HomeMy WebLinkAbout01/05/1993, C-8 - ANNUAL RISK MANAGEMENT REPORT FISCAL YEAR 1991-1992I
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CITY OF SAN LUIS OBISPO
ANNUAL RISK MANAGEMENT REPORT
FISCAL YEAR 1991 -92
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Prepared by
Wendy George
Risk Manager
��iii���►�IIIIIIIIIIII�IIIIII san lu s oBespo
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ACKNOWLEDGEMENTS
We would like to acknowledge the help of the following in the preparation of this
report:
Greenfield- Thompson Associates /Associated Claims Management Inc. - statistical
information on workers' compensation claims.
Carl Warren & Company - statistical information on liability claims.
Jacquie Wertz, Work Health Coordinator - statistical information on Wellness
Programs.
Sue Baasch, Administrative Analyst - preparation of graphical information.
Brett Hough, Student Intern - compilation of all information and preparation of written
material.
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TABLE OF CONTENTS
197MWIV
I. INTRODUCTION I
II.. ELEMENTS OF .RISK MANAGEMENT 1
Exposure Identification
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
City overall Wellness Program.
Fire Department: Wellness Program
VI. "LIABILITY PROGRAM 18
Program Structure
Loss Analysis
Activities and Goals
VII. COMMERCIAL INSURANCE. PROGRAM 20
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
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 first 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 Identification 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, Safety Committee, and
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CITY'OF "SANrLUIS OBISPO�r S , ;
7991.92 ANNUAL-RISK; MANAGEMENT REPORT, �z
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Risk�Eyaluation�is the _measurement�ofinskb canal zin y and
_ y y g ast loss frequenc LL i
rseverity and estimating fuiure frequency' andose "vef ty. This ois accomplisFiedl ,1 V
,through analyzing loss reports produced by the�Clty's workers' compensatlorn
and habilrtY claims adminlstrators y „This report,w II provide a summ ray ofihe e`,
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.Risk Contro/; is�theafeductidmoo�r :eliminationEOf,rlsk�or loss through gocedr_u es ;
'r sand pppTactices;ih' security; p ersonal safety; fire prevention; vehlclesafety =andr , „ :y�
emergency planning; This function Is °5ctlVely9puffsued by the,,Cltys ,Sa`fetyt 5 ,y�
F Lt'Cornmittee and the; tRisk Manager_. Since the city self insures many of,:the,rlsks, ;4
c:clsk control i_s even more critical' in preventing or: ,reducing losses, thus saving L
k directtcosts for the Glty, Ris k. control activmes are ;Identified InRvarlous sectioomr-
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Is the provislonPof, sufficient °funds to meet�loss4sltuatlons,if they° ; r ^:1
occur�by° thKe . most,.:e'ffective use of Internal and aexternal ,flnancy al resources,) - �.....
includingl'Insuranoc Section III ildentlfle`s the cost of risks to' the Clay, while
Attachment 111 provides aschedule of�Insurance)coverage,fornihe vailous;CrtyF` YI,MI�
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R. iskNlanagement— Adm�nrstrationl�ls;fthe tleveloprnent, of�a_ dm�satl
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skills ,Mlboth vvlthln and outside the 5 City gTh includes >overseemg
`adminiStratlon Ofi claims rhandled by° third party: administrators for th'e�Cltys fl' , , �aY
workers' compensation +a ^d''Ila6ilty pnograms,.pfoviding directio^ the1Crty's �'
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Safety;Program, and - as�slsttiing� all City,, Apartments assappropnate
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' III. COST OF RISK
CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
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 the future, the cost of risk will be compared with the previous year.
