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xN <br />City of San Leandro <br />Meeting Date: May 7, 2012 <br />Staff Report <br />File Number: 12 -206 <br />Agenda Section: CONSENT CALENDAR <br />Agenda Number: 8.1. <br />TO: <br />City Council <br />FROM: <br />Chris Zapata <br />City Manager <br />BY: <br />David Baum <br />Finance Director <br />FINANCE REVIEW: David Baum <br />Finance Director <br />TITLE: <br />Staff Report for Resolution Decreasing City's General Liability Self- Insured <br />Retention Level through the California Joint Powers Risk Management <br />Authority <br />SUMMARY AND RECOMMENDATION <br />Staff and the City Council Finance Committee recommend that the City Council approve a <br />decrease to the City's General Liability Self- Insured Retention (SIR) level from $1,000,000 to <br />$500,000 through and in accordance with the City's agreement with the California Joint <br />Powers Risk Management Authority (CJPRMA), and that the City Council adopt a resolution <br />to approve this change as required by the CJPRMA. <br />DISCUSSION <br />The City currently maintains a $1,000,000 per occurrence SIR and participates in the <br />CJPRMA pool above the $1,000,000 limit. Article XIX of the CJPRMA joint powers agreement <br />provides that member entities may determine, on a year -to -year basis, their own self- insured <br />retention levels. The City's SIR was established, and has remained unchanged, since the <br />City joined CJPRMA on December 1, 1986; the same year the risk pool itself was created. <br />At the December 2, 2011 City Council Finance Committee meeting, the Committee reviewed <br />and accepted a report prepared by the City's actuary, AON, evaluating the self- insured <br />retention level and the possibility of decreasing the SIR to $500,000. Based on 10 years loss <br />history the City did not have a loss exceeding $500,000. However, with a decrease in the <br />SIR, premiums will increase by $38,000 for 2012 -13. The Finance Committee determined <br />that the added premium was worth reducing the SIR per occurrence by one -half. <br />At the CJPRMA Board of Directors meeting on March 15, 2012, the Board discussed, <br />reviewed and approved the City's request to change the SIR from $1,000,000 to $500,000. <br />Based on the City's loss history, neither CJPRMA nor the City will be negatively impacted by <br />the SIR reduction. If the City Council authorizes and approves the reduced retention limit, the <br />new SIR will be effective July 1, 2012 for the new fiscal year. <br />City of San Leandro Page 1 Printed on 51112012 <br />