Springfield City Council — November 25, 2024

0:04 I'm G to call the city council work session to order with roll call Mayor Van Gordon here councelor weer here councelor Mo here councelor rodley here councelor Blackwell here councelor Doyle here and councelor pisher here thank you we have one item this evening which is the 2024 risk Report with chame and Jamie good evening mayor and city council my name is Jamie iboa I am the risk manager for the City of Springfield um I am here tonight to just kind of quickly run through the 2024 risk report which is actually the second annual report so far we're going to continue doing this every year um the risk report is really an opportunity uh for us to go through our claims experience across all lines of claims and insurance experience

0:49 to help the organization see where our risks are um I point out um you know Kudos things that are going well but then also some things that uh we need to work on and it's presented to the executive team and then they're given the opportunity to ask for any additional follow-up that they might have based on a graph that they see I'll tell you um I tend to talk really fast so when I get excited I forget to slow down so if anybody needs me to slow down let me know um and if you have any questions feel free to interrupt it's perfectly fine won't uh break the flow um so the there is a copy of the risk report in of course here here it is I can't see it cuz I my reading gos on but

1:35 um so I I start out with trying to uh give the kind of the key findings the things that really jumped out at me for the year um and that's what's contained on the first page um I should also back up a little bit and and tell you this is a fiveyear look back it's really hard to do trending when you're looking at two maybe three years certainly one year it doesn't work so traditionally in the risk management world we look at a five-year window and it is based on fiscal years so this report will address fy20 through fy2 24 one of my uh favorite key findings of course is the uh wonderful work that the organization has done um and also in the police

2:20 department has reduced it it has reduced our deductible with City County Insurance Services um I don't know how many of you were here uh before but in fy21 the police department's deductible went up to 250,000 from 100,000 due to some negative claims experience and then in fy22 it actually increased to 500,000 and we were running the risk of losing our coverage with CIS but due to the efforts that have been made um in FY 24 the deductible drop back down to 250 and for the current fiscal year FY 25 it has dropped down to 100,000 which is the the same as the rest of the organization so that is some great news um I won't

3:05 obviously read through every single thing um here in the report um since you guys have it but another thing I want to point out here is for the third year in a row the fire department has not had any general liability claims so that's good and general liability claims moving on to page two um general liability claims are those oh I forgot I have the clicker sorry I got you thank you chame that's why he's here he's gonna be my my sidekick um so general liability claims are those claims involving bodily injury or property damage to others caused by city employees or city Vehicles so that's what uh page two shows um starting with fy20 you can see that we

3:52 have had a downward Trend in our general liability claims uh we go from 31 to 18 back up to 26 down to 24 and then down to 20 so that's about 119 claims over a 5-year fiscal period it may seem like a high number but based on our operations and the amount of staff we have it's really not a lot of claims and out of those 119 claims 56% of those closed without any payment being made so these are claims that were denied were not appealed or you know no lawsuit was filed um and then as of the writing of this report which I I run the data through the end of uh fy4 so this data is current as of 6:30 anything that

4:38 happened since then we'll see it on next year's report so as of June 30 out of those 119 claims only 11 remained open so CIS is doing a good job of of getting these processed and we get them closed quickly so that's good um one of the things um that you'll notice here you know this uh significant dip from fy20 to fy20 um right around that time in fy21 of course is when Chief sheer started here with our organization so that has had um some effect on of course the reduction in claims but also right around that same time the organization started really looking into and participating in what we call Enterprise risk management which is different from traditional risk

5:23 management because traditional risk management is more of a um reactive approach to risk managing whereas Enterprise risk management is looking to the Future taking in others in the organization to participate in that and trying to figure out what risks do we have and how can we prevent them from happening versus reacting to when they happen um some other um interesting information on this slide um you can see that you know there there are going to be claim years where maybe one claim or a couple of claims are really going to spike um the gra graphs and you'll see that in general liability claims total incurred total incurred is what we have paid out on a claim what we have set

6:10 aside or what CIS has set aside that they think the claim will cost us and that total together is total incurred so that's what we're looking at so for closed claims it's what did we pay for any claims that are still open it's paid plus what our reserves are um and unfortunately in fy21 um 98% of that uh total is due to litigated claims and so those are claims that are currently still open they're still being litigated as of the time of this report um and 98% of that total incurred is what have we paid which is mostly attorney fees right now because we haven't settled any of those claims um and then what we have reserved to pay for them so um that's what that is um since the writing of or

6:57 or since the reports for the report in fy21 one of those litigated ca cases closed so that number dropped by about $200,000 so next pleas yeah and I just want to call out real quickly too um so during that period of course when Nancy came on board was R on fy20 into the pandemic and a good chunk of the expens that we see in fy21 were kind of tied into that and it really was the leadership of the city manager who uh championed uh allowing HR to really get Enterprise risk in place uh so at that time before that Tom and I really struggled to kind of get any progress and movement and it was really Nancy that was able to get us to drive over that hump and get the work going that we ended up getting completed and and that that is tremendous um I have uh been

7:44 taking classes in studying and learning about Enterprise risk management for many years as as well as Tom and one of the things that I find when I meet with my peers they talk a lot about how they cannot get their leadership to buy into Enterprise risk management and well don't you have the same problem and I said absolutely do not because our city manager is very much behind it and they're very very surprised about it and they always ask how did you do that I can't take credit for it so anyway it it is it is great to have that support so um general liability claims by Department this is going to break it down more uh for you as far as um the the bigger the bigger chunks of claims those are the Departments you're going to see and that's going to be the Department of Public Works police and

8:29 fire the rest of the city Department's Finance HR CMO CAO and Library I lump those into other because it really skews the graphs when you have several that have zero and several that have one um and so that's you know that's how I set those graphs forward and as you can see under the fire uh uh bars there no claims for the last three fiscal years which is incredible um down below of course is total amount incurred by department so it's that same those same numbers from uh the general liability claims total incurred but split out by Department next so Auto liability claims Citywide is the next graph and the auto

9:15 liability claims are for damages to PE to other people's property um or bodily injuries caused by a city auto so City employee obviously driving a City Auto in somebody else you think about the ice storm one of the things that popped out when I hit the auto Li liability portion did we have any auto liability claims from the ice storm yes so um if we drop down to so that was in FY 24 88% of the total incurred for auto liability claims which wasn't a lot of money it was only 17455 88% was due to the ice storm so single event right

