Honorable Mayor and Members of the Hermosa Beach City Council
Regular Meeting of May 10, 2022
Title
A RESOLUTION OF THE CITY OF HERMOSA BEACH PROVIDING NOTICE OF THE CITY’S INTENT TO WITHDRAW FROM THE INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY (ICRMA)
(Human Resources Manager Vanessa Godinez)
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Recommended Action:
Recommendation
Staff recommends City Council adopt a resolution (Attachment 1) providing notice of the City’s intent to withdraw from the Independent Cities Risk Management Authority (ICRMA).
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Executive Summary:
The City of Hermosa Beach currently contracts with the Independent Cities Risk Management Authority (ICRMA) for insurance and risk management products and programs. To ensure cost-effective service delivery and reduction of financial risk, staff recommends conducting a review of the various insurance options available to the City. Providing a notice of the City’s intent to withdraw from ICRMA would allow the minimum noticing period to begin while staff concurrently conducts its review.
Background:
The City of Hermosa Beach has been a member of Independent Cities Risk Management Authority (ICRMA) since 1985. ICRMA is currently comprised of 16 Southern California cities including Adelanto, Bell, Downey, El Monte, El Segundo, Fullerton, Glendora, Hawthorne, Hermosa Beach, Huntington Park, Inglewood, Lynwood, Monterey Park, San Fernando, Santa Ana, and South Gate.
The City is enrolled in the self-insured risk-sharing pool for general liability and workers’ compensation programs, along with property, cyber, and crime programs. The term ‘risk sharing pool’ refers to the pooling of risks among a group of entities, generally in a Joint Powers Authority (JPA). Member cities join to share losses within the pooled layer. The annual premium amount each member pays for programs is the best actuarial estimates of what will be needed to fund the claims for a given program year. Currently, ICRMA’s cost allocation formulas for the General Liability and Workers Compensation programs are 70 percent 10-year losses and 30 percent exposure (payroll).
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At its February 27, 2018 meeting, City Council directed staff to continue membership with Independent Cities Risk Management Authority (ICRMA).
Past Council Actions
|
Meeting Date |
Description |
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February 27, 2018 |
City Council direct staff to continue membership with Independent Cities Risk Management Authority (ICRMA) |
Discussion:
To ensure cost-effective service delivery and reduction of financial risk, staff recommends conducting a study of the various insurance options available to the City. This due-diligence analysis would take place over the next six months, at which point the City would have the appropriate information to make an informed decision regarding the best insurance option.
The current ICRMA Bylaws (Attachment 2) require the City provide ICRMA the Notice of Intent to Withdraw no later than July 1 of the preceding year. Notice received after that date shall be considered untimely. The City may revoke such notice by subsequently notifying ICRMA of its revocation by December 1 of the preceding year. Such revocation must be supported by the Council resolution or meeting minutes of the City authorizing such action.
Adoption of the attached resolution (Attachment 1) would preserve the City's right to withdraw from ICRMA if the study shows the City would be better off with another option. Should the analysis, currently underway, demonstrate that ICRMA continues to be the best option for the City, Council will be asked to rescind the resolution at a future meeting.
General Plan Consistency:
This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:
Governance Element
Goal 1. A high degree of transparency and integrity in the decision-making process.
Policies:
• 1.1 Open meetings. Maintain the community’s trust by holding meetings in which decisions are being made, that are open and available for all community members to attend, participate, or view remotely.
• 1.6 Long-term considerations. Prioritize decisions that provide long-term community benefit and discourage decisions that provide short-term community benefit but reduce long-term opportunities.
Fiscal Impact:
There is no fiscal impact associated with the recommended action.
Attachments:
1. Draft Resolution
2. Independent Cities Risk Management Authority (ICRMA) Bylaws
Respectfully Submitted by: Vanessa Godinez, Human Resources Manager
Noted for Fiscal Impact: Viki Copeland, Finance Director
Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager