HomeMy WebLinkAbout9 Insurance Renewals ACWA JPIA 2020.2021
AGENDA ITEM # 9
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MEETING DATE: December 2, 2020
TO: Board of Directors
FROM: Michael Salmon, Chief Financial Officer
SUBJECT: Insurance Renewals 2020/2021 – Property, General
Liability, and Workers Compensation with ACWA JPIA
RECOMMENDATION:
Approve Property, General Liability, and Workers Compensation insurance renewals for
coverage period’s fiscal year ending (FYE) 6/30/2021, 9/30/2021, and 6/30/2021
respectively, for a total of $249,965 (Property and General Liability) and $265,000 for
Workers Compensation.
BACKGROUND:
At the 6/5/2019 Board meeting, the Board approved insurance renewals for 2019/2020.
This action included the following verbiage:
Earlier this year, the above verbiage was interpreted as the Board had approved ACWA
JPIA renewals for up to three years, with existing coverage/provider. Staff has now
determined that the Board should review and approve this matter with each renewal.
The District leverages membership in the Association of California Water Agencies Joint
Powers Insurance Authority (ACWA JPIA) to obtain insurance coverage at competitive
rates, which has equated to significant savings for the District. Having all 3 insurance lines
with ACWA JPIA generates an additional discount for each insurance line.
Last few years insurance premiums for property & general liability cost on a calendar year
basis, the Districts year end 12/31/YY, GL 1/2.3.924.628:
2017 $327,757
2018 $333,237
2019 $294,776
2020 $250,000<forecast
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ACWA JPIA
Insurance Renewals 2019/2020 2020/2021
Renewal Change % Chg.
Property, Mobile Equip,
Vehicles (FYE 6/30/YY) $72,857 $88,554 $15,697 21.5%
No change in coverage or $25k deductible. Property value covered total of
$110.3m for 20/21 was up 10% to past policy. Value of coverage change ~10%
and 11% rate increase.
General Liability
(FYE 9/30/YY) $174,354 $161,411 ($12,943) -7.4%
No change in coverage or deductible. Decrease driven by payroll basis up 3%,
more than offset by Experience Modification improvement/discount factor
improvement impact of ~10%.
Combined Total $247,211 $249,965 $2,754 1.1%
Workers Compensation insurance is directly based on actual payroll wages, by five
worker risk classifications within the District. For FYE 6/30/2020, work comp insurance
cost at 19/20 board approved contract rates with ACWA JPIA was $315,282. The ACWA
JPIA renewal for FYE 6/30/2021 was at favorable reduction in rates per payroll dollar of
10% and an improved overall experience modification factor. On same payroll gross
wages the savings with renewal equates to $70,000 or 22%. The FYE 6/30/2021 renewal
year forecast cost is $265,000.
FISCAL IMPACT:
Property & General Liability Insurance, 2020 Budget (1/2.3.924.628) is $247,417, with
forecast of $250,000, over unfavorably to budget $2,583 or 1.0%.
Property & General Liability Insurance, 2021 Budget (1/2.3.924.628) is $254,840, with
forecast on Budget +/- 1%. Note the renewal effective 10/1/2021 impacts Q4 of 2021 and
that renewal dollar cost is not currently available (renewal occurs in summer 2021).
Workers Compensation cost for calendar year 2020, Budget is $300,000 and forecast is
$294,000 (Q4 estimated) (Q3/Q4 at renewal rates). For 2020, a savings of $6,000 or 2%.
Workers Compensation cost for calendar year 2021, Budget is $308,000 and forecast is
$275,000 (All Qtrs.’ payroll estimated and Q1/Q2 at know renewal rates and Q3/Q4 at +5%
for conservatism). For 2021, as savings of $33,000 or 11%.
ATTACHMENTS: None