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RISK COST FOR 1991 - 92
INSURANCE
OR POOLED COVERAGE
Dollar
Amount
Worker's Compensation Total Expense
$398,314
Uabil - Total Expense
$593,389
Property - Multi -Peril, Fire
$28,146
Mobile Equipment
$22,763
Boiler and Machine
$3,510
Bond - no expense (2nd year of 2 year policy)
$0
TOTAL
$1,046,122
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CITY OF SAN LUIS OBISPO
1991 -92 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. 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. On April 1, 1991, Greenfield- Thompson
Associates replaced Risk Management Associates, Inc. as claims administrator. This
change was based on the results of a claims audit performed by the Central Coast
Cities Self Insurance Fund. This type of transition is not easy but the City has
managed to adjust to new procedures and personnel.
B. Loss Analysis
The City receives monthly, semi - annual, 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.
There was a total of 100 workers' compensation claims filed during 1991 -92, an
increase from 93 in the 1990 -91 fiscal year. Total incurred cost (paid to date plus
reserves) dropped from $97,910.03 in 1990 -01 fiscal year to $88,935.14 in 1991-
92, for a decrease of $8,974.89. Although there has been an increase number of
claims filed this year, there has been a decrease in the total amount paid out on these
claims.
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TOTAL 266,978 337,842 247,770 193,187 61,665 1,107,467
Evaluating all claims with actual incurred costs, excluding "record only claims ",
the "Other" column accounted for 37% of the City's total incurred claim cost and 8%
of claims for fiscal year 1991 -92. Note that the Finance Department listed in the
"Other” column, has had one claim (back injury) amounting to $57,554. Without this
claim, the "Other” column total would amount to $4,131 and only 3% of the total
claim amount for fiscal year 1991 -92. The department with the next highest claim
cost was Public Works at $42,307, 27% of the City's total incurred claim cost and
27% of the claims. The police department ranked third with 21 % of the City's total
incurred claim cost and 29% of the claims. Note that the Police department had the
largest number of claims with incurred costs at 23.
The most frequent injury type for all claims including "record only claims ", was
musculoskeletal injuries to the neck, shoulder, back, lower back, arms, legs, and
knees, accounting for 35% of total injuries department wide. The department with
the most reported injuries was the Fire Department, accounting for 32% of all City
worker injuries. The department with the next highest percentage of total injuries was
the Police Department accounting for 24% of all city worker injuries. The Public
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TOTAL 266,978 337,842 247,770 193,187 61,665 1,107,467
Evaluating all claims with actual incurred costs, excluding "record only claims ",
the "Other" column accounted for 37% of the City's total incurred claim cost and 8%
of claims for fiscal year 1991 -92. Note that the Finance Department listed in the
"Other” column, has had one claim (back injury) amounting to $57,554. Without this
claim, the "Other” column total would amount to $4,131 and only 3% of the total
claim amount for fiscal year 1991 -92. The department with the next highest claim
cost was Public Works at $42,307, 27% of the City's total incurred claim cost and
27% of the claims. The police department ranked third with 21 % of the City's total
incurred claim cost and 29% of the claims. Note that the Police department had the
largest number of claims with incurred costs at 23.
The most frequent injury type for all claims including "record only claims ", was
musculoskeletal injuries to the neck, shoulder, back, lower back, arms, legs, and
knees, accounting for 35% of total injuries department wide. The department with
the most reported injuries was the Fire Department, accounting for 32% of all City
worker injuries. The department with the next highest percentage of total injuries was
the Police Department accounting for 24% of all city worker injuries. The Public
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
Works Department followed closely behind the Police Department in percentage of
injuries, representing 23% of all City worker injuries.
Figure 1
Figure 1 is a graphic illustration of five years of workers' compensation claims 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 2.
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Figure 1
Figure 1 is a graphic illustration of five years of workers' compensation claims 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 2.
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CITY OF SAN LUIS'OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
Figure 2
Figure 2 is a graphic illustration of five years of workers' compensation claims costs
by department.
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Figure 2
Figure 2 is a graphic illustration of five years of workers' compensation claims costs
by department.
