HomeMy WebLinkAbout01/05/1993, C-8 - RISK MANAGEMENT ANNUAL REPORT FOR 1991-921111i11IIIIIp�II ►II�III city of sari ais OBIspo
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COUNCIL AGENDA REPORT
FROM: Ann Slate, Personnel Director 1`
PREPARED BY: Wendy George, Personnel Analyst ''O"
SUBJECT: Risk Management Annual Report for 1991 -92
CAO RECOMMENDATION:
DISCUSSION:
MEETING DATE:
1/5/93
ITEM NUMBER:_
By motion, receive and file the Risk Management Annual Report for
1991 -92
The City of San Luis Obispo has invested much time and effort over the past five years in
developing a Risk Management Program. With the adoption of the Risk Management manual
by Council on March 3, 1992, the program policies and procedures were formalized. The City
spends almost $1.05 million dollars either to purchase commercial insurance or as part of our
self - insured program through the Central Coast Cities Self Insurance Fund. This expenditure
is significant, and requires that close attention be paid to methods of reducing risk and
controlling costs. In order that the City may evaluate the success of the program, we have
prepared the first Risk Management Annual Report. It will provide a baseline of our risk
experience which can then be compared with data in following years.
The report is divided into sections covering the elements of risk management, the cost of risk,
the worker's 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, as well as data on City wellness
programs.
While 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 total expense,
the Fire Department shows a significant downward cost trend thanks to its aggressive wellness
program. Similarly, data indicates that the workers' compensation claims cost for employees
participating in the City-wide Wellness Program is $890 versus $4035 for non - Wellness
participants.
Liability claim costs have averaged about $350,000 over the past five years. The most claims
were filed against the Public Works Department, the majority for "slip and falls" due allegedly
to faulty sidewalk or street design. The Police Department had the next highest number of
claims, most commonly for alleged police harassment and false arrest. Unfortunately, even
though the City is commonly found not to be at fault, the legal process is still expensive.
While the dollars expended by the City as a cost of risk are great, we believe that with a formal
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COUNCIL AGENDA REPORT
Risk Management Annual Report
Page 2
Risk Management Program now in place and documented in a manual which is available to all
City departments, we should be able to more tightly control increases. Involving employees
in components such as the Safety Program and Wellness Program will work to reduce workers'
compensation expense. Considering potential public liability when undertaking special events,
writing contracts or performing daily work activities will, likewise, lessen our chances ' of
liability claims. At a time when cost concerns are paramount to the City, a strong Risk
Management Program becomes of even greater importance.
FISCAL IMPACT:
None
RECOMMENDATION:
Receive and file the Risk Management Annual Report for 1991 -92.
ATTACHMENTS:
Risk Management Annual Report for 1991 -92 (Council & CAO only. Copy
available in City Clerk's Office
for review.)