Loading...
HomeMy WebLinkAboutMinutes - Minutes - Risk Management and Worker's Compensation Trust Board - Meeting Date: 11/13/2019 (3)Glendale R I Z N A MINUTES RISK MANAGEMENT TRUST FUND BOARD CITY HALL HUMAN RESOURCES TRAINING ROOM 5850 W. GLENDALE AVE. GLENDALE, ARIZONA 85301 NOVEMBER 13, 2019 9:00 A.M. Present: Gary Deardorff, Chair Yvonne Knaack, Vice -Chair Ray Malnar, Board Member Raymond Johnson, Board Member Vicki Rios, Board Member 1. CALL TO ORDER: GARY DEARDORF Roll Call and Call to order at 11:07 AM 2. CITIZEN COMMENTS If citizens wish to speak on a matter concerning the Risk Management Trust Fund Board that is not on the printed agenda, please complete a Citizen Comments Card and provide it to the Risk Manager prior to the beginning of the meeting. Once your name is called by the Chairperson, please proceed to the podium and state your name and address for the record. Please limit your comments to a period of three minutes or less. 3. APPOINTMENT OF NEW TRUSTEE - VICKI RIOS At the August 27, 2019 meeting, City Council appointed Vicki Rios to serve as a Trustee on the Risk Management and Workers' Compensation Trust Fund boards. Ms. Rios was sworn in. Ms. Rios term expiration is 1/31/2021. We wish to extend a formal welcome to Ms. Rios. Ms. Rios executed her loyalty oath today in the Workers' Compensation Board meeting. 4. APPROVAL OF THE MINUTES - MAY 15, 2019 Motioned by Vice -Chair Yvonne Knaack, seconded by Board Member Vicki Rios Motion to Approve the May 15, 2019 Minutes AYE: Chair Gary Deardorff Vice -Chair Yvonne Knaack Board Member Raymond Johnson Board Member Vicki Rios Passed a. Risk Management Trust Fund Board Minutes of May 15, 2019 6. MOTION TO ENTER INTO EXECUTIVE SESSION: TRUSTEE NEEDS TO MAKE MOTION TO ENTER INTO EXECUTIVE SESSION Motioned by Vice -Chair Yvonne Knaack, seconded by Board Member Raymond Johnson to enter into Executive Session AYE: Chair Gary Deardorff Vice -Chair Yvonne Knaack Board Member Raymond Johnson Board Member Vicki Rios Passed 6. DISCUSS CLAIMS AND LAWSUITS - Kathy Thomas will provide an update on claims greater than $50,000 and Aaron Schepler will provide an update on litigation. 7. MOTION TO RECONVENE REGULAR SESSION: TRUSTEE NEEDS TO MAKE MOTION TO LEAVE EXECUTIVE SESSION Motioned by Vice -Chair Yvonne Knaack, seconded by Board Member Raymond Johnson to reconvene into Regular Session. AYE: Chair Gary Deardorff Vice -Chair Yvonne Knaack Board Member Raymond Johnson Board Member Vicki Rios Passed 8. ACTUARIAL ANALYSIS OF THE SELF-INSURED LIABILITY AND PROPERTY PROGRAMS EXTRAPOLATED TO JUNE 30, 2019 AON Risk Solutions completed the actuarial analysis of the Risk Management Trust Fund self-insured liability program and property program from data extrapolated to June 30, 2019. Staff provided a copy of both reports attached as Actuarial Study Liability 6-30-19 and Actuarial Study Property to 6-30-19. The actuary conducted the analysis on a fiscal year basis. Self -Insured Liability Program The actuary was provided with the following information, 3 years annual payroll, 10 years claims data including claims payments and current reserves as of December 31, 2018, city operating budget, interest rate and CAFR and Risk Management operating expenses. Currently the City has a $1,000,000 self-insured retention (SIR). The actuarial report provides the following: Estimate of outstanding losses (cost of unpaid claims) - This estimate of outstanding losses includes allocated loss adjustment expenses (ALAE), claims reserves, development of known claims and incurred by not reported (IBNR) claims limited to the SIR Project Ultimate Limited Losses - This is a projection of future losses (the amount of money needed to pay new claims). The amount is limited to the self-insured retention Project Losses Paid - This is an estimate of the claims payments expected to be made during the fiscal year Comparison to the Previous Actuarial Study Affirm GASB Statement No. 10 Compliance In the report, Table 111-1, column 2 "Estimated Outstanding Losses" of the report, the amount of money needed to pay expected claims (outstanding claims) is $3,912,737, see page 7. GASB 10 requires funding of expected claims at a 55% confidence level. This is the minimum amount of funds that are needed in the trust fund to pay current outstanding claims. The estimate increased by about $361,000 from the previous study as of June 30, 2018. The change consisted of:+$1.75 million increase from an additional year (2018/19) of exposure -$2.5 million for claim payments made during 2018/19 and +$1.12 million due to an increase in projected ultimate losses for claims periods 2017/18 and prior; In particular, there were three claims with a large increase in incurred losses (R2014514 in 2013/14, R2016536 in 2016/17, and R2017688 in 2017/18 which increased by $400,000, $761,000 and $990,000 respectively. The projected ultimate limited losses (future claims) to be paid for fiscal year 2019/20 is estimated at $1,824,000, see page 