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HomeMy WebLinkAboutMinutes 02/11/19922194 CITY COUNCIL SPECIAL MF~TING Port Angeles, Washington February 11, 1992 CALL TO ORDER - Mayor Hallett called the special meeting of the Port Angeles City Council to order SPECIAL MEETING: at 4:40 p.m. ROLL CALL: Members Present: Mayor Hallett, Councilmen Braun, Nicholson (arrived at 4:50 p.m.), and Ostrowski (arrived at 4:45 p.m.) ...... Councilwoman Sargent, and Councilmen Schueler and Wight. Members Absent: None. Staff Present: Manager Pomeranz, Attorney Knutson, K. Godbey, B. Coons, and B. Henderson. Risk Management Audit Mayor Hallett explained the purpose of this special meeting was to review the findings of the Risk Management Audit. Human Resources Manager Coons explained ARM-Tech's review of the liability, workers' compensation and medical program. It is intended that the report be reviewed, along with staff recommendations, with no action taken at this time. Consideration was given to workers' compensation and the option of self-funded versus the State program. Manager Coons explained the cost components of participating in the State Fund and noted the State has the authority to close workers' compensation cases, not the City. A portion of the State assessment of $25,000 is used for handling the process. In response to an inquiry from Councilwoman Sargent, Manager Coons indicated the estimated annual cost for the State Fund is $162,433.40, with the State assuming total liability. One consideration is the question of adequate claims handling activities, and Councilman Wight expressed concern with claims management. Attorney Knutson reported his office incurred considerable expense in adjudicating one particular case. Discussion followed concerning the City's experience being self-funded, the reserve balance and the lack of funding. Major claims have been paid from reserves. Manager Coons and City Manager Pomeranz recommended the City stay with self- funded workers' compensation, increase the funding of reserves, and increase excess coverage in order to reduce risk exposure. The following discussion involved employer-provided disability, as well as Risk Manager Henderson's goals in the area of safety. Staff will return to Council with more cost information. On the matter of property, Manager Coons explained the estimated replacement costs of City buildings, contents and heavy equipment. Finance Director Godbey offered clarification that the list is an estimate only, and does not reflect historical cost or appraised cost. Councilman Nicholson suggested the City consider reducing costs by expanding coverage and increasing deductibles. It was noted that earthquake and flood insurance would be included. The schedule of property and casualty insurance was reviewed. After further discussion, it was agreed staff would prepare further cost estimates for Council's consideration, hopefully at the March 3 Council meeting. The Council reviewed information pertinent to liability insurance and considered entering the pooled coverage via the Washington Cities Insurance Authority. Attorney Knutson indicated he will be reviewing the contract language but, in responding to an inquiry from Mayor Hallett, noted the City would probably not incur liability with other cities in the pool. The City would relinquish control to the pool board regarding all claims. Manager Coons then summarized the components of House Bill//1970, effective January 1, 1992, which created a new State office to regulate self-insurance programs for health, property and liability coverage. Manager Coons explained the budget and how reserves have been depleted due to rising medical claims and liability expenses. He reviewed statistics concerning the City's experience with self-insured medical, dental, vision and prescription drag claims, noting the City has three times the claims rate over the norm. The existing -1- 2195 CITY COUNCIL MEETING February 11, 1992 plan is extremely difficult to adininister, and staff recommends purchasing aggregate excess coverage on health benefits to insure claims over $1,000,000. The consultant recommended expanding the prescription drug program to all pharmacies. Discussion followed. ADJOURNMENT: The meeting adjourned at 6:35 p.m. -2-