At the Board of Directors meeting on June 7, 2013, authorization to circulate the Proposal to Eliminate the Public Entity Participation Fee for review and comment was approved. All comments received by September 19th will be included in the October Board of Director’s agenda.
Public entity members are charged a ½ percent participation fee in 7 out of the EIA’s 10 major programs. The EIA Board of Directors will consider eliminating this participation fee in all programs at their October 4, 2013 meeting, effective for all 2014/15 program years.
The Proposal includes background information, fiscal impact, rationale for the recommendation, and details regarding this process.
We encourage members to post their comments in support or opposition to this proposal on the Blog. By posting your comments in this manner the entire membership can view the activity taking place and allows for better discussion regarding either view.
Commenting is easy (no login required), simply complete the “Post your Comment” form on this posting. The comment form supports a significant amount of characters (5k+). If you experience any difficulty or need additional assistance please contact Gina Scott.
As always, we welcome comments and questions via e-mail/phone as well. Please contact Mike Fleming at 916-850-7300.
Hi, all.
I am one of the 7 elected Board members who represent the interests of public entities in CSAC EIA. In the 4 years I’ve been on the Board, I have lobbied for the elimination of the Public Entity Participation Fee.
As a member of the Underwriting Committee, I see the number of non-county public entity members in the EIA, but more importantly I see the very significant amount of premium dollars that public entities bring to the pool. While everyone agrees that it was gracious indeed of the CSAC Board to first allow public entities to join as members back in about 2003, public entity membership and involvement has truly mushroomed since then – and public entity participation and involvement has been shown to be a very significant benefit to the pool.
Today, the public entity members are a very integral part of the EIA. As an Underwriting Committee member, I see that public entities are paying their full share of premiums and administrative charges, and they are absorbing their full share of losses, just like the counties. For some time, a number of the Executive Committee members have felt that based solely on equity, this Fee was ripe to be eliminated. As everyone knows, however, times have been financially difficult the past few years and the Committee just felt that it was not the right time to eliminate the Fee.
At the May Underwriting Committee meeting, I again asked our chairman, Scott (who is also an Executive Committee member), if he would please ask the EC to place this issue on the agenda for a full Board meeting. There was support from our Committee members and Scott agreed to bring it forth.
As a public entity member, I am very appreciative of the EC’s decision to place this issue on the agenda for the June Board meeting. While the Agenda item was to place this Proposal before the membership for review and comment, with a “final” vote to occur at the October Board meeting, I believe that the members present at the June meeting could tell from the discussion and the sentiment that this was pretty much a de facto vote in favor of actually eliminating the Fee.
What isn’t conveyed by staff’s write-up on the website is that this item was passed by a unanimous vote of the Board members present. And, please remember that the Board is made up of 54 county members and 7 public entity members.
While I “moved” this agenda item at the Board meeting, the majority of those who spoke in favor of moving ahead with this Fee-elimination proposal were county members. There was only one county member who spoke in opposition to the item, but ultimately did not vote against it.
I also wish to say that as a public entity member I am aware this is a counties pool, and it will most likely always be a counties pool. This issue is not about public entities trying to gain ANY additional control of the EIA. Both the Board and the Executive Committee are very heavily weighted in favor of the county members. This issue is, plainly and simply, one of equity among all the members of the EIA since all members are essentially treated exactly the same as regards what matters most: contribution of premium, sharing of losses, joint-purchasing of commercial insurance (primary and excess), and payment of the EIA’s administration fees (i.e., the EIA’s cost of doing business).
Lastly, I do not mean to imply that this issue being brought forth was of my doing. This issue has come to fruition as a result of the long-term encouragement and support of a large number of people, whether Board members or not. As a public entity Board representative, I just happen to be in a time and place where I have the opportunity to set forth public entity members’ thought and feelings on the subject of eliminating this Fee and moving further toward equity among the members of this fine organization.
Respectfully,
Tom Vance
Risk Manager, City of Anaheim
Appointed representative to CSAC EIA from the Authority for California Cities Excess Liability (ACCEL)
The following letter was recieved by the EIA on July 25, 2013 from the Board of Supervisors, County of Sutter.