8, column 4. The projection of FY 2019/20 losses paid (payments expected to be paid during the fiscal year), is $1,859,637, see page 9, Table 1111-3, column 2. Self -Insured Property Program The actuary completed the same analysis of the self-insured city property program. The city is self-funded at various levels for damage to its property which is paid out of the Risk Management Trust Fund. When damage to city property occurs, Risk Management acts as the city's insurance office and determines when losses are covered and reimburses city departments based upon the property damage reimbursement procedure. The actuary was provided with the following information to complete the analysis: History of self-insured retentions/deductibles Five years of loss data Property values from FY 2008/09 through 2018/19 On page 7, the actuary provides the estimate of outstanding losses at $491,138. The estimate of outstanding losses did not change materially from our previous estimate of $491,000 as of June 30, 2018. One page 8, column 4, the projected ultimate limited losses (future losses) is $454,000. This amount is limited to the self-insured retentions. In Table 111-3, claims payments expected (projected losses paid) to be made during the upcoming fiscal year is $705,255. The estimated total current outstanding losses (current claims) for both liability and city property is $4,403,870 ($3,912,732 + $491,138). The information contained in the actuarial report was provided to Finance for development of rates to be charged to the Department for their insurance premiums. The next actuarial report will be completed in February 2020. 9. DISCUSSION OF RISK MANAGEMENT TRUST FUND FISCAL YEAR 2019/2020 REVENUE AND EXPENSES A spreadsheet of FY 2019/20 revenue and expenses for the Risk Management Trust Fund is attached. The information provided in the spreadsheet is on a Budget Basis for revenue and expenses. In the column entitled "2020", the total revenue received to date is $4,346,125. Of the revenue received, $6,667 is from interest income, $4,247,680 from self-insurance premiums and $91,778 from recoveries. All self-insurance premiums have been deposited into the Fund. Total expenses paid is $2,260,375. Of that amount $574,839 is for payment of claims, $1,575,918 for payment of professional and contractual fees (actuarial, brokerage, insurance premiums) and $109,618 for administrative and general expenses. The ending Fund balance is $6,808,080. The required 55% confidence level minimum balance is $4,403,870 which is $2,404,210. The actuarial report recommends the minimum fund balance to be held at a 55% confidence as required by GASB 10. Our goal is to maintain the fund above the minimum 55% confidence level. The fund should have sufficient money above the confidence to pay projected losses during the fiscal which is $2,564,892. The fund has $160,681 less than the projected amount of claims to be paid during the fiscal year. Staff will continue to monitor the fund balance to maintain the 55% confidence level. There is a $1,000,000 contingency set aside for this fund in the event the funds are needed. 10. DISCUSSION OF NEW ORIGAMI CLAIMS SYSTEM The COG is self-insured and self administers all first party losses (within the city), third party losses (claims made against the city) and employee injuries and illnesses (workers' compensation). Currently, property and liability claims are managed in an Access database. Minimal amount of data is entered into the database to track claims, total costs and activity. The information captured is downloaded into spreadsheets and then manually manipulated along with additional information to meet all regulatory and reporting requirements. Workers' compensation claims are tracked in a separate Access database that includes the initial report of the injury and keeps documents. All other information needed for reporting lost time days is tracked manually. All information about the workers' compensation claim including the financial information is kept by our Third Party Administrator (TPA). The TPA allows access to their data for viewing and reporting. To comply with regulatory reporting or obtain information on claims, we request information from the TPA and manually manipulate the data to provide required information. Responding to public records requests for all types of claims and financial information is difficult and takes a considerable amount of time to download and put together the information that is being requested. Many current processes are being done manually. When an employee is involved in an incident or accident, the reporting is done on paper and the information is sent to Risk Management. The information is manually entered into the systems. When certificates of insurance are requested from the City, the requesting party completes paperwork and sends it to Risk Management who enters the data and prints the certificate of insurance. All certificate tracking is done manually. The City's property