HomeMy WebLinkAbout0480.094•
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TO:
FROM:
DATE:
City of Palo Alto
C_ity Manager's Report
HONORABLE CITY COUNCil.
CITY MANAGER DEPARThIE)''T: H\J1IiAl" RESOURCES
Odobe 27, 1994 CMR:48Il:94
AUI'HORITY OF CALll'ORNIA EXCESS LIABILITIES (ACCEL)
JOINT roWERS .... lrrnORITY
REOUllSr
Thi", is an informational report cn the stan.lS of ACCEt, a lC!lll P(1'),C-f Aulh~1riry I,I,.h:dl
includes the City of Palo AJw. and provide:. risk p'i"_"'Jlin~:. fM rr;~Jniclp,li li.:,hi:it) t':p{)~IHe<;
RECQM~!Eh1).ATIONS
This is an IT.formattul1 r.;-.port: r,l\ anion 1') i~~q\JiftJ
rm.rCY_IMPLICA110Nji
No change in existing polky.
The Authority of Califonlia Cities Excess Liabilities (ACCEL) Program ;s a join. Powe"
Authority (!PA), formed in 1986 by !be City of Palo Aho and ole"en other cities, to provide
risk pooling for municipal liability e<J'O'ures. rnis self-funded program was desig,>ed to
pool catastrophic losses to.a $10 million limit as a viable altc'ruati\'e to high COS1 ~nsurance
Rather than purclas< llilbility insurance from colIUIlercial carriers which subject
I1ll1nicipalities to market flu<..'tUations, unpredictable preniums, and limited >vailabllily, risI:
pooling provides an opportunity for participating cities to pool !beir rewur= and share !be
ris" for paid losses over $1 million.
Member cities place a percentage of u~eir payroll on dcposil at Ibe beginning of each
program yoa,. These funds are placed in investment acrourus meeting the investmenl
standards of each member city.
After seven years of experience. even with sharing the ("OS[ of losses among the member
cities, ACCEL has managed to return o,,'er $5 rnil\~Dn in TI!'l..rospe('llve adjusl.mc-r~ts. for me
last three years.; ti'js is .approxim.a[~l)' $1 million ffil)te Lh.an the initial invc.s.un ... n[ each
program year' To date, the Cit)' of Palo AILO has received $617,438 (FY 86187), S59B,929
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(FY 87188), and $643,112 (FY 88/89) from our firsl three program yea". while ACCEL
still maintains its resef'lles in e~cess of $34 miUion d()lla~.
ACCEL requires that aU members have a comprehensive risk =gernent program and
cIemands active panicipation in all aspects of pool rnanagr"menL The Board of Directors.
comprised of each entity" R'sk Manager, meets at Ie",,! foVe times a year in various
swewide locations. Eaoh member serves on al least one committee and is "wol,e<! i." and
responsible for, the suc= of ongoing progf3l11s Ca"eutly, the <iIi .. of An;ilie;m.
Bakersfield, Burbank, Modesto, Monterey, Moontam View. OnIllr.O. Palo Alto, Santa
Barbara, Santa Monica anJ Visalia comprise ACCEL
In California. there are over 180 JoLnl Powers Aut110rities formro for L1.e purpu~es of rish
financing and pooling: ACCEL continues 10 be one of the mo<.t succes.sf.:Ji ventures of;~
type in the state. The City of Palo Alw will wntinue to participa!e in lhh prograsn, , ..... ,hicn
provldes. row .. -:(1$\ risk pooling p.rotection.
FISCAL L'\fi' ACT
11lC seven year average rate for ACCEL coverage sirJce iLS inception j~ $.176 per SlOO 01"
payroll. This contrasts with ex""" insutance rat,; of $.55 to .75 per $100 of payroll (when
a"Vailable) for the same coverage.
J<:!lMRQNMENTAL AS~SMENJ
N/A
A'ITACHMENIS
I. ACCEL Newsletter
PREPARED BY: Randall Rafoth, Ris1 Manager
DEPARTMENT HEAD REVIEW: V/l'-J C /l_~,,.>.'~_
JAY C."ROUNDS
Director of Human Resources
CITY MANAGER APPROVAL: ~1\0\ ,5.t~
BE ARD M. STROJNY'
Assis!alll City Manager
~t 1 or 2
~CCEL FALL 1991
Authority For California Cities Excess Liability
MEl'>IRERS
Moaterty, ,1,(':'0' SlOe BakEr
Sou ta Ba.rbara, BnuJ Lwuiret-':
SUta Moa~c:a., Tom. huJlips
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ACCEL RETURNS!
