TO: Committee of the Whole - Finance, Administration, and Communications
FROM: Mayor Angela Birney
DEPARTMENT DIRECTOR CONTACT(S):
|
Finance |
Kelley Cochran |
425-556-2748 |
DEPARTMENT STAFF:
|
Finance |
Kelly Hsi |
Risk Program Manager |
|
Finance |
Adam O’Sullivan |
Finance Manager |
|
Finance |
Haritha Narra |
Deputy Finance Director |
TITLE:
title
Adoption of a Resolution to Accept Membership in the Washington Cities Insurance Authority (WCIA) Through an Interlocal Agreement.
a. Resolution No. XXXX: A Resolution of the City Council of the City of Redmond, Washington, Approving Membership in the Washington Cities Insurance Authority (WCIA) and the Bylaws and Interlocal Agreement of the WCIA
OVERVIEW STATEMENT:
recommendation
The City engaged in pre-membership with Washington Cities Insurance Authority (WCIA) and would like to pursue full membership. WCIA is a member-governed municipal risk pool serving over 165 public entities in Washington State and has over $220M in assets. Joining WCIA would replace the City’s current carrier-based liability insurance structure with comprehensive coverage, dedicated claims management, and proactive risk management services with an emphasis on loss prevention, training, and partnership. WCIA membership would be effective December 1, 2026.
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☒ Additional Background Information/Description of Proposal Attached
REQUESTED ACTION:
☐ Receive Information ☒ Provide Direction ☐ Approve
REQUEST RATIONALE:
• Relevant Plans/Policies:
N/A
• Required:
Council is required to approve an interlocal agreement and its appendix 172-26 (Attachment A) as part of the City joining WCIA.
• Council Request:
N/A
• Other Key Facts:
N/A
OUTCOMES:
During the pre-membership period, city staff evaluated WCIA’s service performance in the areas outlined below. This assessment compared WCIA’s responsiveness, support, pre-litigation costs, and resources against the City’s current multi-entity insurance structure administered through CIAW, Clear Risk Solutions, and Leavitt Group.
Key findings include:
• Response Time: Under the City’s current model, initial responses to claims inquiries, contract reviews, and risk consultations can range from several days to multiple weeks. During the pre-membership evaluation, WCIA had a 100% response rate within one business day.
• Risk Management Support: WCIA offered readily accessible consultations, proactive review of operational policies and contracts, and immediate access to risk prevention tools. As part of the pre-membership evaluation, city staff met with WCIA to review payroll-related risks and discuss best practices for addressing current concerns. WCIA provided preliminary guidance on how the city could structure a potential forensic audit, including helping to define the audit scope and recommending which components to include. WCIA also provided guidance on elevated risks within Public Works’ Maintenance and Operations Center (MOC). WCIA highlighted resources that could support the City’s efforts to develop a stronger safety program at the MOC. WCIA maintains a comprehensive library of resources, trainings, and best-practice guidance designed specifically for municipal operations. These resources can assist the City in building out safety procedures, creating standard operating procedures (SOPs), and policy development.
• Pre-Litigation Cost Savings: Under its current structure, when the City receives a demand or claim that requires legal analysis, the City must engage outside counsel directly. A typical pre-litigation risk analysis, which includes reviewing the claim file, document and evidence evaluation, preliminary risk assessment, and initial defense strategy, can cost between $5,000 and $10,000 per matter. WCIA provides in-house pre-defense legal assistance at no additional cost to members. WCIA conducts initial claim review and provides analysis before any referral to outside counsel is needed. As a result, joining WCIA is expected to reduce the City’s early legal expenditures related to pre-litigation assessment and initial defense preparation.
• Adjuster Assignment: The current model often takes several weeks, or longer, to assign an adjuster. WCIA demonstrated materially faster coordination with both in-house adjusters and external adjusters available for immediate assignment and early case engagement.
• Claims Accessibility: Under the City’s existing insurance structure, coordination must go through multiple external entities, contributing to communication delays. WCIA provided direct access to municipal-focused claims personnel and litigation counsel, resulting in more timely review, clearer direction, and improved communication flow.
• Training Resources & Liability Resource Manual: WCIA’s training catalog was directly accessible during pre-membership, offering a broader range of municipal-focused classes, workshops, and staff development courses. WCIA’s Liability Resource Manual provided extensive policy templates and contract examples tailored to Washington municipal operations. These resources help provide consistency in contract language, strengthen internal policy development, and support departments with practical, ready-to-use guidance.