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
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Five Years of Workers' Compensation
Claims - UTILITIES DEPARTMENT
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FIGURE 3
Figure 3 is a graphic illustration of each
departments' changing Worker's
Compensation claim costs by year
from 1987 -88 to 1991 -92.
Five Years of Workers' Compensation
Claims - PUBLIC WORKS DEPARTMENT
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Annual Claims
Five Years of Workers' Compensation
Claims -ALL OTHER DEPARTMENTS
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
Workers' Compensatlon Claims
Incurred Costs -1987 - 88
Workers' Compensation Claims
Incurred Costs -1988 - 89
Workers' Compensetlon Claims
Incurred Costa -1990 - 91
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FIGURE 4
Figure 4 shows each department's
Workers' Compensation claim costs as
compared to the total claim costs in
the years from 1987 -88 to 1991 -92.
Costs are illustrated as a percentage of
total claim costs.
Workers' Compensation Claims
Incurred Costa -1989 - 90
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Workers' Compensation Claims
Incurred Costa - 1991 - 92
Cl-TY'OF SAN LUIS OBISPO& -:5
-91 ANNUAL RISK MANAGEMENT �REPORT'l:-.-
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
• Revitalization of Safety Committe
The Safety Committee began holding regular bi- monthly meetings, with new
' members appointed to represent new program's such as Parking and Water
Conservation. The Safety Committee was then broken into sub - committees to
address specific problem areas. Subcommittees were formed for Accident Review,
Training, Hazardous Materials, Inspections and Safety Manual Revision.
• Development of New Insoection Forms:
' Based on sample OSHA inspection forms, the inspection Sub - Committee selected
appropriate evaluation questions and developed individual inspection forms for
offices, workshops, buildings and parks. These forms are used for monthly
inspections.
• Training Record Forms:
' As required by SB 198, new training record forms were developed. All supervisors
were given forms for their employees and trained in their use.
' • Safety Manual Revision:
The Safety Manual Revision Sub - Committee is currently working to rewrite the
Safety Manual to reflect the Injury and Illness Prevention Program and the City's
new Risk Management Manual.
• Injury and Illness Prevention Program Training:
All employees were trained in the contents of the Injury and Illness Prevention
Program so that they will be aware of the protection it offers them and what their
responsibilities are in developing safe work habits.
• Development of Codes of Safe Practices:
Individual Codes of Safe Practices were developed for each major work activity.
Supervisors provided input which was then used to create the Codes. Employees
were then trained on the Code or Codes appropriate to their work responsibilities.
' • Review of Safetv Policies and Practices:
A new Hearing Protection Policy was developed after performing noise surveys at
all work locations. The Hazard Communication Policy is in the process of being
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
updated, as is the Lockout/Tagout Policy, and Emergency Procedures Policy. A
Blood borne Pathogens Standard is also under development.
• Training:
Taking advantage of programs provided by the Central Coast Cities Self Insurance
Fund WPA) Risk Management Committee, training classes for employees were
provided in Hazard Communication, Asbestos, and Traffic Delineation. Monthly
safety themes were established to help supervisors with tailgate training sessions.
Quarterly Safety Feeds were provided, where a safety program was given to all
employees who attended. These Safety Feeds are open to all employees.
• Defensive Driving:
The Safety committee is addressing the need to provide defensive driving training
to all employees who drive City vehicles. It hopes to have a program in place in
1993.
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.
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.
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CITY OF SAN LUIS OBISPO
' 1991 -92 ANNUAL RISK MANAGEMENT REPORT
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.
1 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.
' The following is a summary of data based on a thorough evaluation of the Wellness
Program soon to be published.
' The average workers'compensation claim cost for a Wellness Program participant
decreased from $938 in 1983/84 to $890 in 1990/91. The cost for Non - Wellness
employees for the same periods rose from $3661 to $4035. Similarly, while medical
claim costs for both Wellness and non - Wellness employees rose significantly between
1986/87 and 1990/91, the comparison years, the average claim cost for Wellness
' employees in 1990/91 was $1034 and for non - Wellness employees was $2,792.
