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Administration Committee

The main advantages to having this scheme are:

1) Reduced costs, assuming accurage estimates (no built in profit).
2) Increased coverage, for us the maximum coverage would increase from the

present $2 million to $5 million.

The main disadvantages are:

1) Definitive costs are not known prior to signing up- I am very concerned
and hesitant on recommending based on this fact alone. The difference
between this and taking out normal insurance is that with normal insurace
you know before you take out the policy what the costs are and you make your
decision based on this information. With the proposed plan we have an estimate
that if accurate would result in considerable savings BUT no guarantees. It is

not insurance we are buying, it is a three year membership in an association
(co-cp) whereby we promise to pay costs as levied against us.

The size and number of municipalities signing up has a definite effect on our
exposure. On talking with UBCM I have been told that some large muncipalities
(Vancouver and Surrey) will quite probably not be participating, this may have
an effect on us if there are any shortfalls in levies. Lf as expected (page 18)

there is a 6024 participation then the City would be responsible for roughly 2.25%
(30,000/1,339,000) of any shortage in levies. This means that 1£ they are short
$1,000,000 on the estimated costs then we would have to ante up an additional
$22,500 as our share of the costs. However, i4f municipalities with combined
population of 1,000,000 sign up chen our share of any shortage increases to 34.

will be run by an elected board of 15 members which is outlined
(article 3.05), my concern is that the poard will be
dominated by members representing smaller municipalities and that eventually
rates will be amended to the benefit of smaller municipalities. (eg our
percapita costs is estimated at $2.19, a municipality of 5,000 population is —
looking at $3.35 per capita and 1,000 population is looking at $5.00 per capita).

The association
on page 37 of the report