HomeMy WebLinkAbout4.4 Insurance Reserve Fund CITY OF DUBLIN
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AGENDA STATEMENT
CITY COUNCIL MEETING DATE: May 26, 1987
SUBJECT Establishment of Insurance Reserve Fund
EXHIBITS ATTACHED Resolution
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RECOMMENDATION \ Adopt Resolution
FINANCIAL STATEMENT: $137 ,200 Reserve Fund shall be established with
General Fund reserves .
DESCRIPTION The City joined ABAG PLAN, a self insurance risk
sharing pool , effective June 2 , 1986.
The coverage agreement requires each city to submit a deposit premium. Each
years premium is set in accordance with the prior years experience.
Therefore , the City ' s premium is adjusted each year. In addition to changes
in the deposit amount , after three years of experience , a retroactive
adjustment will be made to the first years premium. This may be a credit or
a request for additional premiums , depending on the City' s experience. The
maximum additional premium which would result is 200% of the City' s deposit
premium.
The coverage agreement with ABAG requires each agency to budget sufficient
reserves to fund the maximum retroactive deposit premium. This is not
anticipated to be a line item expense in a particular year. Therefore , it
would be appropriate to establish a reserve fund in accordance with the
coverage agreement .
The following breakdown indicates the recommended funding level for the
reserve fund:
1986-87 Deposit Premium $ 49 ,360
Estimated 1987-88 Deposit Premium 87 ,850
Total $137 ,210
The 1987-88 premium has escalated due to several factors . These include
inflationary costs of claims , higher loss level of pool , and changes in the
formulas . The formulas now provide a closer relationship between premiums
paid and the anticipated losses for each agency. As the program progresses ,
there will be an opportunity for a savings through a retroactive adjustment .
This adjustment will be based on the experience of the City and the pool .
Staff recommends that the City Council adopt the resolution Establishing an
Insurance Reserve Fund and direct Staff to incorporate the recommended
funding level in the current financial statements .
COPIES TO:
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RESOLUTION NO. - 87
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
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ESTABLISHING AN
INSURANCE RESERVE FUND
WHEREAS , the City of Dublin is a member of ABAG Pooled
Liability Assurance Network (ABAG PLAN) ; and
WHEREAS , the coverage agreement attempts to assure that
each agency will have adequate funds to cover retroactive premium
adjustments ; and
WHEREAS , the establishment of a reserve fund will set
aside funds in the event that future adjustments are required.
NOW, THEREFORE, BE IT RESOLVED that the City Council of
the City of Dublin does hereby authorize the establishment of an
Insurance Reserve Fund.
BE IT FURTHER RESOLVED that the Finance Director shall
take appropriate measures to accommodate the fund in the City' s
financial records .
PASSED, APPROVED AND ADOPTED this 26th day of May, 1987 .
AYES :
NOES :
ABSENT:
Mayor
ATTEST:
City Clerk