Vacaville council discusses CIP, liability self-insurance

The Vacaville City Council heard an update Tuesday on the status of the Capital Improvement Program and also discussed the future of Self-Insured Retention through the California Joint Powers Risk Management Authority.

Public Works Director Brian Oxley and CIP Engineering Manager Dan Sutton offered the presentation. Oxley said the plan helps the city create and track infrastructure projects, identify funding sources and implement a schedule. Currently, Oxley said, the city has 214 ongoing CIP projects totaling $478 million in funding.

“The program is an ongoing plan in process that improves key elements, such as determining infrastructure and facility needs of a community and prioritizing those needs, which are evaluated annually,” he said.

Through the capital improvement budget process, Oxley said, various funding sources can be identified, requested and ultimately approved by the city council. The council approves each project, he said, and the budget is adopted annually and can be adjusted based on council priorities.

“These projects usually take the form of large-scale physical improvements such as buildings, streets, parks, utilities, storm drainage facilities, saftey improvements and other types of infrastructure that benefit the community,” Oxley said.

Departments generally serve as a project sponsor, he said, and project managers are dependent on the nature of the infrastructure project. Planning studies are managed by the sponsoring department, allowing the most relevant team to scope and review the project.

Oxley said the city uses general fund money, Measure M funds, Development Impact Fees, Utilities rehabilitation funds, federal and state grants and the gas tax on these projects.

“Projects are typically financed through a combination of these primary funding sources,” he said.

Planning and preliminary engineering can take from six months to a year each on these projects, Oxley said, as well as right of way and environmental clearance. At that point, sometimes four years into the CIP process, the project can be designed, bid on and awarded, which can take one to two years. Finally, he said, construction management and inspection can take one to three years, and council acceptance and project close-outs can take 3-6 months.

“The key is to be shovel-ready when there is grant funding to come in,” Mayor John Carli said.

Staff then asked the council to establish an SIR level for the upcoming year, essentially deciding how much money the city will self-insure itself with next fiscal year. Vacaville became a CJPRMA founding member city in 1986 and has been in the pool with other California municipalities ever since.

“CJPRMA provides comprehensive, stable, and affordable excess liability coverage and risk management services,” the city’s staff report on the item reads. “As of the current program year, CJPRMA provides $40 million in excess liability coverage to its member agencies. Members collectively share risk above each member’s individual retained limit, thereby achieving economies of scale and protecting individual agencies from catastrophic losses.”

Staff gave the council four options for next year’s SIR: leave it at the current $750,000 or raise it to $1 million, $1.25 million or $1.5 million. The city has filed 26 claims over the last 11 years, and exceeded the SIR in three of those years.

While city councilmembers expressed interest in eventual cost savings at higher SIR levels, City Attorney Andria Borba recommended that the council wait a few years before applying those savings to other needs unless the city has a large claim filed against it. Carli praised staff attempts to mitigate risk over the years and made a motion to raise the SIR to $1 million, which received a second from Vice Mayor Michael Silva. The motion passed 6-1, with Councilmember Roy Stockton voting no.

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