HomeMy WebLinkAboutItem 15 - Renew Citywide Insurance Program and Policies Procured through Independent Cities Risk Management Authority and Arthur J. Gallagher15. Renewal of Citywide Insurance Program and Policies Procured through
Independent Cities Risk Management Authority (ICRMA) and Arthur J. Gallagher,
and Appropriation Adjustment, Associated Insurance Premiums, Costs, Programs,
and Regulatory Fees for an Amount not to Exceed $12,600,000 (Non -General
Fund)
Department(s):
Recommended Action: 1. Authorize the City Manager to approve payment of
insurance premiums and associated programs to ICRMA in an amount not to
exceed $8,250,000 for the protection of City assets from July 1, 2024 through June
30, 2025 including, but not limited to, the following:
a. Excess Liability Program
b. Excess Workers' Compensation Program
c. Auto Physical Damage Program
d. Property and Equipment Program
e. Crime Program
f. Cyber Program
g. Associated Programs
2. Authorize the City Manager to approve payment of insurance premiums to
Arthur J. Gallagher, Broker, in an amount not to exceed $3,500,000 for ancillary
coverages of City's assets from July 1, 2024 to June 30, 2025 including but not
limited to:
a. General Liability Buffer Program
b. Workers' Compensation Buffer Program
c. Earth Movement & Flood and Difference in Coverage Program
d. Terrorism Insurance Program
e. Underground Storage Tank and Environmental Program
3. Authorize the City Manager to approve payments to cover FY 2024-25 City
Special Events Insurance for events, including, but not limited to, Fourth of July
fireworks show, neighborhood winter events, and other City -sponsored events as
created and held, in an amount not to exceed $350,000.
4. Authorize the City Manager to approve the City's obligation to pay the State of
California DIR estimated assessment in the amount not to exceed $500,000.
5. Approve an Appropriation Adjustment to recognize $2,200,000 in the Liability and
Property Insurance Revenue, PriorYear Carryforward revenue account (No.
08009002-50001) and appropriate the same amount into the Liability & Property
insurance account (No. 08009051-64010). (Requires five affirmative votes)
Human Resources
https://www.santa-ana.org/human-resources
Item # 15
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
August 6, 2024
TOPIC: Renew Citywide Insurance Program and Policies Procured through
Independent Cities Risk Management Authority and Arthur J. Gallagher
AGENDA TITLE
Renewal of Citywide Insurance Program and Policies Procured through Independent
Cities Risk Management Authority (ICRMA) and Arthur J. Gallagher, and Appropriation
Adjustment, Associated Insurance Premiums, Costs, Programs, and Regulatory Fees
for an Amount not to Exceed $12,600,000 (Non -General Fund)
RECOMMENDED ACTION
1. Authorize the City Manager to approve payment of insurance premiums and
associated programs to ICRMA in an amount not to exceed $8,250,000 for the
protection of City assets from July 1, 2024 through June 30, 2025 including, but not
limited to, the following:
a. Excess Liability Program
b. Excess Workers' Compensation Program
c. Auto Physical Damage Program
d. Property and Equipment Program
e. Crime Program
f. Cyber Program
g. Associated Programs
2. Authorize the City Manager to approve payment of insurance premiums to Arthur J.
Gallagher, Broker, in an amount not to exceed $3,500,000 for ancillary coverages of
City's assets from July 1, 2024 to June 30, 2025 including but not limited to:
a. General Liability Buffer Program
b. Workers' Compensation Buffer Program
c. Earth Movement & Flood and Difference in Coverage Program
d. Terrorism Insurance Program
e. Underground Storage Tank and Environmental Program
3. Authorize the City Manager to approve payments to cover FY 2024-25 City Special
Events Insurance for events, including, but not limited to, Fourth of July fireworks
show, neighborhood winter events, and other City -sponsored events as created and
held, in an amount not to exceed $350,000.
Renew Citywide Insurance Program and Policies Procured through Independent Cities
Risk Management Authority and Arthur J. Gallagher
August 6, 2024
Page 2
4. Authorize the City Manager to approve the City's obligation to pay the State of
California DIR estimated assessment in the amount not to exceed $500,000.
5. Approve an Appropriation Adjustment to recognize $2,200,000 in the Liability and
Property Insurance Revenue, Prior Year Carryforward revenue account (No.
08009002-50001) and appropriate the same amount into the Liability & Property
insurance account (No. 08009051-64010). (Requires five affirmative votes)
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
Staff is recommending renewal with ICRMA, a joint powers authority formed in 1980 in
accordance with California Government Code Section 6500. ICRMA's purpose is to
provide: 1) excess and re -insurance to protect members from extensive financial debt
due to large claims, settlements, and judgments; 2) group insurance purchasing power
that can offer broader coverage at a lower cost; 3) rate stability; and 4) protect individual
member cities through pooling of losses and self-insurance. ICRMA also offers to its
members actuarial services, appraisal services, loss control assessments and
recommendations, safety trainings, claims audits, contract risk transfer consultation,
and other services and resources. Currently composed of 14 California cities, Santa
Ana joined ICRMA in July 2019.
For this renewal period:
• The City's Workers' Compensation coverage experienced an increase of
approximately 12%.
• The City's Liability and Property premiums increased approximately 10%, which
overall is a very good outcome.
• The City's Property & Equipment Program premium decreased approximately
10%.
• Overall, the City's insurance coverages remain the same with a lower than
expected increase in premiums on the Liability and Property program and an
average increase in premiums on the Workers' Compensation program.
Cost of insurance continues to increase primarily due to the following ongoing reasons:
1. An insurance market with continually decreasing excess carriers willing to quote
municipal government entities in California, primarily those with police departments;
2. High dollar jury awards of litigated matters against public entities;
3. High dollar settlements of litigated and non -litigated matters;
4. Rising cost of repairs and replacement of damaged vehicles, property, and
equipment;
5. Increased number of claims filed against the City resulting from aging infrastructure
including sidewalks and streets; and
6. Increased number of claims filed against the City resulting from damage caused by
Renew Citywide Insurance Program and Policies Procured through Independent Cities
Risk Management Authority and Arthur J. Gallagher
August 6, 2024
Page 3
City -owned trees.
