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City staff recommends PRISM to lower Chino’s $5 million deductible; council leans toward $1 million option
Summary
City staff presented four joint powers insurance authorities and recommended joining PRISM to reduce the City of Chino’s $5,000,000 general liability deductible; council members signaled support for a $1,000,000 deductible and asked staff to pursue membership discussions and return with formal approval steps.
Terry Doyle, the City of Chino’s director of human resources and risk management, told the City Council on Feb. 10 that staff had evaluated multiple joint powers insurance authorities and is recommending membership in PRISM as the best balance of flexibility, coverage and cost.
The recommendation is aimed primarily at reducing the city’s current $5,000,000 out‑of‑pocket general liability deductible while maintaining comprehensive coverage. "The primary goal tonight is to explore options to reduce the city's current $5,000,000 general liability deductible while ensuring the city maintains sufficient insurance coverage," Doyle said during the presentation.
Why it matters: staff said Chino has averaged roughly 41 workers’ compensation claims annually (top three averaging about $262,000 each) and about 85 general‑liability claims per year; its single largest recorded general‑liability payment was about $3.9 million in 2019. Staff illustrated that, under PRISM with a $1,000,000 deductible, Chino’s out‑of‑pocket share on that $3.9 million claim would have been about $1,000,000 — a potential reduction of roughly $2.9 million for that incident.
What staff compared: Crystal Murillo, the Deputy Director who led the JPA overview, summarized four pools that responded to staff outreach: PRISM, CIRA, CJPRMA and PERMA. The comparison covered available coverages, third‑party administrator (TPA) and defense counsel arrangements, member resources (training and grant programs), deductible options and premium estimates. PRISM, staff said, allows members to select TPAs and defense counsel and offers broad coverage options; CJPRMA does not provide workers’ compensation and offers fewer member resources.
Estimated costs and tradeoffs: staff reported a preliminary estimate of about $3,000,000 for PRISM covering general liability and workers’ compensation and said additional property/other coverages from PRISM were estimated at roughly $654,800, producing a combined estimate near $3.7 million. By comparison, staff said the city’s total premiums for the current fiscal year (general liability, workers’ compensation and separately purchased property/other coverages) are approximately $2,500,000. Staff cautioned these were estimates and offered to run exact comparative calculations for the council.
Council guidance and next steps: during Q&A, several council members indicated a preference for a $1,000,000 deductible and emphasized the value of being able to choose TPAs and defense counsel if the city joins a pool. Council members also asked about membership deadlines (staff noted some JPAs had near‑term deadlines and were willing to work with the city) and term commitments (staff said many JPAs have 3–5 year commitments, while CJPRMA showed none). Staff noted a council decision to pursue membership would require submitting underwriting information to the preferred JPA, JPA acceptance, and a future City Council item for formal approval.
No final vote was taken at the study session. Staff said it will contact the preferred JPA to begin the membership application process and return to the council with formal approval paperwork and precise premium comparisons.
What’s next: staff will obtain the outstanding premium/aviation estimates, run precise year‑over‑year cost comparisons between current standalone coverage and the PRISM estimate, and report back to council as part of the membership application and approval process.
