HomeMy WebLinkAbout11/15/1994, C-1 - RISK MANAGEMENT ANNUAL REPORT FOR 1993-94 MEETING DATE:
���� ► ►��I�p�i U CIW O� San LUIS OBISPO 11/15/94
COUNCIL AGENDA REPORT REnn NUMBER: -/
FROM: Ann Slate, Personnel Director
PREPARED BY: Wendy George, Personnel Analyst
SUBJECT: Risk Management Annual Report for 1993-94
RECOMMENDATION:
By motion, receive and file the Risk Management Annual Report for
1993-94.
DISCUSSION:
The City of San Luis Obispo has invested much time and effort over the past few years in
developing a Risk Management Program. With the adoption of the Risk Management Manual
by Council in 1992, the program policies and procedures were formalized. The City spent over
$1.6 million dollars during the 1993-94 fiscal year either to purchase commercial insurance or
as part of our self-insured program through the Central Coast Cities Self-Insurance Fund. This
is an increase of over $500,000 from the previous fiscal year and constitutes a significant
expenditure out of the General Fund. Most of this increase was as a result of being required
to increase our liability and workers' compensation deposits to the CCCSIF to begin paying off
negative fund balances in those accounts. As a result, it is important that close attention be paid
to methods of reducing risk and controlling costs. The attached report reflects an evaluation of
the most recently completed fiscal year, and will be used to help us determine developing trends,
both positive and negative.
This report is divided into sections covering the elements of risk management, the cost of risk,
the workers' compensation program, City wellness programs, the liability program and our
commercial insurance program. Graphic representations show claims history by department for
both workers' compensation claims and liability claims.
In a recent national study of the cost of risk in public agencies, the average cost per $1000 of
budget for 1992 was $15.20. In comparison, the City of San Luis Obispo's cost per $1000 of
budget in 1992 was $34.88 and it increased to$53.62 in 1993. It is unfortunate that the national
figures were not broken down by state, as it is well known that the cost of risk in California is
higher than in other states due to generous workers' compensation laws and the litigious nature
of the citizens.
The five year data for workers' compensation understandably shows that higher risk
departments, such as Fire, Police and Public Works, have the greatest share of the total expense.
However, even though the Fire and Police Departments had the same number of claims fled,
�►►�� �III111�IIP ���1I City Of San tins OBI SPO
COUNCIL AGENDA REPORT
the cost in the Police Department was $103,086 which is almost three times higher than the
$40,251 claim cost in the Fire Department. This difference is due to the severity of the claims
in the Police Department. We have had a number of serious back injuries in that department,
several requiring disability retirements, and are currently looking at ways to address this
problem. The most frequent type of claim City-wide was musculoskeletal injuries to the neck,
shoulder, back, lower back, arms, legs and knees.
Liability claims costs have averaged about $387,000 per year over the past five years.
However, the 1993-94 fiscal year was a very "good" year for liability claims, with a total cost
of only $100,220. While one-time annual dips in claim costs are not uncommon, and the costs
of the 1993-94 claims will likely increase somewhat over the next few years as they work their
way through the legal process, it is our hope that this decrease may actually represent the
beginning of a trend. The largest number of claims were filed against the Public Works
Department. Most were for alleged parking lot, side walk or street problems. The Police
Department had the next highest claims cost, mostly for vehicle accidents or alleged false
impoundment of vehicles. Of the 52 claims closed during the 1993-94 fiscal year the City was
held responsible for only 11. Unfortunately, even though the City is commonly found not to
be at fault, the legal process of defending claims is still expensive.
Looking at the trends from last years' annual report to this year's report it is apparent that the
costs of risk are increasing in workers' compensation, even with a formal Risk Management
Program in place. This reality is consistent with the experiences of businesses nationwide. And
while our liability costs went down this past fiscal year, it is impossible to predict whether this
trend will continue. Additionally, even with current claim costs down, the City must still
continue to deposit extra funds into the CCCSIF liability account.to make up for past negative
fund balances. It will be several years down the road before we see any relief as a result of this
"gam" year.
The City has taken aggressive stances to reduce costs, especially with our wellness programs and
our safety program. However, elimination of the Work Health Coordinator position has
significantly impacted both the Fire Department's wellness program and the safety program by
shifting responsibility to others. Even so, the City's Safety Committee has managed to address
such concerns as violence in the workplace, developing new respiratory protection and hazard
communication programs, and, most importantly, establishing a safety incentive program.
At the same time, we have continued to look for avenues to shift risk responsibility from the
City whenever possible, for example, by selling "tenant user" liability insurance for users of
City buildings and facilities and by insuring that any. outside contractors.meet the City's
insurance requirements before a contract is signed. These programs allow the outside party to
assume the cost of any losses that may occur through their own insurance. The Personnel
Department is currently working with the City Clerk's Office to develop a streamlined method
����►���IIIIIpIII����U city of san pais OBispo -
Nia; COUNCIL AGENDA REPORT
of tracking contractor's insurance to prevent its expiration mid-contract.
