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AGENDA ITEM NO. 8.
CITY OF HAWTHORNE City Council AGENDA BILL For the meeting of 07/08/2025 Originating Department: City Attorney |
City Manager:
Department Head:
SUBJECT:
RESOLUTION NO. 8545 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HAWTHORNE, CALIFORNIA, APPROVING TO JOIN A JOINT POWERS AGREEMENT WITH PUBLIC RISK INNOVATION, SOLUTIONS, AND MANAGEMENT.
RECOMMENDED MOTION:
Staff Recommends that the City Council Adopt Resolution No. 8545 and Join a Joint Powers Agreement with Public Risk Innovation, Solutions, And Management
RECOMMENDED MOTION:
DISCUSSION:
The City of Hawthorne has been a long-term member of Independent Cities Risk Management Authority (ICRMA). For several decades, the City was a member in a pool of cities that collectively shared the general liability risks with other member cities of ICRMA. ICRMA is an entity created under the Government Code as a joint powers authority (JPA).
Commencing in the fiscal year ‘23/’24, the City increased its Self-Insurance Retention (SIR) from $500,000 per occurrence to $2 Million. Stated differently, the City became self-insured up to $2 Million per loss. This resulted in the annual savings of the premiums for liability insurance by $1 Million, during a time of dramatic increases in insurance premiums. Even with the savings from increasing the City’s SIR to $2 Million, the annual general liability premium paid to ICRMA was $2,161,298.
For various reasons, the City Attorney’s office has been exploring the City’s options with other similar but larger pooled insurance JPA’s. In the past few years, many cities left ICRMA for other JPAs. ICRMA’s pool had dwindled down to a little over dozen agencies from over 30 cities a few years ago.
On May 28, 2024, the City Council adopted Resolution No. 8467, which gave ICRMA one-year notice of the City’s intentions to withdraw from ICRMA. The effective date of the separation was June 30th, 2025.
Since the May 2024 decision to withdraw from ICRMA, the staff have started the process of transitioning the City’s general liability insurance program to Public Risk Innovation, Solutions, And Management (PRISM). PRISM is another pooled insurance JPA, but with many more agencies in the pool than ICRMA. The transition and application process involved submitting a great volume of documents providing the history of general liability claims. This effort resulted in PRISM’s acceptance of the City into their general liability program.
On June 24, 2025, the City Council approved Resolution No. 8541 which formally noticed the City’s intention to join PRISM’s general liability pooled and excess coverage program. We have now received PRISM’s insurance premium quote, offering two options as follows:
Option 1: $1 Million SIR Annual Premium of $1,405,092.
Option 2: $2 Million SIR Annual Premium of $1,050,690
Based on the 2024 premium payment of $2,161298 for the $2 Million SIR with ICRMA, the membership with PRISM for the same SIR would result in an annual saving of $1,110,608. Even if the City selected Option 1 of self-insuring up to $1 Million, the annual premium would still be significantly less.
Commencing in the fiscal year ‘23/’24, the City increased its Self-Insurance Retention (SIR) from $500,000 per occurrence to $2 Million. Stated differently, the City became self-insured up to $2 Million per loss. This resulted in the annual savings of the premiums for liability insurance by $1 Million, during a time of dramatic increases in insurance premiums. Even with the savings from increasing the City’s SIR to $2 Million, the annual general liability premium paid to ICRMA was $2,161,298.
For various reasons, the City Attorney’s office has been exploring the City’s options with other similar but larger pooled insurance JPA’s. In the past few years, many cities left ICRMA for other JPAs. ICRMA’s pool had dwindled down to a little over dozen agencies from over 30 cities a few years ago.
On May 28, 2024, the City Council adopted Resolution No. 8467, which gave ICRMA one-year notice of the City’s intentions to withdraw from ICRMA. The effective date of the separation was June 30th, 2025.
Since the May 2024 decision to withdraw from ICRMA, the staff have started the process of transitioning the City’s general liability insurance program to Public Risk Innovation, Solutions, And Management (PRISM). PRISM is another pooled insurance JPA, but with many more agencies in the pool than ICRMA. The transition and application process involved submitting a great volume of documents providing the history of general liability claims. This effort resulted in PRISM’s acceptance of the City into their general liability program.
On June 24, 2025, the City Council approved Resolution No. 8541 which formally noticed the City’s intention to join PRISM’s general liability pooled and excess coverage program. We have now received PRISM’s insurance premium quote, offering two options as follows:
Option 1: $1 Million SIR Annual Premium of $1,405,092.
Option 2: $2 Million SIR Annual Premium of $1,050,690
Based on the 2024 premium payment of $2,161298 for the $2 Million SIR with ICRMA, the membership with PRISM for the same SIR would result in an annual saving of $1,110,608. Even if the City selected Option 1 of self-insuring up to $1 Million, the annual premium would still be significantly less.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
n/a
FISCAL IMPACT:
The City Attorney’s Office budgeted $2,900,000 for the General Liability Insurance Program for the fiscal year ‘25/’26. If the City elects the $2 Million SIR, $1,050,690 of the budgeted amount would be spent and the balance would return to the general fund.
NOTICING PROCEDURE:
72 hours posted notice pursuant to the Ralph M. Brown Act.