1976-10-29 Special CC MinutesSPECIAL MEETING OF THE COUNCIL OF THE CITY OF ALAMEDA
HELD FRIDAY - - - - OCTOBER 29, 1976
The meeting convened at 12:15 o'clock p.m. in the Council Chamber of the City Hall with
President Corica presiding.
ROLL CALL:
The roll was called and Councilmen Beckam, Diament, Hurwitz, Sherratt and President Corica,
(5), were noted present. Absent: None.
1. Receipt of the Notice and Agenda of this Special Meeting had been acknowledged by the Councilmen
and was on file. The purpose of this session was for consideration of a Self-Insured Worker's
Compensation Program, excess insurance relating thereto, and action thereon if desired.
UNFINISHED BUSINESS:
2. On request, Assistant City Manager Creagh recapitulated his written report dated October 27,
1976. He remarked that at a special meeting held September 28, 1976, the Council had indicated
its initial agreement to enter into a Self-Insured Program and had accepted the services of Gates,
McDonald & Company as the City's claim administratoribr the program. However, he said, imple-
mentation of the program had been deferred beyond the recommended October 1 starting date because
of several circumatances: (1) State Fund had not had an opportunity to submit a proposal for
excess insurance, and the Council had deferred action on this aspect of the program; and (2)
a ruling received from State Fund to the effect that the Bureau of Electricity could not remain
insured with Stat Fund as a separate entity if the City chose to enter into a self-insured
program. In this regard, he stated, the City had now received a proposal from State Fund for
insurance in excess of $250,000 at a premium of $15,544.60 for the first year; and discussion with
Bureau of Electricity personnel had resulted in a proposal for a joint City-Bureau program.
Mr. Creagh reported the State Fund bid compared very favorably with the previously received bid
from Employers Reinsurance, who had quoted a premium cost of $22,875 for similar coverage. He
noted, as set out in his report, that State Fund had not bid on excess insurance amounts below the
$250,000 figure, whereas Employers Reinsurance had done so.
On question, Mr. Creagh reported the Bureau of Electricity's acceptance of the proposal was based
upon the recommendation for the $250,000 excess insurance, and acceptance of Gates, McDonald &
Company as the claims administrator. He stated the cost of the rrogram would be apportioned 96%
to the City and 4% to the Bureau; that these percentages had been determined by payroll comparison
and the State Compensation rate obligation which was based on the category of employees within
each agency.
Mr. Creagh answered questions of the Council concerning excess insurance coverage. He noted that
should the Council approve coverage of $250,000, any claim or claims of lesser amount would be the
responsiblity of and paid from the joint accumulated reserve of the City and Bureau. He stated
the City and Bureau, in order to establish a reserve for claim payouts and cost, would establish
a reserve fund that would equal the estimated premium amount that would otherwise be paid to State
Fund; that the total reserve would be approximately $475,000 the first year and would build up
yearly until a reserve fund of $1,000,000 had been reached.
Mr. Don DeVere, Vice President of Mund, McLaurin and Company, Consultants, reported their investigation
had shown no single claim over $50,000 since 1970. He said would wnticipate no more than a $60,000
actual output by the City during the first year; that it was their opinion they was no way the loss
could catch up with the amount of money deposited in the reserve fund. He explained the procedure
followed in the payment of bills and compensation after the filing of a claim.
Mr. William Godfrey, of Alameda Associates, 2500 Santa Clara Avenue, congratulated the Council and
staff for implementing the program in the city. He questioned the statement that State Fund would
not submit a bid on any policy with less than $250,000 retention. Mr. DeVere reported State Fund
had taken this position effective July 1, 1976, and it was a position taken when submitting bids
to all interested dties.
At the conclusion of discussion, and there being no objection, the meeting proceeded to "Resolutions".
RESOLUTIONS:
3. The following resolution was introduced by Councilman Hurwitz, who moved its adoption:
"Resolution No. 8618
Accepting Bid Proposal of State Compensation Insurance Fund for Worker's
Compensation Excess Insurance for City of Alameda."
The motion to adopt said resolution was seconded by Councilman Beckam and carried on the following
roll call vote. Ayes: Four. Noes: Councilman Sherratt, (1). Absent: None.
4. The following resolution was introduced by Councilman Beckam, who moved its adoption:
"Resolution No. 8619
Approving Proposal for a Joint City of Alameda - Bureau of Electricity
Self-Insured Worker's Compensation Program."
The motion to adopt said resolution was seconded by Councilman Hurwitz and carried on the following
roll call vote. Ayes: Five. Noes: None. Absent: None.
The President declared the foregoing resolutions adopted.
ADJOURNMENT:
5. There being no further business to come before this meeting, the Council adjourned at 12:55
o'clock p.m.
Respectfully submitted,
City Clerk