FINANCIAL POLICIES
J. Grants and Federal Funds The City shall aggressively pursue all grant opportunities; however, before accepting grants, the City will consider the current and future implications of both accepting and rejecting the monies, including: The amount of matching funds required; In-kind services to be provided; Requirements for reporting, earmarking, and level of effort requirements; The related operating expenses; and Length of grant and consequential disposition of service (i.e. is the City obligated to continue the services after the grant has ended). K. Risk Management The City manages risk through a combination of purchased insurance and direct payment (self- insurance). The City self-insures workers’ compensation claims and general/auto liability claims up to a certain amount ($300,000 and $350,000 per claim, respectively, as of 2020). Excess workers’ compensation and general/auto liability insurance coverage shall be purchased. (In 2020, purchased insurance coverage of up to $3,000,000 per claim is provided through a risk-sharing pool, the California Insurance Pool Authority (CIPA). CIPA also purchases excess coverage up to $43,000,000 for general/auto liability and statutory limits for worker s’ compensation.) Claims against the City are filed with the City Clerk’s office, pursuant to Government Code 915. The City may outsource workers’ compensation and general/auto liability claims administration services by contracting with a third-party claims administrator. (In 2020, claims administration services are provided by AdminSure (workers’ compensation) and George Hills Company (general/auto liability) through CIPA.) Property, earthquake/flood, pollution liability and cyber liability exposures are insured through the purchase of traditional insurance policies. Pursuant to Resolution No. 22- 81, City Council approval is required for settlement of workers’ compensation claims that include payment in excess of those benefits required by statute or general/auto liability claims exceeding $75,000. An annual actuarial study shall be conducted to provide an estimate of the self-insured liability to be recorded by the City in accordance with Governmental Accounting Standards Board Statement No. 10. This statement requires the City to accrue a liability on its financial statements for a reasonable estimate of the cost of claims and expenses associated with all reported and unreported claims. The City shall maintain reserves to fund its outstanding self-insured liabilities at the minimum level of 70 percent. The City shall maintain a Self-Insurance Fund to both fund the liability reserve and recover all associated risk management costs, including claim payments, insurance premiums, and any deductibles, and c laim administration (internal and external). The fund’s revenues shall be generated through assessments to City departments based on their claim experience and outstanding liabilities. These departmental assessments shall be evaluated annually and adjusted as needed. Staff shall report to the Finance Commission and City Council at least annually on the claims processed, amounts paid, and steps taken to manage and reduce the City’s risk and liability.
FY 2023-25 Adopted Budget
457
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