CCMinutes - 09/13/04 WS - Laserfiche WebLink

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ers provided the City with projections twice annually on dates that allowed for a supplemental budget action if the projected reserve requirements were more than anticipated. Ms. Daut noted the fiscal year 2005 operating budget of $4 million, 70 percent of which was dedicated to claims and premiums, and the $5.8 million in reserves. She emphasized that those reserves did not appear in any budget document but were instead reflected in the City's Comprehensive Annual Financial Report (CAFR). Ms. Daut discussed some of the issues affecting the fund, mentioning insurance market cycles and the impact of the terrorist attacks of September 11,2001, on the insurance industry, which resulted both in high claims and investment losses. In terms of Workers Compensation, health insurance costs were rising and the work force was aging. That program also experienced claims volatility, as did the liability program. The liability program had experienced recent claims that exceeded any in recent history. Ms. Daut said the City faced unbudgeted costs in the unemployment program as a result of the extension of benefits at the state and federal level. Ms. Daut shared two bar chart comparisons to demonstrate the City's risk rate history and its risk insurance premium history, noting similarities between the two charts. She provided a brief overview of the City's recent claims history for the Workers Compensation and liability insurance programs and for %quity" claims and noted the City's five largest Workers Compensation and liability claims. Ms. Daut noted the availability of the City's Annual Insurance Marketing Manual and Annual Risk Report on the City's Internet and Intranet sites. Mayor Torrey solicited council comments and questions. Mr. Meisner asked if the cost of claims included the cost of defense by legal counsel. Ms. Daut clarified that the information she provided on the City's five largest claims included the settlement costs only. Mr. Meisner asked if rate-setting at the department level was a fine enough breakdown given the differences within individual departments and the services they provided. Ms. Daut said the City tracked information on a divisional basis but allocated the risk rate on a departmental basis, and if a department wished to allocate the rates internally on a different basis, they could because the information needed to do so was available. Ms. Taylor asked for information about the mandatory physical exams Ms. Daut had briefly mentioned in her presentation as a part of the City's costs. Ms. Daut clarified that potential police and fire employees were subject to mandatory pre-employment physicals, as well as some Public Works staff. The City paid for those costs. Mr. Kelly commended the presentation. He asked if staff or the consultants ever compared Eugene's experience to that of other Oregon jurisdictions or to jurisdictions in other states in terms of amount of claims paid or size of the Risk Fund per capita. He asked if that information could help determine if Eugene was more or less efficient. Ms. Daut said that Mr. Kelly's question touched on the subject of International City Managers Association (ICMA) benchmarking, a process in which Eugene was participating. The service measures used for the fund included ICMA measures. She said that was where staff would look for efficiency. In addition, the City looked to JBL&K, which worked with many other local governments in Oregon, for information about the types of coverage other jurisdictions were buying to handle risk. MINUTES--Eugene City Council September 13, 2004 Page 4 Work Session