Clackamas River Water’s insurance will cost ratepayers $81,500 more per year starting in January after the Special Districts Association of Oregon declined to renew coverage in 2013 for the regional water service that has frequently headed to court.

CRW’s Board of Commissioners authorized, by a 4-1 vote on Thursday, insurance coverage at a $250,000 premium as proposal “B.” The full name of the private company, Philadelphia Insurance, was not revealed until the day after the vote. General Manager Lee Moore said CRW paid approximately $186,000 in premiums last year, minus a $17,500 “longevity” rebate if his employment continues.

Insurance coverage has been a major issue for commissioner recall proponents who allege that the SDAO would have renewed the coverage if all of the board members had resigned. Two of four remaining board members resigned Oct. 31.

Commissioner Patricia Holloway, who is one of the targets of a recall effort, ended up voting in favor of option “B,” although she was concerned about the secrecy.

“This is a much better deal than what we were getting before,” she said. “Since SDAO insurance was pooled, CRW assets may not have been covered in case of an earthquake or flood that wiped out most of our region’s pipes and reservoirs.”

Holloway had expressed concern that she and the other board members couldn’t compare details for the various insurance offers but was ultimately happy that liability deductibles plunged from $50,000 to zero.

“We can only hope that none of the unknown differences are material because, come Jan. 1, the coverage is set,” Holloway said.

Jeff Griffin, chief executive officer of WHA Insurance risk-management consulting, explained to board members on Dec. 27 that CRW asked for coverage of its entire estimated $91 million in assets, but proposal “A” only provided coverage for $70.52 million.

Commissioner Kenneth Humberston, whom the Board of County Commissioners appointed in November, said that it was the job of the board to review the extent of the insurance coverage, and to make sure it is adequate and affordable for the district.

“It is not our job to fill out applications for insurance,” Humberston said.

Commissioner Grafton Sterling, expressing concern about the outdated audit that generated the $91 million figure, voted against the proposal. He is the other current target for recall petitions being circulated.

Holloway was ultimately happy that multiple insurance companies lined up to offer “market-rate” premiums.

“The campaign to drive conservative CRW board members Grafton Sterling and me off the CRW Board has failed despite determined efforts by The Oregonian, Special Districts Association of Oregon and Democrat Clackamas County Commissioner Jim Bernard,” Holloway said. “As 2013 dawns, we, together with conservative Commissioner Larry Sowa, are on the board to protect ratepayer interests. Financially solid insurance companies who specialize in utilities are replacing SDAO on Jan. 1, and ratepayers are at far less risk of uninsured loss than in 2012.”


An earlier version of this online story understated Clackamas River Water’s total coverage in 2013, which includes $1 million in general liability coverage, with an additional $5 million in excess liability coverage.

We apologize for the error.