City changes tact, set to join regional insurance pool
By Joel Wittnebel/The Oshawa Express
The pool was a little too small for the City of Oshawa 16 years ago, but things have grown, and now the city is looking to jump in.
In a recently released report, staff are recommending the city join the Durham Municipal Insurance Pool (DMIP), and move away from the traditional model of coverage currently being used.
By joining the pool, the city will have increased flexibility with its insurance coverage, greater control of the administrative aspects and more stable premiums, the report states.
Formed in 2000, Oshawa and Pickering were the only municipalities in Durham not wishing to take part, with a 2005 report noting that studies “did not find compelling arguments for the city to join.”
Now, according to Councillor Nancy Diamond, with the growth in the region over the last several years, it is now a much more balanced playing field.
“At that time, Oshawa was carrying such a major portion of all the bills,” she says, noting that things have now changed.
“There is a respectful, balanced perspective now at the region because there is much more balance in the size of the communities.”
Put simply, the insurance pool allows cities to share the multitude of risks municipalities face, while at the same time sharing in any potential benefits, such as a dividend. This is something the insurance pool has been successful at doing, netting members a $1.7-million surplus in the last year, an increase from $1.5 million in 2014.
Following a recommendation last year that the possibility of joining be analyzed, staff looked at the options and, according to Stephanie Sinnott, the city’s treasurer, it now makes sense.
With the DMIP, the city will be looking at a premium of a little more than $1.211 million, only slightly more than its current premium of $1.210 million with Jardine Lloyd Thompson.
Despite the increase, Sinnott says over time the benefits will start to show.
“As the city builds experience with the pool, the rate is expected to come down. Therefore, in the longer term, there will be annual savings,” she says.
“Joining the pool will also benefit the city by protecting against the unpredictable ups and downs of the traditional insurance markets.”
Due to the DMIP’s coverage cycle starting in July of each year, the city will not be able to start their coverage until then. For the interim, a single-sourced contract to the Frank Cowan Company in the amount of $560,336 will insure the city for the first six months of 2017.
Cowan, the city’s former insurance provider, is also the insurer for the DMIP. According to Sinnott, the six-month contract will result in a more “efficient transition” into the the regional plan. Insurance is also an exempt service under the city’s purchasing bylaw, not requiring a request for proposals.