The City Council voted last week to acquire insurance coverage through a 26-city insurance pool, terminating policies obtained through brokerage firms co-owned by Mayor Bob Kuhn and a business partner.
With its 3-0 vote to place worker's compensation and property insurance coverage with the Independent Cities Risk Management Authority, the council reversed an earlier decision to seek bids from different brokers.
Finance Director Larry Schroeder already had requested bids from Independent Cities and Glendale Insurance Agency Inc. when the council voted May 23 to open the process to other brokers.
The policies expired today, but since there was just over a month between the May vote and expiration, the council had decided to continue with the current brokers and get new bids effective in October.
But the council voted Tuesday to go with the risk pool before any other bid requests were sent out to brokers. Councilwoman Molly MacLeod said the city would be penalized if it switched insurance carriers in October, the middle of a coverage year.
Schroeder said the pool's rates are hard to beat. He likened them to volume discounts because several cities are seeking coverage together. Besides, he said, it takes a long time to get new quotes.
Councilman David Bodley, who had made the motion to put the insurance out to bid, was on vacation and absent from Tuesday's meeting.
The city's insurance practices and Kuhn's involvement are under review by the district attorney's office. The California Fair Political Practices Commission found no evidence of impropriety after an investigation in May.
Kuhn, who co-owns Alandale Insurance Agency, a broker for the city since the 1960s, abstained from voting in May and on Tuesday.
A Parks and Recreation Department policy brokered by Alandale will be canceled and placed with the insurance pool beginning today. Schroeder did not seek any new quotes from Alandale "to avoid any possible conflict of interest," he said.
The city's policies, covering workers compensation and property, have been brokered through Glendale Insurance Agency Inc. Glendale is co-owned by Cleve Traughber, a co-owner of Alandale.
But the 26-city pool submitted lower quotes to the city last month and will be taking over those coverages, also effective today. Schroeder said three other firms had expressed an interest in brokering the policies.
Since 1986, the bulk of the city's insurance has been acquired through the pool.