HomeMy WebLinkAboutE-06 Staff Report - Insurance Reserve Funds to Settle ClaimsCONSENT ITEM
E-6
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: TANYA BRAGG, DIRECTOR OF HUMAN RESOURCES & RISK
MANAGEMENT
DATE: JUNE 17, 2019
SUBJECT: AUTHORIZATION TO USE GENERAL FUND INSURANCE RESERVE
FUNDS TO SETTLE CLAIMS
BACKGROUND:
On June 3, 2019 City Council conducted a closed session meeting to discuss two Worker’s
Compensation Claims and gave authority to settle those claims.
RECOMMENDATION:
Staff recommends the City Council take the following action:
1)If a settlement is reached, approve the disbursement of funds up to $614,084.66 from the
City’s designated Insurance Reserve account to settle two Worker’s Compensation claims.
ANALYSIS:
The City has been working diligently in closing out Worker’s Compensation claims. Analysis of
closing out lingering Worker’s Compensation claims have proved to result in overall cost savings to
the City. Pending settlement of two claims is more than what’s available in the Risk Management
Worker’s Compensation Claim Expense account budget for FY 2018/19. Therefore, Staff is seeking
Council approval to use up to $614,084.66 from the General Fund designated Insurance Reserve
account, which currently has a balance of $1,000,000, in order to settle two claims.
APPROVED
CITY COUNCIL
6/17/2019
Human Resources Action Items
June 17, 2019
Page 2
FISCAL IMPACT:
Upon Council approval of the recommended action, up to $614,084.66 of the $1,000,000 set aside in
the General Fund Insurance Reserve, account 11-00-000-000, will be disbursed to settle claims,
resulting in an estimated remaining balance of $385,915.34 in the Insurance Reserve account for FY
2018/19. The City will be reimbursed through the excess carrier for one of the claims in the amount
of $297,567.66. Once reimbursement is received, the Insurance Reserve account will be replenished
in the same amount.
Prepared by: Reviewed and Approved:
Tanya Bragg Sergio Gonzalez
Director of Human Resources & City Manager
Risk Management