schedule which is used to develop the rates charged by the property carrier is kept in an excel spreadsheet and all corrections are made manually when facilities are updated or after an appraisal of property. Safety inspections are conducted and recommendations are tracked manually and excess insurance policies are saved and viewed electronically. Tracking of insurance policies is done manually. Analysis Origami Risk LLC will provide the city a claims data management system to compile and process the claims information and the exposure to loss. The information captured will be used for auditing of our trust funds and will become the basis to charge departments their self-insurance premiums. The information is also needed to determine outstanding liabilities for GASB #10 compliance, development of reports for compliance with OSHA and for overall management of claims. Replacing the Access databases with a RMIS will provide a fully functional claims information system, reduce redundancy and increase productivity and accuracy. Our project goals and objectives will be to:Reduce the frequency and severity of department losses by implementing best practices in risk and claims management. Provide ready access to real-time data Automate data input processes Reduce paper-based documentation and tracking Streamline business workflows to reduce redundancy and repetitive action Provide accurate statistical data, reports and dashboards Enhance the ability to measure the effectiveness of strategies and tactics in a timely manner Provide audit functionality for all transactions and user activity Leverage new technologies to reduce the need for customization and software development Successfully migrate the legacy data and implement the RMIS with minimal stress and disruption to users and business operations Create custom forms for outside users to enter data Provide a user-friendly environment to work in Comply with legal requirements for electronic records retention and record destruction and confidentiality. Initially staff looked into the Tyler Munis (SimpliCity) system to provide to track claims by type, manage individual claims and activity and finances. It was determined Munis only has the ability to capture first -party damages of the City property and to track reimbursements made from an outside insurance company. The system has no ability to track outstanding liabilities or to provide statistical data and reports for ICA self-insurance reporting, OSHA injuries or modified duty tracking. The Munis system does not have the ability to track the information currently stored in our legacy system. The City surveyed other Cities who had claims systems and determined the one used by the majority of cities, towns and counties is Origami. It was identified as being the most user-friendly, easy to implement and cost-effective system. Origami has also worked with Munis to share information between the two systems which would reduce the amount of manual input and chance for error. Staff had multiple demonstrations of the system, tested it for 30 days and met with Maricopa County to view their Origami system, how it is being used and obtained recommendations for easy implementation, It was determined that Origami will provide the City with an integrated RMIS that has a platform of products that can be used with the ability to add functionality in the future. The City looked into obtaining the following from Origami:Claims administration - configure and deploy all the standard claims administration functions, features, and workflows to allow staff to effectively administer and adjudicate liability and property claims. Staff will have the ability to enter and update claims, track incidents, provide reports, make check requests and provide complex reporting of information. Workers' compensation claims information will be obtained from the TPA via data feed and downloaded into the system allowing the City to control the data and obtain direct reporting capability, analysis and claims oversight. Accident/injury entry through an enterprise data entry portal, including a mobile form application, Certificate of insurance requests and management, Insured property and contents management, OSHA, Medicare, Medicaid and ICA reporting Safety inspection portal to track safety inspections and recommendations. The services include conversion, loading of all information from our legacy systems (property/liability & workers compensation) and configuring Origami for the City. The system has dashboard capability to allow creating of graphical and tabular reports for availability to others. The system has the ability to provide complex reporting. The system provides three (3) full user licenses and two (2) claims adjusting user licenses. The system allows for up to 1,000 user enterprise -wide data entry portals which includes limited access to records. The system will store up to 10,000 claims and incidents and will provide 100 GB of file attachment