Figure 5 on page 14 is a graphic comparison of Average workers' compensation claim
costs for 1990 -91 Wellness versus non - Wellness employees. Figure 6 is a
' comparison of average health insurance claim costs for 1990 -91 Wellness versus non -
Wellness employees.
Over the past 5 years the difference between the two groups in average sick leave
usage has decreased. However, the average for non - Wellness employees is still 1.5%
' higher at 48.18 hours per year, compared to 47.45 hours per year for Wellness
employees.
-1
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
Figure 5
Figure 6
iEl
Controlling HEALTH INSURANCE
CLAIM COSTS - City Wellness Program
$2,M
E
V
m
0
r
0 1
$1.034
M 1
■
.:: -..
Q
77L
WNlnw Non -Welk w
Comparison of Avg Cost of Claim - 90.91
Figure 6
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
' A survey of employee participation showed Wellness employees to have a higher
understanding of proper nutrition and are more satisfied with the elements of work
life, interpersonal life and the direction of their life.
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
1 (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 reportedly 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) individual consultation;
' c) a recommended physical conditioning program based on each individuals
physiological needs and activity preferences;
1 15
CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
d) an hour during the scheduled workday which allows the participant to workout
and attend to his /her fitness needs;
e) an abbreviated fitness evaluation administered throughout the year to check
progress and re- evaluate the individual's conditioning program;
f) a continuous educational plan for all participants on health related topics; and
g) provide proper equipment, exercise area and an atmosphere which permits each
individual to strive to reach a high fitness level.
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:
Provide each employee an opportunity to learn more about making positive
lifestyle changes for themselves and their families.
2. Increase employee morale and effectiveness.
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.
Jacquie Wertz, the Work - Health Coordinator has collected data from past years which
enabled her to concentrate training on specific areas, i.e. back injury reduction.
• 1990 vs. 1991 On- The -Job Injuries /Accidents by Fire Suppression Personnel.
Results: Back injuries were reduced from 12 in 1990 to 4 in 1991, a 66%
decrease. In 1990, of the 12 reported back injuries, 7 resulted in lost
time away from duty. Of the 4 injuries in 1991, only 2 resulted in lost
on -duty time, a 71 % reduction. Figure 7 illustrates by year, the number
of back injuries reported as well as the number of back injuries that
resulted in lost time.
16
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
Figure 7
Knee injuries were down from 2 in 1990 to 1 in 1992. All other types of injuries
ranged from various musculoskeletal injuries to cuts and burns. The year total for
work - related injuries was down from 24 injuries in 1990 to 18 in 1991, a 25%
reduction. -
• 1991 Sick Leave Utilization by Fire Suppression Personnel (including Personal
Illness, Family Care Leave, and Bereavement Leave)
Results: The most significant change is that in 1991, total sick leave and sick
leave taken for personal illness was the lowest it has been since 1987.
• Five Year (1987 -1991) Review of Fire Suppression On- The -Job Injuries and
Accidents (Workers' Compensation) including Lost Time. This report does not
include data from a serious heart condition or any Department incidents of
communicable disease exposure.
The reductions reflected from the above data are related to the Fire Department's
increased awareness of the importance of health and fitness. An individual's ability
and willingness to become more involved and committed to his or her own well -being
increases his or her ability to have a long, active and productive work life. The goal
17
no
r
RUN
Figure 7
Knee injuries were down from 2 in 1990 to 1 in 1992. All other types of injuries
ranged from various musculoskeletal injuries to cuts and burns. The year total for
work - related injuries was down from 24 injuries in 1990 to 18 in 1991, a 25%
reduction. -
• 1991 Sick Leave Utilization by Fire Suppression Personnel (including Personal
Illness, Family Care Leave, and Bereavement Leave)
Results: The most significant change is that in 1991, total sick leave and sick
leave taken for personal illness was the lowest it has been since 1987.
