Southern California City Taking Steps to Keep Its Insurance

La Puente, Calif. may be on the road to keeping its insurance, according to a statewide insurance authority.

The Southern California city was recently told that it could lose its insurance if city officials and staff don’t start getting their act together.

The California Joint Powers Insurance Authority has issued a warning to the city, with a caution that it may face a similar situation that another Southern California city found itself in. In 2009, after failing to heed a warning from the CJPIA, Maywood was forced to disband its police department and lay off almost all employees because it lost insurance through the authority.

La Puente is faced with loosing liability and workers compensation.

The CJPIA told La Puente that it must meet certain conditions by the end of 2012 or it could lose its insurance. Among the conditions, the city of 40,000 must hire a permanent city manager, give notice of any harassment and retaliation complaints and send council members to etiquette classes to learn how to get along.

Step No. 1 is complete.

“I think the progress is now they’ve hired a city manager,” said Bob May, senior risk consultant with CJPIA.

The city has hired Bret Plumlee, a former assistant city manager for La Quinta. Plumlee and CPJIA are meeting today to lay the groundwork that may allow the city to keep its insurance, May said.

“He’s been around a while,” May said, adding, “A lot of his background’s been in finance.”

Plumlee has also served as director of administrative services in El Segundo and assistant finance director in La Mirada.

CJPIA is meeting with Plumlee today to set benchmarks and timetables to accomplish the goals laid out in CJPIA’s performance improvement plan for La Puente. A meeting between the two entities is step No. 2 in the seven-point plain.

Other steps in the plan are:

• Hire a full-time administrative services director;
• Agree to submit to CJPIA any proposed adverse personnel action before it is administered;
• Meet quarterly with the PJIA;
• Notify the PJIA immediately of any complaints that involve allegations of harassment, discrimination or retaliation;
• City councilmembers must complete training on council relations and cooperation provided by PJIA.

May said the biggest hurdle has been hiring a permanent city manager, which the city completed months past the deadline set by PJIA.

“They were in the process of hiring a city manager, but it just took them a while to get that together,” May said. “The rest of the stuff is really going to be work in progress kind of things.”

But, he added, “The proof’s in the pudding.”

According to May, the warning to La Puente is part the authority’s “healthy members program” criteria, which outlines what members of the authority should be doing to stay within risk management guidelines.

“To be a member of our pool you have to do certain things to maintain sound risk management practices and principals,” May said.

La Puente had made headlines in local newspapers for governance decisions, the lack of stabilization in the city manager position and for lacking key management staff.

According to CJPIA, La Puente’s annual contribution for the 2011-2012 insurance period is $279,261 for liability and workers’ compensation, with liability being the lion’s share of that payment.

The CJPIA has roughly 122 members in its insurance pool, mostly cities, special districts and other JPA’s.

Topics California