Overall, the pre-membership evaluation demonstrated that WCIA delivers substantially faster response times, quicker adjuster engagement for improved customer service with external claims, more direct access to municipal claims expertise, expanded risk-management resources, and savings in pre-litigation legal expenses. These improvements align with the City’s need for timely claims oversight, enhanced financial safeguards, and strategic risk management that supports our growing city.
COMMUNITY/STAKEHOLDER OUTREACH AND INVOLVEMENT:
• Timeline (previous or planned):
2025-2026
• Outreach Methods and Results:
o Consulted and met with the Risk Managers at the cities of Bothell, Issaquah, and Sammamish
o Throughout the evaluation and pre-membership period, finance staff met with WCIA leadership and staff several times to review city needs, examine WCIA’s services, and assess alignment with the City’s operational and risk-management priorities
o Participated in WCIA’s pre-membership offerings
• Feedback Summary:
Peer cities confirm strong WCIA support and a collaborative approach with members to reduce risk. The City’s pre-membership experience aligned with peer cities’ experience with WCIA and provided confidence in pursuing full membership.
BUDGET IMPACT:
Total Cost:
$2,796,706 effective December 1, 2026, for the first year of membership. The City is committed to a three-year period with annual renewals. Increases are anticipated during renewal depending on market conditions and loss run history.
For comparison, the City’s current insurance structure is $2,824,537 per year. A cost comparison between the coverages (current structure vs. proposed WCIA) is available in Attachment F.
Approved in current biennial budget: ☒ Yes ☐ No ☐ N/A
Budget Offer Number:
297 (Fiscal Accountability)
Budget Priority:
Strategic & Responsive
Other budget impacts or additional costs: ☐ Yes ☐ No ☒ N/A
If yes, explain:
N/A
Funding source(s):
Risk Fund
Budget/Funding Constraints:
N/A
☐ Additional budget details attached
COUNCIL REVIEW:
Previous Contact(s)
|
Date |
Meeting |
Requested Action |
|
7/14/2026 |
Committee of the Whole - Finance, Administration, and Communications |
Provide Direction |
|
8/3/2026 |
Business Meeting |
Approve |
Proposed Upcoming Contact(s)
|
Date |
Meeting |
Requested Action |
|
10/20/2026 |
Business Meeting |
Approve |
Time Constraints:
The City’s current insurance policies expire November 30, 2026. The City would like to enter into full membership with WCIA effective December 1, 2026. Council’s approval in October 2026 will allow for adequate time for the formal onboarding process, and to avoid renewal conflicts.
ANTICIPATED RESULT IF NOT APPROVED:
If joining WCIA is not approved, the City would continue with its current property and liability coverages and maintain its existing relationships with CIAW, Clear Risk Solutions, and the Leavitt Group. While this structure has supported the City in past years, the resources available through this multi-entity arrangement have become increasingly limited relative to the City’s growing risk exposure, rising claims activity, and expanding legal demands. Washington’s lack of caps on compensatory damages further heightens the potential financial impact of complex claims, making it essential for the City to have comprehensive and fully integrated support. Remaining with the current model would not provide the same level of coordinated claims management, proactive risk guidance, or municipal governance that a consolidated risk pool such as WCIA offers and may make it more difficult to keep pace with the City’s evolving needs over time.
In addition, if the City does not move forward with joining WCIA, the City will need to proceed with its existing renewal cycle with CIAW and outside insurance carriers and prepare comprehensive renewal applications and underwriting submissions on a significantly condensed timeline prior to the December 1, 2026, policy renewal date. This process would be highly rushed and operationally challenging, limiting the City’s ability to fully review options, negotiate effectively, or meaningfully address risk exposures in advance of renewal. This is not an ideal position for the City and may increase the risk of unfavorable renewal outcomes.
ATTACHMENTS:
Attachment A: Resolution
Attachment B: Appendix 172-26 Redmond (to be signed for full membership in WCIA)
Attachment C: WCIA Interlocal Agreement (effective upon approval of joining WCIA)
Attachment D: List of WCIA Members
Attachment E: WCIA Membership Overview to Redmond
Attachment F: Cost Comparison - Current Insurance Structure vs. WCIA
Attachment G: Council Approval Timeline