• Five Year (1987 -1991) Review of Fire Suppression On- The -Job Injuries and
Accidents (Workers' Compensation) including Lost Time. This report does not
include data from a serious heart condition or any Department incidents of
communicable disease exposure.
The reductions reflected from the above data are related to the Fire Department's
increased awareness of the importance of health and fitness. An individual's ability
and willingness to become more involved and committed to his or her own well -being
increases his or her ability to have a long, active and productive work life. The goal
17
CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
of the Health Maintenance program is to continue efforts which encourage Fire
Department members to increase involvement and commitment to safety, health and
fitness.
VI. LIABILITY PROGRAM
A. Proaram Structure
On July 1, 1978, the City joined the Central Coast Cities Self Insurance Fund
(CCCSIF) for liability coverage. The City is self- insured through 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 James 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. The City's premium deposit to the
CCCSIF for the liability program for fiscal year 1991 -92 was $522,590 as
compared to $518,594 for fiscal year 1990 -91, constituting a .8% increase.
The deposit premium includes the incurred cost of claims and their
administration.
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 includes 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 11 for a five year history of individual liability claims over $10,000.
The Public Works Department had the highest number of claims (37)
and the largest claim cost of $278,128, representing 68% of the
City's total claim costs. Of the 37 claims filed, 14 were for parking lot, side
walk and street design defects which was the most common claim type filed
in fiscal year 1991 -92. The Police Department had the next highest number of
claims (18) representing a total claim cost of $89,175, accounting for
22% of the City's total claim costs. The most common claim filed against the
Police Department was alleged police harassment and false arrest. Figure 8
18
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
displays both the total number of liability claims and total cost associated with
these claims by department.
Figure 8
C. Activities and Goals
One of the most significant activities of fiscal year 1991 -92 was the adoption
of a Risk Management Manual by the City Council. This manual defines a
formalized Risk Management Program which can be used by all departments in
the City. The manual was introduced to all department heads and mid -
managers at individual department meetings. Manuals were provided to all
attendees.
One of the areas identified by the Risk Management Manual is insurance
requirements for contracts. Based on these requirements, the City has modified
its contract guidelines to meet these standards. Training sessions were held
for all department heads and mid - managers on what insurance standards should
be included in bid packages, requests for proposals, and contracts. Included
in the training was basic information on reading Certificates of Insurance and
Additional Insured Endorsements.
19
Liability Cases by Department
Cost and Number - 1991 -92
3W-
M./
5278,128
37 elalms
m
o'
$69,175
18 claims
100
525,657
5 elalma
$6,734
57.000
2 claims
2 Balms
Public Works Police Utilities Fire Mlacellansous
City Departments
Figure 8
C. Activities and Goals
One of the most significant activities of fiscal year 1991 -92 was the adoption
of a Risk Management Manual by the City Council. This manual defines a
formalized Risk Management Program which can be used by all departments in
the City. The manual was introduced to all department heads and mid -
managers at individual department meetings. Manuals were provided to all
attendees.
One of the areas identified by the Risk Management Manual is insurance
requirements for contracts. Based on these requirements, the City has modified
its contract guidelines to meet these standards. Training sessions were held
for all department heads and mid - managers on what insurance standards should
be included in bid packages, requests for proposals, and contracts. Included
in the training was basic information on reading Certificates of Insurance and
Additional Insured Endorsements.
19
CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
Another section of the manual specifies minimum driving standards for
employees operating vehicles on City business. These standards also include
insurance requirements for employees using private vehicles on City business
and were implemented after meeting and consulting with employee
associations. This section of the Risk Management Manual also requires basic
defensive driving training for all employees who regularly drive City vehicles.
The Safety Committee is currently investigating cost effective ways to provide
this training.
In order to monitor employee driving records, the City enrolled in the Motor
Vehicles Driver Record Information Service. This service automatically notifies
the City when there is any action appearing on an employee's driving record.