It is inevitable that even with an aggressive risk management program the City will experience
an increase in the number of claims as our society continues to be more litigious. The City will
need to continue to devote adequate resources to an already strong Risk Management Program
so that those losses that are associated with the kinds of exposures California cities face can be
minimized.
FISCAL IMPACT:
None
Attachment:
Risk Management Annual Report for 1993-94 (Council and CAO only. Copy available in
City Clerk's Office for review)
T
Y
CITY OF SAN LUIS OBISPO
ANNUAL RISK MANAGEMENT REPORT
FISCAL YEAR 1993-94
Prepared by
Wendy George
Risk Manager
111ml city Of
san lues oBlspo
TABLE OF CONTENTS
Page No.
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
If. ELEMENTS OF RISK MANAGEMENT 1
Risk Exposure
Risk Evaluation
Risk Control
Risk Funding
Risk Management Administration
III. COST OF RISK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
IV. WORKER'S COMPENSATION PROGRAM . . . . . . . . . . . . . 4
Program Structure
Loss Analysis
Activities and Goals
V. WELLNESS PROGRAMS . . . . . . . . . . . . . . . . . . . . . 12
VI. LIABILITY PROGRAM . . . . . . . . . . . . . . . . 16
Program Structure
Loss Analysis
Activities and Goals
VII. COMMERCIAL INSURANCE PROGRAM . . . . . . . . . . . . . . 19
ACKNOWLEDGEMENTS
We would like to acknowledge the help of the following in the preparation of this
report:
Gregory B. Bragg and Associates - statistica[ information on workers' compensation
claims.'
Carl Warren & Company statistical information on liability claims:
Governmental Risk Management Reports.- national statistics on the cost of risk.
Jacquie Wertz, Work Health Coordinator=statistical information on:Wellness Program..
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
V
I. INTRODUCTION:
Over the last several years, governmental entities and their public officials have been
embroiled in severe financial and insurance difficulties because of the erosion of
official immunity doctrine and the rising tide of litigation in our society. As a result
of these trends, insurance premiums and deductibles rose drastically in the mid-
1980's while coverage was significantly reduced or not available. The City's
response to these trends was to enter into self-insurance for liability and workers'
compensation programs. These changes in the City's insurance programs have made
understanding and controlling City risk exposures a primary concern.
The objective of the City's Risk Management Program is a coordinated and continuous
effort to uncover significant loss exposures, apply reasonable and effective risk
control, and ensure that the financial integrity of the City is not impaired after a loss.
This is the City's third Annual Risk Management Report. The purpose of this report
is to summarize the activities and programs of the City's risk management effort.
The intent of the report is to identify:
The City's cost for risks;
The City's risk experience; and
The City's programs for risk management
11. ELEMENTS OF RISK MANAGEMENT
The purpose of risk management within the City is twofold: first, it seeks to protect
the resources of the City from loss or destruction; and second, it seeks to continue
the financial viability of the City by ensuring that expected and unexpected losses are
properly financed. In the City, this is done through the following basic elements of
risk management:
Exposure ldenM-cation is the continuous process of identifying the resources
for which the City is responsible and the accidental loss exposures that could
affect them. In San Luis Obispo, this is accomplished through a program of
periodic facility/site surveys, contract and policy review, a Safety Committee,
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
and active participation in the Central Coast Cities Self Insurance Fund Risk
Management Committee.
Risk Evaluation is the measurement of risk by analyzing past loss frequency and
severity and estimating future frequency and severity. This is accomplished
through analyzing loss reports produced by the City's workers' compensation
and liability claims administrators. This report will provide a summary of these
loss reports.
Risk Control is the reduction or elimination of risk or loss through procedures
and practices in security, personal safety, fire prevention, vehicle safety, and
emergency planning. This function is actively pursued by the City's Safety
Committee and the Risk Manager. Since the City self-insures many of the
risks, risk control is even more critical in preventing or reducing losses, thus
saving direct costs for the City. Risk control activities are identified in various
sections of this report.
Risk Funding is the provision of sufficient funds to meet loss situations if they
occur by the most effective use of internal and external financial resources,
including insurance. The City participates in a Joint Powers Authority (JPA)
called the Central Coast Cities' Self Insurance Fund (CCCSIF) which is a
banking group set up to purchase insurance. Section III identifies the cost of
risks to the City, while Attachment III provides a schedule of insurance
coverage for the various City insurance programs.
Risk Management Administration is the development of administrative
techniques to carry out the risk management process most effectively, using
skills both within and outside the City. This includes overseeing the
administration of claims handled by third party administrators for the City's
workers' compensation and liability programs, providing direction to the City's
Safety Program, and assisting all City departments as appropriate.
J
2
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
III. COST OF RISK
The cost of risk for the City is the sum of costs for all self-insurance and commercial
insurance programs. The self-insurance programs are detailed further to account
easily for excess insurance costs,.administrative costs, services, and incurred claim
costs.
