HomeMy WebLinkAboutMinutes - Minutes - Risk Management and Worker's Compensation Trust Board - Meeting Date: 5/3/2023 (3)047
Glendale
A P I Z O N A
MINUTES
WORKERS' COMPENSATION TRUST FUND BOARD
CITY HALL
HUMAN RESOURCES TRAINING ROOM
5850 W. GLENDALE AVE.
GLENDALE, ARIZONA 85301
MAY 3, 2023
8:30 A.M.
1. CALL TO ORDER
Chair Deadorff called the meeting to order at 8:33 AM.
2. ROLL CALL. at 8:35 AM
Present: Gary Deadorff, Chair
Ray Malnar, Councilmember
Vicki Rios, Board Member
Raymond Johnson, Vice Chair
Also Present: Dianne Shoemake, Risk Manager
Lorena Sanchez-Zumph, Workers' Compensation and Risk Program Manager
Kathleen Thomas, Risk and Safety Analyst
Sam Garza, Risk and Safety Program Manager
Ashley Wallace, Assistant City Attorney
Stephanie Guizar, Risk Management Specialist
Attendees: Monica Kloskowski, CorVel Corporation Vice President
3. CITIZEN COMMENTS:
-Vice President Monica Kloskowski from CorVel Corporation, who is the City of Glendale's Workers' Compensation
third party administrator, was present at the meeting.
4. APPROVAL OF THE MINUTES OF NOVEMBER 9, 2022
Motioned by Councilmember Ray Malnar, seconded by Board Member Vicki Rios to approve minutes of the
November 9, 2022 board meeting.
AYE: Chair Gary Deadorff
Board Member Vicki Rios
Councilmember Ray Malnar
Vice Chair Raymond Johnson
Passed
5. MOTION AND CALL TO ENTER INTO EXECUTIVE SESSION at 8:37 AM -Upon a public majority vote of a quorum
of the Risk Management Trust Fund Board, the Board may hold an executive session, which will not be open to the
public, regarding any item listed on the agenda but only for the following purposes: (i) discussion or consideration of
records exempt by law from public inspection (A.R.S.§ 38-431.03(A)(2)); and (ii) discussion or consultation for legal
advice with the city's attorneys (A.R.S. § 38-431.03(A)(3)).
Executive Session
Legal Matters
A. The Risk Management Trust Fund Board will meet with representatives from the City Attorney's Office and Risk
Management to receive an update, discuss, and consult regarding the City's position in pending or
contemplated litigation, including settlement discussions conducted in order to avoid or resolve litigation.
(A.R.S. § 38-431.03(A)(3) and (4))
Motioned by Chair Gary Deadorff, seconded by Board Member Vicki Rios to enter into Executive session.
AYE: Vice Chair Raymond Johnson
Board Member Vicki Rios
Councilmember Ray Malnar
Chair Gary Deadorff
Passed
6. DISCUSSION AND POSSIBLE ACTION OF WORKERS' COMPENSATION CLAIMS AND LAWSUITS
MOTION TO RECONVENE REGULAR SESSION at 8:49 AM
Motioned by Board Member Vicki Rios, seconded by Councilmember Ray Malnar to adjourn Executive session
and return to open session.
AYE: Chair Gary Deadorff
Board Member Vicki Rios
Councilmember Ray Malnar
Vice Chair Raymond Johnson
Passed
8. FOR INFORMATION PURPOSES: DISCUSSION OF 2023 WORKERS' COMPENSATION ACTUARIAL REPORT
AS OF DECEMBER 31, 2022 TO JUNE 30, 2023.
-Annually, Workers' Compensation conducts an actuarial analysis of workers' compensation losses to project fund
balance in compliance with GASB Statement No. 10 and to provide the funding level of the workers' compensation
trust fund on the amounts expended for self-insurance at a 55% confidence level. The Actuarial Report as of June
30, 2023 reflects workers' compensation losses self -insured retention at $2,500,000 for cancer presumptive losses
and $2,000,000 for all other losses.
Staff Liaison Dianne Shoemake read the report verbatim and, when needed, explained any points that were not clear
in the 2023 Workers' Compensation Actuarial Report as of December 31, 2022 to June 30, 2023,
As Staff liaison Dianne Shoemake explained how the ICA requires self -insured entities to maintain their fund
balance, she was asked the following:
Vice -Chair Ray Malnar asked for clarification on "if the monies that we receive from the states... ir-regardless of what
that money is..., we still meet our fund balance requirements?"
Staff Liaison Dianne Shoemake, responded by advising that Ray Malnar was correct.
Council Member Ray Malnar asked if it "replenishes our fund balance for the following year?"
Dianne Shoemake, said to Ray Malnar that he "is correct, as far as the actuary is concerned" and Ray Malnar
continued with "But for the following year." Dianne Shoemake confirmed.
