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1 RiversideCA.gov1
RiversideCA.govFinancial Overview of the City’s Self-Insurance Trust Funds Finance CommitteeFebruary 12, 2025Finance Department
RiversideCA.gov2
•Worker’s Compensation Fund – Administered by Human Resources•General Liability Fund –Program Oversight: Finance/Risk Management Division –Claims Administration: City Attorney’s Office is responsible for administering all third-party claims submitted to the City.OVERVIEW1 2 1/31/2025
2 RiversideCA.gov3
INSURANCE COVERAGE AND EXPOSUREGeneral Liability & Workers' Compensation Policy StructureWorkers' Compensation (WC)General Liability Safety National Excess WC $25,000,000 AggregateAllied World National Assurance Excess Layer #2$10,000,000 per Occurrence$10,000,000 AggregateHomesite/KinsaleExcess Layer #1$10,000,000 per Occurrence $10,000,000 Aggregate Safety National Lead Layer$5,000,000 per Occurrence$5,000,000 AggregateSelf-Insured Retention $3,000,000Self-Insured Retention $3,000,000 RiversideCA.gov4
•Large Cash Outlays–Claim Payments–Legal Fees•Worker’s Compensation–Claim Payments 5-year average $4,386,608–Legal Fees 5-year average $157,320•General Liability –Claim Payments 5-year average $4,103,137–Legal Fees 5-year average $1,839,777FINANCIAL OVERVIEW3 4 1/31/2025
3 RiversideCA.gov5
FINANCIAL OVERVIEW - REVENUE
RiversideCA.gov6
FINANCIAL OVERVIEW - EXPENDITURES
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4 RiversideCA.gov7
FINANCIAL OVERVIEW - FUND BALANCE
•22% ($10.8M) increase in Estimated Claims & Judgements•Projected FY 2023/24 reserve 59%; actual 48%•Projected FY 2024/25 reserve 59%; updated projection 44% RiversideCA.gov8
•Combined cash on hand is approximately $29.3 million•Fund Balance at a deficit–Reflects long-term nature of many claims–Actuarial Adjustments have significant impact on fund balance.–Sufficient cash on hand to cover 48% of long-term liabilities.•Rates will be adjusted in future budgets to regain the 50% policy reserve requirement within 3 years.CASH POSITION AND FUND BALANCE7 8 1/31/2025
5 RiversideCA.gov9
CASH POSITION AND FUND BALANCE (CONT.)
FY20FY21FY22FY23FY24$(25,020)$(32,132)$(34,655)$(24,423)$(31,763)$29,922 $21,602 $23,216 $26,420 $29,303 (In Thousands)Cash Position and Fund BalanceFund BalanceCash Position RiversideCA.gov10
•Claims liabilities are estimates of long-term liabilities:–Basis for determining appropriate level of reserves;–Actuarial valuation based on historical data;–Claims often resolved for less than potential liability; and–Cash on hand not required to service total liability today.CLAIMS AND JUDGMENT LIABILITY BY FUND9 10 1/31/2025
6 RiversideCA.gov11
CLAIMS AND JUDGMENT LIABILITY BY FUND (CONT.)
FY20FY21FY22FY23FY24$35,830 $37,108 $38,897 $35,718 $37,772 $17,831 $15,325 $17,991 $14,184 $22,891 $53,661 $52,433 $56,888 $49,902 $60,663 (In Thousands)Claims and Judgment Liability By FundWorker's CompensationGeneral LiabilityTotal Claims Liability RiversideCA.gov12
STRATEGIC PLAN ALIGNMENT
HIGH PERFORMING GOVERNMENTCROSS-CUTTING THREADS
Equity
Innovation
Community Trust
Fiscal Responsibility
Sustainability and Resiliency11
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7 RiversideCA.gov13
That the Finance Committee receive and provide input onthe annual financial review of the City’s Self-Insurance TrustFunds for Fiscal Year 2023/24.RECOMMENDATION13