From Suorrd Program Year
The ACCEL Bow:! (If Dlrtl;toli dC(:1ared ,~'ailOible fucJ.s fOf terW'11LO Ibembers
or !.be FY gUU p1OJI'UIl yell" wwhnj $5.290.544; appro:utmc.el)' S-I.OOO.OClO
mort·.hJ,.a tlwiir iru~ dqxl$us. Trus is ACCEL', second Retl"O$pe<"tive AdJI&P.·
~I; They u-e ca.lculaced be!llt'Jltng ti .. ·c y~rs aNc, the end oj the ca.;b program
)'eat. A..s of hu")(! J0. J99} ACCEL h;od ill e:,cC$.S cf 535.000,000 III f.u:ding,
co,'enng !~e ~mlxn of the A"U.lholll~ roc .30 5 lO.OOO.C<.lO UIIlJJ OfUAb!ltty at pea.t.er
Ihn l 90 ~ co:; fi dtoce i ~ \'~ I
B¢;.av..">C cf AL:CEL·s to'''\'' los.> t.,n()r;.·, sirruiii.r r:ct\lm~ 3rt ~p:c~ U pi"tl8'DI!I
)'UfS ~(.'~mn~ tv ~N.re · ... ll~ ~.e' ... '( member; a!!<:, rec(:l"Ill~ tht'!ie F:elro~h·.e
AdJustments, mlLI,,1 CJlculJticH\'j project that next }uJ"'i ~ ~ijl aL<.Q
~,m 'SS.OO<l,IY.}Q, for lm \hird ~t.ar in "lI. rw", ..... i&. ~ f(\t\c"-"ina }t<lr
.e.-;timaled W rerun'!:1 f':'\C~ of S7,GOO,o.)(l to the ~rticipat.ing clti.;s.
ACCEL wu formeJ w pod c,-,mmora muro1clpaJ nsk on ,higb l.evcl ell:ces.s ~~s
and SCII.«: the o;'.)1t of mete lct..."e$ .amoo.ist the a-.ettlbcr eftt,tt~, ACCEL 1"CG'.I.\r>:.<>
thaI alJ ~~mbers b.a~'e .a full·t.nnc: risk ~g~r, and a compre.!Jen.slve nU
~gemell! pro8'r.Jn. To di.:.e.. llus poel has ~ v~r)' sucO:eJ.Iill.i.l. W1L~ 001)'
I ~retl p,ud losie'S and noauc.aJ rese1''''~ pend1,01i 0
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The se."tl' ~'ear B\I~ n.te of ACCEL sino: Ulo:poocl IS S, !.75 nus CXil'itn'I5t5"W1tn
e.xa::ss 1ftiUI"anCC n.t=:s QfS SS ~,75 (when a..1iilable) for tlus same $9mm x.i 511r.m
l.aya, The fuUwio.,dmlllll.l.StlVJl':$thLs:
PRGM. PA'r'ROLL 59! uSl ADMP.I!,& RESERVES RATE ....
YI:A1I (illl loons) DHOSIT PO CL'\!S." &mNR" (",/0 h.e.)
$J 11,873 .$3.754,481 545.000 $OJ .0[4
689.010 U6S.IZ0 8'15.422 0 127 , 4O~.Q~2 4-.B%,619 11)4,500 Q .016 1
4 450.116 .U{)8.j~~ 191,-400 164.677 01>
"7,544 l,J70.m 112,QOO 428,2il2 .US
6 3SS.W2 UOH2J 465.597 2,456,844 611
38U50 ·U83,J9Y 23 j.()(}(l 705,600 Ie,
TOtAl.. S3,~i,9",' Sl6.~S1,J'(l. n.Il44.'H90 SJ,'S5.313 .1.'761
• A4 or Inc )0, i'Wl F,.-..n''''; A~Il'(
u nlll ""Hal (". <"*Ie jpe. ~n()" r pJ.-:-roill dou ~Ol ;1I~:~J.Ih~ ''''~J.(:I 0 (1M .add,~4IIl Se,Hl.6B.
