To: BUDGET AND FINANCE COMMISSION
From: MARNI RUHLAND, FINANCE DIRECTOR
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DISCUSSION AND POSSIBLE ACTION REGARDING AN OVERVIEW OF THE SELF-INSURANCE PROGRAM FUND
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EXECUTIVE SUMMARY
The Self-Insurance Program Fund is one of the City's internal service funds. It was established in FY 2000-01 and accounts for the cost of providing liability and property, workers' compensation and unemployment insurances and all legal, medical and professional service expenses associated with the processing of claims made against the City in these areas. Below is an overview of the revenues and expenditures reflected in the fund.
BACKGROUND
The revenue in the Self-Insurance Program Fund is almost exclusively from charges to operating departments for their share of insurance costs. As described in the attached Administrative Policy/Procedures (APP), there is a separate allocation basis for the premiums and claims of each insurance type. These are summarized below.
* Liability and property insurance premiums are charged to the operating departments based on the insurance costs for the structure occupied by the department/division. In the case of shared structures, the department's/division's occupied square footage is used to determine its percentage of the structure.
* The basis for charging departments for liability and property claims is a five-year average of claims outstanding (paid, as well as reserved for future payments) for the structure occupied or the activity performed as provided by the City's third-party administrator. The general liability claims (e.g., employment issues, tax issues, procedural items) are charged to the City Hall departments with square footage occupied determining the percentage of the claims.
* Workers' compensation premiums are charged based on employee earnings as reported annually to the City's risk pool administrator to be used in calculating premiums for the coming year.
* As with liability and property claims,...
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