In a study of the cost of risk in public agencies done by Towers Perrin, the average
cost per $1000 of budget for 1992 was $15.20. In comparison, the City of San Luis
Obispo's cost for $1000 of budget in 1992 was $34.88 and it increased to $53.62
in 1993. It is unfortunate that the national figures were not broken down by state,
as it is well known that the cost of risk in California is higher than in other states due
to generous workers' compensation laws and the litigious nature of the citizens.
RISK COST FOR 1993-94
INSURANCE OR ,.;:;1;993::::::,;94;:;':.;.:;; 1992-93
SELF—INSURED COVERAGE COST
Workers' Compensation Total Expense
$859,:197' $522,730
Uability Total Expense $674,.3..3V $522,850
Property — Multi—Peril, Fire $30,..5..39;. $28,590
Mobile Equipment $25533' $21,683
Boiler and Machinery $3,5/I.i $3,626
Faithful Performance Bond** $8,372 $0
**3— ear policy paid every third year $1 60.1 543: $1,099.4791
Figure 1
3
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
IV. WORKERS' COMPENSATION PROGRAM
A. Program Structure
The City of San Luis Obispo has been self-insured for workers' compensation
coverage since July 1, 1978 through its membership in the Central Coast Cities Self-
Insurance Fund. In 1984 we obtained an excess workers' compensation policy to
cover any claim in excess of $250,000 up to a maximum limit of $5,000,000.
Workers' compensation claims for the City are adjusted by a third party administrator.
The Risk Manager oversees the claims administrator and reviews and coordinates open
claims with the adjustor. In January, 1994, the City changed from Associated Claims
Management, Inc. as the City's claims administrator to Gregory B. Bragg &
Associates.
B. Loss Analysis
The City receives monthly, and annual loss reports from the City's claims
administrator, identifying the nature and cause of each claim, as well as how much
has been paid and/or reserved for each claim. This information is helpful in
determining cost of risks by frequency and severity, as well as the type of risk control
to focus on City-wide or within a particular department.
The City of San Luis Obispo's claims represent 28% of the total claims reported by
the Central Coast Cities' Self-Insurance Fund (CCCSIF). At the same time, San Luis
Obispo's losses represent 21 % of the CCCSIF's total losses.
There was a total of 75 workers' compensation claims filed during 1993-94, a
decrease from 97 the prior year. Total incurred cost (actual paid-to-date plus
estimated reserves)went from $975,656 for the 1992-93 fiscal year to $154,657 for
1993-94, for a decrease of $840,999. It should be noted that workers'
compensation claims tend to "mature" over a period of 2-3 years, so we can expect
the total incurred costs for 1993-94 to increase. However, even with increases the
total expenses should be significantly less than those estimated for the 1992-93 fiscal
year. It is hard to know exactly what causes a "good" workers' compensation year,
but it is our hope that, thanks to our active Safety and Wellness Programs, this past
year's experience will carry over into the coming year.
4
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
Below is a list of incurred claim costs by year and department for five years:
V
FIVE YEAR WORKERS' COMPENSATION CLAIM HISTORY
h: Loi+: >...F ,>x::9L; ;:s!�.1' >:>N.<'" ;} }�:�y�{r £.•;.,:: �y
,�,. . ,c:.,:.......��.'f?Ct. A'L ia..a�.?° ..s,:.:>:>::::..:�Y1: 7►L. :. .fl <.,: .<r,�<;;..�:�:� x�;+ ,.h<.,�< �5.<.c�#�a?'''
89 90 $69887 204% $127,526 37.3% $106,302 31.1% $216 0.1% 537,832 11.1% $341,763
NO CLAIMS 32 .29 6% 27 25.0%.. 32' :29.6% 5 :: 4 6% 12 11196 108
90-91 541,550 13.4% S229,603 74.0% $28,067 9.0% 55,166 1.7% 55,944 1.9% 5310,330
NO CLAIMS 31 30 7% ;: 2Z 26 7%: 23 22.8% 13 .;12 9% 7 6 996 101
91-9.2 S7,993 32% S51,710 20.7% $40,331 16.2% $32,954 13.2% $116,318 46.7% $249,306
NO CLAIMS 31 .292% Y7 35 596; 26 24:5% 12 :.'11 3% y0 9:4% 106
92793 $328,814 33.?% $408,782 41.9% $207,737 21.3% $29,405 3.0% $918 0.1% $975,656
NO CLAIMS 24 . 22 0% 38, 34.996, 28 25:7% 14 .:.12 8% S 4 696 109
93-94 $40,251 26.0% $103,086 66.7% $5,282 3.4% $2,637 1.7% $3,401 22% $154,657
.
CLAIMS 3%22 ,.29 22' 29 34
7J 22.7% A , : 5 3% 70 13 396 75
TOTAL 1 $488,495 24'0%1 $920,707 45.3%1 5387,719 19.1% 270,378 3 5%1 $164,4138.1% 52,031,712
...,..