QUOTED & ESTIMATED PREMIUMS & FEES
WORKERS' COMPENSATION COVERAGES
FY 2022/23
FY 2023/24
FY 2024/25
Excess Pool Workers' Compensation
Program
$
345,678
$
415,464
$
459,770
Excess Workers' Compensation
Buffer
$
257,356
$
264,085
$
300,027
Sub -Total
$
603,034
$
679,549
$
759,797
Percent Change
12%
13%
12%
LIABILITY AND PROPERTY COVERAGES
FY 2022/23
FY 2023/24
FY 2024/25
Excess Pool Liability Program
$
5,123,142
$
6,070,925
$
6,927,723
Auto Physical Damage Program
$
129,488
$
145,108
$
185,294
Property & Equipment Program
$
485,380
$
593,557
$
534,757
Crime Program
$
14,233
$
15,394
$
17,563
Cyber Program
$
111,964
$
100,445
$
118,787
Excess Liability Buffer
$
1,233,321
$
1,743,398
$
1,805,650
DIC Earth Movement & Flood
$
1,126,819
$
1,283,147
$
1,353,245
Terrorism
$
13,164
$
13,723
$
14,652
Underground Storage Tanks -
Environmental
$
11,112
$
12,539
$
15,314
Sub -Total
$
8,248,623
$
9,978,236
$
10,972,985
Percent Change
25%
21 %
10%
FY 2022/23
FY 2023/24
FY 2024/25
City Special Events Insurance
$
300,000
$
350,000
State of California DIR
$
500,000
$
500,000
Total
$
11,457,785
$
12,582,782
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
The recommended action includes appropriating $2.2 million of the General Liability
Fund balance, which will reduce the available funds to pay liability claims in the future.
The following table compares the most recent actuarial valuation for claims liability to
the estimated fund balances in the Workers' Compensation and General Liability Funds.
Actuarial estimates of the liabilitv are more than the Citv has on deposit.
I I Workers' Compensation I General Liabilitv I
Renew Citywide Insurance Program and Policies Procured through Independent Cities
Risk Management Authority and Arthur J. Gallagher
August 6, 2024
Page 4
Actuarial valuation as of June 30, 2024
$18,367,000
$35,595,000
Estimated fund balance as of July 1, 2024
$18,304,735
$13,954,070
Estimated Shortfall
$62,265
$21,640,930
After appropriation adjustment, the following table summarizes the funds budgeted and
available for estimated premium and administrative costs. Staff will continue to propose
increases to internal service charges in future budget cycles to reduce the estimated
shortfall, which will primarily be borne by the General Fund.
Accounting
Fund
Accounting Unit —
r
Year ea
Unit —
Description
Account No.
Amount
Account No
Description
08209054-
Workers
Workers
$ 1,300,000
2024-25
64010
Compensation
Compensation,
Insurance Payment
08009051-
Liability &
Liability & Property
$ 9,640,380
2024-25
64010
Property
Insurance, Insurance
Insurance
Payment
APPROPRIATION
ADJUSTMENT
2024-25
08009051-
Liability &
Liability & Property
$ 2,200,000
64010
Property
Insurance, Insurance
Insurance
Payment
Total:
$ 13,140,380
EXHIBIT(S)
1. Joint Exercise of Powers Agreement for Insurance and Risk Management
Purposes
2. Agreement For Consultant Services Between City of Santa Ana and Arthur J.
Gallagher Risk Management Services LLC
3. ICRMA Member Contribution Invoice — Santa Ana — Invoice # 4373
4. Arthur J. Gallagher Risk Management Services, LLC — Invoice # 5195470
Submitted By: Lori Schnaider, Executive Director of Human Resources
Approved By: Alvaro Nunez, Acting City Manager
A-2019-107
iNSURHNCE NOT REQUIRED
WORK kI Y PROCEED
t { ;� Of COUNC;II.
6 AU1 4 2019
H2`p)
FIFTH AMENDMENT TO
JOINT EXERCISE OF POWERS AGREEMENT
FOR INSURANCE AND RISK MANAGEMENT PURPOSES
This Fifth Amendment To Joint Exercise Of Powers Agreement For insurance and Risk
Management Purposes ("Agreement" is executed by and among the public entities,
hereafter referred to as Member or Members, each of which is organized and existing
under the laws of the State of California and is a signatory to this Agreement and listed in
Appendix "A", which is attached hereto and made a part hereof. This Agreement, dated
October 13, 2004, for identification purposes, amends the Joint Exercise of Powers
Agreement For Insurance and Risk Management Purposes dated August 12, 1998.
RECITALS
This Agreement is predicated upon the following facts:
The following State laws, among others, authorize the Members to enter into this
Agreement:
1. Labor Code Section 3700, permitting a Member to fund its own Workers'
Compensation claims;
2. Government Code Section 990, permitting a Member to insure itself against tort
or inverse condemnation liability;
Appmved by the Governing Board Oefoher 13, 2004
1
3. Government Code Section 990.4, permitting a Member to provide insurance and
self-insurance in any desired combination;
4. Government Code Section 990.6, permitting the proper casts for self-insurance to
be charged against each Member and authorizing the Governing Board to make
promium payments for such coverage in an amount such Governing Board
determines to be necessary to provide such coverage;
5. Government Code Section 990.8, permitting two or more Members to enter into
an agreement to jointly fund such expenditures under the authority of
Government Code Sections 6500 of se_g,.;
6. Government Code Section 6500 et seq., permitting two or more Members to
jointly exercise, under an agreement, any power which is common to each of
them.
NOW,. TIMEFORE, for and in consideration of the mutual benefits, covemts, and
agreements set forth in this Agreement, the Members agree as follows:
.ARTIcLX 1.
