HomeMy WebLinkAboutMinutes-06-30-78-Adjourned Regular MeetingMINUTES OF THE CITY COUNCIL
OF THE CITY OF DOWNEY
ADJOURNED REGULAR MEETING
JUNE 30, 1978
The City Council of the City of Downey held an adjourned regular meeting at
1:00 p.m., June 30, 1978, in the City Manager's Office of the Downey City Hall,
Mayor Pro Tem Kenneth J. Miller presiding.
PRESENT: Council Members:
Theodore H. Jackman
Kenneth J. Miller Mayor Pro Tem
Milton R. Mackaig
ABSENT: Lyell W. Swearingen (excused)
William L. Greene Mayor (excused)
ALSO PRESENT: Charles W. Thompson, City Manager
Royal M. Sorensen, City Attorney
Martin F. Wynne, Director of Finance
Russ K. Reynolds, Manager of Procurement
Robert L. Shand, City Clerk -Treasurer
City of Downey Liability Self -Insurance Program
Mr. Wynne explained the prospect of fully self -insuring the City's liability
insurance program is advisable at this time. He said Mr. Bogen of Cal-Surance
has recommended the same basic coverage level the City currently has, which is
$100,000 retention per claim and $500,000 aggregate. The annual premium cost
would be $159,280. Mr. Wynne stated that considering the loss experience of the
City, self -insuring fully with some kind of umbrella over and above $1 million
seems feasible, and it is his recommendation the City contract to self -insure
next year and cancel it at such time as the City Council decides to fully insure.
Councilman Jackman inquired about purchasing insurance against a catastrophic
loss, and how much the premium would be.
Mr. Reynolds replied this has not been discussed specifically with the City's
broker. He pointed out that there is "tail" coverage available on the city's old
policy to cover the City against claims for the next two years, and the premium
would be 25 percent of the current premium.
Mr. Thompson commented on his participation in a committee of independent
cities to study self-insurance.
Councilman Mackaig prefers purchasing a policy for the entire year.
Discussion followed.
Councilman Jackman inquired how the City would pay off a $2 million law suit
Mr. Sorensen feels that although it would have to be paid, it would not have
to be paid in,one lump sum.
Councilman Jackman stated that with the $257,000 set aside for payment of
liability claims, plus the $159,000 premium, would total a quarter million dollars,
and in a few years there could be a million dollar fund. Each each the amount the
City now pays in premiums could be added.
Mr. Sorensen said there should be insurance coverage for the Water Facilities
Corporation so as to not expose the members of the Board of Directors from some
potential liability. The bond indenture says there must not be less than $2
million public liability.
Mr. Thompson cited the various cities that have self-insurance programs.
Further discussion ensued.
Mr. Wynne reviewed the loss payments vs. premiums and reserves.
Councilman Mackaig favored the self -insured program and the stop loss for the
next two years.
Council Minutes 6/30/78 (adjourned) -1-
Mr. Sorensen pointed out there is a Federal grant application for the Downey
Senior Citizen Drop -in Center, which requires the City must maintain a $1 million
liability insurance for each accident or occurrence.
It was moved by Councilman Jackman, seconded by Councilman Mackaig, and passed
by the following vote to approve the self-insurance program; purchase a $2 million
umbrella coverage and place the money normally paid for premiums into the reserve;
purchase the coverage required for the Water Facilities Corporation; and purchase
the tail coverage for a one-year period.
AYES: 3 Council Members: Jackman, Miller, Mackaig
ABSENT: 2 Council Members: Swearingen, Greene
At 2:18 p.m., it was moved by Councilman Jackman and seconded by Councilman
Mackaig to adjourn the meeting.
Robert L. Shand, City Clerk -Treasurer
%
nn4,T.11r, Mayor Pro Tem
Council Minutes 6/30/78 (adjourned) -2-