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Blue Lake agrees to pay FRMS assessment in installments under protest after self‑insurance shortfall
Summary
After learning FRMS (a self‑funded JPA) imposed special assessments for an $11 million shortfall, Blue Lake approved an 18‑month installment plan and authorized a payment‑under‑protest letter while staff seeks alternative insurance and monitors FRMS board actions.
City staff told the council that the Fire Risk Management Services (FRMS) joint powers authority — a self‑funded group that had provided health coverage — approved two resolutions in June 2025 to impose special assessments for calendar years 2024 and 2025 and to terminate the medical benefits program due to a roughly $11 million shortfall. Blue Lake’s assessed share is a little over $80,000 (about $19,900 for 2024; just over $60,000 for 2025). Staff said FRMS initially demanded full payment but later offered an 18‑month repayment option.
Staff recommended the municipality pay under protest and pursue replacement coverage, describing the prior plan as an unusually generous (and now unsustainable) benefit pool. “We made the first payment… but my recommendation is we move forward with an 18‑month repayment schedule because we simply don't have the cash flow to pay off $80,000 in one fell swoop,” staff said.
Council approved a motion to authorize installment payments under protest and authorized the mayor to sign the protest letter. Staff will continue to request detailed FRMS financial information, pursue alternatives with commercial carriers and report back to council and the budget ad hoc committee on funding impacts and options.
