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l roEer made a supreme effort to get various quotes; however, he was unable to obtain <br />more than the following quote for insurance coverage: <br />Fiscal Year Self Insurance Retention Premium % Increase from <br />previous year <br />03 -04 proposal $750,000 $450,327 267% <br />Anticipating this outcome the City explored the possibility of joining a group pool through <br />Bay Cities Joint Powers Insurance Authority (BCJPIA) for excess insurance. The City <br />has belonged to Bay Cities for General Liability insurance since 1990 and is pleased <br />with the program management, insurance advice and risk management assistance. <br />BCJPIA has recently entered the excess insurance market through the Local Agency <br />Worker's Compensation Excess Pool (LAWCX)) and has worked diligently in pursuing <br />local government agencies to join the excess insurance pool thereby achieving <br />economies of scale and projected long term stability. Under the group purchase pool <br />the City received the following cost saving quote: <br />Fiscal Year I Self Insurance Retention I Premium <br />103-04 proposal 1$350,000 <br />$294,073 <br />% Increase from <br />previous year <br />139.6% <br />In determining a recommendation staff sought the input of Richard E. Sherman & <br />Associates, the firm that audited the City's Worker's Compensation Program. They <br />agreed with staff that, given current economic conditions and the unstable insurance <br />industry, the City needs to look for opportunities to lower retention levels and stabilize <br />excess insurance premiums. Staff recommends that the City join the BCJPIA group <br />purchase pool because the BCJPIA meets the program objectives: lower retention level <br />and stabilize premiums. <br />Alternative <br />1. Join Bay Cities Joint Powers Insurance Authority at the current $500,000 SIR for <br />$215,474. <br />2. Stay with the City's current Broker and accept the $750,000 SIR for $450,327. <br />Fiscal impact <br />Currently the City operates under a two -year budget cycle, an increase of this <br />magnitude was not anticipated in 2002 when the budget was established. Therefore a <br />budget adjustment of $243,073 for FN 03 -04 will be required. If options 1 or 2 are <br />selected, the required budget adjustment will be $ 164,474 and $399,327, respectively. <br />Maria Rivera -Pena <br />Human Resources Director <br />Ji,1,,;,J <br />Ed Everett <br />City Manager <br />