City Council Could Adopt Resolution to Join Risk Sharing Pool

The Pasadena City Council may adopt Monday a resolution for the city to become a member of Public Risk Innovation, Solutions, and Management (PRISM), for the City’s general and excess municipal liability insurance coverages effective July 1 to July 1, 2021

PRISM, a risk sharing pool created in 1979 to find cost-effective insurance solutions and risk management services for members. 

Currently, PRISM members include 55 of the 58 California counties and 295 public entity members that include cities, special districts, schools, courts, and smaller joint powers authorities. 

On Monday, the City Attorney’s Liability and Claims Division will provide City Councilmembers with additional information about the plan. 

The proposal was presented last week, and included a draft resolution to effect Pasadena’s membership, but the City Council requested additional information, such as any prior consideration of risk pool options, PRISM’s financial stability, PRISM’s ability to pay significant and multi-claim losses, and whether there are potential risks of other public entities the city could be taking on by joining PRISM. 

Last week, the city’s insurance broker, Alliant, received a firm quote from PRISM in the amount of $1.97 million for the city’s fiscal year 2021 general and excess municipal liability coverage. Staff will present Monday both a standalone option and a risk pool option to City Council for consideration. 

Once the City Council adopts the proposed resolution and becomes a PRISM member, PRISM will allow the city to retain its current terms of a $5 million self-insured retention (SIR) as opposed to increasing its Law Enforcement SIR to $7.5 million which would occur with the standalone option, a preliminary report by the City Attorney said.

The report said the premium amount is $6,967 less than the standalone option. Since risk exposures among PRISM members are diverse, risk would be spread more evenly throughout the organization, resulting in more stability. The city will benefit from risk management offerings not currently found in its current standalone coverage, the report added. 

Explaining the preference for PRISM, the City Attorney’s office said other pool options exist but are not considered as good of a fit for the City of Pasadena when compared to PRISM. 

Adoption of the proposed resolution will lead to Pasadena signing a joint powers agreement with PRISM, the report added.