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
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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.
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