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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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 : 23 24 25 26 '27 28 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. 1 2 3 •4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 "23 24 25 26 27 28 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)