9. FOR INFORMATION PURPOSES: DISCUSSION OF WORKERS' COMPENSATION TRUST FUND FISCAL YEAR
(FY) 2022-2023 REVENUES, EXPENSES AND FUND BALANCE
Staff liaison Dianne Shoemake read the report verbatim and, when needed, explained any points that were not clear
on the spreadsheet of the Workers' Compensation Trust Fund FY 2022/2023 revenue and expenses and fund
balance, Staff provided an explanation of revenues received, expenses paid and the ending fund balance as of April
10, 2023. The information provided in the spreadsheet is on a budget basis.
The ICA requires a minimum balance at 125% of known liabilities or at a 55% confidence level, whichever is greater.
The greater amount is the actuary's 55% confidence level. The fund must be maintained at this amount to be in
compliance with Arizona statutes for self-insurance. Arizona's statutes were changed last year, now requiring
self -insured entities to report to the ICA the status of their fund balance every six (6) months so that they can monitor
the fund balance to ensure it meets the statutory requirements. The fund also must have money above the minimum
to pay for new losses (projected ultimate limited losses) and money to pay out losses (projected losses paid) during
the FY.
Council Member Ray Malnar asked: "What are we going to be asking for the general fund to put into here? Are we
asking to put another 2.5 million in?
Staff Liaison Dianne Shoemake responded with, "We are not...in the Workers' Compensation we asked for 1 million
dollars ... We need the 15 million in there, plus what we expect for new losses, so we are adequately funded as of
today. But as of July 1, we need an additional 1 million dollars added to this to bring us up to have enough money in
place for new losses and what is already there, the known losses."
Chair Gary Deardorff asked where the $1 million figure came from? Staff Liaison Dianne Shoemake advised it was
estimated between what amount we have in place and the amount we project for known and new losses, and
excess Workers' Compensation premiums.
Council member Ray Malnar asked: "Why does interest income drop dramatically when the balance is higher?"
Board Member Vicki Rios responded that it was a "portion of the year" and at times the funds are put into
investments and there is a waiting period to pull out funds. Pulling out funds can cause the city to take a loss if
taken out too soon. Staff Liaison Dianne Shoemake advised that she would verify it in the next meeting.
10. DISCUSSION AND ACTION OF FY 23/24 WORKERS' COMPENSATION EXCESS INSURANCE PROGRAM
Staff Liaison Dianne Shoemake read the background verbatim and, when needed, explained any points that were not
clear in the discussion of the FY 23/24 Workers' Compensation Excess Insurance Program.
City of Glendale Ordinance, Chapter 2, Administration, Article 5. Financial Affairs, Division 6. Workers'
Compensation Trust Fund, Section 2-219 Insurance provides that "The city risk manager, acting for the city
manager, is authorized to enter into, on behalf of the city, any appropriate commercial insurance, or alternative risk
financing to be in the best interests of the city". We have been working together with our broker, Alliant Insurance
Services, on the renewal of the excess workers' compensation program. Alliant has been placing insurance for cities
for over 28 years. Their insurance placements include all lines of coverage. As discussed in the earlier Risk
Management Trust Fund meeting, Chris Tobin, Banesa Laird, and Pamela Dominguez of Alliant will provide a
complete overview of the insurance market in the Risk Management Trust Fund Board Meeting,
Council Member Raymond Johnson asked if any of the ratings fluctuated or stayed the same? Pamela Dominguez
of Alliant advised that the rates have stabalized consistent with neighboring cities. Council Member Raymond
Johnson asked if carriers are A- or greater? Pamela Dominguez of Alliant answered yes.
Dianne presented motion for the Workers' Compensation FY 23124 excess insurance program with the completion of
questions.
Motioned by Vice Chair Raymond Johnson, seconded by Councilmember Ray Malnar to approve
and recommend to the City Council for approval of the Workers' Compensation FY 23124 excess insurance
program not to exceed $500,477.00.
AYE: Chair Gary Deadorff
Councilmember Ray Malnar
Board Member Vicki Rios
Vice Chair Raymond Johnson
Passed
11. NEXT MEETING
The next regular meeting of the Workers' Compensation Trust Fund Board will be held on August/September 2023,
location to be determined.
12. ADJOURNMENT
Motioned by Chair Gary Deadorff, seconded by Councilmember Ray Malnar to adjourn the meeting g at 9:15 AM
AYE: Chair Gary Deadorff
Board Member Vicki Rios
Councilmember Ray Malnar
Vice Chair Raymond Johnson
Passed
The Workers' Compensation Trust Fund Board meeting minutes of May 3, 2023 were submitted and approved this 17th day of
May, 2024.
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Michael Andersen
Recording Secretary