HomeMy WebLinkAbout1981-06-16; City Council; 6515-1; Liability self-insurance programV^'^.-v-V ••.•.'"•.'.,. : '.' A CITY =OF CARLSBAD
. AGENDA . BILL .NO. fy &/ g ~ ^f^^^JL^jL-JL ^"/ - Initial
'DATE: ; ;'.. JUNE 16, 1981
::DEPARTMENT: ' CITY MANAGER
/Subject: ESTABLISHMENT- OF A LIABILITY-SELF-INSURANCE REVOLVING '• - ' , , '
: . YFUND AND APPROPRIATION OF FUNDS FQR THE CITY rS LIABILITY; -':-:'-:-
,."' . . SELF-INSURANCE PROGRAM..- . • .'-..'• " , ; :..''* • ' ' ..;'.-.'
.Statement of the Matter Y/-Y , .. ; ; ///''•'' >
. ".. Under 'the city' s self-insurance programs,; liability is 'incurred for
the settlement of -claims which may not be actually "paid,until;some Y- ;
. years following an:incident or accident. In addition,, 'the city :
undertakes responsibility for the cost of adjusting,and-defending ;
claims which was previously included in insurance premium. It is
accordingly necessary that a fund be. established to provide for -.'.,-,:'
future payments and also to create an independent fiscal and accounting
; entity for the operation of the city's liability program. This
•should be a revolving fund and not subject to re-apprppriatibn 'each
.. :- -year. .' •' •._•...-• • '..- •' • .. ••; '.-..-.. ' ••;''•• ''. '' ' •-.,';- ....-..•••';'''•. •• -'/''•/..'''. •. :..• - .'.; -..-
At -this time it is recommended .that' the sum of $1'00,000 be. trans-
.f erred to this fund.- Ultimately, as . a result of/future appropriations,;
.. this fund should be maintained at a level of $500,000'. All monies .•
.:.'•• -in the fund should be used exclusively for (a) the payment of iiabiiity
Y claims within the city's self-insured retention, ;(b) outside liability
claims adjustment and legal defense costs, and (c) 'excess liability,
insurance premium costs. Interest earned should be credited to the
• - fund'.- ;-\- ; - , • /'••'- -, - ., • • . :"•','' •."/;-. ;-../-„--.•' :.':. :•'..••:••'.'.•'..".- '.'- '.!/...> ^:'-'':-•
Fiscal impact - In order, to establish the fund and. reduce/the; impact on."
/•next year's operating budget it - is recommended that $100 ,-00'0 be / r
appropriated from the contingency account;to the liability .revolving ,
fund.; A balance of approximately $190,000 will remain^ in the .
"•.-• contingency account after this transfer.; ,;. . ; • ;Y "
Exhib its: . ". ; .'•.• ' •••-.• ' ' ' -•. . ..— •.'•' -'-, " ' --''--..:-;'--' ' '.-.-• • / -.. -YVY -.:' '. '. Y ••'.•:,;..,
Resolution No.
R'e'commendat ion . ' . .; ,/ / ,"L' Y '; - Y . Y - •'
. Approve-Resolution No. ^ ^<f7 authorizing the -establishment
of a'liability revolving fund and authorize theY'-transfer-of Y
$100,000 to that: fund. ; Y Y:; Y...,.."'
APEBOVED
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RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA ESTABLISHING THE LIABILITY
SELF-INSURANCE REVOLVING FUND AND MAKING AN APPRO
PRIATION THERETO. • -
WHEREAS, the City Council of the City of Carlsbad has estab-
lished a program of liability self-insurance; and
WHEREAS, the City Council desires to establish a fund from
which to-pay various expenses involved in liability self-insurance
program; and .
WHEREAS, the City Council desires to establish certain
controls on expenditures from such a fund.
'NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Carlsbad as follows: .
1. That the above recitations are true and correct.
2. That there is hereby established a fund to be known
as the Liability Self-Insurance Revolving Fund.
3. That appropriations shall be made annually during
• succeeding fiscal years in order to establish and
maintain a minimum balance of five hundred thousand
dollars ($500,000) in said fund/
4. • That interest earning on the balance in said fund
^
shall be deposited into said fund.
5. That expenditures from said fund shall be limited
to the following purposes:-
A.- To pay premiums on excess liability insurance
policies. ,
B. To pay liability claims within the city's self-
insured retention.
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C. To pay liability claims administration, adjustment
and legal defense costs.
6. That the sum of one-hundred thousand dollars ($100,000)
is hereby appropriated from the Contingency Account
to the Liability Self-Insurance Revolving Fund.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council on the 16th day of June- / 1981 by the
following vote, to wit:
AYES: Council Members Packard, Casler, Anear, Lewis and Kulchin
NOES: None
"ABSENT: None
RONALD C. PACKARD, Mayor
ATTEST:
ALE)THA L. RAJJTENKRAN'Z , City Clerk
N R. STEVENS, Deputy City Clerk
(SEAL)