This action can be anything from a suspended license to a change of name or
address. Through this program employees may be classified as negligent
operators based on a point system assigned by the DMV to different violations.
Such employees can be identified for further driver training and /or closer
supervision.
The Risk Management Manual also addresses insurance requirements for special
events. In order to implement these requirements, training was provided for the
City Clerk's Office and the Recreation Department, the locations where the
public goes to receive special event permits. In addition, the City has
purchased a "tenant user" umbrella insurance policy under which public groups
or individuals may purchase insurance for their special events. As a result, the
Personnel Department now includes "insurance sales" as part of its other
duties.
A committee under the direction of the Police Department was also established
to address the City's special events policies. A final policy has yet to be
completed, but when done it should simplify the permitting process and provide
for cost recovery on the part of the City. It will also allow for greater control
of such events and a better opportunity to evaluate the risks involved.
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 $84,940,643 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 $2,276,252. In addition, the City
20
CITY OF SAN:LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
purchases honesty and faithful performance bonds; for its employees. There was
one loss reported in the 1991 -92 fiscal year against, our boiler and machinery
policy. See Attachment III for a schedule of City insurance.
211
CITY OF SAN LUIS OBISPO 1
' 1991 -92 ANNUAL -RISK MANAGEMENT REPORT
ATTACHMENT
r;-
e
22
1
A FIVE YEAR HISTORY OF LIABILITY
CLAIMS
:NET RESERVES
NET PAYMENTS
TOTAL INCURRED
NUMBER
LOSS
.
EXPENSE
TOTAL
LOSS
EXPENSE
TOTAL
LOSS
E7PENSE
TOTAL
OF CLAIMS
.......
.......
.......
.......
.......
.......
.......
.......
.......
..............
07/1187.06/.10188
......
OPEN.
2
25,000
23.197
48,197
78,803
78,803
'25,000
100,000
125,000 _
CLOSED
34
-
25.597
53AU
79.136
.25,597
53AM
79.136
TOTAL
36
25,000
.23.197
46,197
25,597
130,542
1551939
50.597
153,539
204,138'.1
0 710118 8 - 0 6/3 0169
OPEN
.8
72,540
214,096
.286,638
2.460
133.448
135,907
75.030
347,545
422,545'
,CLOSED
39
40.4S3
140,307
180,760
40,453
140407
180,760
TOTAL
45.
74540
214.098
2BB,S38
42,913
. 273,755
316,687
115.453
487,853
803,305
07/1189.06/30190
'
OPEN.
11
82.505
134,530
217.035
645
.73im
74,690
'89,350
208.3.74
281,724
CLOSED
47
27,085
25214
53,199
.27,885
25914
9,199
TOTAL
58
82,505
134,530
.217,035
28,831
89,058
127,089
.111,=
•233,588
544,924,
07/01/90 - 06/30/91
OPEN
13
34}72
1 &185
52.751
40,378
30
1$9
53.866
74,BSD
31,873
106,425.,
CLOSED
39
19.432
'30234
49,666
10.432
30.234
49,866
TOTAL
52
34}72
1 &185
52,757
59,810
43.524
103,934
04,382
61,709
156,091
0 7/1191 - 0 6/3 0192
OPEN
47
17204.1
115,180
287,223
73.757
43,820
117,577
245.900
159,000
404,6001
CLOSED
25
15,363
12238.:
27.602
15,963
12.230
27.802
+
2872223
89.119
WAD
- 145.178
261.163
_
171,239.
