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CITY OF EUGENE, OREGON
<br />Notes to Basic Financial Statements
<br />(5) Other Information
<br /> (A) Risk Management
<br />The City has established an internal service fund to account for and finance its risks of loss. The City has a self-
<br />insured liability program which covers personal injury, public official’s errors and omissions, automobile, and
<br />employer’s liability, with a maximum self-insured retention of $500,000 per occurrence for automobile and general
<br />liability and $750,000 per occurrence for employee benefit and employment practice liability. In addition, the City has
<br />a self-insured workers’ compensation program which covers employees’ work-related illnesses and injuries, including
<br />employer’s liability, with a maximum self-insured retention of $1,000,000 per occurrence. During the previous three
<br />fiscal years, there were no liability claims that exceeded the insurance coverage levels.
<br />All regular full and part-time City employees are eligible for medical, dental, and vision insurance coverage.
<br />Employees may choose between two self-insured plans: the City Health Plan, a Preferred Provider Organization
<br />(PPO) plan or the City Managed Care Plan, a Point of Service (POS) plan. A third self-insured medical plan, the City
<br />Hybrid Plan, is available to non-represented and IATSE-represented employees. The City has established a self-
<br />insurance fund to pay medical, dental, and vision claims of employees and their dependents on the City Health Plan,
<br />up to the self-insurance retention limit of $250,000 per employee.
<br />Coverage for workers’ compensation, general liability, and employees’ health claims in excess of the self-insurance
<br />retention limit is purchased from commercial insurers. The City also purchases all-risk property insurance coverage
<br />from a commercial insurer. The property insurance policy has a basic $25,000 deductible, with earthquake and flood
<br />insurance coverages subject to the following deductibles: flood – $100,000 deductible per occurrence except that
<br />buildings in Flood Zones A and V have a $500,000 deductible per building; earthquake – 2% of the combined value of
<br />the property at the location, subject to a minimum deductible of $100,000 per location and the deductible applies
<br />separately to each location.
<br />At June 30, 2015, a total claims liability of $12,172,588 is reported in the Risk and Benefits Internal Service Fund.
<br />Claims liabilities reported by the City are based on an actuarial estimate of the ultimate cost of settling claims
<br />incurred, including incurred but not reported (IBNR) claims. Claims liabilities include all incremental costs incurred
<br />directly as a result of a claim, and consider estimated recoveries on both settled and unsettled claims. Claims
<br />expense has been reduced by amounts recovered, or expected to be recovered through excess insurance.
<br />The following changes occurred in the claims liability in the current and previous fiscal year:
<br /> (B) Joint Ventures
<br />The City is a participant with Lane County and the City of Springfield in the Metropolitan Wastewater Management
<br />Commission (MWMC), a joint venture established by intergovernmental agreement to construct, maintain, and
<br />operate regional sewerage facilities. The MWMC consists of a seven-member board to which the City appoints three
<br />voting members. The City has no explicit, measurable equity interest in the MWMC. However, the City has an
<br />ongoing financial responsibility for the operations of the MWMC in that the City is obligated to adopt disposal rates
<br />and charges not less than those adopted by the MWMC, and to forward to the MWMC, its share of the revenues as
<br />specified in the adopted financing plan, which requires that all MWMC administrative, operational, and maintenance
<br />expenses be financed through a uniform district-wide monthly fee.
<br />MWMC contracts with the City for operation of the regional sewerage facilities on a cost reimbursement basis which is
<br />accounted for in the Wastewater Utility Fund. For the fiscal year ended June 30, 2015, the City provided billable
<br />operations to MWMC costing $13,151,663 and MWMC owed the City $1,484,779 for unreimbursed costs at year-end.
<br />The City of Springfield includes the MWMC as a component unit of its financial reporting entity. MWMC’s most
<br />recently published financial statement was for the year ended June 30, 2014, which reflected net income of
<br />$4,311,980 and net position of $137,807,910. Separate financial statements for MWMC can be obtained from the
<br />City of Springfield Finance Department.
<br />continued
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