To: Honorable Mayor and Members of City Council
From: Liz Habkirk, Assistant City Manager
Prepared By: Erika Leahy, Risk Manager
TITLE:
Title
Delegation of Authority to Procure and Administer the City’s Insurance, Self-Insurance, and Risk Pooling Coverage Consistent with Approved Budget Appropriations
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a Resolution delegating authority to the City Manager or designee to procure and administer the City’s insurance, self-insurance, and risk pooling programs, including execution of required agreements, consistent with approved budget appropriation or actions taken to amend the annual budget.
Body
DISCUSSION:
The proposed resolution authorizes the City Manager or designee to procure and maintain insurance coverage necessary to address the City’s evolving risk exposures. This action ensures operational flexibility, timely procurement of coverage, and alignment with industry standards and public sector risk management best practices.
As a condition of continued participation in certain PRISM programs for Fiscal Year 2026/2027 and beyond, PRISM requires member entities to execute Program-Specific Memoranda of Understanding (MOUs) for each program in which the entity participates. Execution of these MOUs is necessary to maintain coverage and program participation. Delegating authority to the City Manager or designee ensures timely execution of required program agreements and prevents any lapse in coverage.
Insurance markets, regulatory requirements, contractual obligations, and emerging risks continue to evolve. Public agencies face increasing exposure in areas such as catastrophic weather events, wildfire, cybersecurity threats, employment practices liability, environmental risks, infrastructure replacement costs, and inflationary impacts on claims and asset values. Insurance carriers regularly adjust underwriting standards, retentions, coverage terms, and available limits. Securing or modifying coverage often requires prompt action due to renewal deadlines, market volatility, and carrier capacity constraints.
The City maintains a comprehensive risk management program that includes a combination of:
• Participation in risk pooling arrangements (e.g., PRISM or other joint powers authorities, as applicable)
• Commercial insurance policies
• Self-insured retentions
• Excess liability coverage
• Specialty coverages such as cyber liability, drone liability, pollution liability, crime, and special event coverage
Historically, insurance procurement authority may have required separate Council action or been subject to fixed thresholds. Given the dynamic nature of insurance markets and renewal timelines, delegated authority allows the City to respond efficiently while ensuring appropriate risk protection.
Delegating procurement authority to the City Manager or designee:
• Allows timely response to renewal deadlines and binding requirements
• Enables negotiation of appropriate limits and retentions
• Supports competitive placement strategies
• Reduces administrative delay associated with routine coverage adjustments
The Risk Manager will continue to evaluate exposures, market conditions, and program structure and will provide recommendations to the City Manager regarding appropriate coverage levels and program design.
Oversight and Accountability
This resolution does not eliminate Council oversight. Insurance costs remain subject to:
• Annual budget approval or council actions taken to amend the annual budget
• Financial reporting requirements
• Audit review processes
The delegated authority allows administrative execution within Council-approved budget parameters and operational needs.
Maintaining appropriate insurance coverage supports the City’s fiscal stability, operational continuity, and overall risk mitigation objectives. Adequate coverage protects public assets and reduces financial uncertainty associated with claims and catastrophic events.
FINANCIAL IMPACTS:
Insurance premiums are included in the adopted annual budget. The proposed resolution does not increase appropriations but authorizes procurement within approved funding levels.
Future premium adjustments will be incorporated into the annual budget process and presented to Council for approval as part of normal financial oversight.
CEQA:
The City Manager has determined that the recommended action described in this agenda report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - Resolution
NOTIFICATION:
None.