10:00 it was actually three separate events that 88% yeah so one of them was um a vehicle stopped in the middle of the road because somebody was in front of them and officer could not stop in time and rear ended that vehicle um a fire truck slid off the road and took out a chunk of fence and then another one the bucket of one of the uh engines or one of the fire apparatus there was a business down here at fifth in Centennial I think they're wires were hanging down low and it got wrapped up into the bucket and pulled the wires off so that's what those uh ice or storm related claims were um you know anything else I you know I broke down um for the fiveyear period there were only 13 claims four

10:45 were DPW three were police and six were from fire and only as as of June 30 only one of those claims remained open so next Auto physical damage claims these claims are for or damage to our Auto it can be our staff damaging our Auto or somebody else damaged our Auto and CIS is in trying to pursue recovery against the other person we do try very hard to recover anything and everything that we can on these claims unfortunately sometimes people don't have insurance and so it just takes a little longer um but we've had you know you can see on the graph here

11:30 um our biggest year was FY 23 there were actually nine um but for as many Autos as we have that's really not a sign significant amount of um Auto physical damage claims um in FY 24 um the breakdown of that the $5,440 per was basically I didn't see a vehicle coming and I pulled out in front of them 28% was due to an officer was blocking um Mohawk when they had that water main break and for whatever reason somebody didn't see him and just plowed into the side of him and we are pursuing on that but unfortunately our damages were well over $30,000 and this uh gentleman only has 25,000 in liability

12:16 or liability coverage so sometimes we don't get everything back but we get what we can uh 34% of those costs were for damages to our vehicles that that were damaged during the ice storm and then 7% was due to a maneuver you know as part of of what our officers sometimes have to do so workers comp so workers comp I try not to get too far down into the weeds because based on the number of employees we have the number of claims we have isn't a significant amount and we do try to respect and honor our employees uh confidentiality and privacy when it comes to medical issues and so I'm a little bit careful about giving out too much in in the reports so that people can't be identified um but like I said

13:03 this isn't a significant amount of claims um of course we saw a spike in 21 and 22 because of covid um in 20 fy21 six police and 12 fire claims were covid related and then in fy22 five police claims and 18 fire claims um and it's kind of dropped we don't see them very often anymore in the mo most recent couple of years so that that did affect that claims experience um otherwise our our our you know numbers would be quite quite a bit lower um as far as the workers comp total claim total incurred it's the same as general liability it's paid plus reserves um in FY 24 um just a few claims like I mentioned earlier can

13:49 really Drive uh the costs and the and the spikes in the graphs and a good example in FY 24 three claims are uh account for 69% of the total incurred in claims so just a few claims can really uh Spike that number up and you'll see that in fy21 one claim um contributes to 75% of the total cost for that year and this is another good example of um trying to maintain the confidentiality of employees this one has been marked a privacy case OSHA defines privacy for us as being um a needle stick injury to intimate Parts uh sexual assault mental illness or some kind of bloodborne pathogen uh contracted illness and it

14:35 was that claim was one of those uh privacy cases so it you know it caused that big spike otherwise we tend to kind of generally be you know 346 282 and 383 and fy20 it's been pretty consistent um and then of course uh on the next page I break it down by um Department you know licker for me thank you um it's broken down by department so you can see um obviously again the the other category is those that have very very few claims and then we get into uh Public Works police and fire and that's where you're going to see more claims obviously due to the nature of what they do um and kind of to break it down a little bit more uh one of the things

15:21 that I found in the last couple of years that the most commonly injured body parts are wrists and hands a lot of times it tends to be the low back but here it's the in hands using tools and equipment um and arrest injuries U we've we've seen quite a few injuries there um shoulder claims don't happen that often they're only 5% of the total number of claims over the reporting period but they have the highest average cost incurred because those tend to have to they result in surgery so we're going to see uh the cost on those higher um the the um strains and sprains of course um as is common Nationwide is the most common type of injury so versus a fracture or a dislocation or something like that sprains and strains are the

16:06 most common um let's see let's go ahead and just gonna something else to kind of mention is um with the pandemic was the great resignation uh and so when you factor in the number of new staff that have been on board and the number of overtime hours uh the police and fire had to work um while we were going through that Staffing transition the fact that we saw the decline in workplace injuries is really something that should be um positively reflect really the leadership of those groups yeah yeah and another thing I'll point out is the most common cause of injury are arrest injuries but it was wonderful to see um over the last over the reporting period that it has been

16:51 decreasing starting in fy20 there were 15 then 11 then four then it uh went up to seven and FY 23 and then drop de back down to five in FY 24 so that's a a important thing to point out I think for the police department okay experienced modifier this thing is complicated um if if you know numbers and you like numbers and you might enjoy this but it is very complicated but I feel like it's important to point out because the experience modifier combined with our payroll is what dictates our workers compensation premiums and so the lower the experienced modif fire the lower the uh the premium is and so what it what is considered normal or average is one um

17:39 and as you can see here it's been gradually dropping to where in fy2 we already have fy2 numbers of course um and I try to include more than just the five years because it does tell a good story our experience is below average so we're not having as many claims five as other organizations similar to us um which like I said means a reduction in workers compensation premium which is based on total hours work right correct yeah so that's the important factor to this is um we're positively progressing and we've had a lot of overtime hours and the fact that we're still below one is amazing yes yeah and every every job that we have is is calculated differently police and fire of course we

18:24 pay a higher workers comp rate for them because of the nature of what they do versus as office workers we pay a less rate I think fire is up to $9 and something whereas for us it's a couple of dollars so it it it does um diff differ on the job um another thing that I think is important because I did mention that we do try to pursue wherever we can recovery of those taxpayers dollars um when it comes to claims one of the things that we do is we participate a lot in the employer at injury program everybody's paycheck gets some money taken out of it that get goes into this state of state run pot they want us to use it and so we do if we have an employee who is on modified duty um

