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HomeMy WebLinkAboutMINUTES - 02041986 - 1.5 (2) HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA TO: BOARD OF COMMISSIONERS DATE: January 28, 1986 FROM: Perfecto Villarreal , Executive Director cc: SUBJECT; LIABILITY INSURANCE - JOINT POWERS AGREEMENT I. RECOMMENDED ACTION: Authorize the Executive Director of the Housing Authority of the County of Contra Costa to execute the Joint Powers Agreement to Provide Risk Management Services for California Housing Authorities and approve Housing Authority participation in the California Housing Authority Risk Management Agency for $ (,000,000 coverage with a $x.5,000 deductible and a first year premium of as recommended by the Advisory Housing Commission. II. 'FINANCIAL IMPACT: The Housing Authority is currently self-insured for both public liability and fire and extended coverage. This interim measure was implemented with the County of Contra Costa and a $500,000 self-insurance fund has been established. By participating in this Joint Powers Agreement, the Housing Authority would be able to expand its liability insurance coverage from $500,000 to $2,000,000. In addition, savings in staff costs would be realized by both the County and the Housing Authority should the Housing Authority participate in the California Housing Authority Rick Management Agency (CHARMA). The $136,153 premium would be paid from the Section 8 insurance reserve. III. REASONS FOR RECOMMENDATION/BACKGROUND: As you are aware, the Housing Authority of the County of Contra Costa, along with other housing authorities throughout the nation, has encountered difficulty in obtaining public liability insurance. During the period October 1981 to October 1984 the Housing Authority was insured by Canadian Indemnity Company at a three year premium of $12,450. In June of 1984 the Housing Authority requested proposals for public liability insurance for the period October 1984 to October 1987. The lowest bidder was Fremont Indemnity Company with a three year premium of $11,510. C014TINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDA ION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER VOTE OF COMMISSIONERS X_- UNANIMOUS (ABSENT ) I HEREBY CERTIFY THAT THIS A TRUE AND AYES: NOES: CORRECT COPY OF AN ACTION TAKEN AND ABSENT: ABSTAIN: ENTERED ON THE MINUTES OF THE BOARD OF COMMISSIONE S ON THE DATE SHOWN. CC: County Administrator ATTESTED �b County Counsel Phil Batchelo , Cl rk of the Housing Authority Board of Commissioners M382/7-68 BY �� . DEPUTY K Board of Commissioners January 28, 1986 Page -2- On November 5, 1985 Fremont Indemnity Company cancelled the Housing Authority' s three year policy. Extensive efforts have been made to replace the public liability insurance, however, the only quotation received for a $500,000 policy, had a one year premium of $175,000 with a $100,000 per occurrence deductible. On September 16, 1985 the Advisory Housing Commission voted to reject this insurance offer and to implement an interim measure with the County of Contra Costa to establish a Housing Authority self-insurance program for liability insurance. On October 29, 1985 the Board of Commissioners approved the proposed self-insurance program as an interim measure. The Housing Authority self-insurance program would continue until the Housing Authority has obtained Fire and Extended Coverage insurance. Currently, Housing Authority staff is working with a group of Northern California Housing Authorities to form an insurance pool for Fire and Extended Coverage insurance. Due to the instability of the insurance market, the Housing Authority of the County of Contra Costa, along with the Housing Authorities of Oakland, Alameda, Fresno, Marin, Richmond, Santa Cruz and Tulare, has investigated joining together to establish and operate a cooperative program of risk management and claims management similar to programs currently being used by a number of counties and other municipalities. Housing Authority staff has worked closely with staff, legal counsel and risk management personnel from the involved Housing Authorities, to put together a proposed California Housing Authority Risk Management Agency. This Agency, which would have the power and duty to establish and operate a program of risk and claims management, would operate as a separate entity and the debts, liabilities and obligations of the Agency would not be assumed by the parties to the Agreement. We have now prepared a draft Joint Exercise of Powers Agreement, By-Laws and a Joint Protection Agreement for California Housing Authority Risk Management Agency (CHARMA) and once the program has been implemented, CHARMA will offer its member Housing Authorities public liability, automobile liability and Public Officials liability insurance. A copy of the draft documents is attached for your review. As a member of CHARMA, the Housing Authority of the County of Contra Costa would enter into a policy for $2,000,000 coverage with a $50,000 deductible and a first year premium of $136,153. The attached Tables A and B indicate the factors used in determining the size of each Housing Authority and the first year premium for each Housing Authority. Coverage may be tailored to fit the financial requirements of each housing authority and should the Commission feel that the $50,000 deductible is unacceptable, a premium adjustment could be made and the deductible level could be lowered. It is anticipated that CHARMA can be operable by March 1, 1986. On January 27, 1986 the Advisory Housing Commission voted to recommend that the Executive Director be authorized to execute the Joint Powers Agreement to Provide Risk Management Services for California Housing Authority and approval of Housing Authority participation in the California Housing Authority Risk Management Agency for $2,000,000 coverage with a $50,000 deductible and a first year premium of $136,153. IV. CONSEQUENCES OF NEGATIVE ACTION: Should the Board of Commissioners elect to not authorize participation in the California Housing Authority Risk Management Agency, the Housing Authority will miss an opportunity to expand its insurance coverage from $500,000 to $2,000,000. In addition staff costs covering attempts to obtain coverage through the insurance market will increase, as will County staff costs covering the processing of Housing Authority claims.