~unIORlTY fOR C.U.lFOR."\11t. CmES EXCESS UA5:IUTY
t/II SedpiclI. JMUII ~ Eacit) G~
"P.O, BOll: 1!j.(J1. Sea F~t1, C.\ H12~160l 14IJl \I3J·5~
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FALL 1993
FY 93/94 Rate Redu<:tion I
The Authority'~ 199] i1Ct\Jarial sru.dy demonstratcU that the pool.;ould
lower I(S memotf ,,;oilrrl'cLJIlcn rate from S 1.'0 {))(!f 100 of oayroll) to a
$".riO rne .and stifl maintain 190% confide."1.:e leveL To be prudent, the
Boacd ela.,ed to st't thP. rate ilt $,90 for Co/If'O yean effective July 1991.
Bas.t<d on ACell's ccntinui.n& n~Uent klrss history, lnd a stmilu
.ct~riJ! ~l1lJ'nef1ci1:tiOll. tilt Board redJJced ,he 1993194 contribu
!..ion 10 $.60.
History of ACCEil
The :\u!::"nt:, kr CJhj,)rnJii ("Ilib E~~~ss L_lablh!~ rACCEL.) pc:-oJ I. !lOW iLl 1:.\
&,/0. p~'-;":"'''I ",(,;1r ,")1 -;.:!;Ir·fur.&:nli mWlI::-lpl[ tlabdlly exPO~"1,j)es. ACCEL .......
de!>ig':le;l.~} po:"»: ~wlroFl",;.: l,l.$.Soes· .... " -.:\ab;'!-al~e",.3l\';.e ~(, bgll-(~~t <'.:\>:es;,
lat:-,Iit:. Ul~"r¥.:e il ..... ;J$ »r1S .. , .. II~' ,oc;:-e!.'e:..l by I~S mur.be!">.11 l1n';lt(!.t:ig t:e!d
;., P,;!'...\fA ~n h_~~n,'" 19S6 ~j ';.i\..iirJII~heJ b.I' IuJ)' 1 of t.I' .. i.t J'·U ..... 1tO se;'@
meml:-""r; ?~r~c:h' 'C''''1~Wl~ ~l .:-:el'etI Ul.!mt--er ... ~tlt.S. !:he pool pro\lides
':~JI"~n~e l't' 59:)JJ.w(i r",r v;;:::-urre!l~C, UC~5..'i or a SUXXl,{I{)O SIR.
~}X(': ,'tmaadia(tJ~'c parfjclp"tton by members 1D!.be lIUlUII"emenl of~t pool:
..... ..s:p«( ~~f!.he [":xlI thAI members fee! 1~.1 re.11 ·"Iu.$· £a,;:h mcrobtr IS 1.lII'olved
11\, a.'"Id respo:l.!'lbl e for, the suc-.;n5 Qf 'Jr:!-~Otng prag-nms. Th.o: Bo.ud of D).!tctors
moel ill :a..~: fi~t tl~ d !~U III ... a.nous SUCt .... ld: lOCltIOQS, The ..\utt-:.Orit)' is
sucttSSfoJ beca~ or th~ Inrolyemen! and corrunilment of the member city>s
~uti .. ti. ~ lI'I~i1" \j,'t.Ia.i!;, a.re lfl''''O\'IW in lit tt'~ tit.: rommlaa,
.addf'Ul.lt!!I' iIDpOrt&lII.a.speas or pool maugemQU that Jead to red~ C('.4t fo[.all
memben 0 f !:be Aoubonly.
There ur two ~oo.a.l pto!r,atIP aVlu!a.bJe fur ACCEL members, 'The OpmMa/
&.eer! Liabdiry Pn)~ram p-:'C'IId.es puUcapr..uni CII,::S With cotallir:ruts oflSability
'lip to S20.COO.COO. The Op:i(l1l41 Wo..ter;' CCMpetUaJion frogrM'l pro .... lCe&
CCNttIoft {OJ. QCb mcmbct to. a. :!oWI,UCry limit ~ t;1ty, 0
~
35,
30,
,\Iillion 2S,
20.
/5,
ACCEL Funding
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.. " Ali'tkiORIn' roll C,illroJl"'I,~ emrs EXCESS UA8U.Il't
t.<.~'-IIl~~G'VQp.
'",0 ..... 7601. SoIaI'I"McixIl, CA "'1ll).1~1 ['-LSI 9&3.~600
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