19:10 light duty they're not able to do their regular job they get their regular wage but as an incentive for employers to provide light duty we get half of their wage returned to us for a period of 66 calendar days so um along with if if there's some kind of equipment or modific we can make to their work site um then the state will give us up to $5,000 to help pay for that so we've taken advantage of that quite a bit too so over the last five fiscal years just for the wage subsidy we've received $243,000 back so and we use that money um we call it the injury and loss prevention Grant if there's something that in the department uh one of the Departments needs will help them fund that a recent example is um it's known

19:56 that U motorcycle officers um have a a greater level of hearing loss from being out with that wind and noise and we were able to help them purchase different windshields that significantly um reduces the noise exposure that they receive so it's things like that that that we work with the departments on and then premiums by line of coverage so this is again fy20 through fy2 because we recently just had our fy2 uh renewal year you can see I've listed out the cost of the premiums for each of our insurance lines but then above it's also been graphed out so you can kind of see the way it goes we don't really have a lot of control over the property line item obviously because there's a lot of

20:41 disasters and things going on in the world and that dictates um our increases we reach out at budget time to our broker like you know I recently did to find out what what can you tell us pull out your crystal ball what do you think is going to happen so for FY 26 they're predicting a 15% at least 15% increase so we Factor all of that in um and so it you know the the graph probably doesn't surprise you uh much except for the workers comp graph the green line the one on the top in when it dips down in fy22 that is when the the city made the decision to go to Safe Corporation and so that has been it's been great for us they they they managed claims well not saying CIS didn't they managed them well

21:26 as well but the premiums are significant us and it's a guaranteed cost program so we're not having to pay out money um all the time to we pay our premium and we're done so that is all I had but I am definitely open to any questions hey um so I have some questions but they may not be directly related to this but they are risk okay questions okay so um lower claims equals lower rates right there tends to be like lower deductibles and that sort of thing is that correct like the less claims you have the yeah not necessarily because they're looking at the severity of the claims as well and that's kind of that

22:11 experience modifier where I was talking about it's very complicated they go back four years they look at the first three of those four years and if you've had a lot of little tiny claims it doesn't really mean as much as if you have a couple of big ones so it's also based on severity not just frequency so I guess I would say if you have okay but more claims it looked like because of the claims we had like in 20 and 21 we had higher we had this risk of losing our insurance and all that okay um have we had any type of claims um in the development field like faulty planning construction engineering those type of claims not that I know of okay I know we haven't since I started and then the last few years before I started since I've been doing this report I have not seen any okay so I had come to you and

22:57 to the attorney and talk to you guys about professional liability and the amount that we're charging our Engineers to work for us um I thought we had resolved it it sounds like we have not all we did was just change the date of when they have to actually carry that professional liability but we are requiring our Engineers to carry $2 million per occurrence in a $3 million aggregate the engineer so we they don't do that in Eugene they don't do that up the road up I5 it's it's this thing that I haven't seen other municipalities do and I thought okay well we must have had some claims but it sounds like we haven't and so we're what we're doing is we're creating a situation where the only people that can um bid on jobs in our town are kpff Branch engineering big giant

23:43 firms the smaller engineering firms they can't afford to do a $150,000 pip because they have to carry a $2,000 a year extra policy because of the cost of this and no one can tell me why other than that's what we charge and that's what we were it was recommended that we do and I think we need to take a look at this because what we're doing is we're excluding smaller engineers and it's costing our constituents more money because then they can't find someone who's reasonable they have to go to a big giant firm to be able to do a small extension of a Wastewater line because they're building you know they're partitioning their land and so I'm asking again publicly that we take consideration of this and I don't think do you have an

24:29 answer for this I asked if it was okay to talk about this and they told me that it was no no no I I I I understand that piece I just don't know that this is the uh this is the this is rhetorical it was let's have this conversation because so the the issue with the engineers so anybody who's required to have educ you know continued education and has licenses doctors lawyers Architects Engineers they potentially can mess up not in a way where you know our vehicle hits somebody else's vehicle but in a design flaw for for the engineers for example if an engineer carries general liability insurance and they don't carry professional liability and they do a job that is flawed due to their design if and a claim or an event were to happen

25:15 or a claim were to be filed against the city because it's now the city's infrastructure and it was due to a design flaw their general liability coverage is not going to cover it and so it would be up the up to the city to pay for for the client except for the fact that we also charge them for the city's Engineers to review those same things and in many cases the city decides what they have to design so they're building it based on what our code is so they're doing what we're telling them to do and it's not like they're going out and like creating some new thing that we've never heard of before it has to go through a rigorous process through our system and so basically what we're saying is we're not going to take any responsibility for the fact that we review those plans or the fact that they have a

26:00 professional uh license that means a lot that's their stamp so we have Engineers that stamp stuff and our they engineer stuff but on top of that now we're going to make them do this and you just said yourself that you haven't seen any of those claims and so I'm just asking the what we're the amount that we're doing I'm not saying they shouldn't carry it I'm saying what we're asking of these people is a is a barrier and it is creating situations in our community that are costing other people money and I need to know why right we shouldn't just do it just because it's been in the code right no and I can only speak to of course the the insurance coverage that we want them to have the the professional liability and um I sometimes have people ask well if if the contract is only a $10,000 contract why are we requiring them to carry 2 million

26:45 the issue isn't how much was the contract the issue is what could potentially happen if there were a design flaw and public entities are are are protected by the torque claims statute the cap um which is over 1.7 million right now and so we need them to cover at least that amount so that we aren't spending taxpayer dollars to pay for a claim that really was not due to our negligence or our design flaw the other parts of it of course is something that I I wouldn't be able to speak to sure because I mean we can plan for if a meteor hits the city we want to make sure you know what I'm saying like it's it's also has to do with like what's the what's the likelihood and what have we seen potten eventually and all of that too so ncy do you

27:32 have have Insight here I well well for one I appreciate raising the issue because we certainly don't want to have an unintended consequence but I think what I need to do is do some more research around um I was just talking to Christine like hey is there a legal question here in front of this is this a um you know I want to get into more the root of the requirements um based on how we work with CIS and our overall so I don't know enough to know to answer that the problem is that I already brought this up a year and a half ago and I did go with legal and I met with them twice and now we're having the conversation again so this is one of those situations that I'm a little frustrated with because now you're saying let's go do this research I'm

