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.july :23, 1992
HONORABLE CITY COUNCIL
palo Alto, California
Men-Ebers of the Council ~
This report is for informational purposes only, and no Council
a~tion is required.
AS part of its risk management policy, in 1986-87 Palo Alto jOined
with several other cities in an excess liability pool to spread the
risk of any large gener~.l liability claims. This pool is called
Authority for california Cities Excess Liability (ACCEL), and no~
consists of the cities vf Anaheim, Bakersfield, Burbank, Modest.o,
Yonterey, Mountain View, Ontario, Palo Alto, Santa Barbara, Santa
Monica and Visalia.
Each year each city deposits \w"ith ACCEL an actuarially determined
deposit to provide funds to cover its sh~re of potential claims for
the entire pool. The joint powers agreement r€quires that five
years after a deposit is made, ACCEL must compute each city's share
of pooled costs for that deposit year. ACCEL has already computed
actual 1986-87 costs for Palo Alto and the other cities that ~ere
members at that time.
Since no major claims on the pool ~ere filed for the 1986-87 year,
and, therefore, no major costs incurred, ACcEL is refunding cities'
contributions far that year, with interest. Palo Alto's 1985-87
deposit was $415,122, and ACCEL has just sent the City a deposit
refund check for $617,438; the implicit interest rate earned by
CMR:34S:92
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ACCEL in the six years since the deposit was made is 6.8 percent.
The deposit refund ~ill be placed in liability reserves to continue
to :maintain a prudent level of r<!serves for the city's general
lia~ility exposure not covered by ACCEL, and for workers' compensa
tion liabilities.
X::Ullfi;i~d'
KEVIN RIPER
Assi~tant Finance Director
CNR:)45: 92 2
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