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~A-~ municipalities such as the Redwood City. Additionally, CPEIA offers economic incentives not provided by other vendors; including reimbursements for costs and charges associated with annual claims audits, periodic actuarial costs are split up to a maximum of $2,000, and safety and prevention classroom trainings are offered at no cost or at $25.00 per class. Staff recommends entering into contract with CPEIA such that there is no lapse in coverage and we maintain with the current SIR of 350K. The only concern however is that by joining CPEIA there is a major exclusion: Labor Code 4850 benefits (salary continuance) that exceed Worker's Compensation law will not be covered. In the last ten years the City has only had two claims that exceed the 350k SIR. Additionally, of these two claims, the 4850 portion did not exceed $100,000 each. Hence, the City's exposure is minimal and the difference between the CPEIA program cost and LAWXC is 55K. Alternatives 1. Join LAWXC for a total program cost of $556,529 with a three year participation period. The City would be able to keep its current TPA. -2. St~ with Bay Cities Joint Powers Insurance Authority Worker's Compensation Program for a total program cost of $573,659 for one additional year. (The JPA requires a 3 year participation period; however, the City has already been with the JPA for two). The City would have to change Third Party Administrator (TPA) as the JPA has selected its own for the next twelve months. Fiscal impact The California Public Entity Insurar}ce Authority total program cost is $501,976. Currently the City operates under a two-year budget cycle. An increase to premiums was anticipated when the 04-06 budget was created. No additional funds are required at this time. ~, '1 ? I--- // / - ;'xiic U Ed Everett City Manager 71/a1{i( [lU/)/. Ji~ Maria Rivera-Peña If-- Human Resources Director