REPORT TO THE CITY COUNCIL June 25, 2015 FROM: JEFF CARDELL, Director Personnel Services Department BY: MICHAEL PAYNE, Risk Manager Personnel Services Department SUBJECT ..Title RESOLUTION - Approving the reallocation of $1,500,000 from the Property/Liability Self-Insurance Fund Contingency to fund refunds and claims ..Body RECOMMENDATION It is recommended that Council approve the attached Resolution which authorizes the reallocation of $1,500,000 from the Property/Liability Self-Insurance Fund Contingency/Reserve account to the Refunds and Claims account to meet anticipated obligations through June 30, 2015. EXECUTIVE SUMMARY The Self-Insurance Fund which provides the resources to pay claims and claims related expenses includes a Contingency/Reserve which is typically utilized near the end of the fiscal year to allocate sufficient resources to pay claims and related expenses. The FY 2016 budget assumes this transfer and is built to replenish the Self-Insurance Retention (SIR) to the required $3,000,000. BACKGROUND The authorized FY 2015 appropriations in the Property/Liability Self-Insurance fund totals $12,633,600 which includes employee service costs, operations and maintenance costs, interdepartmental charges, insurance claims and refunds, and Contingency/Reserve of $3,000,000. The Refunds and Claims account has insufficient appropriation authority to pay projected costs through the end of the fiscal year. The Contingency/Reserve account is budgeted in the event claims, or claims expense, exceed budgeted levels or to respond to situational emergencies. This reallocation is required to pay liability refunds and claims as well as outside legal expenses. The FY 2016 budget assumes the use of these funds and includes charges to replenish the reserve to the $3.0 million level. Funds not expended by June 30th will be carried over into the property/Liability Self-Insurance Fund's beginning balance. The attached Resolution authorizes the reallocation of $1,500,000 from the Contingency/Reserve to fund the claims related expenses. ENVIRONMENTAL FINDINGS Not applicable. LOCAL PREFERENCE Not applicable. FISCAL IMPACT This item does not increase the expenditure authority it is a reallocation of appropriations between existing accounts to allow for payment of refunds and claims owed through June 30, 2015. Any amount not used for refunds and claims or legal expenses will be included in the carry over balance in the Property/Liability Self-Insurance Fund in FY 2016. Attachment: Resolution