HomeMy WebLinkAbout01/06/1998, C6 - RISK MANAGEMENT REPORT FOR 1996-97Council MIfin D.rc I ��
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C I T Y OF S A N L U I S O B I S P O
FROM: Ann Slate, Personnel Director.,
Prepared By: Karen Jenny, Risk Managerl�i
SUBJECT: RISK MANAGEMENT REPORT FOR 1996 -97
CAO RECOMMENDATION
Receive and file the Risk Management Report for 1996 -97.
DISCUSSION
The City of San Luis Obispo has invested much time and effort over the past several years in
developing and maintaining a strong risk management program. The 1996 -97 Risk Management
Report reflects an evaluation of the most recently completed fiscal year. It will be used to help
determine developing trends, both positive and negative.
The 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 the
commercial insurance program. Graphic representations show claims history by department for
both workers' compensation claims and liability clams. Information is also provided on City
wellness programs.
According to the State of California, Department of Industrial Relations, the average cost per
claim in 1995 -96 for cities and counties was $4,963. The City's average cost per employee in
1996 -97 was $6,378, which puts us well above the state -wide average from the prior year. The
five -year claims history understandably shows that the higher risk departments, such as Police
and Fire, have the greatest share of the total expense. Fire Department claims were down in
1996 -97. However, Police Department claims showed a dramatic increase in 1996 -97, due to a
number of back and knee injuries that occurred while officers were in pursuit of fleeing or
combative suspects. Two such claims account for more than $230,000 in claim costs for that
department. The most frequent injury type for all claims was musculoskeletal injuries to the
neck, shoulder, lower back, arms, legs, ankles and knees, accounting for 54.8% of injuries City-
wide.
Liability claim costs have averaged about $190,000 per year over the last five years. 1996 -97
costs are above that average and also show an increase over the previous year, although the
number of claims decreased. The largest number of claims were filed against the Public Works
Department, with the majority of those being for slips and falls as a result of allegedly faulty
sidewalks or street design. The Utilities Department had the next highest number of claims, most
commonly for sewer backups. Unfortunately, even though the City is regularly found not to be
at fault, the legal process of defending claims is still expensive.
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Council Agenda Report — Risk Management Report for 1996 -97
Page 2
Looking at the trends over the last five years, workers' compensation costs and number of claims
have decreased. 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 trend will
continue. Although the number of liability claims has decreased over the last five years, the
costs are increasing. This is most likely related to the cost of defending claims.
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.
ATTACHMENTS
Risk Management Report for 1996 -97
(Council and CAO only. Copy available in City Clerk's Office for review.)
CVG .