HomeMy WebLinkAboutMin - CC - 1986.06.254L4
CITY OF BURLINGA},IE
CITY COUNCIL SPECIAL MEETING
JIINE 25, 1986 - 3:30 P.M.
Mayor Victor A. Mangini convened the special meeting of the Burlingame City Council on the
above date in Conference Room B of Burlingame City ltall at 3:30 p.n.
PRESENT: COUNCILMEMBERS AI{STRUP, BARTON, LEMBI, MANGINI
ABSENT: COUNCILMEMBER PAGLIARO
STAFF
PRESENT:COLEMAN
TOPIC:Review of Insurance Alternatives
The City Attorney described to the Council the three alternative j-nsurance options for the
coming y""r. The first was buying insurance. He stated that our premium quote is $237,76L
for coverage from $100,000 to 3 mi11ion. IIe listed points in favor and against this option.
In favor is that this is a traditional form of coverage, buying i-nsurance on the market.
Negative points were that historically we have had few claims in this range and that the
policy being offered does not offer good coverage. Another favorable element was that it
is only a one year commitmenE, since it is hoped the market will improve next year.
The second alternative was joining the Joint Powers Authority pooI. Our contribution would
be $261,000 based upon actuarial studies. The proposed coverage is $l-00,000 to 5 million
dollars. In favor of ttti" option is that there is local control of policy terms and other
decisions.
However, the city Attorney noted that some persons
consider this local eontrol to be a negative factor since other city representatives are
determining settlement of large city lawsuits. Another plus is that it is an investment 'not a payment. A negative is that unless th,.,re is at least eight strong members the pool
will not have enough funding to make it work properly. The City Attorney also noted that
this pool requires a three year commitment. The Association of Bay Area Governments pool
was not recommended since there was coiilgiderable loss of control in settling claims and
because it involves sharing risk with cities whom we vlere not familiar with.
The third option was to go uninsured, with a recomnendation that if we do so $250,000 be
added to our reserve fund. The favorable items were that we are investlng our own money
and that we have a low claims experience. The unfavorable item is that if there i"s a
large judgmenE or settlement City assets would have to be used.
Council then discussed these opti-ons. The cities which would be included in the JPA pool
were discussed as well as the possibilities of buying insurance above the million dollar
level if the City were to remain uninsured. The initial contributions to the pool would be
approximately 1.-g to 2 million do11ars, depending on the cities involved, and would
evlntually Uuifa up to the 5 million coverage. It was noted thaE even at this time the
exact number and participation of San Mateo County cities in JPA is not known and that a
meeting was being held on Thursday at 10:00 a.m. for final commitments. Exposure problems
of other cities in the Joint Powers Authority were discussed. It was mentioned that it
may be possible to purehase insurance i-n excess of a million dollars for the City. Council-
,.n ergiiarots concerns were explored, particularly his doubts about the Joint Powers
Authority as a proper entity and his interest in the insurance alternative.
After further discussions it was moved by Councilman Amstrup' seconded by Councilwoman
Barton, that the City go completely self-insured for the 1986-87 budget year. The City
Attorney stated that he would continue to explore possibilities of excess insurance above
the million dollar 1evel.
ADJOURNMENT: The session was adjourned at aPproximately 4:15 p.m.
APP ROVE D:
JEROME F. COLEMAN
City Attorney
JUDI TH A.
CITY CLERK
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