1.1 Pursuant to Article T (commencing with Section 6500) of Chapter 5 of Division 7
of Tide. I of the Government Code of the State of California, the Members hereby
create a public entity, separate and apart from the Members, to be kmown as the
Approved by the Oayerakg Bond October 13, 2004
2
Independent Cities Risk Management Authority, hereinafter referred to as
"TC,RMA°' or the "Authority". Pursuant to. Govemmeat Code Section 6508.1, the
debts, liabilities, and obligations of the Authority shall not constitute debts,
liabilities, or obligations of any Member.
ARTLc E 2. rl rOSE.
2.1 The purpose of creating this Authority is to exercise the powers of the Members
to jointly accomplish the following;
2.1.1 Develop effective Risk Management Progr=s to reduce the
amount and frequency of their losses.
2.1.2 Develop Risk Management .Programs of insurance to protect
Members from the effects of catastrophic or unexpected losses.
Such programs shall include, but not be limited to, coverages for
losses arking out of Tort Liability, Workers' Compe tion, Health
Benefits, and the ownership or use of real or personal property.
2.1.3 Design.Risk Management Programs of the Authority on a pooled
or self -funded basis whereby the Members share some portion, or
all, of the costs of the program losses.
11.4 Jointly purchase insurance, excess insurance, or reinsurance and/or
develop alternative financial arrangements for the purpose of
transferring risk of loss to commercial insurers.
Approved by fho GOVU*9 Board LlOWW 13, U04
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i
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2.1.5 Assist Members to the maximum extant authorized by law to
semrO long term solutions enabling the Authority to provide
adequato protection to Members against catastrophic, or greater
than expected; claims and to attract major reinsurers for the
purpose of transferring risk.
2.1.6 Jointly secure administrative rdm' ` ative and other services 'including, but not
limited to, general administration, underwriting, risk management,
loss prevention, claims adjusting, data processing, brokerage,
accounting, and legal services when related to any of the other
purposes.
AIEiT ' E 3. DEFZNMONS
11 The following definitions shall apply to the provisions of this Agreement and the.
R j'=La r"r"u of the Authority and JR.'sk NUnageme i Ptvograwis:
3.1.1 "Agreement" shall mean this ,Agreement, as it may be amended
from time to time, creating the Independent Cities Risk
Management.Authority,
3.1.2 "Board" or "Governing Board" shall moan the governing body of
the Authority:
3.1.3 "By -Laws" shall mean the rules governing the management of the
Authority and each individual Risk Management Program,
Appmvod by tha Omming Soard Oaaba 13.2004
4
3.1.4 "Claim(s)" small mean demand(s) complying with the requirements
of California Government Code Section 910 and made against the
Member arising out of occurrences which are covered or alleged to
be covered by the Authority's Memorandums of Coverage, or
policies of insurance.
3,1,5 "Fiscal Year" shall mean the period of time commencing on July 1
of each year, and thereafter ending on June 30 each following year.
3.1.6 "Governing Documents" shall mean this Agreement, the By -Laws
of the Authority and each Risk Management Program, the
Memorandum. of Coverage and any other document stipulated as a
Governing Document in the By -Laws or by action of the
Governing Hoard.
3.1.7 "Insurance" shall mean insurance or reinsurance purchased by the
Authority to corer losses for its Members.
3.1.8 'Member" shall mean any Municipal Corporation or public entity
authorized to be a member of a Joint Powers Authority, which is a
pain to this Agreement .and is participating in one or more Risk
Management programs.
3.1.E "Memorandum of Coverage" shall mean the document or
documents issued by the Authority specifying the types of
coverages and limits provided to the Members.
Approved by the Gmning Road October 13, 2004
W
3.1.Io 'Wogram Year" shall mean a period of time in which each
program. shall be segregated for ease in determining coverage
premiums..
3.1.11 "Participation" or "Participating" shall mean a Member has elected
to jointly participate in the management of a specifics risk and is a
member of that Risk Management Program.
3,1.12 "Disk Management" shall mean the process of identifying,
evaluating, reducing, transferring, and eliminating. risks. .Risk
Management includes, but is not limited to, various methods of
funding claims payments, purchasing insurance, legal defense of
claims, controlling losses, and determining self -insured retention
levels and the amount of reserves for potential claims.
3.1.13 "Risk Mtmmagement Program" shall mean those coverage programs
of risk sharing, insurance, and risk management services created
by the Authority to manage specific Risk Management Programs,
i.e. "Liability Risk Management program".
ARTICLE 4... ,PARTI(ES TO THE AGREEMENT BIND RESPONSIBILITMS OF
AMAMERS.
4.1 Each Member represents and warrants that it intends to, and does hereby, contract
with all other Members listed in Appendix "A", and any new membars admitted
to the .Authority pursuant to Article 16. Each Member also represents and
warrants that the withdrawal or expulsion of any Member, pursuant to Article 14
Approved byrhv Govenins Board October 13, 2W4
6
or 15, shall not relieve any Member of its rights, obligations, liabilities or duties
under this. Agreement or the individual Risk Management Programs in which the
Member participates.
4.2 Each. Member agrees to be bound by and to comply with all of the term and
conditions of the Governing Documents and any Resolution or other action
adopted by the Governing Board as they now exist or may hereinafter be adopted
or amended. Each Member assumes the obligations and responsibilities set forth
in the Governing Documents.
AR CLE 5. gyERNTNG BOARD;
5.1 The Authority shall be governed by a Governing Board the composition of which
shall be set forth in the. Authority's By -Laws. Immediately upon admission of a
new Member 'pursuant to Article .16, the Member shall be entitled to appoint a
Treaeiirative to iue Governing i'ssvard and an alternate Representative and, if
desired, a substitute alternate Representative, each of whom shall meet the
parameters set forth. in the Authority's By -Laws. Decisions of the Member
representative, or the Governing Board in hislher absence, shall be binding on. the
Memmber.
5.2 The Member Representative and/or alternate Representative or substitute alternate
Representative shall be remover/ from the Governing Board upon the occurrence
Of any one of the following events: (1) the expulsion or withdrawal of the
Member from the Authority; (2) the death or :resignation of the Member
Representative, (3) the Authority receives the written notice from the Member
ApPMved by the Governing Hoard 000ber 13,004
7
that the Member Rapresentativo is no longer a :member of the governing body of
the Member or as otherwise provided in the Authority's By -Laws.