28:17 like we already had this conversation a year and a half ago and I thought it was resolved so well so I think Jamie explained it pretty well when I I just was was able to go back and pull up the correspondence from um a year ago and the there's a difference as Jamie explained between general liability coverage and professional liability coverage so previously we required um engineering um Engineers who work on public Improvement permits so these are not contracts the city directly holds these are permits that people come in to design and build infrastructure that then transfers to the city um we had required those Engineers to carry General commercial liability coverage um business liability coverage um in addition to professional liability

29:02 coverage and going back and looking at you know what are we requiring um and working with Jamie it was it um and our insur CIS we realized we were really unnecessary to charge um to not charge to require General commercial liability coverage for engineers and so I believe um I don't have Stan Petro the city engineer with me but I believe we removed that requirement um in 2023 so now what remains is the requirement that Engineers have professional liability coverage and those amounts are correlated to the Oregon Tor claims act um so I was not personally um and I do want to say I was on Parental leave for the last couple months I know this issue has come up while I was on leave um I I was not aware that there was more additional issues with the professional

29:47 liability coverage um which is a different type of a coverage Than The General commercial liability so that will take some more followup and investigation and I'm also not aware of what other jurisdictions do on the profession it's complicated we take more than two seconds to have an answer I think we all understand that go ahead Nancy I I would just suggest perhaps if we could do a council briefing Memo from the city attorney's office um to address uh one to double check on on the requirements as they presently are and um if there's anything that we have an obligation to with our contractual relationship with CIS that would be uh pertinent here did you also include here just if if our position well

30:32 staff's position is that this is all correct right this is you know the the way that they're suggesting we do business can we explicitly call that out because I'm I'm assuming that's going to be relevant to uh some of Victoria's questions go Joe thank you um those are good questions and I they deserve answers um but in your answer you're talking about getting the information back whatnot if you could I think would be additionally helpful with the information you just spoke about is if you could include comparators and if you had U you know not a bunch you don't have to do 100 City research but it would be good I think for if Council was in a position where they need to make a decision B on

31:18 this topic that if they had that information and that to take it one step further if there's enough time or if you have the ability to I don't know why you wouldn't um is if you find another entity that doesn't is reach out and ask them how and why how can they how can they get away with that you know I mean how can they how can they do that because there may be something small or something major that we're missing and that would enable us to U make us more compatible more more competitive cuz you were with Eugene too right were you were you at the City of Eugene okay so then you might have some people to ask so okay awesome thank you that very much for letting me have that conversation I

32:03 know I just kind of budded that in with everything else but I was like o risk we could talk about this so thank you very much so yeah that'd be great all right any other questions mine's a little simpler than that of course so I did notice the downward Trend in the number of claims and the upward Trend in the um the actual costs being incurred by thosea claims um and I've heard overtime and some other factors that are playing into that and we've had that conversation about overtime before so are we at a place yet where we're able to downward Trend o overtime or are we still kind of up in that higher space there so there's multiple units so I believe looking at

32:49 Chief uh the police is uh really got to a staffing point where they expect that to to drop down and then we on top of that successfully navigated some contract language um to help that um so we ant I would anticipate that we would see that fire I believe is still working through a up Staffing that they need to do they kind of got delayed um uh and so my understanding from talking to Chief Caven was that they anticipated by the I think by the end of this fiscal year that they'd be at a staff level where they would be able to reduce overtime now that doesn't take in account what would happen with Fire season and some of those other details but we seem to be um what I've been noticing in the data that I pulled is that we've been in a heavy Rec that seems to be declining and our turnover rate has dropped last FIS

33:36 school year below 10% and so uh get considering the size of hiring that we have and to see that lower and that turnover is a positive indicator go Nancy I do want to you know when we talk about uh Spire you know it's it's complicated because we have two different cities with two different budgets two different process is um I would say on the City of Springfield side of things the city has done well and the council has done well to make investments to try to uh make hires in the fire department so we don't have the the lag that is being described in the City of Eugene um we also have um uh we paramedics going you know we split off a

34:21 single roll program that was an Innovative uh approach that Chief Cav started and so we have seen it and increase in people that have interest in being paramedics and we also have some uh some Fire Academy graduates that that are going through the process and should be wrapping up very imminently so I think we will be able to um move the needle on that in the upcoming year okay can I just ask a followup so so for police and fire I understand that um I'm looking at workers compensation and that looks to have gone up about 37,000 from last year that what is a lot of that is going to be of course due to increased cost medical costs um and then another big part of that is the most

35:06 recent two fiscal years it kind of takes claims a while to develop and so there's quite a few claims there that are still open that are holding not only monies paid out but also those reserves and when the claim is finally completed they're medical stationary they're done treating then the claim closes and those Reserves drop off however Under Oregon workers comp statute benef medical benefits are Lifetime on claims so they could reopen at at any given time but for now the last two fiscal years they're still developing is PR the short answer they're developing thank

35:51 you all right I don't see anybody else this is thank you so much for coming and uh sharing this information I know liability has been a topic of conversation around this community the last couple of years and the work is definitely noticed and appreciated go ahead Nancy I'm sorry I know you all want to go I just wanted to thank uh Jamie and chames specifically um they are so talented at this work and it's a real passion you I you can just tell what Jamie I love how she just wants to go after getting that money back and getting every dollar she can for our uh for our residents and saving every taxpayer Penny we can and that is this is real money when we do Enterprise rest Str this is real savings to our community and that's I'm so passionate about that so thank you for both of you yeah and it really is a group effort I you know I'm certainly not going to take

36:37 all the credit um you know others in HR that work on claims as well are passionate about it um and then it helps when across the city other staff will report to us oh I saw this happened or I saw that happen um and they let us know so sometimes we don't even know there's damage and so they let us know and then we can start pursuing you know who did that kind of thing so is a a team effort you mentioned uh Enterprise risk management yes Gordon Graham he's wonderful he can be so he's the in you know the inventor of that ter or that statement if it's predictable it's preventable and so I would I mean I think it is so worth and chief you've

37:23 seen or heard of him before have you not yeah that that training that I've had with that attorney has been has stuck with me my entire life and if our folks haven't gone through that I would highly recommend at some point I think it would save the city money if staff went through his program that he puts together to allow people to get that in in their mindset because people don't walk around like that yeah no he he is he is very good and he's very Dynamic spe amazing he's a good friend so yeah yeah he's awesome awesome right we are returned thank you everybody and good night