NO.CLATINS 140 ; 28 1%. 28:3% 126 25.3% 48 9 6% 499.
Figure 2
Evaluating all claims, the Police Department accounted for 66.7% of the City's total
incurred claim cost and 29.3% of the number of claims filed for fiscal year 1993-94.
The Fire Department had the same number of claims filed, 29.3% of the total, but the
cost of-its claims amounted to only 26% of the total cost.
The most frequent injury type for all claims was musculoskeletal injuries to the neck,
shoulder, back, lower back, arms, legs, and. knees, accounting for 49.3% of total
injuries City-wide. Of these injuries, back injuries were the most common, making up
22.6% of the total claims filed. Cuts and bruises constituted another 29.3% of total
claims filed, with the rest falling into a variety of miscellaneous categories.
J
5
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
5 YEARS OF WORKERS ' COMPENSATION CLAIMS
TOTAL NUMBER BY DEPARTMENT
150 140 141
140
12
130
120
110
100
ro 90
U
o BO
L 70
g 60 4
Z 4
50 4
40
30
20
10
0
Fire Police PUbllc Works Utllltie6 Other
City of Sen LUIS ObISDO OeDertments
Figure 3
Figure 3 is a graphic illustration of the total number of claims filed over five years by
department. Note that the total number of claims reported does not have a direct
correlation to the total cost of claims as shown in Figure 4.
6
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
5 YEARS OF WORKERS ' COMPENSATION CLAIMS
TOTAL COST BY DEPARTMENT
1
S9
0.9
0.8
n 0.7
U
m 0.6
L0
0.5 $44 4
$387 719
0 0.4
0
0.3
0.2 S1 41
0.1 S70 B
0
Fire Police Public Works Utilities Other
City of San LUIS Obispo Departments
Figure 4
Figure 4 is a graphic illustration of five years total of workers' compensation claims
costs by department.
7
CITY OF SAN LUIS OBISPO
199 G ANNUAL RISK MANAGEMENT RI RT
FIGURE 5
FIRE DEPARTMENT
"° Figure 5 is a graphic illustration of each
departments' changing Worker's
Compensation claim costs by year
from 1989-90 to 1993-94.
'p J
�� mD
N
SD
•
D
lim 9D-9+ H-® 9?tl BYN
FISpL,FA16
POLICE DEPARTMENT UTILITIES DEPARTMENT
.9D .m
.m .m
rD FF m
m 8 9m
°
>m E
SD „ ,]0
,m ,m
•
• D
tl-m BO-9, N-9t 9Z-tl 0.}w •Fm m-H H-92 ,Ttl 0.}H
F194L,6,m Fi6CAL,U,6
PUBLIC WORKS DEPARTMENT OTHER DEPARTMENTS
.m w
.m .m
9ro 9m
mD § m
diV
e
1w >o
,m ,m
7"V7 7
a a
19-90 90-H H-92 9?93 9}N BB•9D BD-91 992 9.ti 99 99.w ,
LISC♦L+'FY6' FjR ,PA18
8
CITY OF SAN LUIS OBISPO
199; ANNUAL RISK MANAGEMENT RE IT
WORKERS ' COMPENSATION COSTS FIGURE 6
,seseo
MLIT165 CO.Mo Figure 6 shows each department's
Workers' Compensation claim costs as
,SIC vms C31_,0 compared to the total claim costs in
the years from 1989-90 to 1993-94.
Costs are illustrated as a percentage of
total claim costs.
F ICE CV.3M
WORKERS ' COMPENSATION COSTS
,aso-a, WORKERS ' COMPENSATION COSTS
,an�a3
QTS CI-M 11T LITIES C1.7n
FI{E C13.4%) PUOLIC v s Ca.M OTIEP(e.'Ip W1LITIE3 C3.eO
F IC fe 3 C21.M
f 111E(33.M
ipLICS(.,.ij
FOLICE(T,.[en
WORKERSCOMPENSATION COSTS
,6a 6z WORKERS ' COMPENSATION COSTS
lwsw
CR IL,TIES(13.210 WILITIEB(LM
• FI¢036.03
gBIC 3 s C,e.m
eTeen cue.ap
m1�+(i.ap
103911(via(3..0
1¢ICE[ee.Tn
fTF.I CE czo.�3
vlq;C3.2q .
9
CITY OF SAN LUIS OBISPO
199 1 ANNUAL RISK MANAGEMENT R, RT
1993-94 WORKERS' COMPENSATION CLAIMS OVER $5,000
Department Injury Cause Reserve
Public Works Chemical exposure Possible exposure to chemicals 29,200
Police Hypertension, stress, knee Cumulative trauma 98,570
Police Knee injury Cumulative trauma 16,000
Police stress, acne, glandular
problems, tmj, back Cumulative trauma 35,500
Police Hypertension, stress Cumulative trauma 26,500
Police Back Wrestling with suspect 14,700
Fire Shoulder Using fire ax 35,000
C. Activities and Goals
The City of San Luis Obispo implemented an Injury and Illness Prevention Program in
1991-92. The program is designed to reduce and keep to a minimum occupational
accidents and injury as required by the passage of SB 198 in October, 1989.
