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GRF Asks Elected Officials For Help With Skyrocketing Property Insurance Costs

By Sam Richards

Staff writer

 

GRF officials said last week their battle to cope with skyrocketing property insurance costs continues, and that they’ve turned to state and regional elected officials to support legislation to help ease the pain.

At an Oct. 26 GRF Board meeting discussion about the increased costs and decreased availability of property insurance, Board President Dwight Walker said Rossmoor leaders have approached politicians for help in addressing this crisis, including for support of a federal bill, HR 3777, that would make housing cooperatives, homeowners associations (“Mutuals,” in Rossmoor parlance) eligible for the same federal FEMA disaster assistance other American homeowners are eligible to receive.

Among the electeds with whom Rossmoor leaders have met include state Sen. Steve Glazer and state Rep. Rebecca Bauer Kahan, both from Orinda; Contra Costa County Supervisor Candace Andersen; and Walnut Creek City Councilwoman Cindy Darling. Representatives of U.S. Sen. Alex Padilla have also met with Rossmoor leaders, as has state Insurance Commissioner Ricardo Lara. A meeting with U.S. Rep. Mark DeSaulnier of Walnut Creek, or members of his staff, is also being explored.

Property insurance premiums are being driven sky-high by payouts following disasters all over the world, resulting in the money supply shrinking worldwide. In turn, there is less money available for the “reinsurance” companies to which insurance firms transfer risk. Reinsurance companies have also lost money in recent years.

“We don’t see the problem going away,” said Herma Lichtenstein, a resident of Mutual 70 and the chair of Rossmoor’s Insurance Task Force. She said a master policy premium increase in Rossmoor of anywhere from 40% to 70% can be expected next year. Each Mutual obtains its own property insurance policy, as well.

She said Rossmoor has already taken significant steps to improve fire resilience, and thus keep rate increases as low as possible. They include the recent formation of a FireWise residents’ group, to organize volunteer efforts and resident education on fire safety and work with the Contra Costa County Fire Protection District on a grant-funded program to create a vegetation fire break around Rossmoor.

As it stands, Lichtenstein said, Rossmoor, through its broker A.J. Gallagher, can only obtain about $1 billion worth of insurance for its master policy, even though it would cost an estimated $1.47 billion to replace Rossmoor should it all be lost in a fire or other disaster.

Councilwoman Darling told the Board Thursday she is also interested in the idea of local programs that could help pay to make individual homes more “fire hardened” – with modernized wiring, improved insulation and other upgrades – and set aside money for them.

 

Jenark’s replacement

GRF Chief Financial Officer Tom Hand told the Board on Thursday that two software systems – NetSuite Enterprise Resource Planning (ERP) software and Optimus property tax calculation software – are being eyed as replacements for the current 20-year-old Jenark software system.

The Board last year approved spending up to $2.5 million to replace the current software with a newer, better system to cover accounting for GRF and the Mutuals, MOD operations and myriad other GRF functions.

Hand said the current Jenark system was created pre-internet, meaning it has little connectivity with internet-based processes. A more modern system, with abundant connectivity possibilities, could speed up several existing tasks (including work order requests) and make new ones possible (like paying GRF bills online).

“This will be like going from stone tablets to modern-day technology,” Hand told the Board.

The NetSuite and Optimus software hasn’t been purchased yet, with some product research still underway. The hope is for a final agreement to be approved no later than January, with the new system in operation by mid-2024, Hand said.

2024 MOD budget

The Board last Thursday also voted unanimously to approve a $13.06 million Mutual Operations Department (MOD). That figure represents a 1.9% increase over the 2023 MOD budget. MOD’s operation costs, Walker said, are paid for by Mutuals, and not by GRF.

End of GRF pension

 In another unanimous vote, the Board approved a plan to end GRF’S pension system, an action expected to save GRF between $5 million and $6 million over the next 10 years (see related story in this week’s News). No new GRF hires have entered the pension program since 2009, but approximately 30 current employees hired

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