TO: LINDA REICH, CITY MANAGER
FROM: TERRY DOYLE, DIRECTOR OF HUMAN RESOURCES/RISK MANAGEMENT
SUBJECT
title
California Intergovernmental Risk Authority (CIRA) Membership and Participation in the General Liability and Workers’ Compensation Programs.
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RECOMMENDATION
recommendation
Adopt Resolution No. 2025-027 approving the City of Chino's membership into CIRA and participation in the General Liability and Workers' Compensation Programs.
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FISCAL IMPACT
Based on the City’s loss experience, CIRA provided premium estimates of $1,569,784 for general liability with a $1,000,000 deductible and $362,351 for workers' compensation coverage with a $500,000 deductible. If the City Council approves membership into CIRA, these premiums will be included in the FY2025-26 Budget.
CITY OF CHINO 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:
• Positive City Image
• Superior Customer Service
• Financial Stability
• Responsible Long-Range Planning
• Public Service Excellence through Internal and External Partnerships
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BACKGROUND
The City of Chino currently has a self-insured program for workers’ compensation and general liability coverage and purchases excess insurance coverage through Safety National. Under the workers’ compensation program, the City has a deductible of $750,000 per claim for non-safety personnel and $1,000,000 per claim for safety personnel, with coverage provided up to the statutory limits required by law.
Under the general liability program, the City has a deductible of $5,000,000 per claim. Excess coverage includes both occurrence and aggregate limits of $25,000,000. If the City were to continue the same coverages for FY2025-26, the premiums are estimated to be $1,286,646 for general liability and $356,089 for workers’ compensation.
ISSUES/ANALYSIS
A $5,000,000 deductible for general liability is considered high for the City of Chino’s size. In addition, neighboring cities have deductibles of $1,000,000 or less. As a result, in November 2024, staff began to explore alternative coverage options, including requesting a lower deductible from Safety National. However, Safety National is unable to provide the City with a deductible option that is lower than $5,000,000.
One of the other options staff explored was joining a risk pool, also called a joint powers insurance authority. Based on staff’s prior experience with risk pools and the membership of neighboring cities including Rancho Cucamonga, Upland, Highland, Yucaipa, and Menifee, the California Intergovernmental Risk Authority (CIRA) was asked to provide estimates for both general liability and workers’ compensation coverage. Based on the City’s loss experience, CIRA provided premium estimates of $1,569,784 for general liability with a $1,000,000 deductible and $362,351 for workers' compensation with a $500,000 deductible.
At the City Council Study Session held on May 13, 2025, CIRA presented an overview of joint powers insurance authorities and analysis of the City’s total cost of risk when evaluating insurance coverage options. At this Study Session, the City Council directed staff to obtain estimates from other risk pools for consideration. Attached is a comparison of insurance pool options for both general liability and workers’ compensation coverage.
Out of the other risk pool options, Public Risk Innovation, Solutions, and Management (PRISM) and the California Joint Powers Risk Management Authority (CJPRMA) are the most competitive options from just a cost perspective. However, unlike CIRA, neither pool provides comprehensive risk control services. If the City were to join CIRA, it would receive not only workers’ compensation and general liability coverage that is lower than its current deductibles, but City staff would also be given access to numerous safety training programs, safety policies, contract review services, and on-site risk assessments. These are all risk control services that CIRA would provide to the City at little to no cost.
If the City Council approves membership into CIRA, the premiums for the general liability and workers’ compensation programs will be included in the FY2025-26 Budget and the City would be allowed to join in FY2025/26.
Resolution No. 2025-027 authorizes the City Manager to sign the joint powers agreement to join CIRA and appoint staff to serve as a Director and Alternative on the CIRA Board of Directors. Upon approval, the City will receive workers’ compensation and general liability coverage from CIRA effective July 1, 2025.
Attachments: 1 - General Liability and Workers’ Compensation Comparison
2 - Resolution No. 2025-027
3 - CIRA Joint Powers Authority Agreement