TO: LINDA REICH, CITY MANAGER
FROM: TERRY DOYLE, DIRECTOR OF HUMAN RESOURCES/RISK MANAGEMENT
SUBJECT
title
Authorize the City of Chino to join Public Risk Innovation, Solutions, and Management (PRISM) for Fiscal Year 2026-27 for general and excess municipal liability insurance coverage.
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RECOMMENDATION
recommendation
Adopt Resolution No. 2026-025 authorizing the City of Chino to join Public Risk Innovation, Solutions, and Management (PRISM) for the City’s general and excess municipal liability insurance coverage effective Fiscal Year 2026-27; designate the City Manager as primary member and Director of Human Resources/Risk Management as alternate member representative to the PRISM Governing Board; and authorize the City Manager to execute all required membership agreements to bind coverage with PRISM and related carriers.
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FISCAL IMPACT
There is no fiscal impact for FY 2025-26. The approximate net fiscal impact for Fiscal Year 2026-27 will be an increase of $1,284,552, which will be incorporated into the FY2026-27 Proposed Budget, within Fund 630 Liability Insurance.
CITY OF CHINO 2026-2027 MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Superior Customer Service
• Financial Stability
• Responsible Long-Range Planning
• Public Service Excellence through Internal and External Partnerships
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Revenue: |
Expenditure: 6305010-43270 & 43250 |
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Transfer In: |
Transfer Out: |
BACKGROUND
As a municipal organization, the City of Chino is authorized to manage all risks associated with local government operations, including general liability, workers’ compensation, claims against the City and lawsuits.
Since 2007, the City has maintained stand-alone insurance coverage and utilizes an insurance broker to procure insurance programs to mitigate significant risks that could otherwise impact the City’s ability to operate and provide services to the community. The City’s current insurance broker is AON Risk Insurance Services West.
As the cost of claims continues to increase, insufficient coverage may expose the City to significant financial risk. To ensure the City remains properly protected, staff conducted a comprehensive review and analysis of the City’s existing insurance portfolio and compared it to four Joint Powers Insurance Authorities (JPAs) commonly used by California cities, counties, and special districts.
ISSUES/ANALYSIS
During the February 10, 2026, Study Session, City staff presented to the City Council a comprehensive overview of the City’s current insurance programs and four JPAs: the California Joint Powers Risk Management Authority (CJPRMA), California Intergovernmental Risk Authority (CIRA), Public Entity Risk Management Authority (PERMA), and Public Risk Innovation, Solutions, and Management (PRISM).
The presentation highlighted the benefits and key considerations associated with joining a JPA. Benefits include reduced exposure to catastrophic losses, access to specialized legal and risk management resources, and opportunities for member involvement in governance and oversight. Key considerations include shared liability for losses incurred by other members, the possibility of future assessments or increased contributions, reduced autonomy over certain coverage decisions, and mandatory advance notice for withdrawing from a JPA.
In addition, City staff presented a thorough overview and comparison of the out-of-pocket deductibles and limits provided by the City’s current insurance carriers and each of the four JPAs. The intent of the comparison was to find alternative insurance that reduces the City’s out-of-pocket deductibles while maintaining the same, or higher, coverage limits under a JPA.
Based on this analysis, staff recommended pursuing membership with PRISM. Participation in PRISM would strengthen the City’s overall risk management program while providing enhanced financial protection through risk pooling, reduced out-of-pocket deductibles, and greater comprehensive coverage. In addition, many JPAs already purchase coverage through PRISM, giving the City direct access to this coverage while avoiding extra administrative fees that other JPAs may charge.
At the conclusion of the Study Session, the City Council directed staff to proceed with pursuing PRISM membership effective July 1, 2026.
Below is a table summarizing the City’s insurance elections for Fiscal Year 2026-27 by insurance coverage type, out-of-pocket deductibles, coverage limits, and premium estimates.
|
Insurance Coverage Type |
Out-of-pocket Deductible |
Coverage Limit |
Premium Estimates |
|
General Liability (Includes Employment Practice Liability) |
$1 MIL |
$50 MIL |
$2,655,000 |
|
Workers’ Compensation |
$500 K |
Statutory |
$395,000 |
|
Property (DIC -Flood and Earthquake) |
$25 K |
$700 MIL |
$580,000 |
|
Cyber |
$3 MIL |
$100 K |
$69,300 |
|
Crime |
$1 MIL |
$10 K |
$5,500 |
|
Aviation |
$50 K |
$3.7 MIL (Hull)/ $25 MIL Liability |
$60,000 |
|
- |
- |
Total |
$3,764,800 |
As part of the underwriting process for membership, PRISM has begun evaluating the City’s risk profile, including claims history, operational exposures, and existing risk management practices. In addition, the City’s membership application will be presented for final underwriting approval to the PRISM Underwriting Committee meeting on May 6, 2026.
Prior to PRISM’s Board Meeting, the City Council is required to formally approve Resolution No. 2026-025, approving membership into PRISM and designating the City Manager as the primary board representative and the Director of Human Resources/Risk Management as the alternate.
The approximate cost of the premium estimates will increase by $1,284,552, with $640,000 due to the including of earthquake, flood and aviation insurance.
Attachments: Resolution No. 2026-025
PRISM Membership Application
MOU’s