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Home My WebLink About1989-3197 AMENDING THE 1989 YAKIMA CITY BUDGET 8197 ORDINANCE NO. 4110) AN ORDINANCE amending the 1989 budget for the City of Yakima, and making an appropriation of $110,000 in the 514 - Workers' Compensation Fund for expenditure during 1989 for projected increases in insurance, claims and disability costs. WHEREAS, the amount of $110,000 must be appropriated within the 514 - Workers' Compensation Fund in order to provide funding for projected increases in insurance, claims and disability costs, and WHEREAS, at the time of the adoption of the 1989 budget it could not reasonably have been foreseen that the appropriation provided for by this ordinance would be required, and the City Council finds that an emergency exists of the type contemplated by RCW 35.33.091 and that it is in the best — interests of the City to make the appropriation herein provided, now, therefore, BE IT ORDAINED BY THE CITY OF YAKIMA: Section 1. The amount of $110,000 is hereby appropriated from the Unappropriated Fund Balance in the 514 - Workers' Compensation Fund to account numbers 514 514 623.0000 517.66.460, $30,000, 514 514 623.0000 517 67 410,$15,000, and 514 514 623.0000 517 68 232, $65,000 as a 1989 appropriation Section 2, This ordinance is one making an appropriation and shall take effect immediately upon its passage, approval and publication as provided by law and by the City Charter 4110 PASSED BY THE CITY COUNCIL, signed and approved this day of 1989 egc../ MAYOR ATTEST: Lk), CITY CLERK First Reading 8/15/89 Publication Date AUG 2 5 1989 Effective Date AUG 2 6 1989 AO/Approp Ordi. JarnES FRED S. JAMES & CO of WASHINGTON, INC. P.O. Box 2547, Yakima, Washington 98907 (509) 248-7460 Telex 15-2010 Fax (509) 248-9007 1110 July 25, 1989 Mr. Archie Sutton Personnel Manager City of Yakima 129 N. 2nd Street Yakima, WA 98901 RE: Self-Insured Workers' Compensation Program Dear Archie: Enclosed is a summary of your Self-Insured Worker's Compensation program from 7-1-65 to 7-1-89. This is not intended to be a detailed analysis, but rather a general overview of the program. 1111/ Modified Premium The premiums that you would have paid to the State would be the manual premium which is manhours times the appropriate rate adjusted based on the experience modification factor. The experience factor would vary from year to year based on actual loss experience, and a .80 factor was used for comparison purposes. The manual premium escalated dramatically this past year due in part to an increase in manhours, and also due to an increase in overall State rates. Excess Workers' Compensation Coverage The Excess Workers' Compensation policy provides catastrophe type protection over and above a retention level of $200,000 per occurrence. In addition, if the City were to pay out $500,000 of claims expenses within a three-year period, the excess coverage would pay on the first dollar basis for claims in excess of that amount. Thus, the City has protection for individual occurrences as well as adverse loss experience over a three-year period. 11111 The Excess Workers' Compensation premium is currently 10% of the State manual premiums. The premium is audited based on actual manhours. Insurance Brokers Since 1858 41111 JarnE5 FRED S. JAMES & CO of WASHINGTON, INC. P.O. Box 2547, Yakima, Washington 98907 (509) 248-7460 Telex 15-2010 Fax (509) 248-9007 Archie Sutton lb Self-Insured Workers' Compensation Program July 25, 1989 Page 2 Self-Insurance Bond The self-insurance bond limit is set by the State. The current bond premium is $1,500 per year. Claims Handling and Loss Control Claims handling and loss control services are provided by Scott Wetzel Services. They also provide monthly loss reports. An annual fee is charged for up to 75 claims, and an additional amount is charged for claims over and above that amount. The most claims the City has had filed against is 86 for the period 7-1-87 to 7-1-88. 4111 Claims Summary The enclosed summary was taken from the Scott Wetzel reports and shows the number of claims for each period, payments to date, and the total incurred losses. Incurred losses would include the amount that has been paid plus reserves on open claims. The reserve amount is the anticipated additional loss payment to close the claim. Summary Based on the estimated savings of $239,375, the City's self-insurance program has been successful. The excess coverage allows you to purchase insurance to minimize the risk of a catastrophe type loss, yet you still benefit with the savings associated with good loss experienc s compared to a fully insured progra through the State. S cerel , Lc (2 ( m j ... / J el Pearson _., V ce President 41 110 JP:sp Enclosure Inelirmnr.3 Cirr■Leare Cinnia 1 GIRR 0 j Ja mEs CITY OF YAKIMA SELF INSURED WORKERS' COMPENSATION PROGRAM COST COMPARISON 7 -1 -85 to 7 -1 -89 Manual Premium $848,637 Estimated Modification Factor _ 80% Modified Premium 678,910 (Premium you would have paid to the state) Self Insurance Expenses. Incurred Claims $344,546 Excess Insurance 87,790 Bonds 9,300 Claims Handling & Safety 55,320 (496,956) Direct Savings 181,954 Cash Flow at 8X 57,421 TOTAL SAVINGS $239,375 III Jam€s CITY OF YAKIMA WORKERS' COMPENSATION CLAIM SUMMARY 7 -1 -88 7 -1 -87 7 -1 -86 7 -1 -85 to to to to 7 -1 -89 7 -1 -88 7 -1 -87 7 -1 -86 Number of Claims 69 86 66 61 Payments to Date $76,269 $68,518 $55,416 $49,456 Total Incurred* $110,510 $106,164 $78,416 $49,456 * Incurred amount includes paid claims plus reserves on open claims. 7/89 Jam€s CITY OF YAKIMA SUMMARY OF MANHOURS REPORTED CODE 7/1/88 to 7/1/89 7/1/88 to 7/1/88 7/1/86 to 7/1/87 7/1/85 to 7/1/86 8 -3 385,535 256,728 128,921.90 331,549.30 14 -4 56,861 48,912 44,155.70 42,789.50 53 -5 254,172 231,890 208,890.10 224,974.40 69 -5 85,585 65,751 52,825.40 48,241.40 69 -4 48,783 36,674 32,042.00 29,789.00 TOTAL 830,936 639,955 466,872.10 .677,343.60 MANUAL WORKERS' COMPENSATION PREMIUMS $281,417 $190,198 $173,209.55 $203,812.69 EXCESS WORKERS' COMPENSATION PREMIUMS $ 33,770 $ 19,020 $ 17,472.11 $ 17,527.89 BOND PREMIUMS $ 1,500 $ 1,800 $ 3,000 00 $ 3,000 00 CLAIMS HANDLING AND LOSS CONTROL $ 13,500 $ 14,820 $ 13,500.00 $ 13,500.00 7/89