0:04 I'm G to call the city council work session to order with roll call Mayor Van Gordon here councelor weer here councelor Mo here councelor rodley here councelor Blackwell here councelor Doyle here and councelor pisher here thank you we have one item this evening which is the 2024 risk Report with chame and Jamie good evening mayor and city council my name is Jamie iboa I am the risk manager for the City of Springfield um I am here tonight to just kind of quickly run through the 2024 risk report which is actually the second annual report so far we're going to continue doing this every year um the risk report is really an opportunity uh for us to go through our claims experience across all lines of claims and insurance experience

0:49 to help the organization see where our risks are um I point out um you know Kudos things that are going well but then also some things that uh we need to work on and it's presented to the executive team and then they're given the opportunity to ask for any additional follow-up that they might have based on a graph that they see I'll tell you um I tend to talk really fast so when I get excited I forget to slow down so if anybody needs me to slow down let me know um and if you have any questions feel free to interrupt it's perfectly fine won't uh break the flow um so the there is a copy of the risk report in of course here here it is I can't see it cuz I my reading gos on but

1:35 um so I I start out with trying to uh give the kind of the key findings the things that really jumped out at me for the year um and that's what's contained on the first page um I should also back up a little bit and and tell you this is a fiveyear look back it's really hard to do trending when you're looking at two maybe three years certainly one year it doesn't work so traditionally in the risk management world we look at a five-year window and it is based on fiscal years so this report will address fy20 through fy2 24 one of my uh favorite key findings of course is the uh wonderful work that the organization has done um and also in the police

2:20 department has reduced it it has reduced our deductible with City County Insurance Services um I don't know how many of you were here uh before but in fy21 the police department's deductible went up to 250,000 from 100,000 due to some negative claims experience and then in fy22 it actually increased to 500,000 and we were running the risk of losing our coverage with CIS but due to the efforts that have been made um in FY 24 the deductible drop back down to 250 and for the current fiscal year FY 25 it has dropped down to 100,000 which is the the same as the rest of the organization so that is some great news um I won't

3:05 obviously read through every single thing um here in the report um since you guys have it but another thing I want to point out here is for the third year in a row the fire department has not had any general liability claims so that's good and general liability claims moving on to page two um general liability claims are those oh I forgot I have the clicker sorry I got you thank you chame that's why he's here he's gonna be my my sidekick um so general liability claims are those claims involving bodily injury or property damage to others caused by city employees or city Vehicles so that's what uh page two shows um starting with fy20 you can see that we

3:52 have had a downward Trend in our general liability claims uh we go from 31 to 18 back up to 26 down to 24 and then down to 20 so that's about 119 claims over a 5-year fiscal period it may seem like a high number but based on our operations and the amount of staff we have it's really not a lot of claims and out of those 119 claims 56% of those closed without any payment being made so these are claims that were denied were not appealed or you know no lawsuit was filed um and then as of the writing of this report which I I run the data through the end of uh fy2 24 so this data is current as of 6:30 anything that

4:38 happened since then we'll see it on next year's report so as of June 30 out of those 119 claims only 11 remained open so CIS is doing a good job of of getting these processed and we get them closed quickly so that's good um one of the things um that you'll notice here you know this uh significant dip from fy20 to fy20 um right around that time in fy21 of course is when Chief sheer started here with our organization so that has had um some effect on of course the reduction in claims but also right around that same time the organization started really looking into and participating in what we call Enterprise risk management which is different from traditional risk

5:23 management because traditional risk management is more of a um reactive approach to risk managing whereas Enterprise risk management is looking to the Future taking in others in the organization to participate in that and trying to figure out what risks do we have and how can we prevent them from happening versus reacting to when they happen um some other um interesting information on this slide um you can see that you know there there are going to be claim years where maybe one claim or a couple of claims are really going to spike um the gra graphs and you'll see that in general liability claims total incurred total incurred is what we have paid out on a claim what we have set

6:10 aside or what CIS has set aside that they think the claim will cost us and that total together is total incurred so that's what we're looking at so for closed claims it's what did we pay for any claims that are still open it's paid plus what our reserves are um and unfortunately in fy21 um 98% of that uh total is due to litigated claims and so those are claims that are currently still open they're still being litigated as of the time of this report um and 98% of that total incurred is what have we paid which is mostly attorney fees right now because we haven't settled any of those claims um and then what we have reserved to pay for them so um that's what that is um since the writing of or

6:57 or since the reports for the report in fy21 one of those litigated ca cases closed so that number dropped by about $200,000 so next pleas yeah and I just want to call out real quickly too um so during that period of course when Nancy came on board was R on fy20 into the pandemic and a good chunk of the expens that we SE in fy21 were kind of tied into that and it really was the leadership of the city manager who uh championed uh allowing HR to really get Enterprise risk in place uh so at that time before that Tom and I really struggled to kind of get any progress and movement and it was really Nancy that was able to get us to drive over that hump and get the work going that we ended up getting completed and and that that is tremendous um I have uh been

7:44 taking classes in studying and learning about Enterprise risk management for many years as as well as Tom and one of the things that I find when I meet with my peers they talk a lot about how they cannot get their leadership to buy into Enterprise risk management and well don't you have the same problem and I said absolutely do not because our city manager is very much behind it and they're very very surprised about it and they always ask how did you do that I can't take credit for it so anyway it it is it is great to have that support so um general liability claims by Department this is going to break it down more uh for you as far as um the the bigger the bigger chunks of claims those are the Departments you're going to see and that's going to be the Department of Public Works police and

8:29 fire the rest of the city Department's Finance HR CMO CAO and Library I lump those into other because it really skews the graphs when you have several that have zero and several that have one um and so that's you know that's how I set those graphs forward and as you can see under the fire uh uh bars there no claims for the last three fiscal years which is incredible um down below of course is total amount incurred by department so it's that same those same numbers from uh the general liability claims total incurred but split out by Department next so Auto liability claims Citywide is the next graph and the auto

9:15 liability claims are for damages to PE to other people's property um or bodily injuries caused by a city auto so City employee obviously driving a City Auto in somebody else you think about the ice storm one of the things that popped out when I hit the auto Li liability portion did we have any auto liability claims from the ice storm yes so um if we drop down to so that was in FY 24 88% of the total incurred for auto liability claims which wasn't a lot of money it was only 17455 88% was due to the ice storm so single event right

