Vacaville raises liability retention to $1 million and directs reserve set‑aside

The Vacaville City Council on April 28 adopted a change to its liability risk posture, approving an increase in the city's CJPRMA self-insured retention (SIR) level from $750,000 to $1,000,000 for the 2026-27 program year and directing staff to set savings aside in a dedicated reserve.

Rachel Duranza, the city's legal services manager, presented four SIR options and the trade-offs involved: the higher the SIR the lower the annual CJPRMA contribution, but the greater the per-claim exposure the city must fund before excess coverage applies. Duranza summarized the 10-year claims history and observed that the SIR had been exceeded in three of the past 11 years. She explained the estimated savings at each tier and the "break-even" timeframe for one additional exceeded claim.

After discussion, Mayor Chair Carly moved to set the SIR at $1,000,000 and to direct that the premium savings be placed into a dedicated self-insurance reserve to build coverage capacity over a multiyear period. Staff and the city manager emphasized safeguards: any savings applied to the reserve would be carried forward and staff will return with a formal reserve policy for council review.

Council members split on the proposal. Several members cited the city's recent low claims activity and the need to protect general fund services before taking on higher per-claim exposure; others argued that a modest increase and a disciplined reserve policy balance fiscal savings and risk.

What happens next: Staff will establish the dedicated self-insurance reserve and present proposed reserve policy language and funding targets to council, including options for how many years of premium savings to accumulate before any reallocation.