Letter
The referenced attachments “CSAC EIA/CPEIA Restructure, An Executive Summary” and the “Purpose and Transition Plan” are available for viewing.
Stanislaus County has been a long-standing member of the CSAC Excess Insurance Authority and agrees with Sutter County that the original intent of the CSAC EIA program was formed to serve the needs of California Counties and we oppose the elimination of the “Public Entity Participation Fee” (PEPF). Public entities have been allowed to join this program and have agreed to pay the participate fee.
The premium paid by the non-county members does increase the overall premium generated, but similarly the added member’s increase the risk of a catastrophic loss affecting the entire membership. The PEPF was presented to the County members as an incentive to allow non-count public agencies to join the program.
CSAC EIA has expanded their focus to develop and incorporate loss control programs directed to the non-county public entities. We believe that this has caused the need for additional staff and the ½ % fees that are collected from the non-county members remain appropriate.
Peggy J. Huntsinger
Assistant Risk Manager
Stanislaus County
I am also one of the 7 elected Public Entity Board Members who represent the various public entities interests to CSAC-EIA. I was also a County Board Member during the time that CSAC-EIA decided to open up the programs to public entities other than Counties. The Counties were very concerned at the time about losing influence, and also concerned that the growth and needs of the organization would increase their administrative fees. Safeguards were instated in terms of voting rights, and the fee was established.
When I joined CSAC-EIA as a public entity board member, I was aware of the fee, and soon, as a member of the Health Committee, I actively moved to delete the fee from that program, as the health program came after the original decision, the amount of the subsidy became quite significant, and employees were ending up directly paying a fee that subsidized the counties.
The 1/2% fee does NOT go to pay for additional staff or CSAC-EIA administration. It directly goes to County Risk funds that the County is free to spend how it wishes. CSAC-EIA charges administrative fees directly to the programs, and the Executive Staff has been clear that there have been economies of scale to all on those administrative costs. Rather the fee is taken from the Cities and given to the Counties coffers. Given turnover in our elected officials, it is most likely that many are simply unaware of this process.
In the end, there is no justification for continuation of the fee, other than that noone likes to get less money. I respectfully request those that are thinking of not supporting the end of the fee to put themselves in the public entities shoes. What would they think would be the correct decision if they became a public entity member rather than a County?
Lynne Margolies
Risk Manager
City of Santa Rosa
The following letter was recieved by the EIA on September 3, 2013 from the Board of Supervisors, County of El Dorado.
Letter
At its September 5, 2013 meeting, the Executive Committee revisited the topic of the elimination of the public entity fee. After considering the comments posted on the blog, as well as those shared at the June Board of Directors’ meeting, the Committee reaffirmed its support of the elimination of the fee. We look forward to hearing from all Board Members during the discussion and vote at the October Board of Directors Meeting.
Barbara Lubben
President,
CSAC-EIA
All:
We are sending to each County member of the Board of Directors our response to the CSAC EIA’s proposal to eliminate the Public Entity Participation Fee. Attached is the County of Sacramento’s response in PDF. We have also provided a copy of Sutter County’s response on the issue for reference. It is hoped that you will take the time to read and consider this issue. Thank you.
Paul Hight
Property & Liability Insurance Supervisor
County of Sacramento
Letter
To all:
The County of Marin supports the position taken and expressed by both Sutter and Sacramento Counties: we vote against the proposal to eliminate Public Entity Participation Fees.
Karol Hosking, ARM
Risk Manager
I too am in agreement with Sutter and Sacramento regarding the public entity fees.
Thank you.
Janet McKinley, ARM
Risk Manager
County of Santa Cruz
The Colusa County Board of Supervisors voted to support the elimination of the fee, we believe that the public agencies are an important part of the CSAC-EIA programs and that they should be treated with the fairness and respect that they have earned as important members of our organization.
Mark D. Marshall, Supervisor
County of Colusa
The following letter was recieved by the EIA on September 30, 2013 from LAWCX.
Letter
The following letter was recieved by the EIA on September 30, 2013 from CHWCA.
Letter
The following letter was recieved by the EIA on October 1, 2013 from BCJPIA.
Letter