10:00 it was actually three separate events that 88% yeah so one of them was um a vehicle stopped in the middle of the road because somebody was in front of them and officer could not stop in time and rear ended that vehicle um a fire Tru slid off the road and took out a chunk of fence and then another one the bucket of one of the uh engines or one of the fire apparatus there was a business down here at fifth in Centennial I think they're wires were hanging down low and it got wrapped up into the bucket and pulled the wires off so that's what those uh ice or storm related claims were um you know anything else I you know I broke down um for the fiveyear period there were only 13 claims four

10:45 were DPW three were police and six were from fire and only as as of June 30 only one of those claims remained open so next Auto physical damage claims these claims are for or damage to our Auto it can be our staff damaging our Auto or somebody else damaged our Auto and CIS is in trying to pursue recovery against the other person we do try very hard to recover anything and everything that we can on these claims unfortunately sometimes people don't have insurance and so it just takes a little longer um but we've had you know you can see on the graph here

11:30 um our biggest year was FY 23 there were actually nine um but for as many Autos as we have that's really not a sign significant amount of um Auto physical damage claims um in FY 24 um the breakdown of that the $5,440 per was basically I didn't see a vehicle coming and I pulled out in front of them 28% was due to an officer was blocking um Mohawk when they had that water main break and for whatever reason somebody didn't see him and just plowed into the side of him and we are pursuing on that but unfortunately our damages were well over $30,000 and this uh gentleman only has 25,000 in liability

12:16 or liability coverage so sometimes we don't get everything back but we get what we can uh 34% of those costs were for damages to our vehicles that that were damaged during the ice storm and then 7% was due to a maneuver you know as part of of what our officers sometimes have to do so workers comp so workers comp I try not to get too far down into the weeds because based on the number of employees we have the number of claims we have isn't a significant amount and we do try to respect and honor our employees uh confidentiality and privacy when it comes to medical issues and so I'm a little bit careful about giving out too much in in the reports so that people can't be identified um but like I said

13:03 this isn't a significant amount of claims um of course we saw a spike in 21 and 22 because of covid um in 20 fy21 six police and 12 fire claims were covid related and then in fy22 five police claims and 18 fire claims um and it's kind of dropped we don't see them very often anymore in the mo most recent couple of years so that that did affect that claims experience um otherwise our our our you know numbers would be quite quite a bit lower um as far as the workers comp total claim total incurred it's the same as general liability it's paid plus reserves um in FY 24 um just a few claims like I mentioned earlier can

13:49 really Drive uh the costs and the and the spikes in the graphs and a good example in FY 24 three claims are uh account for 69% of the total incurred in claims so just a few claims can really uh Spike that number up and you'll see that in fy21 one claim um contributes to 75% of the total cost for that year and this is another good example of um trying to maintain the confidentiality of employees this one has been marked a privacy case OSHA defines privacy for us as being um a needle stick injury to intimate Parts uh sexual assault mental illness or some kind of bloodborne pathogen uh contracted illness and it

14:35 was that claim was one of those uh privacy cases so it you know it caused that big spike otherwise we tend to kind of generally be you know 346 282 and 383 and fy20 it's been pretty consistent um and then of course uh on the next page I break it down by um Department you know licker for me thank you um it's broken down by department so you can see um obviously again the the other category is those that have very very few claims and then we get into uh Public Works police and fire and that's where you're going to see more claims obviously due to the nature of what they do um and kind of to break it down a little bit more uh one of the things

15:21 that I found in the last couple of years that the most commonly injured body parts are wrists and hands a lot of times it tends to be the low back but here it's the in hands using tools and equipment um and arrest injuries U we've we've seen quite a few injuries there um shoulder claims don't happen that often they're only 5% of the total number of claims over the reporting period but they have the highest average cost incurred because those tend to have to they result in surgery so we're going to see uh the cost on those higher um the the um strains and sprains of course um as is common Nationwide is the most common type of injury so versus a fracture or a dislocation or something like that sprains and strains are the

16:06 most common um let's see let's go ahead and just gonna something else to kind of mention is um with the pandemic was the great resignation uh and so when you factor in the number of new staff that have been on board and the number of overtime hours uh the police and fire had to work um while we were going through that Staffing transition the fact that we saw the decline in workplace injuries is really something that should be um positively reflect really the leadership of those groups yeah yeah and another thing I'll point out is the most common cause of injury are arrest injuries but it was wonderful to see um over the last over the reporting period that it has been

16:51 decreasing starting in fy20 there were 15 then 11 then four then it uh went up to seven and FY 23 and then drop thatt back down to five in fy4 so that's a a important thing to point out I think for the police department okay experiened modifier this thing is complicated um if if you know numbers and you like numbers and you might enjoy this but it is very complicated but I feel like it's important to point out because the experience modifier combined with our payroll is what dictates our workers compensation premiums and so the lower the experienced modif fire the lower the uh the premium is and so what it what is considered normal or average is one um

17:39 and as you can see here it's been gradually dropping to where in fy2 we already have fy2 numbers of course um and I try to include more than just the five years because it does tell a good story our experience is below average so we're not having as many claims five as other organizations similar to us um which like I said means a reduction in workers compensation premium which is based on total hours work right correct yeah so that's the important factor to this is um we're positively progressing and we've had a lot of overtime hours and the fact that we're still below one is amazing yes yeah and every every job that we have is is calculated differently police and fire of course we

18:24 pay a higher workers comp rate for them because of the nature of what they do versus as office workers we pay a less rate I think fire is up to $9 and something whereas for us it's a couple of dollars so it it it does um diff differ on the job um another thing that I think is important because I did mention that we do try to pursue wherever we can recovery of those taxpayers dollars um when it comes to claims one of the things that we do is we participate a lot in the employer at injury program everybody's paycheck gets some money taken out of it that get goes into this state of state run pot they want us to use it and so we do if we have an employee who is on modified duty um

19:10 light duty they're not able to do their regular job they get their regular wage but as an incentive for employers to provide light duty we get half of their wage returned to us for a period of 66 calendar days so um along with if if there's some kind of equipment or modific we can make to their work site um then the state will give us up to $5,000 to help pay for that so we've taken advantage of that quite a bit too so over the last five fiscal years just for the wage subsidy we've received $243,000 back so and we use that money um we call it the injury and loss prevention Grant if there's something that in the department uh one of the Departments needs will help them fund that a recent example is um it's known

