete~ining the feasibility of creating a Joint Powers
Authority for Risk Management Services.
DISCUSSION' -.
_
In 1970, the'League of California Cities .published a document' which noted both
the intensified exposure of public agencies 'to. liability for losses arising
from personal injury and property damage; and the deterioration of the insurance
market with increases in premiums and a narrowing of coverage. Since then, this
situation has worsened by reason 'of accelerated insurance company withdrawal from
most types of public liability insurance, coupled with the accelerating of total
insurance premiums charged by carriers remaining in the field.
In response 'to the insurance dile~a, public agencies ame incWeasingly moving
into Self-Insurance and Risk Management Programs. This can occur either indi-
vidually or through pooling arrang~ents. This City has ~barked in the direction
of being independently ~elf;insured in both our Dental and Workers' Compensation
Programs. ..
On April loth, twelve of the cities in San Mateo County met "ith Risk Management
Group, Inc. to discuss the feasibility of creating a Joing Powers Authority for
liability Risk Manag~ent Services. At that meeting, a two-phase proposal was
presented as- follows'
PHASE ONE
a. Interview each city's management and discuss the Joint Risk Management
Facility. ~- ·
b. Obtain updated underwriting data for preliminary insurance broking.
To' The Honorable City Council
Subject' RISK MANAGEMENT SERVICES/LIABILITY
PROGRAM FEASIBILITY STUDY
May. 3, 1978
c. Obtain price indications for the excess insurance.
Page 2
..
d. Obtain price indications fOr Risk Management Services other than insurance.
e. Establish self-insurance capability for each city.
.
f. Establish predicable loss levels for each city.
..
g. Formalize the Loss Funding Plan and the Joint Risk Management Facility
. agreement.,
h. Provide Year. One operating budget for Risk Management S.ystem.
i..Be prepared to implement the system.
PHASE TWO
a. 5elect the implementation, date.
b. Finalize the Joint Exercise of Powers Agreement and By-laws.
c. Finalize and execute necessary insurance program: rates, form, etal.
d. Activate Loss 'Funding system.
e. Provide the Risk Management System services including, but not'limited to,
adjusters, claims'manag~ent, loss control services, manag~ent information
Of particular interest was the suggested fund pooling concept which is being .imple-
mented for cities in Marin, Orange and Santa Clara Counties. It avoids the political
obstacles inherent in some types of pools because one city does not pay any of
another city's'losses. If a city's losses are greater than expected (anticipated
losses are projected and budgeted), then it borrows funds fmm the pool and repays
th~ over a pe~od of ~me. The buffer fund pool allows a city to spread the cost
of unexpected losses_rather than paying th~ all at once.
It was the-general concurrence of the cities represented that the matter should be
seriously pursued with certain provisos' 1) A minimum of 8-9 cities must partic-
ipate to realize any econOmics of scale; 2) The commitment would be for Phase I
with no obligation to participate in Phase II. ~ .:.~?~ .
It is staff's opinion that the City will eventually be unable to rely solely on
the procurement of insurance for protection from losses arising from personal .-
..
~,.,~.~. r~..~ . · ...~ ...:~ ;~,¥..,,
.~ ;.,-.
To: The Honorable City Council
Subject: RISK MANAGEMENT SERVICES/LIABILITY
PROGRAM FEASIBILITY STUDY
May. 3, 1978
Page 3
C. Walter Birkelo
City Manager . //~_~,~
BY:Mich~a~el A. Wilson '
Assistant to City Manager
Funds are available in Personnel Division Budget, AcCount 12-4329-108-08, Other
Professional Services.
injury and property damage claims, and therefore, a greater lcommitment to both
risk production and risk management will be required. Participation in Phase I
would provide the necessary-analysis for the Ci-ty to determine whether it is
prudent to. remain statu.s-~quo, become individually self-insured or enter into a
mul ti-agency program.
It is anticipated that the study wil.1 demonstrate that a Joint Powers Authority
Risk Management Program will result in substantial cost savings and better service.
The City's share to participate, in Phase I is $900.
FUNDING' :