5.3 Pursuant to Government Code Section 6505.6, the Governing Board shall
designate an officer or employee, or offloers and employees, to receive, deposit,
invest, and disburse the property of the Authority pursuant to Government Code
Sections 6505 and 6505,5. The Governing. Board shall fix the amount of the
fidelity bond to be .Bleb by such public officer(s) and/or employee(s).
ARU= 6. BOARD MEETIN AMID RECORDS
6.1 ]regular MMwfings. The Governing Board and all standing committees shall hold
meetings at the location and time set forth in the By -Laws of the Authority and
each individual Risk Management Program.
6.2 Ralph M. Brown Act. All meetings of the Governing Board, and appointed
committees, including without limitation, regular, adjourned ,regular, and special
meetings, shall be.called, noticed, held, and conducted in accordance with the
Ralph M. Brown Act (Section 54950 et.'seq. of the Government Code).
6.3 Minutes. Minutes of regular, adjourned regular, and special meetings of the
Authority shall be kept under direction of the Secretary. As soon as passible after
each meeting, the Secretary shall forward copies of the minutes to each
Governing Board member.
6.4 Quorum. A majorityof the members of the Governing Board is a quorum for the
transaction of busium. However, less than a quorum may adjourn from time to
Approved by the Governing Board October 13, 2004
8
time. A vote of the mejority of a cuwn= at .a meeting is sufficient to take action:
AR CLE 7.. OFFLC&RS.
7.1 The Governing Board shall elect a president, vice-president, Treasurer and
Secretary from among its members. The manner of election and term of office of
elected officers; and their authority and responsibilities shall be as set forth in the
.Authority By -]Laws. if any of the officers cease to be a Member's representative,
the resulting vacancy shall be filled as provided in the Authority BY -Laws. The
Governing Board may appoint such other officers as it considers necessary.
ARTICLE s. PMR&
8.1 The Authority shall have the powers common to its Members and is authorized, in
its own. name, to do all acts necessary and to exercise such common powers to
fulfill the purposes of this Agreement referred. to in Article 2 including, but not
HMI'MA in- 1-10n11 of the. fnllnwirlg:
8.1.1 Fiwmcc through the issuance of Bonds or other financial
instruments of indebtedness, self-insurance reserve funds
necessary or convenient for the implementation of this Agreement..
8.1.2 Incur debts,.liabiiities, and obligations.
8.1.3 Acquire, hold, or dispose of real and personal property.
8.1A Receive contributions and donations of property, funds, services,
and other farina of assistance from any source.
8.1.5 Sue and be stied in its own name.
Approved by ft GoymWag Domd October 13, 2M4
9
8
Employ agents and employees.
8.1.7 Acquire, construct, manage, maintain, or operate buildings, works,
or improvements.
8.1.8 Lease real or personal property, including that of a Member.
8.1.9 Receive, collect, and disburse monies.
8.1.10 Invest money in the treasury of the Authority in the, same manner
and on the same conditions as local agencies pursuant to
Government Code Section 53 60 1.
8.1.11 Exercise all other powers necessary and proper to carry out the
provisions of thi's Agreement.
8,1.12 Develop and implement Risk Management programs,
83.13 Jointly purchase for the benefit of Members, insurance, excess
insurance, reinsurance, and. enter into agreements for the benefit of
Members, for the purpose of transferring risk of loss to commercial
insurers or reinsurers or other insurance pools.
ARTICLE 99. RLSK MANAGE 1 U PROGRAMS.
9.1 The Governing Board shall establish Risk Management Programs as provided in
the .Authority's .By -Laws.
9.2 No Risk Management Program shall become operational, or possess any
authority, until the proposed Risk Management Program By -Laws have been
AWmvW by*a Goaem(ngBoatd Oc 6bff 13, 20fl4
10
approved by the Governing Board. The voting on the approval of By -Laws shall
be restricted to Governing Board Member representatives of the particular Risk
Management Program. Approval of the By -Laws and any amendments thereto
shall be as provided in the By -Laws of the individual Risk Management
Programs. On approval of the By -Laws, the various Risk Management Programs
shall become operational and will have all of the powers specifically delegated to
them by the 0 av+atning Board.
ARIM Z Ia. BUDGET
10.1 The Governing Board shall adopt an annul budget not later than 30 days prior to
the beginning of each Fiscal Year,
ARTIiCLE i1. ANNUAL AUDIT AND RUEEW.
11,1 The Governing Board shall cause an annual financial audit of the accounts and
records to be made. and _filial as provided in the Authorit, By �a—ris and the laws
of the State.
ARTIC1';., +'_ 12-- )KSTALLISHMENT Al LD AD ISMLT-ION OF FiU S.,
121 Funds of the Authority may be commingled for investment and administration
purposes. However, each Risk Management Program shall be accounted for
separately on a full accrual basis,
12.2 The Governing Board shall establish the policy for warrants drawn to pay
demands against the Authority.
12.3 The coverage for each Program Year of each Risk Management Program shall be
as specified in the Memorandum of Coverage or policies of insurance for that
AppxovW by the Gavernbg Bamd October 13, 2004
11
Program Year of the Risk Management Prom.
ARTICLE 13, W.[THDRAWAL.
1.3.1 Any Member which. enters a Risk Management program may withdraw from that
Risk Management Program and may at a later time seek to renew participation in
said Program subject to the terms and conditions as set forth in the By -Laws of
that partioutar.Risk Management Program.
13.2 A Member is no longer a patty to the Authority or this Agreement upon its
withdrawal fraxn all of the Authority's Risk Management Programs.
ARTICLE 14. 9Xl" ULSION.
14J The Governing Board may expel any Member from the Authority and/or from a
Risk Management Program at any time for material breaches of the Governing
Documents. Such expulsion shall be as provided in the By -Laws of the Authority
or each Individual Risk. Management Program.
ARTICLE IS- T'EI 7NATION.
