Title
Human Resources Department, Risk Management Division, recommending the Board authorize the Director of Human Resources to sign the attached PRISM Joint Powers Authority agreement and Coverage Memorandum of Understandings.
FUNDING: Risk Funds.
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DISCUSSION / BACKGROUND
PRISM was formed in 1979 by the California State Association of Counties (CSAC) for and by the California counties. Today, 54 of California's 58 counties participate in one or more PRISM programs. In 2001, PRISM expanded its offerings to other California public agencies. At this point, over 70% of California's cities participate in one or more PRISM programs. In addition, a variety of special districts, school districts, and JPAs also participate in PRISM Programs. PRISM is recognized as the largest public entity property and casualty pool in the United States.
After 25 years of public entity members participating in PRISM, the PRISM members have proposed updating the Board of Directors' composition to recognize the partnership between the counties and the public entity members. At present, the PRISM Board of Directors is composed of 54 county members (all of whom hold voting positions on the Board of Directors) and 7 public entity voting spots, for a total of 61 voting members. There are also 3 alternates for the public entity votes, but they only fill the 7 voting spots, not add to them. The proposal is to add 10 voting public entity board seats, bringing the total to 17 (with 3 additional alternates), instead of 7 (with 3 additional alternates). This results in a total of 71 Board of Directors voting seats. Under this proposal, the counties will hold 76% of the Board of Directors’ seats.
In addition, the PRISM members have proposed updating the composition of the Executive Committee, which oversees the organization's day-to-day activities. Currently, the Executive Committee has 11 members, and the proposal is to increase the membership to 13, with 2 additional alternates. The Executive Committee members are elected by the Board of Directors. The other proposed changes are updates to the Agreement that reflect the organization's current operations and remove the word "insurance" from the document, since the organization is a pool, not insurance.
These proposed changes were discussed with PRISM’s Executive Committee and various Committee Chairs at a strategic planning retreat in November 2022. The discussion largely centered on the idea that public entities have been members of the organization since 2001, have participated in the organization's governance by serving on PRISM Committees, and that approximately ½ of the contributions made to PRISM each year are from public entity members, while the other ½ are from counties. The group felt that the organization should reconsider the size and function of the Board of Directors, including what it delegates to others and whether to eliminate the distinction between counties and public entity members in the governance process. The composition of the Executive Committee was also discussed.
Thereafter, the Executive Committee tasked the Governance Sub-Committee with reviewing the JPA Agreement and proposing amendments to expand governance opportunities for public entity members and their participation on the Executive Committee. The Governance Sub-Committee did so, and those proposed changes were then reviewed by the Executive Committee and the Board of Directors. PRISM has also made some other amendments to the Agreement to “clean up” the document to coincide with current practices and the future vision of the organization and to remove the word “insurance” from the Agreement since the JPA is a risk-sharing pool that provides excess coverage for members, and risk-sharing pools are not “insurance” under the law.
In addition, the PRISM Executive Committee recently approved a significant structural change to the way PRISM Programs are categorized. Historically, “major programs” included programs with pooling aspects and required execution of the PRISM Joint Powers Agreement and the specific Program Memorandum of Understanding (MOU). “Miscellaneous Programs” were group-purchased programs with no risk sharing and which did not require execution of any documents. The Executive Committee’s recent action was to categorize all PRISM Programs the same way, which will now require members in the former Miscellaneous Programs to execute the PRISM Joint Powers Agreement and the specific Program MOU, specifically, the Crime, Cyber, Pollution, Optional Excess Liability, and Catastrophic Inmate Medical Programs.
ALTERNATIVES
Not signing the JPA would prevent the County from binding coverage with PRISM. Therefore, there are no recommended alternatives.
PRIOR BOARD ACTION
06/09/2020 Legistar file 20-0676 - JPA Amendment
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel
CAO RECOMMENDATION
Approve as recommended.
FINANCIAL IMPACT
There is no financial impact to approving the amendment to the PRISM JPA agreement.
CLERK OF THE BOARD FOLLOW UP ACTIONS
N/A
STRATEGIC PLAN COMPONENT
Strategic Innovation: Improve External and Internal Service Delivery in a more Convenient and Efficient Way
CONTACT
Joseph Carruesco, Director of Human Resources