The difference between the amount of a settlement or judgement and public agency  liability coverage most often can’t be drawn from reserves without threatening an  agency’s long-term financial sustainability. Developing a payment strategy for filing the  gap will be essential. This session will discuss the strengths and weaknesses of different  payment strategies for different agencies including receiverships and emergency  apportionments, tax increases, and bond issuance. Panelists will address the challenging  constitutional, statutory, and procedural hurdles and how they may be overcome to  form a viable payment strategy.

This session will explain how public agencies have insured against their liability claims through risk-pools – pooling funds and sharing risk across many agencies. California’s  risk-pools did not anticipate the costs of retroactive claims associated with the change in  the statute of limitations for childhood assaults. This has led to a huge liquidity gap for  the onslaught of new claims, among other coverage limitations. Panelists will address the state of the risk-pool landscape, specific limitations of risk pools to settle claims individually and collectively, and their expectations for a massive cost gap that will be absorbed by the general funds of all pool participants.

This session will discuss the magnitude of claims, those agencies directly impacted, and  the limitations on our ability to estimate the full scope of liability. Panelists will frame our understanding of the total liability versus the general fund capacity of local  agencies, the potential effects on public services, and the current response strategy of  local leadership. The session will also discuss the direct and indirect ratings implications,  potential risks of financial contagion, and the impact on the cost of financing.

The cost of victim compensation for past crimes against children resulting from AB 218 is sobering. Estimates of the direct liability of K-14 schools are more than $3 billion. Counties, cities, districts and non-profit service providers are faced with exposure that is expected to exceed the K-14 liability many times over. How will agencies already challenged with structural imbalances pay for the deluge of judgements and settlements? This program will bring into focus the magnitude of the financial storm facing agencies across California, and it will also examine the condition of the insurance safety net that is recognized as the first line of fiscal defense. Lastly, experienced issuers and market professionals will explore the public finance strategies that agencies may use to overcome a fiscal challenge that may appear insurmountable.