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ITY OF; SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
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EDWARD RAYA
Subject:
REVIEW OF OPTIONS TO BICEP
It: RISK MANAGEMENT
e:
SEPTEMBER 2, 1997
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,<,psis of Previous Council Action:
July 7, 1997, the City Council authorized the renewal of the City's excess liability insurance coverage through
BICEP program and instructed staff to review options to continued participation in the BICEP Programs.
::ommended Motion:
1. That the Mayor and Common Council continue this item until the September 15, 1997 Council
Meeting.
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Signature
IOtact person:
Edward ~
Phone:
909-384-5103
pporting data attached: Ward:
JNDING REQUIREMENTS: Amount:
Source: (Acet. No.)
(Acct. Description)
Finance:
Juncil Notes:
. Continued to () '1/',/1 7
Agenda Item No.
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.. J CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
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STAFF REPORT
On July 7, 1997 the City Council authorized the renewal of the City's excess liability insurance
coverage through the BICEP Program and i~ted staff to review options to continued
participation in the BICEP Programs.
Information packets have been submitted to two of the largest insurance brokerage firms in the
state, the Robert F. Driver Company, and Segwick James. These fmns specialize in placing
insurance coverage for public agencies and combined, they represent over two hundred public
entities. Both brokers requested at least 45 days to prepare their recommendations. Their
premium quotes will be submitted by 9/3/97.
Recommendations:
1. That the Mayor and City Council continue this item until the September 15, 1997 Council
Meeting.
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CITY Gf? SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
'rom: EDWARD RAYA
lePe RISK MANAGEMENT
late: JUNE 25, 1997
Subject:
AUTHORIZING THE RENEWAL
OF THE CITY'S CONTINUED
PARTICIPATION IN THE
BlCEP PROGRAM
ynopsis of Previous Council Action:
JUN 2 6 1997
~ecommended Motion:
1.
Authorize the payment of $442,956 as the City's cost of continuing participation in the BICEP
program.
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Signat e
:ontact person:
Edward Raya
Phone:
909-384-5103
;upporting data attached:
Ward:
~UNDING REQUIREMENTS:
Amount: $442.956
Source: (Acct. No.)
629-453-5161 ~
(Aocl ~~~.n p~,mi ms
Fmanr.e:
:ouncil Notes: _ Previously - . LfI-tJ7!o7/97
"~.r 7lJ /'Vl'u...J<aiV ""1/ h<77/'7J ~l<'.:.t.<!'I
Agenda Item No.
%/17
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I -
. .... CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
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STAFF REPORT
The Big Independent Cities Excess Pool was formed as a Joint Powers Authority of California
cities (San Bernardino, Santa Ana, Pomona, Huntington Beach, and Oxnard) on October I,
1988. The pool provided member cities a means of insuring their catastrophic liability losses.
The program provides protection up to $25,000,000.
The group utilizes Certificates of Participation in the amount of $20,000,000 to capitalize the
pool. The pool was structured so that each member city retained the first $1,000,000 of each
loss and shared the risk for losses between $1,000,000 and $2,000,000. Commercial insurance
was purchased by BICEP to cover losses between $2,000,000 and $10,000,000, and the group
risk shared for losses between $10,000,000 and $25,000,000.
Since July I, 1994, the group has been able to purchase commercial insurance for all losses
between $1,000,000 and $20,000,000, and continues to risk share for losses between
$20,000,000 and $25,000,000.
The City's cost for the coverage for fiscal year 1997-1998 is $442,956. This figure includes
$120,801 for debt service on the COP's, a $206,470 cost for the commercial insurance, a
$82,103 cost for the City's portion of the risk sharing for those losses still carrying reserves
or paid losses which were not covered by commercial insurance. There is also a $33,582 charge
for administrative cost.
The BICEP bylaws require the City to provide three years written notice prior to leaving the
pool. In spite of this requirement, alternatives to the City's continued participation in BICEP
were reviewed.
Informal discussions with commercial insurance carriers indicated that coverage similar to that
provided by BICEP might be available at a cost of approximately $300,000. This cost would
be dependent on a strict underwriting review and would of course be subject to market
fluctuations. The City's obligation on the debt service which extends until the year 2008,
coupled with the City's portion of the risk sharing assessments, which both have to be paid in
addition to the cost for stand alone coverage, eliminate any financial advantage to leaving
BICEP.
Recommendations:
1. Authorize the payment of $442,956 as the City's cost of continuing participation in the
BICEP program.