The key elements of the Injury and Illness Prevention Program are:
• Identification of the person(s) responsible for implementing
safety programs;
• A system for identifying and evaluating work place hazards including
inspections and accident investigations;
• A program to correct unsafe and unhealthy conditions in a timely
manner;
• Health and safety training instructing employees in safe practices; .
• A system to communicate with employees regarding safety, including
means for employees to report hazards and unsafe work practices
without fear of reprisal (i.e., safety committee); and
• A system ensuring that employees comply with safe and healthy work
practices, which may include disciplinary action.
The Safety Committee continued to be active in promoting safety awareness and J
training. In the process, the following activities took place:
10
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
• Safety Committee Self-Assessment
The Safety Committee started 1994 off by putting itself through a self-assessment.
As a result of evaluating what was and was not working, the Committee decided
to meet on a monthly basis instead of bi-monthly. It also changed the meeting time
to 8:30 a.m. to avoid the distractions caused by members eating lunch during the
meeting. Finally, the location was changed to the City/County library as it is more
pleasant and also provides less distractions than the Corporation Yard.
• Rotating Attendance Schedule for Department Heads and Mid-Managers
The City Administrative Officer approved a rotating schedule so that at least one .
department head and one division head is present at each meeting.
• Survey of City Emoloyees
The Safety Committee surveyed all City employees to ask for feedback on Safety
Feeds and Quarterly Safety Meetings. There was overwhelming support for
reinstating Safety Feeds. However, the Safety Committee decided that due to
budgetary constraints Safety Feeds should only be scheduled when there is a
significant safety issue to be addressed, or perhaps as a time to give out safety
awards.
• Violence in the Workplace Subcommittee
As more .and more concern was expressed by employees about the potential of
violence in the workplace, the Management Team asked the Safety Committee to
establish a Violence in the Workplace Subcommittee. The subcommittee has been
reviewing possible video tapes to be used for training, arranged for training from
County Mental Health and will be making information available to departments
concerning alarms or self-dialing telephones.
• Self-Inspection Subcommittee
The Self-Inspection Subcommittee performed a mock OSHA inspection of the
Corporation Yard and sent a list of changes and improvements needed to the
department heads involved. In the future, the Subcommittee will be inspecting
other City locations, again looking for safety hazards.
11
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
• Safety Incentive Program
The Safety Committee devoted significant time to developing a safety incentive
program as mandated by SB 198. The program has now been funded and will
allow groups of employees to be rewarded for reducing the number of workers'
compensation injuries for their group, and individuals to be rewarded for safety
suggestions or significant acts of safety.
• Respiratory Protection Program
With the help of an outside consultant, the supervisors in the Public Works and
Utilities Departments are developing a comprehensive Respiratory Protection
Program. When it is complete, training will be provided to all employees who are
required to use respirators as part of their job.
• CPR Class
Thanks to instructors provided . by the Recreation Department, the Safety
Committee was able to provide a CPR class to interested City employees.
• Confined Space Training
As a joint effort of the JPA Risk Management Committee, Confined Space Training
was offered to our employees along with employees of neighboring cities.
V. WELLNESS PROGRAMS
A. The City's Overall Wellness Program
The City has implemented a Wellness Program offered to all regular City employees.
The City began this voluntary Wellness Program for its employees in November of
1986. The Wellness Program for the City of San Luis Obispo was inspired by a desire
to develop a preventative program that would increase employee productivity and at
the same time decrease the City's health-related costs. Currently, the program has
approximately 135 members.
During the 1993-94 fiscal year the City lost its full-time Work Health Coordinator as
part of the budget cutting process. However, we were able to find a part-time
Wellness Coordinator who has very successfully maintained the program with almost
no apparent loss of service to employees.
12
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
By encouraging employees to participate in this program,the City believes that a new
attitude of health and fitness awareness will result. From this knowledge a healthier
and more fit work force will emerge.
Proposed benefits to the City include a safer, healthier, more productive work force;
benefits to the employee include reduced injuries, illness and accidents, and
improvement in the quality of life.
The program consists of the following components:
1 . A Health Risk Appraisal which provides computerized feedback based on blood
tests and employee supplied health information. This appraisal is interpreted
for the employee by a health professional.
2. A Nutrition Profile for each employee based on answers to a questionnaire.
3. A Fitness Evaluation which includes blood pressure measurement, body fat
measurement, and testing of muscular strength, endurance, flexibility, and
aerobic capacity.
4. Fitness goal setting done individually by each employee to provide direction for
his/her own particular fitness activities.
5. Fitness and educational activities selected by the employee which allow him/her
to meet established goals.
6. Retesting and re-evaluation of goals at the end of each 6-month session.
Partial subsidy of expenses is available to employees who follow pre-
determined requirements and achieve their goals.