15.1 This Agreement shall Continue until tenninnated by vote or written consent of two-
thirds of the Members provided, however, that this Agreement and the Authority
shall continue to exist for the purposes of disposing of all claims; the distribution
of assets, and any other filnotions necessary to conclude the affairs of the
Authority.
15.2 Upon termination of this Agreement, all assets of the Authority shall be
distributed only among the Members that Have been pardeipants in its Risk
Management Programs, including any of those Members which. previously
Appnmved by tke Coming MaW OuWber 13, 2004
12
withdrew or were expelled pursuant to Articles 13 and 14 of thug Agreement, in
accordance with and proportionate to their net premium payments made during
the term of this Agreement. The Governing Board shall determine such
distribution within six: months after the last claim covered by this Agreement has
been finalized.
15.3 The Governing Board is vested with all powers of the Authority for the purpose of
concluding and dissolVM8 business affairs of the Authority. These include the
power to require those Members which were Risk Management Program
participants at the time of any particular occurrence which was covered or alleged
to be covered under the Memorandum(s) of Coverage or policies of insurance to
pay their share of any additional amount of premium deemed necessary by the
Governing Board for the final disposition of all claims and expenses associated
with such loss.
ARTI" 1.6. NFW AffimBERq.
16.1 Any governmental agency, organized and operating under the laws of the State of
California; which is authorized to participate in a joint powers authority under the
Government Code may become a member of the Authority by complying with the
requirements of the Authority By -Laws.
ARTICLE 17, L1C48LT'Y OF TMAC.1THL]f2ITY.
17.1 Each Member agrees to indemnify, save and defend the Authority and all other
Members harmless from and against all claims, losses, and damages, including
legal fees and expenses, arising out of any breach or default on the part of such
AWOved by ft 0-=Wg Board 0atobar 13.2004
13
Member in performance of any of its obligations under this Agreement, or any act
or negligence of such Member. or any of its agents, contractors, servants,
employees or licensees with respect to this Agreement. No indemnification is
made under this Section for claims, losses or damages, including legal fees and
expenses, arising out of the willful misconduct, negligence or breach of duty
under this Agreement. by the Authority or a Member or their officers, employees,
agents or contractors..
17.2 The Representatives to the Governing Board and to each of the Risk Management
Programs and any officer, employee, contractor, or agent of the Authority shall
use ordinary care and reasonable diligence in the exercise of their power and in
- - the performance of their duties under this Agreement.
1.7.3 Mends of the Authority may be used to defend, indemnify, and hold harmless the
x► -'or.-y and any mernber of the Goven5ing Board, any member of a Risk
Management Program, and any employee of the Authority for their actions taken
within tho scope of their duties while acting on behalf of the Authority. Nothing
herein shall limit the right; of the Authority to purchase insurance to provide such
Coverage as is hereinabove sot forth.
AB ICLE 18, NOTICES.
18.1 Notices to each Member under this Agreement shall be sufficient if mailed to its
respective address on file with the Authority. Any Member may designate any
other address in substitution of the foregoing address to which sueh notice will be
given at any time by giving five days written notice to the Authority and all other
Approved by the aavamiug Board OvIokr 13, 2004
14
9
Members.
ARTICLE 19.
19.1 This Agreement ;may be amended at any time by vote of two-thirds of the
Members acting through their governing body. Amendments to the individual
Risk Management Program By -Laws require the two -third vote of the Governing
Board members representing Members of that Risk Management Program.
ARTICLE 20. Sm'B BILITY.
20.1 Should any portion, term, condition, ar provision of this Agreement be decided by
a eotut of competent jurisdiction to be illegal or in conflict with any law of the
Stag of California, or be otherwise rendered unenforceable or ineffectual, the
validity of the remaining portions, terms, conditions, and provisions shall not be
affected thereby.
AR"IC F 21. AgREEMENT COMPLET .
21.1 The foregoing constitutes the full and complete Agreement of the parties. 'Mere
are no oral understandings or agreements not set forth in writing herein,
ARTICLE 22, TERM QF AGREEMENT.
22.1 This fiE1h amended Agreement shall become .effective upon the Authority
receiving notice of the approval by the governing body of two-thirds of the
Members.
IN. WUN.ESS W PXOF, the parties hereto have executed this Agreement as of the day
Approved by the dovemlug Hand October 13,2W4
15
and year first written above.
City Of man .a Ana .�
By -
Title ri ty Manager --
Executed before me this
day of . 200
�b
-L --IC:�-�-Z)z
On
(City Seal)
City Clerk
7
City vf_ _ Santa Ana
APPROVED AS TO FORM
Laufa A. Rossini
Senior Assiltant City Attorney
FOR APFIROVAL
Executive Director, Human Resources
Appmved by the Qwmine Board 0daba 13. M04
16
0
APPENDIX "A"
IMEPENDENT CITIES RISK MMAGEMENT AUTHORITY
MMMER CITIES
1.
Alhambra
2.
Arcadia
3.
Azusa
4.
Baldwin Park
S.
Bell
5.
Buena Park
7.
Chino
9.
Colton
9.
Culver City
10..
Downey
11,
EI Monte
12.
El Segundo
13.
Fullerton
14.
Glendora
15.
Hawthorne
147449,4 (MS WORD) 000602.9000
16. Hermosa Beach
17. Huntington Park
18. Inglewood
19. La Habra
20. Lynwood
21. Manhattan Beach
22, Monrovia.