19:56 that U motorcycle officers um have a a greater level of hearing loss from being out with that wind and noise and we were able to help them purchase different wind Shields that significantly um reduces the noise exposure that they receive so it's things like that that that we work with the departments on and then premiums by line of coverage so this is again fy20 through fy2 because we recently just had our fy2 uh renewal year you can see I've listed out the cost of the premiums for each of our insurance lines but then above it's also been graphed out so you can kind of see the way it goes we don't really have a lot of control over the property line item obviously because there's a lot of

20:41 disasters and things going on in the world and that dictates um our increases we reach out at budget time to our broker like you know I recently did to find out what what can you tell us pull out your crystal ball what do you think is going to happen so for FY 26 they're predicting a 15% at least 15% increase so we Factor all of that in um and so it you know the the graph probably doesn't surprise you uh much except for the workers comp graph the green line the one on the top in when it dips down in fy22 that is when the the city made the decision to go to Safe Corporation and so that has been it's been great for us they they they managed claims well not saying CIS didn't they managed them well

21:26 as well but the premiums are significant us and it's a guaranteed cost program so we're not having to pay out money um all the time to we pay our premium and we're done so that is all I had but I am definitely open to any questions hey um so I have some questions but they may not be directly related to this but they are risk okay questions okay so um lower claims equals lower rates right there tends to be like lower deductibles and that sort of thing is that correct like the less claims you have the yeah not necessarily because they're looking at the severity of the claims as well and that's kind of that

22:11 experience modifier where I was talking about it's very complicated they go back four years they look at the first three of those four years and if you've had a lot of little tiny claims it doesn't really mean as much as if you have a couple of big ones so it's also based on severity not just frequency so I guess I would say if you have okay but more claims it looked like because of the claims we had like in 20 and 21 we had higher we had this risk of losing our insurance and all that okay um have we had any type of claims um in the development field like faulty planning construction engineering those type of claims not that I know of okay I know we haven't since I started and then the last few years before I started since I've been doing this report I have not seen any okay so I had come to you and

22:57 to the attorney and talk to you guys about professional liability and the amount that we're charging our Engineers to work for us um I thought we had resolved it it sounds like we have not all we did was just change the date of when they have to actually carry that professional liability but we are requiring our Engineers to carry $2 million per occurrence in a $3 million aggregate the engineer so we they don't do that in Eugene they don't do that up the road up I5 it's it's this thing that I haven't seen other municipalities do and I thought okay well we must have had some claims but it sounds like we haven't and so we're what we're doing is we're creating a situation where the only people that can um bid on jobs in our town are kpff Branch engineering big giant

23:43 firms the smaller engineering firms they can't afford to do a $150,000 pip because they have to carry a $2,000 a year extra policy because of the cost of this and no one can tell me why other than that's what we charge and that's what we were it was recommended that we do and I think we need to take a look at this because what we're doing is we're excluding smaller engineers and it's costing our constituents more money because then they can't find someone who's reasonable they have to go to a big giant firm to be able to do a small extension of a Wastewater line because they're building you know they're partitioning their land and so I'm asking again publicly that we take consideration of this and I don't think do you have an

24:29 answer for this I asked if it was okay to talk about this and they told me that it was no no no I I I I understand that piece I just don't know that this is the uh this is the this is rhetorical it was let's have this conversation because so the the issue with the engineers so anybody who's required to have educ you know continued education and has licenses doctors lawyers Architects Engineers they potentially can mess up not in a way where you know our vehicle hits somebody else's vehicle but in a design flaw for for the engineers for example if an engineer carries general liability insurance and they don't carry professional liability and they do a job that is flawed due to their design if and a claim or an event were to happen

25:15 or a claim were to be filed against the city because it's now the city's infrastructure and it was due to a design flaw their general liability coverage is not going to cover it and so it would be up the up to the city to pay for for the client except for the fact that we also charge them for the city's Engineers to review those same things and in many cases the city decides what they have to design so they're building it based on what our code is so they're doing what we're telling them to do and it's not like they're going out and like creating some new thing that we've never heard of before it has to go through a rigorous process through our system and so basically what we're saying is we're not going to take any responsibility for the fact that we review those plans or the fact that they have a

26:00 professional uh license that means a lot that's their stamp so we have Engineers that stamp stuff and our they engineer stuff but on top of that now we're going to make them do this and you just said yourself that you haven't seen any of those claims and so I'm just asking the what we're the amount that we're doing I'm not saying they shouldn't carry it I'm saying what we're asking of these people is a is a barrier and it is creating situations in our community that are costing other people money and I need to know why right we shouldn't just do it just because it's been in the code right no and I can only speak to of course the the insurance coverage that we want them to have the the professional liability and um I sometimes have people ask well if if the contract is only a $10,000 contract why are we requiring them to carry 2 million

26:45 the issue isn't how much was the contract the issue is what could potentially happen if there were a design flaw and public entities are are are protected by the torque claims statute the cap um which is over 1.7 million right now and so we need them to cover at least that amount so that we aren't spending taxpayer dollars to pay for a claim that really was not due to our negligence or our design flaw the other parts of it of course is something that I I wouldn't be able to speak to sure because I mean we can plan for if a meteor hits the city we want to make sure you know what I'm saying like it's it's also has to do with like what's the what's the likelihood and what have we seen potten eventually and all of that too so ncy do you

27:32 have have Insight here I well well for one I appreciate raising the issue because we certainly don't want to have an unintended consequence but I think what I need to do is do some more research around um I was just talking to Christine like hey is there a legal question here in front of this is this a um you know I want to get into more the root of the requirements um based on how we work with CIS and our overall so I don't know enough to know to answer that the problem is that I already brought this up a year and a half ago and I did go with legal and I met with them twice and now we're having the conversation again so this is one of those situations that I'm a little frustrated with because now you're saying let's go do this research I'm

