REPORT TO THE CITY COUNCIL
March 9, 2017
FROM: JEFF CARDELL, Director
Personnel Services Department
BY: MICHAEL PAYNE, Risk Manager
Personnel Services Department
SUBJECT
Title
RESOLUTION - Approving the reallocation of $3,000,000 from the Liability Self-Insurance Fund Contingency to fund refunds and claims
Body
RECOMMENDATION
It is recommended that Council approve the attached Resolution which authorizes the reallocation of $3,000,000 from the Liability Self-Insurance Fund Contingency/Reserve account to the Refunds and Claims account to meet anticipated obligations through June 30, 2017.
EXECUTIVE SUMMARY
The Self-Insurance Fund, which provides the resources to pay claims and claims related expenses, includes a Contingency/Reserve which is typically utilized near the end of the fiscal year to allocate sufficient resources to pay claims and related expenses. The FY 2018 budget assumes this transfer and is built to replenish the Self-Insurance Retention (SIR) to the required $3,000,000.
BACKGROUND
The authorized FY 2017 appropriations in the Liability Self-Insurance fund total $9,822,700. This includes personnel, operations and maintenance expenses, interdepartmental charges, insurance claims and refunds, and a contingency reserve of $3,000,000. The contingency reserve is budgeted in the event the actual expenses associated with claims are greater than the amount anticipated.
The refunds and claims appropriation for this fiscal year is less than what is required to cover the paid and projected expenses through the end of the fiscal year. Specifically, as of January 1, 2017, the City has paid liability claims related expenses of more than $4.8 million. Through the remainder of this fiscal year it is anticipated additional settlement payments of at least $1.5 million with additional claim expenses of approximately $500,000. Therefore, reallocation of the contingency reserve by resolution is required.
The FY 2018 budget assumes t...
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