23. Monterey.Park
24. Redondo Beach
25, San Fernando
26. South, Gate
27. Upland
28. Vernon
29. Whittier
INDEPENDENT CITIES RISK MANAGEMENT AUTHORIW
FIFTH AMENDMZNT TO JOINT EXERCISE OF POWERS AGREEMENT
FOR INSURANCE AND WSK MANAGEIVX:ENT PURPOSES
147448.4 (MS WORD) 0006U.9000
4NSURANCE NOT ON FILE A-2023A40
WORK MAY i�OT PROCEED
CITY CLER4(
DATE. AGREEMENT FOR CONSULTANT SERVICES BETWEEN
CITY OF SANTA ANA AND ARTHUR J. GALLAGHER RISK
(B.Lynch7�,� 1
MANAGEMENT SERVICES LLC
INSURANCE BROKER SERVICES
N
THIS AGREEMENT is made and effective as of August 1, 2023 between the City of Santa
ClIj Ana, a municipal corporation (hereinafter referred to as "City"), and Arthur J. Gallagher Risk
cq Management Services LLC, a Delaware limited liability company (hereinafter referred to as
cD "Consultant"). City and Consultant are also referred to collectively as "the Parties" or singularly
ZD
as a "Party." In consideration of the mutual covenants and conditions set forth herein, the Parties
agree as follows:
1. TERM
This Agreement shall commence on August 1, 2023, and shall remain and continue in
effect until tasks described herein are completed, but in no event later than August 31, 2026
unless sooner terminated pursuant to the provisions of this Agreement. The Parties acknowledge
that Consultant has been providing services since July 1, 2023. This Agreement can be canceled
by either Party with thirty (30) days written notice to the other Party.
2. SERVICES
Consultant shall perform insurance brokerage services for the placement of the City of
Santa Ana's insurance programs as outlined in Exhibit A.
3. PERFORMANCE
Consultant shall at all times faithfully, competently and to the best of his or her ability,
experience, and talent, perform all tasks described herein. Consultant shall employ, at a minimum,
generally accepted standards and practices utilized by persons engaged in providing similar
services as are required of Consultant hereunder in meeting its obligations under this Agreement.
4. PAYMENT
a. The City agrees to pay Consultant for insurance premiums invoiced for
insurance placements.
b. Consultant will submit invoices for insurance premiums. Invoices shall be
submitted once insurance coverage is bound. Payment shall be made within thirty (30) days of
receipt of each invoice as to all non -disputed fees. If the City disputes any of Consultant's fees, it
shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed
fees set forth on the invoice.
5. LEGAL RESPONSIBILITIES
The Consultant shall keep itself informed of all local, State and Federal ordinances, laws
and regulations which in any manner affect those employed by it or in any way affect the
performance of its service pursuant to this Agreement. The Consultant shall at all times observe
and comply with all such ordinances, laws and regulations. The City, and its officers
and employees, shall not be liable at law or in equity occasioned by failure of the Consultant to
comply with this section.
6. RELEASE OF INFORMATION
a. All information gained by Consultant in performance of this Agreement shall
be considered confidential and shall not be released by Consultant without City's prior written
authorization. Consultant, its officers, employees, agents or subcontractors, shall not without
written authorization from Risk Management Department or unless requested by the City
Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response
to interrogatories or other information concerning the work performed under this Agreement or
relating to any project or property located within the City. Response to a subpoena or court order
shall not be considered "voluntary" provided Consultant gives City notice of such court order or
subpoena.
b. Consultant shall promptly notify City should Consultant, its officers,
employees, agents or subcontractors be served with any summons, complaint, subpoena, notice
of deposition, request for documents, interrogatories, request for admissions or other discovery
request, court order or subpoena from any party regarding this Agreement and the work
performed there under or with respect to any project or property located within the City. City
retains the right, but has no obligation, to represent Consultant and/or be present at any
deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to
provide City with the opportunity to review any response to discovery requests provided by
Consultant. However, City's right to review any such response does not imply or mean the right
by City to control, direct, or rewrite said response.
7. NOTICES
Any notices which either party may desire to give to the other party under this Agreement
must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable
document delivery service, such as but not limited to, Federal Express, that provides a receipt
showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage
prepaid, return receipt requested, addressed to the address of the party as set forth below or at
any other address as that party may later designate by Notice. Notice shall be effective upon
delivery to the addresses specified below or on the third business day following deposit with the
document delivery service or United States Mail as provided above.
Mailing Address: City of Santa Ana
20 Civic Center Plaza, M-28
Risk Management, 4t" Floor
Santa Ana, CA 92701
AND
City Clerk
City of Santa Ana
20 Civic Center Plaza, M-30
Santa Ana, CA 92702
To Consultant: Arthur J. Gallagher & Co., Insurance Brokers of
California., Inc.
Susan J. Blankenburg
San Francisco, CA 94111
415-536-8417
Susan Blankenburgft-aig.com
8. ASSIGNMENT
The Consultant shall not assign the performance of this Agreement, nor any part thereof,
nor any monies due hereunder, without prior written consent of the City. Upon termination of this
Agreement, Consultant's sole compensation shall be payment for actual services performed up
to, and including, the date of termination or as may be otherwise agreed to in writing between the
City Council and the Consultant.
9. LICENSES
At all times during the term of this Agreement, Consultant shall have in full force and effect,
all licenses required of it by law for the performance of the services described in this Agreement.
10. GOVERNING LAW
The City and Consultant understand and agree that the laws of the State of California shall
govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern
the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in
the municipal, superior, or federal district court with geographic jurisdiction over the City of Santa
Ana. In the event such litigation is filed by one party against the other to enforce its rights under
this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to
reasonable attorney fees and litigation expenses for the relief granted.
This Agreement contains the entire understanding between the parties relating to the
obligations of the parties described in this Agreement. All prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged into this Agreement
and shall be of no further force or effect. Each party is entering into this Agreement based solely
upon the representations set forth herein and upon each party's own independent investigation of
any and all facts such party deems material.
12. AUTHORITY TO EXECUTE THIS AGREEMENT
The person or persons executing this Agreement on behalf of Consultant warrants and
represents that he or she has the authority to execute this Agreement on behalf of the Consultant
and has the authority to bind Consultant to the performance of its obligations hereunder. The Risk
Management Department is authorized to enter into an amendment on behalf of the City to make
the following non -substantive modifications to the agreement: (a) name changes; (b) extension
of time; (c) non -monetary changes in scope of work; (d) agreement termination.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the
day and year first above written.
CITY OF SANTA ANA
Arthur J. Gallagher & Co.
By � - -- By.
Kristine Ridge
City Manager
ATTEST:
By.