7. Educational programs offered on a bi-monthly basis.
An analytical study of the Wellness Program was completed in 1991. It drew
comparisons between the average number and cost of worker's compensation claims
over a four year period before the program started and during the four years of the
program from 1987-1991 . While the study showed that each group filed
approximately the same number of claims in the later period as they did before the
program began,the average claim cost for members of the Wellness Program dropped
5.1 %, while the cost for non-members increased 10.2°/x.
A survey of employee participants showed Wellness employees to have a higher
understanding of proper nutrition and be more satisfied with the elements of work life,.
interpersonal life and the direction of their life.
13
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
To further aid employees in their effort to stay physically and mentally fit, the City
offers an Employee Assistance Program administered by Occupational Health Services
(OHS). OHS provides a wide-range of counseling services to all employees and
eligible family members including: marital and family problems, alcoholism, drug
dependency, financial and credit concerns, legal issues and questions, tax problems,
emotional problems, stress, childcare, eldercare,interpersonal conflicts and situational
life problems.
B. Fire Department Wellness Program
The Health and Fitness Program for the San Luis Obispo City Fire Department assists
the members of that organization in maintaining a high level of physical fitness.
The San Luis Obispo Fire Department has made a choice to fight back and reduce the
physical risks their occupation demands. Beginning January 1, 1990 a physical
fitness program was implemented to meet the training requirements of each Fire
Department safety employee covered under the Fire MOA contract. This program
adopted as guidelines the policies outlined in Chapter 8 of the 1987 edition of the
National Fire Protection Association Standard 1500 (Appendix A). Physical
conditioning programs in public safety departments have shown beneficial
physiological changes, improved physical performance, and a reduction in cardio-
respiratory disease risk factors. A properly designed and managed physical
conditioning program is the best solution to the problem of low fitness, high injury
rates, and excessive cardiovascular disabilities among firefighters.
PROGRAM COMPONENTS:
The design of an effective fitness program must include certain essential factors to
insure its success in the Fire Department. These factors include, yet are not limited
to:
a) a comprehensive health and fitness evaluation;
b) t€ jai ;
i;"il,.::nYM.v?'':':'i:'F.<:f:i::i:::;;.:nnHv..»?iY'y>:i::•;n.:::v(::::..r'J.x.irtn':<•y']:iii:':'.i:'4�(.::'i'.i'.':.:...:::....:::.:n...:::.::.:::...::::::::..:.':.'::rv:::.v::.:.nv: .v........ ................ ... ....
c1
pys�atv�xcat:ns�d� a�dav� <; rs��canc�s;
d) an hour during the scheduled work day which allows the participant to workout
and attend to his/her fitness needs; .
elMOM
�ror ��[u r�-eY�l�ate the i�ct)tr�dUa1's conct�t�onin�pr��r�trn;
14
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
f) rt3ots�dt1B fplr + )78tS G hE tl&@d tOG : and
` g) provide proper equipment, exercise area and an atmosphere which permits each
individual to strive to reach a high fitness level.
Unfortunately,the highlighted components above and on the preceding page were not
continued during the 1993-94 fiscal year due to the loss of the Health Fitness
Coordinator position during budget cutbacks. However, the department is looking for
ways to reinstate at least some of them during the 1994-95 fiscal year. In the
meantime, firefighters are encouraged to participate in the City-wide Wellness Program
which is able to provide a number of the missing components.
Through the implementation of its program, the San Luis Obispo Fire Department has
become an organization committed to assisting its personnel in reducing the health
risks resulting from occupational demands. The department strives to develop and
maintain a level of fitness in each employee that contributes to the wellness of that
individual and to the department as a whole. The objectives of the program are:
1. Provide each employee an opportunity to learn more about making positive
lifestyle changes for themselves and their families.
2. Increase employee morale and effectiveness.
e
3. Reduce early retirement due to disability.
4. Reduce the number of sick days taken due to stress, injury or illness.
5. Maintain the health of all safety personnel above levels of disease and injury
risk.
• 1992 vs. 1993 On-The-Job Injuries/Accidents by Fire Suppression Personnel.
There were 12 reported incidents of back strain in 1993-94 among fire suppression
personnel, but only one resulted in any lost time. This number is an increase in
reported incidents from the prior year's 5 reported back injuries, but a decrease in the
number resulting in lost time from 3 to 1.
Knee injuries stayed the same in 1993 as in 1992. In both years, there was only 1
one knee injury. All other types of injuries ranged from various musculoskeletal injuries
to cuts and burns. The year total for work-related injuries decreased from 25 injuries
in 1992 to 22 in 1993, a 12% decrease.
