HomeMy Public PortalAbout10) 7G FY 2014-15 City Budget Amendment - Retrospective Payment to CJPIAAGENDA
ITEM ?.G.
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
DATE: June 2, 2015
TO: The Honorable City Council
FROM: Bryan Cool<, City Manager
By: Tracey L. Hause, Administrative Services Director
SUBJECT: FISCAL YEAR (FY) 2014-15 CITY BUDGET AMENDMENT -
RETROSPECTIVE PAYMENT TO CALIFORNIA JOINT POWERS
INSURANCE AUTHORITY (CJP IA)
RECOMMENDATION:
The City Council is requested to authorize staff to revise budgeted appropriations for the
FY 2014-15 City Budget in the amount of $122,089 for a retrospective payment to
CJPIA.
BACKGROUND:
1. On April1, 1978, the City joined the CJPIA pool for liability coverage.
2. On January 1, 1980, the City joined the CJPIA pool for worke rs ' compensation
coverage.
3. In May 2015, the City received notice from CJPIA that a retrospective payment
was required.
ANALYSIS:
The CJPIA provides insurance protection to members through a pooled liability
program, which offers first dollar coverage for third-party damages up to $50 million for
each occurrence. Workers' compensation, a second but optional pooled program,
ensures benefits to injured or ill workers according to California statues.
In addition, the California JPIA makes available other important cove rage to the City,
including first-party property, first and third-party pollution l iabi li ty, employee crime,
special events liability, and contractual vendor/contractor liability.
City Council
June 2, 2015
Page 2 of 2
The City received notice of a required retrospective adjustment for the FY 2012-13,
claim year. Prior to the FY 2013-14, CJPIA calculated premiums for workers'
compensation coverage using a retrospective funding model. Under the retrospective
funding model, member cities are charged an estimated annual premium. Once actual
costs and reserves related to claims for that fiscal year are incurred, then the member
cities are charged the difference between the premium and actual costs paid.
Beginning in FY 2013-14, the CJPIA changed from the retrospective funding model to
prospective funding model. As a result of this change, annual premiums for workers'
camp coverage increased, however there will no longer be retrospective adjustments for
claims in FY 2013-14 and beyond.
CONCLUSION:
Funding and payment to CJPIA for this retrospective adjustment is necessary to ensure
the City remains in good standing with CJPIA.
FISCAL IMPACT:
This item has an impact on the FY 2014-15 City Budget. If the City Council approves
the recommended appropriation adjustment, an additional $122,089 will be appropriated
to the Workers' Compensation/General Liability line item, creating appropriation
authority to remit the Retrospective payment to CJPIA.