J
"' r-H�
City Clerk
APPROVED AS TO FORM:
Sonia R. Carvalha
City Attorney
By: j!a� N. na'Y\I
Laura A. Rossini
Chief Assistant City Attorney
Michael Gallagher, Area President
CONSULTANT
Arthur J. Gallagher & Co.
Susan J. Blankenburg
1255 Battery Street, Suite 450
San Francisco, CA 94111
(415) 536-8417
Susan Blankenbur a .com
PM Initials:
Date:
CLIENT SERVICE AGREEMENT
EXHIBIT A
The following outlines Services provided by Gallagher over the term of this Agreement:
• Use its best efforts to secure the following lines of insurance coverage on Client's behalf:
o List of Insurance Placements:
■ Underground Storage Tanks
■ Excess Liability (Buffer)
Excess Workers' Compensation (Buffer)
■ Terrorism
• Difference in Conditions (Earth Movement & Flood)
• Work with Client to prepare comprehensive underwriting data and criteria for insurance carrier
negotiations.
• Formally present coverage submissions to agreed upon insurance carrier(s) and negotiate terms
on behalf of Client.
• Summarize the results of executing the marketing strategy developed with Client and
communicate program recommendations.
• Provide consultation to Client on exposures, existing coverage, and the desirability and/ or
feasibility of potential program changes, retention and data analysis as recommended by
Gallagher.
• Request change endorsements, when requested by the Client or when otherwise necessary,
ensuring accuracy and delivery in a timely manner.
• Administration of insurance program (only if applicable), including policy review and issuance,
invoicing, coordination and/ or issuance of required documentation, i.e., certificates of insurance,
and other program administration, as required by the Client.
• Review accounting and billing data; audit information from insurance carriers to ensure accuracy.
• Other Services:
o Risk Control Services
o Loss control consultation and claim advocacy
o Certificate Tracking
INDEPENDENT CITIES
RISK MANAGEMENT AUTHORITY
1 C R M AA Joint Powers Authority
Bill To:
CITY OF SANTA ANA
20 Civic Center Plaza
4th Floor (Risk Management)
Santa Ana,CA 92701
INVOICE
Customer #:
Invoice #:
CUS_1047
4373
Invoice Date:
Due Date:
07/01/2024
07/31/2024
Total Due: $ 8,248,894.00
Description
Amount
Liabilfty Program 2024/2025
6,927,723.00
Workers' Compensation Program 2024/2025
459,770.00
Property & Equipment Breakdown Program 2024/2025
534,757.00
Auto Physical Damage APD Program 2024/2025
185,294.00
Crime Program 2024/2025
17,563.00
C ber Program 2024/2025
118,787.00
2024/2025 Risk Management Fund Contribution - OPTIONAL
5,000.00
TOTAL AMOUNT DUE
$ 8,248,894.00
Wire (ACH) Davments:
Bank Name:
Bank Address:
Routing Number:
Account Number:
For credit to:
Checks:
Please mail payments to
Payment Instructions
California Bank & Trust
520 Capitol Mall, Suite 380, Sacramento, CA 95814
121002042
1030068561
Independent Cities Risk Management Authority
ICRMA
c/o Eide Bailly LLP
Attn: Brad Rockabrand
10681 Foothill Blvd., Ste. 300
Rancho Cucamonga, CA 91730
In accordance with Article V Section D.1-3 of the ICRMA Bylaws, unless other arrangements for payment have been approved by the Governing Board,
Members with delinquent amounts due shall be assessed a penalty which shall be one percent of the unpaid amount due and payable to the Authority 30
days after the initial invoice due date. A penalty of another one percent shall accrue after an additional 45 days.
Interest shall accrue on all delinquent amounts due and payable to the Authority at the applicable rate of 10% per annum from the due date of the billing
until the date finally posted by the designated financial institution.
A member may appeal any surcharge assessed in accordance with Article XII of the ICRMA Bylaws.
18201 Von Karman, Suite 200, Irvine, CA 92612 Phone: 760-217-4952 Questions: ICRMA-Payments@eidebailly.com
Arthur J. Gallagher Risk Management Services, LLC
San Francisco, CA 94105
Phone: (415)546-9300
BATM11
Invoice # 5195470
1 of
ACCOUNT NUMBER
DATE
SANTAANA-1
7/15/2024
BALANCE DUE ON
AMOUNT DUE
7/8/2024
$3,473,573.47
City of Santa Ana
20 Civic Center Plaza, M-28
Risk Management, 4th Floor
Gallagher
g
Santa Ana, CA 92701
Insurance I Risk Management I Consulting
Excess Workers Comp
PolicyNumber:
ABL100000805
Company: Response Indemnity Company of California Effective:
7/1/2024
to 7/1/2025
Item #
Trans Eff Date
Due Date
Trans
Description
Amount
34874868
7/1/2024
7/8/2024
RENB
WC Buffer - $500K xs $1.5M SIR
$300,027.00
Difference in Conditions
PolicyNumber:
ESP30001763404
Company: Endurance American Specialty Ins Co Effective:
7/1/2024
to 7/1/2025
Item #
Trans Eff Date
Due Date
Trans
Description
Amount
34874912
7/1/2024
7/8/2024
RENB
Primary EM/Flood - $5M part of $10M
$370,000.00
34874916
7/1/2024
7/8/2024
SLTX
Surplus Lines Taxes
$11,100.00
34874919
7/1/2024
7/8/2024
STFX
Stamping Fees
$666.00
Excess Liability
PolicyNumber:
IXG677029A
Company: General Star Indemnity Company Effective:
7/1/2024
to 7/1/2025
Item #
Trans Eff Date
Due Date
Trans
Description
Amount
34982883
7/1/2024
7/15/2024
RENB
Excess Liability Buffer- $1M xs $2M SIR
$1,750,000.00
34982885
7/1/2024
7/15/2024
SLTX
Surplus Lines Taxes - CA
$52,500.00
34982887
7/1/2024
7/15/2024
STFX
Stamping Fees - CA
$3,150.00
Difference in Conditions
PolicyNumber:
LHD944859
Company: Landmark American Insurance Company Effective:
7/1/2024
to 7/1/2025
Item #
Trans Eff Date
Due Date
Trans
Description
Amount
34874968
7/1/2024
7/8/2024
RENB
Primary EM/Flood - $2.5M part of $10M
$185,000.00
34874970
7/1/2024
7/8/2024
CFEE
Carrier Policy Fee
$1,500.00
34874984
7/1/2024
7/8/2024
SLTX
Surplus Lines Taxes
$5,595.00
34874989
7/1/2024
7/8/2024
STFX
Stamping Fees
$335.70
Excess Difference in Conditi
PolicyNumber:
MCQ0101224
Company: Mt Hawley Insurance Company Effective:
7/1/2024
to 7/1/2025
Item #
Trans Eff Date
Due Date
Trans
Description
Amount
Please return this portion with your payment. Include your invoice number on your remittance to expedite processing.