432.402'
TOTAL
72
172,043
115.180
-
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CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
ATTACHMENT II
INCURRED COSTS FOR
INDIVIDUAL CLAIMS OVER $10,000
AS OF 6/30/92
FISCAL YEAR 1991-92
DATE ALLEGED CAUSE RESERVES PAYMENTS TOTAL
LOSS EXPENSE LOSS EXPENSE INCURRED
--- �_ �_-- a- a- aaa�- a�a- a- �s_aaaa�z= ea�aasaaarae• �---m� ��'•^°s.� a-- eaaaaeaaaa¢� ��
23
1987 -88
07/26/87
ALTO STRUCK AND KILLED BICYCLIST
20,000
7,474
0
67,526
95,000
10/02/87
FOOT TURNED UNDER CRACK IN SIDEWALK
5,000
12,112
0
12,888
30,000
1968 -89
07/05/88
R/E BY FIRE TRUCK
25,040
34,745
2,460
5,255
67,500
10/25/88
SLIP 8 FALL
10,000
21,858
0
6,413
38,271
08/18188
BLDG. PERMIT -RON LIC. CONTRACT
15,000
71,718
0
39,254
125,972
04/10189
JOGGER MIT BY A VEH
15,000
42,204
0
33,599
90,803
02/28189
CLMT SHOT BY POLICE OFFICER
5,000
40,012
0
49,988
95,000
1989 -90
08/28/89
CLMT TRIPPED ON SIDEWALK
20,000
22,478
0
2,522
45,000
11/28/89
TRIP E FALL ON SIDEWALK
2,500
18,728
0
3,772
25,000
04/27/90
ASSAULT BY POLICE
10,000
23,673
0
7,415
41,088
04/27/90
ASSAULT BY POLICE
10,000
21,293
0
9,023
40,316
04130/90
FALSE ARREST
5,000
15,949
0
7,101
28,050
06/01/90
INVERSE CONDEMNATION
20,000
55,582
0
67,850
143,432
1990 -91
05/27/91
SIDEWALK TRIP AND FALL
9,500
1,424
500
1,076
12,500
02/22/91
CONTRACT DISPUTE
5,000
3,001
0
1,999
10,000
1991 -92
07/10/91
SIDEWALK TRIP AND FALL
80,000
14,865
0
5,135
100,000
01/04/92
STREET FLOODED/VEHICLE DAMAGED
29,500
BBS
0
1,612
32,000
02/14/92
DRAIN CLOGGED FLOODING
7,500
1,818
0
682
10,000
10/08/92
FALSE ARREST
10,000
2,500
0
0
12,500
23
CITY OF SAN LUIS OBISPO
1991 -92 ANNUAL RISK MANAGEMENT REPORT
ATTACHMENT III
24
)Ram
$19,127
$154,945
ine. above.
$$0,143
513,741
$7,339
52,091
$1,178
S1,7SS
CITY OF SAN LUIS
OBISPO
INSURANCE
POLICY
SUMMARY
1991.93
TYPE
COMPANY
&�.
DEDUCTIBLE
PROPERTY
F 8391788
Lesiwm
$10,000,000
510,000
MUICCIPAL
LIABILITY Gne. E & O)
CSR 1164219 (Occurrence)
his. Co. of the Wen.
54000,000
$100,000
AUTOMOBILE
LIABILITY
CSR 1164219 (Occurrence)
Im. Co. of the West
31,000,000
$100,000
EXCESS
LIABILITY
lm .co. of the West
$4,000,000
Eaeea
OR I1644ixo
MOBILE EQUIPMENT
GC 011545
First State
$1,000,000
$5,000
FIDELITY BOND
30285649 (Except PbUm)
Fi c&y and
5300,000
52,500
30285648 (Police)
Deposit Co. of MD
5300,000
52,500
BOILER AND MACIIINERY
7384)8.36
Pacific Indemnity Co.
SS,000,000
woo
FLOOD
060503490791
National Flood llndervritem
5200.000
SS,000
EXCESS
WORKERS COMPENSATION
C2!%SQR38
Evployc`a Reimonoee Crop.
32,000.000
5250,000
24
)Ram
$19,127
$154,945
ine. above.
$$0,143
513,741
$7,339
52,091
$1,178
S1,7SS