28:17 like we already had this conversation a year and a half ago and I thought it was resolved so well so I think Jamie explained it pretty well when I I just was was able to go back and pull up the correspondence from um a year ago and the there's a difference as Jamie explained between general liability coverage and professional liability coverage so previously we required um engineering um Engineers who work on public Improvement permits so these are not contracts the city directly holds these are permits that people come in to design and build infrastructure that then transfers to the city um we had required those Engineers to carry General commercial liability coverage um business liability coverage um in addition to professional liability

29:02 coverage and going back and looking at you know what are we requiring um and working with Jamie it was it um and our insur CIS we realized we were really unnecessary to charge um to not charge to require General commercial liability coverage for engineers and so I believe um I don't have Stan Petro the city engineer with me but I believe we removed that requirement um in 2023 so now what remains is the requirement that Engineers have professional liability coverage and those amounts are correlated to the Oregon Tor claims act um so I was not personally um and I do want to say I was on Parental leave for the last couple months I know this issue has come up while I was on leave um I I was not aware that there was more additional issues with the professional

29:47 liability coverage um which is a different type of a coverage Than The General commercial liability so that will take some more followup and investigation and I'm also not aware of what other jurisdictions do on the profession it's complicated we take more than two seconds to have an answer I think we all understand that go ahead Nancy I I would just suggest perhaps if we could do a council briefing Memo from the city attorney's office um to address uh one to double check on on the requirements as they presently are and um if there's anything that we have an obligation to with our contractual relationship with CIS that would be uh pertinent here did you also include here just if if our position well

30:32 staff's position is that this is all correct right this is you know the the way that they're suggesting we do business can we explicitly call that out because I'm I'm assuming that's going to be relevant to uh some of Victoria's questions go Joe thank you um those are good questions and I they deserve answers um but in your answer you're talking about getting the information back whatnot if you could I think would be additionally helpful with the information you just spoke about is if you could include comparators and if you had U you know not a bunch you don't have to do 100 City research but it would be good I think for if Council was in a position where they need to make a decision B on

31:18 this topic that if they had that information and that to take it one step further if there's enough time or if you have the ability to I don't know why you wouldn't um is if you find another entity that doesn't is reach out and ask them how and why how can they how can they get away with that you know I mean how can they how can they do that because there may be something small or something major that we're missing and that would enable us to U make us more competible more more competitive cuz you were with Eugene too right were you were you at the City of Eugene okay so then you might have some people to ask so okay awesome thank you that very much for letting me have that conversation I

32:03 know I just kind of buted that in with everything else but I was like o risk we could talk about this so thank you very much so yeah that'd be great all right any other questions mine's a little simpler than that of course so I did notice the downward Trend in the number of claims and the upward Trend in the um the actual costs being incurred by those claims um and I've heard overtime and some other factors that are playing into that and we've had that conversation about overtime before so are we at a place yet where we're able to downward Trend o overtime or are we still kind of up in that higher space there so there's multiple units so I believe looking at

32:49 Chief uh the police is uh really got to a staffing point where they expect that to to drop down and then we on top of that successfully navigated some contract language um to help that um so we an I would anticipate that we would see that fire I believe is still working through up Staffing that they need to do they kind of got delayed um uh and so my understanding from talking to Chief Caven was that they anticipated by the I think by the end of this fiscal year that they'd be at a staff level where they would be able to reduce overtime now that doesn't take in account what would happen with Fire season and some of those other details but we seem to be um what I've been noticing in the data that I pulled is that we've been in a heavy Rec that seems to be declining and our turnover rate has dropped last FIS

33:36 school year below 10% and so uh get considering the size of hiring that we have and to see that lower and that turnover is a positive indicator go Nancy I do want to you know when we talk about uh Spire you know it's it's complicated because we have two different cities with two different budgets two different process is um I would say on the City of Springfield side of things the city has done well and the council has done well to make investments to try to uh make hires in the fire department so we don't have the the lag that is being described in the City of Eugene um we also have um uh we paramedics going you know we split off a

34:21 single roll program that was an Innovative uh approach that Chief Cav started and so we have seen it and increase in people that have interest in being paramedics and we also have some uh some Fire Academy graduates that that are going through the process and should be wrapping up very imminently so I think we will be able to um move the needle on that in the upcoming year okay can I just ask a followup so so for police and fire I understand that um I'm looking at workers compensation and that looks to have gone up about 37,000 from last year that what is a lot of that is going to be of course due to increased cost medical costs um and then another big part of that is the most

35:06 recent two fiscal years it kind of takes claims a while to develop and so there's quite a few claims there that are still open that are holding not only monies paid out but also those reserves and when the claim is finally completed they're medical stationary they're done treating then the claim closes and those Reserves drop off however Under Oregon workers comp statute benef medical benefits are Lifetime on claims so they could reopen at at any given time but for now the last two fiscal years they're still developing is PR the short answer they're developing thank

35:51 you all right I don't see anybody else this is thank you so much for coming and uh sharing this information I know liability has been a topic of conversation around this community the last couple of years and the work is definitely noticed and appreciated go ahead Nancy I'm sorry I know you all want to go I just wanted to thank uh Jamie and chames specifically um they are so talented at this work and it's a real passion you I you can just tell what Jamie I love how she just wants to go after getting that money back and getting every dollar she can for our uh for our residents and saving every taxpayer Penny we can and that is this is real money when we do Enterprise rest Str this is real savings to our community and that's I'm so passionate about that so thank you for both of you yeah and it really is a group effort I you know I'm certainly not going to take

36:37 all the credit um you know others in HR that work on claims as well are passionate about it um and then it helps when across the city other staff will report to us oh I saw this happened or I saw that happen um and they let us know so sometimes we don't even know there's damage and so they let us know and then we can start pursuing you know who did that kind of thing so is a a team effort you mentioned uh Enterprise risk management yes Gordon Graham he's wonderful he can be so he's the in you know the inventor of that ter or that statement if it's predictable it's preventable and so I would I mean I think it is so worth and chief you've

37:23 seen or heard of him before have you not yeah that that training that I've had with that attorney has been has stuck with me my entire life and if our folks haven't gone through that I would highly recommend at some point I think it would save the city money if staff went through his program that he puts together to allow people to get that in in their mindset because people don't walk around like that yeah no he he is he is very good and he's very Dynamic spe amazing he's a good friend so yeah yeah he's awesome awesome right we are returned thank you everybody and good night