15
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
VI. LIABILITY PROGRAM
A. Program Structure
Since July 1, 1978, the City has belonged to the Central Coast Cities Self
Insurance Fund (CCCSIF) for liability coverage. The City is self-insured through r
the CCCSIF for the first $100,000 for liability claims, which include bodily
injury, personal injury and property damage to the public. Carl Warren and
Company adjusts claims for the CCCSIF member cities. Sedgwick of California
provides administrative services to the CCCSIF. Settlement authority for claims
is: $1,000 or less - Carl Warren and Company; $1,000 to $10,000 - City
Administrator or his designee; $10,000 to $100,000 - City Council. For claims
in excess of $100,000 the CCCSIF has purchased excess liability insurance
through Insurance Company of the West up to a total of $5 million. The City
paid a deposit premium to the CCCSIF in 1993-94 of $674,331 . This deposit
includes the estimated cost of claims, administrative charges and the cost of
purchasing excess liability insurance.
B. Loss Analysis
The City receives monthly loss reports from Carl Warren and Company. These
loss reports indicate each claim with a brief description, and identify expense
reserves, paid loss reserves and total incurred expense, which is the total of
actual expenses plus reserves. The report is organized by year of claim
occurrence. Attachment I shows the City's claim experience for the past five
years. See Attachment II for a five year history of individual liability claims over
$10,000.
The total liability claim costs for the City in fiscal year 1993-94 were
$100,220. The Public Works Department had the highest number of claims
(26) and the largest claim cost of $46,135, representing 46°x6 of the City's
total claim costs. This is a cost decrease of 64% from last year for the
department. Of the 26 claims filed, 10 were for parking lot, side walk and
street design defects which was the most common claim type filed in fiscal
year 1993-94. The Police Department tied for the next highest number of
claims (7) representing a total claim cost of $17,383, accounting for 17% of
the City's total claim costs. This represents a 36% decrease for the
department. The most common claims filed against the Police Department
were for vehicle accidents or impounding vehicles. The Utilities Department
also had 7 claims in 1993-94 and a total claim cost of $3,963. .Although the +
total number of claims for the department increased, the cost of claims
decreased by 57%. The most common type of claim was for sewer back-ups.
Figure 7 displays total cost associated with these claims by department.
16
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
LIABILITY CLAIMS BY DEPARTMENT
199}94
Y
so
40
m 30
a o
_m
8r
s1
u
20 f77
10 f
S 4 f
0
P IC Works PoI ICs VtI I I'm S
17 qat Ion Fir* Ot hpr
Figure 7
C. Activities and Goals
Departments are becoming more and more conscious of the need for analyzing
the certificates of insurance received from contractors, and with the help of the
City Clerk's Office and the Risk Manager, have worked with many different
contractors to achieve compliance with the City's insurance requirements.
The City also continues to use its Tenant User umbrella policy under which
public groups or individual may purchase insurance for their special events. In
order to streamline the purchasing process, the Recreation Department now
sells tenant user insurance as part of it parks user permit process. This change
means the public can now purchase insurance, as well as reserve a City park,
all in one stop.
The Risk Manager sat in on the pre-event discussions for a number of special
events such as the Christmas Parade, Criterium, Mardi Gras, Railroad
Centennial and Street Painting Festival to assure that there was compliance
17
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK.MANAGEMENT REPORT
with City Risk Management Policies. Often working on one these special
events can become very time consuming, but since events of this type are
what help make the City a unique community, the Risk Manager makes efforts
to assure that they occur in a manner that is safe for the participants but
without unreasonable restrictions placed on the sponsors.
J
VII. COMMERCIAL INSURANCE PROGRAM
Insurance is purchased by the City through Sedgwick James of California to cover
all insurable property. Generally, insurable property is covered for all risks except
earthquake and flood with a total of $54,519,449 in insured values. The City also
purchases boiler and machinery insurance to cover heavy mechanical equipment
such as water well pumps. We also participate in the California Public Entity Mobile
Equipment Program which insures large pieces of mobile equipment, such as fire
trucks, which have a value in excess of $50,000. The total value of insured
equipment under this program is $2,553,252. In addition, the City purchases
honesty and faithful performance bonds, for its employees. There were no claims
made against any of these policies during the 1993-94 fiscal year. See Attachment
III for a schedule of City insurance.
v
18
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
ATTACHMENT I
A FIVE YEAR HISTORY OF LIABILITY CLAIMS
V
NET RESERVES NET PAYMENTS TOTAL INCURRED....
NO.
CLAIMS LOSS EXP . ::TOTAL: LOSS EXP TOTAL; LOSS: EXP TOTAL'"
07/01/89 - 06/30/90so
OPEN 2 35,000 26,400 ::61,400; 36;649 36,649, 35,000 63,0$0 98,050;
CLOSED 53 45„331 110,977 156,308 45,331 110,977 156,308.
TOTAL 55 35,000 " 26,400 ::61,400; 45,331 147,626 192,957 80,331 174;027 254,358.
07/01/90 - 06/30/91
OPEN 3 10,000 30,786 „40,786; 10,000: 108,376 118,376:
CLOSED 51 ;44
TOTAL 54 10000 30786 40,786: 70,560; 156,861 227,421:
07/01/91 - 06/30/92
OPEN 6 50;000 127,881 177,881 110,000 98;782 208,782 160,000 226,664 386,664':
CLOSED 70 151,642 140,428 292,070 151,6426 140 428 292 070
TOTAL 76 50,000 127,881 '177,881 : 261,642 239,210 500,852 311,642: 367,092 678,734.'
