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Mr. Randy Johnsen, Assistant to the City Manager, referred to the report and Exhibit B, stating
<br />the cost of Reinsurance Premium is estimated at $8,000; Administrative Fee of $8,500; and an
<br />amount of $80,500 for losses estimated at 20/0 of the premium, which would represent a savings
<br />to the City of $306,000 annually.
<br />Mr. Johnsen also referred to Exhibit D, which indicates an illustration of computation of cash
<br />loss payments under self-insurance and the funds involved.
<br />Discussion then followed regarding the reinsurance premium costs, loss claims and payments,
<br />injuries, and benefits paid.
<br />Councilman Hayes questioned a portion regarding disability in the report on Page 2, paragraph 4,
<br />and asked how this compared to the current Workmens Compensation Program.
<br />Mr. Johnsen stated there is no difference as these benefits are determined by State law and
<br />would have to be followed in any regard.
<br />Additional discussion was held regarding disability claims and payments, and benefits to the
<br />employee.
<br />Councilman Rehrer said if the City does decide to go for the self-insurance, how much money
<br />will the City be spending.
<br />Mr. Johnsen said the costs involved will be $8,000 for Reinsurance Premium, $8,500 for Adminis-
<br />trative Fee, plus- the amount of money that will be invested in a revolving checking account,
<br />for a total amount of approximately $80,000 in one year.
<br />Mr. Vaughn referred to Exhibit C of the report showing the cash flow under reinsured self-
<br />insurance and the cost projection from 1975 to 1979.
<br />Councilwoman Spragins stated after hearing the presentation this evening, she feels this is
<br />the only way the City can go, and enter into a self-insurance program.
<br />Councilman Hayes moved that the City Council authorize the Mayor to sign an agreement with
<br />R. L. Kautz and Company to provide administrative services relating to Workmens Compensation
<br />Insurance to be effective January 6, 1975.
<br />Motion seconded by Councilwoman Spragins and unanimously passed.
<br />Community Development Act of 1974.
<br />Planning Director George Williams advised that he and Mr. Randy Johnsen have talked with
<br />approximately eight different consultants regarding the Community Development Act, and this
<br />evening Staff has a recommendation for a consultant, who is here to address the Council members.
<br />Mr. Williams continued that a Mr. Ed Haworth, of Haworth, Anderson and Lafer, a Consulting
<br />Firm, will make a presentation to the City Council, as he is very familiar with the Community
<br />Development Act of 1974, and has been involved in this program with other cities.
<br />Mr. Haworth spoke to the Council members stating the Community Development Act gives the City
<br />the opportunity, as a local community, to provide a program that sets the goals and objectives
<br />of that city, and provides decent housing and suitable living environment and expanding econo-
<br />mic opportunities, principally for persons of low and moderate income.
<br />Mr. Haworth explained that Colton is known as a "Hold Harmless" city, principally because of
<br />its experience with Federal monies coming into the city, and the City of Colton is eligible
<br />for 1.09? million dollars in entitlement funds over a six year period.
<br />Mr. Haworth continued explaining the uses for these funds and what the City might do with the
<br />allocated monies, and other aspects of the Community Development Act.
<br />Mr. Haworth discussed the procedure of filing the application with HUD for the proposed funds,
<br />which must be completed and sent in before March 13
<br />1975, which would entail a one year program,
<br />three year plan, and would consist o f 10 percent ofthe first year's entitlement for this pur-
<br />pose.
<br />Mr. Haworth stated that in preparation of an application, one of the requirements is that the
<br />City hold at least two public hearings with citizen participation and input into the use of the
<br />propos ed funds
<br />Assistant City Attorney Edwards asked Mr. Haworth what the actual expenses to the City will be
<br />in applying for these funds initially.
<br />Mr. Haworth stated that they have set up a time -materials expenditure not to exceed $18,000,
<br />and the guarantee that the finished product will be acceptable to HUD.
<br />Assistant City Attorney Edwards asked approximately when would the City of Colton be receiving
<br />the first insto1lment of the monies.
<br />Mr. Haworth stated he believed that would be in approximately June or July. Mr. Haworth
<br />advised that the City will receive a Letter of Credit from HUD for the first portion of monies
<br />to be received.
<br />Assistant City Attorney Edwards asked if this Letter of Credit from HUD is assured or not.
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