storage. Origami will host the application and data in a secure internet accessible environment. The Origami system is configured on a role -based security basis that operates at the database level and controls user access to all data across all interfaces and output screens, fields, reports, dashboards, simple query tools, menus, administrative tools, etc. Being configured in this manner allows for the ability to restrict access to sensitive data such as HIPPA and PHI or other sensitive data. Training of all users is included. City Council approved the contract with Origami at its 11/12/2019 meeting. Our Origami implementation kick-off meeting is scheduled 11/21/19. Configuration would be completed in January -February 2020 with integration and migration scheduled for completion in April, 2020. The City will begin testing in May, 2020 and training and final documentation in June 2020. The system would go live on July 1, 2020. Total cost of all services to complete the implementation of Origami is as follows: Project Management Total $5,920.00 Analysis & Design $10,360.00 Configurations $32,560.00 Data Conversion Total: $5,920.00 Documentation $740.00 Travel Estimate $4,400.00 Training Total $4,440.00 Implementation Services Total $64,340.00 Software Subscription Services - total annual cost of software subscription and any support fees to include all updates, patches, versions and enhancements as follows: Software Subscription Year 1 $28,164.23 Software Subscription Year 2 $44,380.00 Software Subscription Year 3 $44,380.00 Software Subscription Total $116,924.23 Total of all implementation services and software subscription services during the term of this contract is $181,264.23. The cost for FY 2020 ($92,504.23) was included in the budget for this fiscal year and approved by the IT Steering Committee. IT has assigned a project manager who will work with Risk Management on implementation of the new RMIS. 11. DISCUSSION AND APPROVAL OF RISK MANAGEMENT TRUST FUND FISCAL YEAR 2018/2019 ANNUAL REPORT TO CITY COUNCIL Glendale City Ordinance, Chapter 2, Article V., Division 5, Section 2-2014 requires the Trustees to provide to City Council a report as to the status of the Risk Management Trust Fund. The report shall include a summary of all monies collected and all payments made and any recommendations the trustees deem necessary to meet their joint fiduciary obligations for administering the Risk Management Trust Fund. Attached is a draft of the Risk Management Trust Fund Report to Council for FY ending June 30, 2019 for your review and approval. As in past years, we have provided the following information: Introduction Risk Management Structure & Functions Risk Management Trust Fund Audit Self -Insurance and Excess Insurance Property and Liability Revenues and Expenses Workers' Compensation Revenue and Expenses Accomplishments Safety and Loss Control Claims Management Total Cost of Risk After your input and approval, we will send the Report to all City Council members. Motioned by Vice -Chair Yvonne Knaack, seconded by Board Member Ray Malnar to approve the Risk Management Trust Fund Fiscal Year 2018/2019 Annual Report to City Council. AYE: Chair Gary Deardorff Vice -Chair Yvonne Knaack Board Member Ray Malnar Board Member Raymond Johnson Board Member Vicki Rios Passed 12. UPDATE ON JULY 1, 2019 RENEWAL OF PROPERTY AND LIABILITY INSURANCES As reported in the May 15, 2019 Board meeting, copy of the resolution attached, staff worked with our broker to finalize the renewals of all property and liability insurance and excess insurance. Alliant obtained quotations for excess or commercial insurance as follows: property coverage including auto physical damage, cyber, boiler and machinery, pollution, crime and builders risk, excess liability coverage including automobile, general, errors and omissions, employment practices, employee benefits, cyber enhancement and excess pollution enhancement (underground storage tanks) airport commercial insurance coverage, deferred compensation committee fiduciary liability, special liability policy for Glendale Regional Public Safety Training Center (GRPSTC) public officials bond for risk management and workers' compensation trust fund board The final renewal spreadsheet will be distributed at the meeting. All costs did not exceed the approved amount. The total cost is $1,477,715. 13. NEXT MEETING The next regular meeting of the Risk Management Trust Fund Board will be held in February or March 2020, located at 5850 W. Glendale Ave, Glendale, Arizona, 85301. 14. ADJOURNMENT Motioned by Vice -Chair Yvonne Knaack, seconded by Board Member Ray Malnar to adjourn meeting. AYE: Chair Gary Deardorff Vice -Chair Yvonne Knaack Board Member Ray Malnar Board Member Raymond Johnson Board Member Vicki Rios Passed The Risk Management Trust Fund Board meeting minutes of November 13, 2019 were submitted and approved this 21 st day of May, 2020. /s/Dianne Shoemake Dianne Shoemake Recording Secretary afCk 6jonalol-O&O