07/01/92 - 06/30/93
OPEN 12 120;751 148,452 269,203 5,748 60;019 65;767 126,498'; 208,472 334,970;
CLOSED 69 24,029 27,168 51;197 24,029': 27,168 S1,i97:
TOTAL 81 120,751 148,452 269,203; 29,777 87,187 i 16,964 150,527 235,640 386,167;
so
07/01/93 - 06/30/94
OPEN 23 51;471 27,138 78,609: 3;454 5,962 9;416 54,925 .33,100, 88,025;
CLOSED 27 6;613 5,582 12;195 6,613`:: 5,582 12,1..95:
TOTAL 50 51,471 27,138 78,609; 10,067 11,544 21,611 61,538 38,682 100,220'
19
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
ATTACHMENT II
TOTAL INCURRED COSTS FOR OPEN CLAIMS OVER $10,000
AS OF JUNE 30, 1994
_RESERVES PAYMENTS TOTAL
OATS ALLEDGED CAUSE . LOSS EXPENSES LOSS ...EXPENSES INCURRED
1988-89
08/18/88 BLDG. PERMIT/NON LIC. CONTR. 0 3,075 0 69,887 72,962
1989-90
08/28/89 CLMT TRIPPED ON SIDEWALK 20,000 13,350 0 11,650 ]53,050
04/30/90 FALSE ARREST 15,000 13,051 0 24,999
1990-91
02/22/91 CONTRACT DISPUTE 5,000 10,718 0 69,282 85,000
05/12/91 SIDEWALK TRIP AND FALL 2,500 18,824 0 3,676 25,000
1991-92
12/05/91 BICYCLE HIT POTHOLE 0 68,120 75,000 14,380 157,500
12/14/91 ALLEDGED FALSE ARREST 5,000 6,923 0 15,577 27,500
01/04/92 WRONGFUL DEATH 0 6,782 35,000 41,088 82,870
06/17/92 SIDEWALK TRIP AND FALL 25,000 28,742 0 17,552 71,294
04/09/92 LOST CONTROL OF SCOOTER 20,000 17,314 0 10,186 47,500
1992-93
10/16/92 STEPPED IN POTHOLE, FELL 15,000 16,406 0 3,595 35,001
01/07/93 SIDEWALK TRIP AND FALL 22,500 25,918 0 1,582 50,000
06/10/93 SEWER BACKUP 1,881 7,973 5,620 14,527 30,001
04/08/93 FATAL BICYCLE ACCIDENT 25,000 42,824 0 2,176 70,000
01/09/93 ALLEDGED EXCESSIVE FORCE 25,000 13,326 0 29,174 67,500
03/20/93 ALLEDGED FALSE ARREST 2,500 18,234 0 2,737 23,471
04/05/93 ALLEDGED CIVIL RGTS VIOLATION 10,000 15,208 0 4,792 30,000
09/17/92 LITIGATION REIMBURSEMENT 8,870 2,336 0 164 11,370
1993-94
11/16/93 CONTRACT COMPENSATION 10,000 2,006 0 494 12,500
20
CITY OF SAN LUIS OBISPO
1993-94 ANNUAL RISK MANAGEMENT REPORT
ATTACHMENT III
CITY OF SAN LUIS OBISPO
PURCHASED INSURANCE POLICY SUASURY
TYPE MANY LIMIT DEDUCTIBLE PR
EMrM EXPIRATION
PROPERTY
8687784 L dngton ins.Co. $10,000,000 $10,000 $28,591 3/1/94
FLOOD AND EARTHQUAKE
N/A
MUNICIPAL
LIABILITY(Im E&O)
CSR 116 4219 03(Occuneoce) Ins.Co.of the Wert SI,000,000 $100,000 $128,800 7/1/94
AUTOMOBILE
LIABILITY
CSR 116 4219 03(Oceutrence) Ins.Co.of the West $1,000,000 5100,000 Inc.w/liability 7/1/94
EXCESS
ESR 116 4220 03(Occurrence) Ina Co.of the Wert 54,000,000 E=cu $41,867 7/1/94
MOBILE EQUIPMENT
GC 011545 Twin City Fite Ins.Co. $1,000,000 $5,000 $21,683
7/1/94
FIDELITY BOND
30285649(E=cpt Police) Fidelity and S300,000 $2,500 S6,338
30285648(Police) Deposit Co of MD 5300,000 7/1/94
52,500 52,034 7/1/94
BOILER AND MACHINERY
7832 08 36 Pacific Indemnity 55,000,000 $2,500 $3,626
3/1/94
EXCESS
WORKERS'COMPENSATION Ned Union Fits Ins.Co. $2,000,000 $250,000 $23,634
4154257 7/1/94
Total 5256,573
21