PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #12.B
SUBJECT/TITLE:
RISK MANAGEMENT ANNUAL REPORT
RECOMMENDATION:
Receive the 2021 Risk Management Annual Report as information.
BACKGROUND
The City of Pismo Beach Risk Management Program includes policies, programs, insurance, and risk pool coverage to minimize the City's risk exposure from employee injury claims, third-party liability claims, or property loss.
The California Joint Powers Insurance Authority (CJPIA) is the City's provider of Risk Management Services. Their services include the coverage for Liability, Workers' Compensation and Property Insurance claims. In addition, the CJPIA works closely with the City's Risk Manager to review and develop the City's Risk Management programs and policies toward the goal of controlling costs and risk exposure to the City. The CJPIA acts as the City's agent in claims processing and litigation and provides the City with regulatory safety training to meet Occupational Safety and Health Administration (OSHA) requirements as well as best practice and development training. In addition to this direct support and coordination with the City of Pismo Beach, the CJPIA evaluates trends in claims exposure across the pool and develops programs for its members.
The City's Three Major Risk Management Programs
The City's Risk Management program is very comprehensive and has received high marks from CJPIA. The Program has three areas of focus: workers' compensation, general liability, and insurance against property loss.
Workers' Compensation Program
This program is designed toward ensuring employee safety and reducing employee injury through proactive activities including:
Safety policies and programs.
Staff training as required by OSHA to improve safe work practices. Regularly scheduled workplace safety evaluations and safety meetings. Prompt reporting of all workplace injuries that includes a documented assessment by the supervisor on ways to prevent future injury.
Quarterly City Safety Steering Committee meetings to review injuries and safety training requirements, develop safety incentive programs, and review site inspections. Working with York Insurance Services for claims administration and case management.
Council Agenda 2-15-2022 12.B-1
General Liability Program
This program includes identifying the areas of risk exposure for the City and developing or maintaining programs that will minimize or mitigate liability exposure. General liability is any claim against the City including, but not limited to vehicle accidents, trip-and-falls, sewage backup, and errors and omissions.
Property Insurance
The third component of the City's Risk Management program includes insurance coverage for City property, automobiles, and revenue loss, and a restitution program to pursue reimbursement for damages from third parties.
Risk Assessment/Loss Cap Program
With the goal of minimizing the City's risk exposure, the CJPIA conducts regular Risk Assessments approximately every three years. This program both reviews and makes recommendations for corrections to:
City policies and programs
Contract language
Public Facilities including sidewalks, streets, parks and buildings Insurance requirements
Training programs and procedures for City staff
The City's assessments also include a regular review of claims by the City's Risk Manager and City Attorney, in an effort to learn from and identify areas for correction to prevent future exposure.
Reporting and Claims History
The City's cost of insurance is calculated on both the City's losses, and based on size of payroll, the CJPIA pool losses.
The CJPIA provides the City with claims status reports on the City's General Liability and Workers' Compensation Claims. The Overview reports summarize the claims history over a five-year period, the category or cause of the claim, cost centers, and a comparison to other agencies of a comparable size. The five-year claims history is used in calculating the City's premiums. The City's claims are reviewed by the City's Risk Manager, Safety Steering Committee, and City Attorney, in an effort to learn from and identify areas for correction to prevent future exposure.
Annual Update
The City Council's continued commitment to Risk Management supports staff efforts to update programs and infrastructure, which will continue to reduce or mitigate the City's liability in claims and litigation. Key projects and programs for 2022 included:
1. Virtual Training: Efforts to maintain and improve the City's safety program will continue through quarterly Safety Steering Committee meetings, department-led safety meetings and inspections, policy development, and safety training. Our Council Agenda 2-15-2022 12.B-2
training for the last two years has been made possible through virtual offerings by CJPIA, Leibert Cassidy Whitmore, and other training partners. As in-person training becomes available, staff is evaluating the ability to have a hybrid solution moving forward. There are efficiencies gained by not having commute time, however, there has been an impact on professional networking, which is often relied upon between agencies.
2. Workers' Compensation Claims: The total number of workers' compensation claims in the policy year 2020/21 was 18, which included a closure of 5 claims.
The average severity was $3,557, which is -233% less than the pool for the Authority. The City partners with its assigned CJPIA Regional Risk Manager, Tim Karcz, to continue its work with a focus on applicable trainings and safe working practices aimed at improving worker safety. The City was recognized as the CJPIA’s most outstanding agency for managing workers’ compensation claims last year! The City’s employees deserve a great deal of credit as this drives down costs.
3. General Liability Claims: The City had 30 total liability claims for the policy year, 11 of which were closed at no cost to the City. The remaining claims incurred an average severity of $67,135 including what is reserved but not yet paid.
4. Focus on the future: The City continues to aggressively pursue best practices and identify solutions to reduce General Liability, Workers' Compensation and Property Insurance exposure. Additionally, staff continues to track and follow legislation that impacts the future of claims against the City and employee safety.
FISCAL IMPACT:
There is no fiscal impact associated with receiving this report.
ALTERNATIVES:
1. Request more information from staff.
ATTACHMENTS:
None.
Prepared by: Meeting Date: February 15, 2022
Jorge Garcia, Assistant City Manager
City Manager Approval:
Council Agenda 2-15-2022 12.B-3