HomeMy WebLinkAbout2025-06-24 - AGENDA REPORTS - CJPIA CITY INSURANCE RENEWALO
Agenda Item: 4
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL: Li
'
DATE: June 24, 2025
SUBJECT: GENERAL LIABILITY, PROPERTY LIABILITY, WORKERS'
COMPENSATION, AND EARTHQUAKE COVERAGE
DEPARTMENT: Administrative Services
PRESENTER: Melody Bartlette
RECOMMENDED ACTION
City Council:
Authorize the renewal of the City of Santa Clarita's general liability, property liability, and
workers' compensation insurance coverage through the California Joint Powers Insurance
Authority at a total premium cost of $3,236,993.
2. Authorize Alliant Insurance Services, Inc., to bind earthquake coverage on behalf of the City
of Santa Clarita for Fiscal Year 2025-26 for various City of Santa Clarita facilities, securing
coverage through Arrowhead General Insurance Agency, Inc. and RLI Insurance Company,
for a total premium fee of $654,769.
3. Authorize an ongoing budget appropriation from Self Insurance Fund (Fund 721) to
expenditure account 7212306-516101 for $340,562 for ongoing general liability, property
liability, and earthquake coverage renewals commencing in Fiscal Year 2025-26.
4. Authorize an ongoing budget appropriation from Public Library Fund (Fund 309) to
expenditure account 3098301-516101 for $52,823 for ongoing earthquake coverage renewals
commencing in Fiscal Year 2025-26.
5. Authorize an ongoing budget appropriation from Landscape Maintenance District Fund
(Fund 357) to expenditure account 3577312-516101 for $23,232 for ongoing earthquake
coverage renewals commencing in Fiscal Year 2025-26.
6. Authorize the City Manager or designee to execute all documents, subject to City Attorney
approval.
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BACKGROUND
The City of Santa Clarita (City) has been a member of the California Joint Powers Insurance
Authority (CJPIA) for general liability, workers' compensation, property liability, and other
various lines of coverage since 2021. The CJPIA was established in 1978 for the purpose of
providing liability protection for its members. Today, CJPIA is one of the largest municipal self-
insurance pools in the state of California, with over 120 member cities and other governmental
agencies. Insurance pools, also known as Joint Powers Authorities, provide several advantages
related to insurance coverage and risk management practices that traditional insurance coverage
does not offer, such as policy review, employee training, and facility and risk assessments. Risk
pools help reduce individual members' financial exposure by distributing potential losses
amongst its members.
Under the terms of its membership with CJPIA, the City committed to an initial three-year
participation period, which ran from July 1, 2021, through June 30, 2024. During this period, the
City experienced stable pricing with minimal escalations, as the total cost of claims incurred had
not yet reached a substantial level. Following this initial term, the City extended its participation
for Fiscal Year (FY) 2024-25. For the upcoming FY 2025-26 renewal term, the City's premium
is expected to rise 14 percent, for a not -to -exceed cost of $3,236,993, due to factors such as
increasing payroll; rising loss runs from claims; higher insurable values driven by expanded
coverage for additional property, vehicles, and equipment; and overall volatility in the insurance
market.
In addition to the aforementioned program, staff worked with the City's earthquake insurance
broker, Alliant Insurance Services, Inc. (Alliant), to analyze the City's current property schedule
and determine which facilities should be considered for earthquake coverage. Various factors
contribute to the decision -making process, including facility replacement value, operational
importance, and location. In an effort to secure the lowest cost renewal premium, Alliant
solicited bids from the earthquake insurance marketplace. Following correspondence with
multiple carriers, the most competitive proposals were submitted by Arrowhead General
Insurance Agency, Inc., the City's incumbent carrier, in combination with RLI Insurance
Company. Together, the two carriers will provide earthquake coverage for various City facilities
for FY 2025-26.
Staff evaluated the costs and elements of the proposal and recommends renewing the City's
earthquake insurance policy for FY 2025-26 with Arrowhead General Insurance Agency, Inc.,
maintaining the policy limit at $45 million with a 15 percent deductible, for a total premium cost
of $556,276. This coverage level, which was increased last year to align with the City's ongoing
growth and acquisition of new properties, continues to provide appropriate protection for 20
critical facilities, most notably the Sheriff's Station, City Hall, The Cube, Transit Maintenance
Facility, Vista Canyon Parking Structure and Water Factory, Libraries, and Community Centers,
in the event of a significant earthquake.
Additionally, staff recommends expanding earthquake coverage to include two historically and
culturally significant facilities. William S. Hart Regional Park would be insured for a policy limit
of $5 million with a 15 percent deductible, at a cost of $75,261. Tesoro Adobe Historic Park
would be insured for its full replacement value of $2,092,800, with a 10 percent deductible, at a
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cost of $23,232. Coverage for both facilities would be provided through RLI Insurance
Company. With their inclusion, the number of insured City facilities will increase from 20 to 22,
with a total program cost of $654,769.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
The recommended actions require ongoing appropriations of $340,562 from the Self Insurance
Fund (Fund 721) to expenditure account 7212306-516101, $52,823 from the Public Library Fund
(Fund 309) to expenditure account 3098301-516101, and $23,232 from the Landscape
Maintenance District Fund (Fund 357) to expenditure account 3577312-516101, beginning in
Fiscal Year 2025-26, to support the renewal of the City's Liability (general liability, property
liability, and workers' compensation programs), and earthquake coverage for an annual premium
amount of $3,236,993 and $654,769 respectively.
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