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The Central Basin Municipal Water District said Wednesday it is looking at “alternatives” in the face of being tossed out of the state’s largest insurance pool for water districts.
Central Baisn also said that it has responded to several serious concerns voiced by the Association of California Water Agencies Joint Powers Insurance Authority, which has threatened to cut off its insurance.
This is despite the insistence by JPIA’s CEO on Monday that he has gotten no response to a list of demands issued to Central Basin urging the water district to get its act together.
Not only has Central Basin responded to those demands, but it is actively looking at ways to fix problems pointed out by JPIA, and it’s looking for insurance alternatives, a Central Basin spokesman said.
“We have been in communication regarding ACWA JPIA’s proposal,” said Central Basin spokesman Joseph Legaspi. “We’ve been keeping them in the loop.”
Currently Central Basin staff is working to gather information “to inform directors, who wanted to see what alternatives exist out there,” Legaspi said.
Legaspi said Central Basin has hired Torrance-based broker Keenan & Associates to explore those alternatives.
Central Basin staff plans to present those alternatives to the directors prior to JPIA’s May 5 board meeting in Monterey, where JPIA board members have been presented with an agenda item to consider cutting off Central Basin’s insurance.
The controversy-riddled water district’s problems have been noticeable enough to garner coverage local media outlets. It has also incurred a high amount of workers’ compensation claims and its directors are involved in several lawsuits.
Walter A. Sells, JPIA’s chief executive officer, and his staff had asked a contingent from Central Basin to visit, and during that visit the issues were laid on the table.
Like many water districts in the insurance pool, Central Basin is insured through JPIA insurance pools for employment liability, property and workers’ compensation.
JPIA is self-staffed. Its liability program is a pooled program with a $2 million retention and $60 million in limits, the workers’ comp program is also pooled with a $2 million retention and statutory limits and the property program is pooled with a $100,000 retention and $100 million limits.
Sells has been called in on several lawsuits involving Central Basin’s various directors, and the entity’s workers’ comp claims have been mounting, he said.
“I’ve paid out more in losses than I’ve collected in premiums from them,” he said of Central Basin track record in the workers’ comp pool.
For the past five years in the liability program Central Basin’s premiums were $303,249 paid vs. $331,699 in losses, and its workers’ comp premiums were $84,759 vs. $384,114 in losses, according to JPIA.
However, according to Legaspi , those workers’ comp losses are based off of only two claims.
He said he couldn’t discuss the claims, but that Central Basin saw no workers’ comp claims in the years prior to those claims, and the organization even had their premiums lowered because of a good track record.
“It really is two claims as opposed to a bunch of different ones,” he said.
JPIA uses payroll to rank its members in terms of size. Central Basin comes in about the middle of the pack of the authority’s 290 water districts with roughly 30 employees.
Central Basin is a public agency based in Commerce that purchases imported water from the Metropolitan Water District of Southern California. There are reportedly 24 cities in Central Basin’s service area.
The authority demands were laid out in a letter that includes paying for a negotiated settlement in the sexual harassment suit, requiring Central Basin to reimburse the authority for legal fees on another case and requiring Central Basin to agree to a six-month suspension of its EPL coverage.
Central Basin must also withdraw from the authority’s workers’ comp program, though it will be eligible to reapply within one year.
JPIA is also asking that Central Basin designate an existing employee with safety and risk management responsibilities to work with an authority risk consultant.
Legaspi wouldn’t say what options Central Baisn is seeking, only that they were actively seeking them. He also didn’t comment on the ongoing lawsuits, other than that they were working toward resolving those.
See related story:
California Water Authority Mum Over Possible Loss of Insurance