City of Santa Ana
20 Civic Center Plaza, M-28
Risk Management, 4th Floor
Santa Ana. CA 92701
Please send your remittance to:
Arthur J. Gallagher Risk Management Services, LLC
P.O. Box 39735
Chicago, IL 60694-9700
BATM I 1
Invoice # 5195470
ACCOUNTNUMBER DATE
SANTAANA-1 7/15/2024
7/8/2024 $3,473,573.47
AMOUNT PAID
PAY ONLINE AT: WWW.AJG.COM/EZPAY
Gallagher
Insurance I Risk Management I consulting
Arthur J. Gallagher Risk Management Services, LLC
San Francisco, CA 94105
Phone: (415)546-9300
City of Santa Ana
20 Civic Center Plaza, M-28
Risk Management, 4th Floor
Santa Ana, CA 92701
34875022
7/1/2024
7/8/2024
RENB
34875025
7/1/2024
7/8/2024
CFEE
34875029
7/1/2024
7/8/2024
SLTX
34875033
7/1/2024
7/8/2024
STFX
Excess Difference in Conditi PolicyNumber:
Item #
Trans Eff Date
34875047
7/1/2024
34875049
7/1/2024
34875054
7/1/2024
34875059
7/1/2024
Difference in Conditions
PolicyNumber:
Item #
Trans Eff Date
34874944
7/1/2024
34874952
7/1/2024
34874955
7/1/2024
34874958
7/1/2024
Terrorism Standalone
PolicyNumber:
Item #
Trans Eff Date
34874844
7/1/2024
34874846
7/1/2024
34874850
7/1/2024
PE705469
Due Date
7/8/2024
7/8/2024
7/8/2024
7/8/2024
PLM0084424
Due Date
7/8/2024
7/8/2024
7/8/2024
7/8/2024
W27DO7240601
Due Date
7/8/2024
7/8/2024
7/8/2024
Trans
RENB
CFEE
SLTX
STFX
Trans
RENB
CFEE
SLTX
STFX
Trans
RENB
SLTX
STFX
BATM11
Invoice # 5195470
2 of 3
ACCOUNT NUMBER
DATE
SANTAANA-1
7/15/2024
BALANCE DUE ON
AMOUNT DUE
7/8/2024
$3,473,573.47
Gallagher
Insurance I Risk Management I Consulting
XS EM/FL - $5M xs $10M
Catastrophe Analysis Fee
Surplus Lines Taxes
Stamping Fees
Company: Palomar Excess and Surplus Insurance Compan Effective: 7/1/2024
Description
XS EM/FL - $10M xs $15M
Catastrophe Analysis Fee
Surplus Lines Taxes
Stamping Fees
Company: Palms Insurance Company, Limited Effective: 7/1/2024
Description
Primary EM/Flood - $2.5M part of $10M
Carrier Policy Fee
Surplus Lines Taxes
Stamping Fees
Company: Lloyd's Syndicate 3623 (Beazley Furlonge Limite Effective: 7/1/2024
Description
Terrorism Standalone - $10M
Surplus Lines Taxes
Stamping Fees
Total Invoice Balance:
Please return this portion with your payment. Include your invoice number on your remittance to expedite processing.
City of Santa Ana
20 Civic Center Plaza, M-28
Risk Management, 4th Floor
Santa Ana. CA 92701
Please send your remittance to:
Arthur J. Gallagher Risk Management Services, LLC
P.O. Box 39735
Chicago, IL 60694-9700
$229,100.00
$500.00
$6,888.00
$413.28
to 7/1/2025
Amount
$338,338.00
$600.00
$10,168.14
$610.09
to 7/1/2025
Amount
$185,000.00
$1, 500.00
$5,595.00
$335.70
to 7/1/2025
Amount
$14,200.00
$426.00
$25.56
$3,473,573.47
BATM11
Invoice # 5195470
ACCOUNTNUMBER DATE
SANTAANA-1 7/15/2024
7/8/2024 $3,473,573.47
AMOUNT PAID
PAY ONLINE AT: WWW.AJG.COM/EZPAY
Gallagher
Insurance I Risk Management I consulting
Arthur J. Gallagher Risk Management Services, LLC
San Francisco, CA 94105
Phone: (415)546-9300
City of Santa Ana
20 Civic Center Plaza, M-28
Risk Management, 4th Floor
Santa Ana, CA 92701
-- --.q
r A —do
BATMH
Invoice # 5195470
3 of 3
ACCOUNT NUMBER
DATE
SANTAANA-1
7/15/2024
BALANCE DUE ON
AMOUNT DUE
7/8/2024
$3,473,573.47
Gallagher
Insurance I Risk Management I Consulting
Please return this portion with your payment. Include your invoice number on your remittance to expedite processing.
BATM I 1
City of Santa Ana Invoice # 5195470
20 Civic Center Plaza, M-28
Risk Management, 4th Floor ACCOUNTNUMBER DATE
Santa Ana. CA 92701 SANTAANA-1 7/15/2024
7/8/2024 $3,473,573.47
AMOUNT PAID
Please send your remittance to:
Arthur J. Gallagher Risk Management Services, LLC
P.O. Box 39735
Chicago, IL 60694-9700 \
PAY ONLINE AT: WWW.AJG.COM/EZPAY Gallagher
Insurance I Risk Management I Consulting