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Council votes to pursue PRISM membership application as interim step on liability/workers' comp coverage
Summary
Faced with a $5 million general-liability self-insured retention, the council voted to pursue application to the PRISM risk pool as a one-year alternative while staff continues to evaluate longer-term joint-powers options such as CIRA.
The City Council on July 3 debated alternatives to its current excess-insurance arrangements for general liability and workers’ compensation and voted to pursue an application to Public Risk Innovation, Solutions, and Management (PRISM) as a potential one-year alternative while staff continues evaluation.
Deputy Director of Human Resources and Risk Management Crystal Mirela and Director Terry Doyle presented a comparison of the city’s existing coverage (a $5 million deductible for general liability and $750,000/$1,000,000 for workers’ compensation) and several joint-powers pool alternatives. Staff said Safety National (the city’s current excess insurer) would not quote a deductible lower than $5 million. California Intergovernmental Risk Authority (CIRA) provided an estimate that would lower the general-liability deductible to $1 million but with a higher premium than some other pool options; CIRA also bundles third-party administration (TPA) services and other risk-control programs into membership.
Council members pressed for broader comparison data. Several members said they wanted the freedom to avoid a long-term lock-in if a less-costly alternative were available. Council discussion focused on tradeoffs between lower deductibles (lowered maximum city risk exposure) and higher ongoing premiums, the availability and scope of risk-control services bundled by pools, TPA arrangements, the membership commitment terms (CIRA offered a five-year membership commitment), and the practical timing constraint: to change coverage effective July 1 staff said the city needed to commit now or wait a fiscal year.
Councilman Lucio moved, and Councilmember Flores seconded, a motion directing staff to apply to PRISM and attempt to secure membership for an earlier effective date (if accepted, staff will notify the council). Council voted 3 yes, 1 no, 1 absent (Councilman Flores voted no in roll call). Staff said if PRISM does not accept the application in time the city would remain with the current carrier for the coming year and continue evaluation.
Staff noted features of CIRA highlighted in the presentation: lower deductible options, higher coverage limits, no aggregate cap on some coverages, and proactive risk-control and training programs (annual academy, police chiefs forum, on-site risk assessments, and grants for safety equipment). Staff explained some alternatives required completed applications and fees to receive firm quotes; PRISM was the option the council directed staff to pursue immediately to attempt a faster transition without a multi-year lock-in.
